CTQ process flow development and the impact for cost of quality

Tämä työ tehtiin Kone Industrial Oy:lle Major Projects yksikköön, laatuosastolle. Kone Major Projects yksikkö keskittyy erikoisiin ja suuriin hissi- ja liukuporras projekteihin. Työn tavoitteena oli luoda harmonisoitu prosessi hissikomponenttien laaduntarkkailua varten sekä tarkastella ja vertailla kustannussäästöjä, jota tällä uudella prosessilla voidaan saavuttaa. Tavoitteena oli saavuttaa 80-prosentin kustannussäästöt laatukustannuksissa uuden laatuprosessin avulla. Työn taustana ja tutkimusongelmana ovat lisääntyneet erikoisprojektit ja niiden myötä lisääntynyt laaduntarkkailun tarve. Ongelmana laaduntarkkailussa voitiin pitää harmonisoidun ja selkeän prosessin puuttumista C-prosessikomponenttien valmistuksessa. Lisäksi kehitysprosessin aikana luotiin vanhojen työkalujen pohjalta keskeinen laaduntarkkailutyökalu, CTQ-työkalu. Työssä käsitellään ensin Konetta yhtiönä ja selvitetään Koneen keskeisimmät prosessit työn taustaksi. Teoria osuudessa käsitellään prosessin kehitykseen liittyviä teorioita sekä yleisiä laatukäsitteitä ja esitetään teorioita laadun asemasta nykypäivänä. Lopuksi käsitellään COQ eli laatukustannusten teoriaa ja esitellään teoria PAF-analyysille, jota käytetään työssä laatukustannusten vertailuun case esimerkin avulla. Työssä kuvataan CTQ prosessin luominen alusta loppuun ja case esimerkin avulla testataan uutta CTQ prosessia pilottihankkeessa. Tässä case esimerkissä projektin bracket eli johdekiinnitysklipsi tuotetaan uuden laatuprosessin avulla sekä tehdään kustannusvertailu saman projektin toisen bracketin kanssa, joka on tuotettu ennen uuden laatuprosessin implementoimista. Työn lopputuloksena CTQ prosessi saatiin luotua ja sitä pystyttiin testaamaan käytännössä case esimerkin avulla. Tulosten perusteella voidaan sanoa, että CTQ prosessin käyttö vähentää laatukustannuksia huomattavasti ja helpottaa laadunhallintaa C-prosessikomponenttien tuotannossa.

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.

Cost-benefit analysis of using test automation in the development of embedded software

The goal of this thesis is to make a case study of test automation’s profitability in the development of embedded software in a real industrial setting. The cost-benefit analysis is done by considering the costs and benefits test automation causes to software development, before the software is released to customers. The potential benefits of test automation regarding software quality after customer release were not estimated. Test automation is a significant investment which often requires dedicated resources. When done accordingly, the investment in test automation can produce major cost savings by reducing the need for manual testing effort, especially if the software is developed with an agile development framework. It can reduce the cost of avoidable rework of software development, as test automation enables the detection of construction time defects in the earliest possible moment. Test automation also has many pitfalls such as test maintainability and testability of the software, and if those areas are neglected, the investment in test automation may become worthless or it may even produce negative results. The results of this thesis suggest that test automation is very profitable at the company under study.

European luxury brands made in China: the effect of low-cost country manufacturing on brand image and purchase decisions

European luxury brands have an image of manufacturing their products in the same country where the brands originate. However, in the past years many luxury brands have shifted their manufacturing to countries outside Europe. China is now a common manufacturing country for European luxury brands despite the country’s poor image as a manufacturer. Chinese manufacturing is often associated with bad quality, bad labour conditions, mass production, and counterfeits. The image of China does not quite match the image luxury brands enjoy including characteristics such as high end quality, craftsmanship, details, design, or premium price. A negatively perceived country-of-manufacture may have an effect on a brand’s image and consumers’ purchase decisions. This thesis is focused on European luxury brands manufacturing in China, and how this effects the brand image and purchase decisions among luxury consumers. The empirical part of this thesis is based on focus group research, which is a popular method in the field of qualitative research. The main focus group is female luxury consumers in Finland. This main group has been divided into three categories: 1) the university students, 2) the young career women, 3) the experienced luxury consumers. This categorization has been done based on their different stages in luxury consumption. All in all, the empirical research consisted of 11 interviews and 29 participants. The main contribution of this thesis was that there is a difference between the opinions of the younger groups (university students and young career women) and the experienced luxury consumers when discussing the effect of country-of-manufacture on brand image and purchase decisions of luxury brands. The younger participants thought that manufacturing luxury products in China might affect the brand image, but their purchase decisions would not be that much affected by the country-of-origin. The experienced luxury consumers had quite a different view on the country-of-origin of luxury brands – they found it an important decisive factor prior making purchases. The majority of experienced luxury consumers would not buy luxury products made in China, and they would always check where these products are made in.

