International business agreements need careful follow up
Agreements for major international business are often subject to a mismatch between the overall agreement and agreements at the operative level. In her doctoral thesis, Anna Malm proposes tools that can link these.
When Saab, manufacturer of the fighter aircraft Gripen, sells aircraft to customers in other countries, a large collaboration commences between Saab, the buyer and the industrial network of the buyer. In 2015 Saab signed a contract with Brazil, one of the results of which was that the company entered into collaboration with the Brazilian aircraft manufacturer Embraer. The purpose of this type of industrial collaboration, known as “offset business”, is to promote the industry of the buyer through, for example, the transfer of production expertise. Industrial collaboration today is increasingly targeted towards the transfer of expertise in which the buyer desires to increase expertise within certain selected areas.
Anna Malm, industrial PhD student at Saab, has recently defended her doctoral thesis, dealing with offset business within the aircraft industry. She has worked on the thesis at the Division of Manufacturing Engineering, where Professor Mats Björkman has been principal supervisor.
At first glance, this may appear to be a very narrow field of specialisation, but her results are of major significance for international collaboration in several industries. The greatest challenge when conducting business of this type, in which expertise is also to be transferred, is that negotiations and signing of the contracts require a long time, and that personnel at different hierarchical levels negotiate and carry out the work specified in the contracts.
“The people who are to transfer production expertise in practice do not always have the comprehensive view that is present in the overall agreement. It must be remembered that these have often been negotiated several years previously. The main focus of the execution for this reason does not always mirror the main focus of the overall contract,” says Anna Malm.
Offset business is sometimes compared with outsourcing.
“I have sometimes used outsourcing as a comparison, but it is definitely not the same thing as offset business. When production is outsourced, it goes to a company that has been selected on the basis of capability and price. In the case of offset business, it is usually the customer that selects the company that is to take on the production, and the recipient is selected on the basis of learning more within a field that the customer has designated. The calculated value of the offset agreement increases as the degree of correspondence between the educational needs of the recipient and the expertise of the selling company increases,” she explains.
During her years as industrial PhD student Anna Malm has worked in parallel at Saab, in a number of roles.
“This has been a great advantage: I have been able to see how concepts have changed and how knowledge about the difficulties of this type of business has increased, while the same time being able to appreciate the situation from an overall academic perspective,” she says.
She has developed a tool, a means to retain the coupling between the agreements, from the highest level right down to the very detailed operational level.
“What is required is a connection that decreases the effects of the distance between the overall agreement and the operative level. The agreements must be coupled with syllabuses, which must in turn be coupled with operating instructions. Such operating instructions are being continuously improved, by the use of, for example, 3D models and virtual reality.
Anna Malm plans to continue her research, and is working on, among other things, a Vinnova project looking at knowledge transfer using operating instructions in 3D and virtual reality. She will also continue her work developing operating procedures and methods at the Aeronautics business unit at Saab.
The thesis: Technology transfer within related offset business – From an aircraft production perspective, Anna Malm, Division of Manufacturing Engineering, Department of Management and Engineering, LiU 2016.
Photo of Gripen: Saab AB/Stefan Kalm
Last updated: Tue Dec 13 10:34:03 CET 2016