Strategic outsourcing of R&D: The location-specific advantages of India to the pharmaceutical industry

Companies are increasingly under pressure to be more efficient both in terms of costs and overall performance and thus, they seek new ways to develop their products and innovate. For pharmaceutical industry it can take several decades to launch a new drug to the markets. Since pharmaceutical industry is one of the most research-intensive industries, is outsourcing one way to enhance the R&D processes of such companies. It is said that outsourcing to offshore locations is vastly more challenging and complicated than any other exporting activity or inter-company relationship that has evoked a lot of discussion. By outsourcing strategically, companies must also thoroughly focus on transaction costs and core competences. Today, the suppliers are looked for beyond national boundaries and furthermore, the location of the outsourcing activity must also be thoroughly considered. Consequently, the purpose of this study is to analyze what is known of strategic outsourcing of pharmaceutical R&D to India. In order to meet the purpose of the study, this study tries to answer three sub-questions set to it: first, what is strategic outsourcing, second, why pharmaceutical companies utilize strategic outsourcing of R&D and last, why pharmaceutical companies select India as the location for outsourcing their R&D. The study is a qualitative study. The purpose of the study was approached by a literature review with systematic elements and sub-questions were analyzed through different relevant theories, such as theory of transaction costs, core competences and location advantages. Applicable academic journal articles were comprehensively included in the study. The data was collected from electronic journal article databases using key words and almost only peer-reviewed, as new as possible articles were included. Also both the reference list of the included articles and article recommendations from professionals generated more articles for inclusion. The data was analyzed through thematization that resulted in themes that illuminate the purpose of the study and sub-questions. As an outcome of the analysis, each of the theory chapters in the study represents one sub-question. The literature used in this study revealed that strategic outsourcing of R&D is increasingly used in pharmaceutical industry and the major motives to practice it has to do with lowering costs, accessing skilled labor, resources and knowledge and enhancing their quality while speeding up the introduction of new drugs. Mainly for the above-mentioned motives India is frequently chosen as the target location for pharma outsourcers. Still, the literature is somewhat incomplete in this complex phenomenon and more research is needed.

The effects of location, feedstock availability, and supply-chain logistics on the greenhouse gas emissions of forest-biomass energy utilization in Finland

Forest biomass represents a geographically distributed feedstock, and geographical location affects the greenhouse gas (GHG) performance of a given forest-bioenergy system in several ways. For example, biomass availability, forest operations, transportation possibilities and the distances involved, biomass end-use possibilities, fossil reference systems, and forest carbon balances all depend to some extent on location. The overall objective of this thesis was to assess the GHG emissions derived from supply and energy-utilization chains of forest biomass in Finland, with a specific focus on the effect of location in relation to forest biomass’s availability and the transportation possibilities. Biomass availability and transportation-network assessments were conducted through utilization of geographical information system methods, and the GHG emissions were assessed by means of lifecycle assessment. The thesis is based on four papers in which forest biomass supply on industrial scale was assessed. The feedstocks assessed in this thesis include harvesting residues, smalldiameter energy wood and stumps. The principal implication of the findings in this thesis is that in Finland, the location and availability of biomass in the proximity of a given energyutilization or energy-conversion plant is not a decisive factor in supply-chain GHG emissions or the possible GHG savings to be achieved with forest-biomass energy use. Therefore, for the greatest GHG reductions with limited forest-biomass resources, energy utilization of forest biomass in Finland should be directed to the locations where most GHG savings are achieved through replacement of fossil fuels. Furthermore, one should prioritize the types of forest biomass with the lowest direct supply-chain GHG emissions (e.g., from transport and comminution) and the lowest indirect ones (in particular, soil carbon-stock losses), regardless of location. In this respect, the best combination is to use harvesting residues in combined heat and power production, replacing peat or coal.