Treatment of Fe-containing Acid Mine Waters in Fixed Bed Adsorption Column with Calcite Side-Stone

The acid mining drainage is considered the most significant environmental pollution problem around the world for the extensive formation acidic leachates containing heavy metals. Adsorption is widely used methods in water treatment due to it easy operation and the availability of a wide variety of commercial adsorbent (low cost). The primary goal of this thesis was to investigate the efficiency of neutralizing agents, CaCO3 and CaSiO3, and metal adsorption materials with unmodified limestone from Company Nordkalk Oy. In addition to this, the side materials of limestone mining were tested for iron adsorption from acidic model solution. This study was executed at Lappeenranta University of Technology, Finland. The work utilised fixed-bed adsorption column as the main equipment and large fluidized column. Atomic absorption spectroscopy (AAS) and x-ray diffraction (XRD) was used to determine ferric removal and the composition of material respectively. The results suggest a high potential for the studied materials to be used a low cost adsorbents in acid mine drainage treatment. From the two studied adsorbents, the FS material was more suitable than the Gotland material. Based on the findings, it is recommended that further studies might include detailed analysis of Gotland materials.

Cost-efficient virtual machine management : provisioning, admission control, and consolidation

One of the main challenges in Software Engineering is to cope with the transition from an industry based on software as a product to software as a service. The field of Software Engineering should provide the necessary methods and tools to develop and deploy new cost-efficient and scalable digital services. In this thesis, we focus on deployment platforms to ensure cost-efficient scalability of multi-tier web applications and on-demand video transcoding service for different types of load conditions. Infrastructure as a Service (IaaS) clouds provide Virtual Machines (VMs) under the pay-per-use business model. Dynamically provisioning VMs on demand allows service providers to cope with fluctuations on the number of service users. However, VM provisioning must be done carefully, because over-provisioning results in an increased operational cost, while underprovisioning leads to a subpar service. Therefore, our main focus in this thesis is on cost-efficient VM provisioning for multi-tier web applications and on-demand video transcoding. Moreover, to prevent provisioned VMs from becoming overloaded, we augment VM provisioning with an admission control mechanism. Similarly, to ensure efficient use of provisioned VMs, web applications on the under-utilized VMs are consolidated periodically. Thus, the main problem that we address is cost-efficient VM provisioning augmented with server consolidation and admission control on the provisioned VMs. We seek solutions for two types of applications: multi-tier web applications that follow the request-response paradigm and on-demand video transcoding that is based on video streams with soft realtime constraints. Our first contribution is a cost-efficient VM provisioning approach for multi-tier web applications. The proposed approach comprises two subapproaches: a reactive VM provisioning approach called ARVUE and a hybrid reactive-proactive VM provisioning approach called Cost-efficient Resource Allocation for Multiple web applications with Proactive scaling. Our second contribution is a prediction-based VM provisioning approach for on-demand video transcoding in the cloud. Moreover, to prevent virtualized servers from becoming overloaded, the proposed VM provisioning approaches are augmented with admission control approaches. Therefore, our third contribution is a session-based admission control approach for multi-tier web applications called adaptive Admission Control for Virtualized Application Servers. Similarly, the fourth contribution in this thesis is a stream-based admission control and scheduling approach for on-demand video transcoding called Stream-Based Admission Control and Scheduling. Our fifth contribution is a computation and storage trade-o strategy for cost-efficient video transcoding in cloud computing. Finally, the sixth and the last contribution is a web application consolidation approach, which uses Ant Colony System to minimize the under-utilization of the virtualized application servers.

A Phase Model for Building a Customer Value Based Sales Tool – Case Mining and Metals Industry

The objective of this research is to observe the state of customer value management in Outotec Oyj, determine the key development areas and develop a phase model with which to guide the development of a customer value based sales tool. The study was conducted with a constructive research approach with the focus of identifying a problem and developing a solution for the problem. As a basis for the study, the current literature involving customer value assessment and solution and customer value selling was studied. The data was collected by conducting 16 interviews in two rounds within the company and it was analyzed by coding openly. First, seven important development areas were identified, out of which the most critical were “Customer value mindset inside the company” and “Coordination of customer value management activities”. Utilizing these seven areas three functionality requirements, “Preparation”, “Outotec’s value creation and communication” and “Documentation” and three development requirements for a customer value sales tool were identified. The study concluded with the formulation of a phase model for building a customer value based sales tool. The model included five steps that were defined as 1) Enable customer value utilization, 2) Connect with the customer, 3) Create customer value, 4) Define tool to facilitate value selling and 5) Develop sales tool. Further practical activities were also recommended as a guide for executing the phase model.

