Wärtsilä’s value and activity systems

The importance of presence of Wärtsilä in its different forms can be traced back to the underlying importance of capabilities. Knowing which capabilities need to be strengthened will allow to translate such into demand for employee placement and hence presence suggestion. To do so, the value system has to be understood and Wärtsilä’s key activities mapped out.

Understanding the underlying values that guides actors provides an insight into the complexity of collaborations. Wärtsilä’s directing values are Energy, Excellence and Excitement. Yet these are general guidelines and for each actor a set of additional, more specific values and expectations provide the base for a successful collaboration and partnership. Figure 14 depicts this value pattern, illustrating the shift from transaction based towards collaborative relation-based governance.

The value system is derived from the value chain, a concept introduced by Porter in 1985 with the aim to understand advantage creation. Each value chain is built a firms’ activities, giving insight into their effect on cost and final output. Looking at the network of firms within the industry, each actor incorporates their own unique value chain. If these chains are placed into the larger context, a connected system of value chains evolves: the value system. Given their collaborative nature, some activities might be shared or interlinked with other actors, creating a downstream flow where actors overlap in phases. This leads to value adding activity structures across the supply chain. Or interconnected processes and activates,

Figure 14. The FGSS values map.

eventually leading to value to the consumer, respectively shipowner. For Wärtsilä, the value system reflects its complexity in terms of technical complexity, interdependence and complex interactions. Figure 15 depicts this network. The horizontal axis represents the different stages across the supply chain and the related actors. The arrows represent the actors value chains, located in the larger network. Wärtsilä is located at the intersection between manufacturers and customer as integrated solution provider. It has to be noted that the shipyard and Wärtsilä, unlike depicted, actually overlap in stages and are both in close contact to the customer. Listed below are Wärtsilä’s main LNG operations related actors and their inputs.

The complexity increases noticeably as interdepended and interaction increase when moving downstream. Although value is created throughout the process, successful collaboration with the shipyards are key. Even with only the main inputs depicted it becomes obvious that the activities and processes are shared at the last stage. This supports the findings regarding most important capabilities for successful service integration addressing collaboration, networks, structures, processes and people focus. Also, this further emphasizes on social competences within project management and leadership styles. Moreover, this can be reconnected with the

Figure 15. The FGSS value system.

values map, where a shift from price-oriented towards collaboration-oriented values is visible towards the downstream side. Wärtsilä’s tight collaboration is structured through contractual arrangement, yet values important for this collaboration tend to be relation based. Values, soft skills and capabilities should be in focus.

The value map conceptualized Wärtsilä’s inputs, embedded in its larger context. The next step is then to focus on Wärtsilä itself and its activities. This aims to strengthen the understanding of the company’s structure, the details of collaboration, and eventually the capabilities behind the actions. Collaboration hereby also refers to internal cooperation.

Activities are created by people and hence are not isolated events. Cooperation addresses all actors in the project and therefore starts from within each company by linking internal business units and cross-functional collaboration. Only with successful coordination of the internal departments and its activities and processes integrated solutions can be developed.

(Windahl and Lakemond 2006: 814). By grouping activities into their intercorrelated fields, linkages and capabilities shared by various activities can become visible. Figure 16 depicts FGSS’ activities and offers a more detailed view on how they are interconnected.

Figure 16. The FGSS activity system.

Clusters are found within different stages of the projects, such as during contract creation and during services after handover, as well as clusters within divisions. Especially within divisions the various internal as well as external linkages become obvious. Communication, relationship management, project management, solution design and engineering as well as exchange of experience are some of the most embedded actions. These are actions that are concerned with collaboration across the value system. Having the adequate resources and competences in these areas could be the base for successful collaboration. On the other side, understanding what competences are lacking can give insight into the current limitations as well as future opportunities. Activities that are shared among actors might not require internal capabilities only, but could be built upon its broader network. Changes in the presence infrastructure can reinforce weaknesses within the clusters by redistributing capabilities or take advantage of strong clusters by linking them to others. With this data, one can now derive a strategical analysis and combine the concepts to analyse the demand of local presence for Wärtsilä’s FGSS division.