A couple of weeks ago, German news were concentrating on the public fight between Volkswagen and its subcontractors. Two of the latter have refused delivering unique parts for the Volkswagen cars. It all started with covers for Golf’s seats, and short time later followed by a unique spare part for the Golf’s gearbox. The state court’s decision in favor of Volkswagen didn’t help. The supplies still refused to deliver what they committed to according to the contracts with this car producing giant.
The whole scandal grew and grew further forcing “Volkswagen to reduce hours for about 27,700 workers” as the company was forced to cut the production of cars. I followed the news and found out that such problems existed before, but until this year, mainly in the locations outside Germany. There have been many speculations on the news why this has happened. Some of the experts said that this was a political game and that someone big behind those suppliers were measuring themselves in strength with Volkswagen.
And some said that Volkswagen saw all this coming. That as their counterparts, they were just playing this political game even if it affected their employees. Maybe they were. Maybe they weren’t. The true reasons might never become public. These reasons might be also seen differently by the counterparts or even by various people on the same side. The truth is often subjective. But let’s assume the managers responsible for the production of the Golf car didn’t see such a scenario coming.
Then the reason and the clue to all this is very simple. They weren’t in control of their business rules. Neither the business rules of the whole company nor, and especially so, of the business rules for the Golf car. In the first post in the Bitesize series on Business Rules, we stated that business rules are all decisions in respect to the given product or service, touching every single bit of its life-cycle.
In the case of this particular scandal between Volkswagen and their suppliers, the contracts were not bulletproof, since it looks like they had only one supplier per particular part. Thus there must have been some exclusiveness clause in there. It is hard to understand why they had those unique and seemingly irreplaceable parts at all. For the seat covers?!
But whatever the reason, it is obvious that in addition to contractual problems, the acquisition part of the business rules wasn’t working either. Then the involved team seemed not being able to work reasonably together either. Such teams usually include all the partners, i.e. also suppliers, and even customers or their representatives. Again an obvious conclusion: the communication wasn’t what is should have been.
Such a lack of control over the business rules, as well as the latest emission scandal, threw Volkswagen off from their first place among the car producing leaders down to the second place. But such a behaviour would have been deadly for a small business. Some might say that Volkswagen’s business policy was limping.
The problem, however, is much wider than their business policy. It doesn’t have to do solely with the way a manager has to behave in a certain situation or what range of decisions he or she can make in what circumstance, but it has to do with concrete decisions in respect to a concrete product.
And there is another important aspect to business rules, which makes them more and more vital to be clearly understood. Business rules are exchanged between project partners. These are contracts the partners exchange, these are the parameters of the spare parts and supplies, the diameters of the valves inside a gear box, the data on the bolts, the screws used to keep all those parts together, and so on.
All these details – the contracts, the frequency of exchange of parts, or frequency of data exchange, the diameter of parts, the thickness of lines on the graphics presenting those parts, the colour of warnings and cautions during maintenance procedures, on who is doing what, the termination rules of a contract – they all make part of a product’s or a company’s business rules in respect to a product or a range of products.
If you want your product to be a success, then you will agree that all these have to play together well, and if they don’t, then you need to modify one or another decision ASAP. Otherwise you will lose control of your products, your team and your business.
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Victoria has been working with S1000D since 2004, first for German Defence, then for a major S1000D software vendor and today as part of her own business. In the S1000D community, Victoria serves as the Business Rules Working Group (BRWG) chair since 2005.
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