Validation and Selection of Transportation Cost Drivers with Advanced Methods

In today's logistics environment, there is a tremendous need for accurate cost information and cost allocation. Companies searching for the proper solution often come across with activity-based costing (ABC) or one of its variations which utilizes cost drivers to allocate the costs of activities to cost objects. In order to allocate the costs accurately and reliably, the selection of appropriate cost drivers is essential in order to get the benefits of the costing system. The purpose of this study is to validate the transportation cost drivers of a Finnish wholesaler company and ultimately select the best possible driver alternatives for the company. The use of cost driver combinations as an alternative is also studied. The study is conducted as a part of case company's applied ABC-project using the statistical research as the main research method supported by a theoretical, literature based method. The main research tools featured in the study include simple and multiple regression analyses, which together with the literature and observations based practicality analysis forms the basis for the advanced methods. The results suggest that the most appropriate cost driver alternatives are the delivery drops and internal delivery weight. The possibility of using cost driver combinations is not suggested as their use doesn't provide substantially better results while increasing the measurement costs, complexity and load of use at the same time. The use of internal freight cost drivers is also questionable as the results indicate weakening trend in the cost allocation capabilities towards the end of the period. Therefore more research towards internal freight cost drivers should be conducted before taking them in use.

Scouring uncharted waters – managing outbound open innovation in maritime industry

This thesis discusses the unexplored opportunities of open innovation, with a special focus on outbound open innovation. The extant literature indicates that the field of outbound open innovation still lacks of research, and especially the managerial issues lack of practicality. Also, the applicability to SME’s and traditional fields has been argued. The purpose of this study is to investigate how the outbound open innovation activities can be managed in maritime industry. By combining existing literature from the field of open innovation and innovation management, this study suggests first a theoretical management model, and contributes how it can be applied to industry- and company specifics; and then develops a practical model by constructing from the case company’s current management processes. As a result, the study synthesises a theoretical model of how the outbound open innovation activities can be managed. This model positions the outbound open innovation activities, the theoretical concepts found from the literature review, R&D processes, and the outbound open innovation implementation stages identified by previous research; and thus responses the need for practical steps for any company planning outbound open innovation activities. Practical tool for managers is also provided by identifying issues that are applied to industry- and company specifics. Then, open-ended case study questions are formulated accordingly and expert interviews selected by chain referral sampling, are conducted. Interviews provide information for the current management processes. By identifying the best practices and main challenges it is possible to outline and evaluate current outbound open innovation management processes and strategic choices in it. The researcher considers also the networks and their spheres of influences for the actors, activities and resources in the processes. Thus, the study provides a novel approach, and practical tools for the researchers and practioners in the field of open innovation. All in all, the study has come up that outbound open innovation is applicable to maritime industry; and the case company indeed has perfected its processes as cost-effective as possible, and so found its balance between the costs and benefits. However, several issues for future development are pointed out, and the study offers proposals for theory building. Findings are piloting in kind, but provide several theoretical and managerial implications, and reveal new research needs for the field.

Activity-based life cycle costing model for cost estimation and monitoring – Case: manned and autonomous dry bulk carrier

Recent developments in automation, robotics and artificial intelligence have given a push to a wider usage of these technologies in recent years, and nowadays, driverless transport systems are already state-of-the-art on certain legs of transportation. This has given a push for the maritime industry to join the advancement. The case organisation, AAWA initiative, is a joint industry-academia research consortium with the objective of developing readiness for the first commercial autonomous solutions, exploiting state-of-the-art autonomous and remote technology. The initiative develops both autonomous and remote operation technology for navigation, machinery, and all on-board operating systems. The aim of this study is to develop a model with which to estimate and forecast the operational costs, and thus enable comparisons between manned and autonomous cargo vessels. The building process of the model is also described and discussed. Furthermore, the model’s aim is to track and identify the critical success factors of the chosen ship design, and to enable monitoring and tracking of the incurred operational costs as the life cycle of the vessel progresses. The study adopts the constructive research approach, as the aim is to develop a construct to meet the needs of a case organisation. Data has been collected through discussions and meeting with consortium members and researchers, as well as through written and internal communications material. The model itself is built using activity-based life cycle costing, which enables both realistic cost estimation and forecasting, as well as the identification of critical success factors due to the process-orientation adopted from activity-based costing and the statistical nature of Monte Carlo simulation techniques. As the model was able to meet the multiple aims set for it, and the case organisation was satisfied with it, it could be argued that activity-based life cycle costing is the method with which to conduct cost estimation and forecasting in the case of autonomous cargo vessels. The model was able to perform the cost analysis and forecasting, as well as to trace the critical success factors. Later on, it also enabled, albeit hypothetically, monitoring and tracking of the incurred costs. By collecting costs this way, it was argued that the activity-based LCC model is able facilitate learning from and continuous improvement of the autonomous vessel. As with the building process of the model, an individual approach was chosen, while still using the implementation and model building steps presented in existing literature. This was due to two factors: the nature of the model and – perhaps even more importantly – the nature of the case organisation. Furthermore, the loosely organised network structure means that knowing the case organisation and its aims is of great importance when conducting a constructive research.