Evaluation of Location Intelligence exploitation in capital-intensive business

As technology has developed it has increased the number of data produced and collected from business environment. Over 80% of that data includes some sort of reference to geographical location. Individuals have used that information by utilizing Google Maps or different GPS devices, however such information has remained unexploited in business. This thesis will study the use and utilization of geographically referenced data in capital-intensive business by first providing theoretical insight into how data and data-driven management enables and enhances the business and how especially geographically referenced data adds value to the company and then examining empirical case evidence how geographical information can truly be exploited in capital-intensive business and what are the value adding elements of geographical information to the business. The study contains semi-structured interviews that are used to scan attitudes and beliefs of an organization towards the geographic information and to discover fields of applications for the use of geographic information system within the case company. Additionally geographical data is tested in order to illustrate how the data could be used in practice. Finally the outcome of the thesis provides understanding from which elements the added value of geographical information in business is consisted of and how such data can be utilized in the case company and in capital-intensive business.

Location intelligence strategisen päätöksenteon tukena

Kilpailuetua tavoittelevan yrityksen pitää kyetä jalostamaan tietoa ja tunnistamaan sen avulla uusia tulevaisuuden mahdollisuuksia. Tulevaisuuden mielikuvien luomiseksi yrityksen on tunnettava toimintaympäristönsä ja olla herkkänä havaitsemaan muutostrendit ja muut toimintaympäristön signaalit. Ympäristön elintärkeät signaalit liittyvät kilpailijoihin, teknologian kehittymiseen, arvomaailman muutoksiin, globaaleihin väestötrendeihin tai jopa ympäristön muutoksiin. Spatiaaliset suhteet ovat peruspilareita käsitteellistää maailmaamme. Pitney (2015) on arvioinut, että 80 % kaikesta bisnesdatasta sisältää jollakin tavoin viittauksia paikkatietoon. Siitä huolimatta paikkatietoa on vielä huonosti hyödynnetty yritysten strategisten päätösten tukena. Teknologioiden kehittyminen, tiedon nopea siirto ja paikannustekniikoiden integroiminen eri laitteisiin ovat mahdollistaneet sen, että paikkatietoa hyödyntäviä palveluja ja ratkaisuja tullaan yhä enemmän näkemään yrityskentässä. Tutkimuksen tavoitteena oli selvittää voiko location intelligence toimia strategisen päätöksenteon tukena ja jos voi, niin miten. Työ toteutettiin konstruktiivista tutkimusmenetelmää käyttäen, jolla pyritään ratkaisemaan jokin relevantti ongelma. Konstruktiivinen tutkimus tehtiin tiiviissä yhteistyössä kolmen pk-yrityksen kanssa ja siihen haastateltiin kuutta eri strategiasta vastaavaa henkilöä. Tutkimuksen tuloksena löydettiin, että location intelligenceä voidaan hyödyntää strategisen päätöksenteon tukena usealla eri tasolla. Yksinkertaisimmassa karttaratkaisussa halutut tiedot tuodaan kartalle ja luodaan visuaalinen esitys, jonka avulla johtopäätöksien tekeminen helpottuu. Toisen tason karttaratkaisu pitää sisällään sekä sijainti- että ominaisuustietoa, jota on yhdistetty eri lähteistä. Tämä toisen tason karttaratkaisu on usein kuvailevaa analytiikkaa, joka mahdollistaa erilaisten ilmiöiden analysoinnin. Kolmannen eli ylimmän tason karttaratkaisu tarjoaa ennakoivaa analytiikkaa ja malleja tulevaisuudesta. Tällöin ohjelmaan koodataan älykkyyttä, jossa informaation keskinäisiä suhteita on määritelty joko tiedon louhintaa tai tilastollisia analyysejä hyödyntäen. Tutkimuksen johtopäätöksenä voidaan todeta, että location intelligence pystyy tarjoamaan lisäarvoa strategisen päätöksenteon tueksi, mikäli yritykselle on hyödyllistä ymmärtää eri ilmiöiden, asiakastarpeiden, kilpailijoiden ja markkinamuutoksien maantieteellisiä eroavaisuuksia. Parhaimmillaan location intelligence -ratkaisu tarjoaa luotettavan analyysin, jossa tieto välittyy muuttumattomana päätöksentekijältä toiselle ja johtopäätökseen johtaneita syitä on mahdollista palata tarkastelemaan tarvittaessa uudelleen.