The demand-supply balancing process in supply chain management - case mining & metals industry equipment

The aim of this thesis is to search how to match the demand and supply effectively in industrial and project-oriented business environment. The demand-supply balancing process is searched through three different phases: the demand planning and forecasting, synchronization of demand and supply and measurement of the results. The thesis contains a single case study that has been implemented in a company called Outotec. In the case study the demand is planned and forecasted with qualitative (judgmental) forecasting method. The quantitative forecasting methods are searched further to support the demand forecast and long term planning. The sales and operations planning process is used in the synchronization of the demand and supply. The demand forecast is applied in the management of a supply chain of critical unit of elemental analyzer. Different meters on operational and strategic level are proposed for the measurement of performance.

Novel virtual environment and real-time simulation based methods for improving life-cycle efficiency of non-road mobile machinery

Virtual environments and real-time simulators (VERS) are becoming more and more important tools in research and development (R&D) process of non-road mobile machinery (NRMM). The virtual prototyping techniques enable faster and more cost-efficient development of machines compared to use of real life prototypes. High energy efficiency has become an important topic in the world of NRMM because of environmental and economic demands. The objective of this thesis is to develop VERS based methods for research and development of NRMM. A process using VERS for assessing effects of human operators on the life-cycle efficiency of NRMM was developed. Human in the loop simulations are ran using an underground mining loader to study the developed process. The simulations were ran in the virtual environment of the Laboratory of Intelligent Machines of Lappeenranta University of Technology. A physically adequate real-time simulation model of NRMM was shown to be reliable and cost effective in testing of hardware components by the means of hardware-in-the-loop (HIL) simulations. A control interface connecting integrated electro-hydraulic energy converter (IEHEC) with virtual simulation model of log crane was developed. IEHEC consists of a hydraulic pump-motor and an integrated electrical permanent magnet synchronous motorgenerator. The results show that state of the art real-time NRMM simulators are capable to solve factors related to energy consumption and productivity of the NRMM. A significant variation between the test drivers is found. The results show that VERS can be used for assessing human effects on the life-cycle efficiency of NRMM. HIL simulation responses compared to that achieved with conventional simulation method demonstrate the advances and drawbacks of various possible interfaces between the simulator and hardware part of the system under study. Novel ideas for arranging the interface are successfully tested and compared with the more traditional one. The proposed process for assessing the effects of operators on the life-cycle efficiency will be applied for wider group of operators in the future. Driving styles of the operators can be analysed statistically from sufficient large result data. The statistical analysis can find the most life-cycle efficient driving style for the specific environment and machinery. The proposed control interface for HIL simulation need to be further studied. The robustness and the adaptation of the interface in different situations must be verified. The future work will also include studying the suitability of the IEHEC for different working machines using the proposed HIL simulation method.

Production unit’s overhead cost allocation with activity-based costing in food industry enterprise

The main objective of this Master’s thesis is to develop a cost allocation model for a leading food industry company in Finland. The goal is to develop an allocation method for fixed overhead expenses produced in a specific production unit and create a plausible tracking system for product costs. The second objective is to construct an allocation model and modify the created model to be suited for other units as well. Costs, activities, drivers and appropriate allocation methods are studied. This thesis is started with literature review of existing theory of ABC, inspecting cost information and then conducting interviews with officials to get a general view of the requirements for the model to be constructed. The familiarization of the company started with becoming acquainted with the existing cost accounting methods. The main proposals for a new allocation model were revealed through interviews, which were utilized in setting targets for developing the new allocation method. As a result of this thesis, an Excel-based model is created based on the theoretical and empiric data. The new system is able to handle overhead costs in more detail improving the cost awareness, transparency in cost allocations and enhancing products’ cost structure. The improved cost awareness is received by selecting the best possible cost drivers for this situation. Also the capacity changes are taken into consideration, such as usage of practical or normal capacity instead of theoretical is suggested to apply. Also some recommendations for further development are made about capacity handling and cost collection.

Cost Reduction of Permanent Magnet Synchronous Machines

Electrical machine drives are the most electrical energy-consuming systems worldwide. The largest proportion of drives is found in industrial applications. There are, however many other applications that are also based on the use of electrical machines, because they have a relatively high efficiency, a low noise level, and do not produce local pollution. Electrical machines can be classified into several categories. One of the most commonly used electrical machine types (especially in the industry) is induction motors, also known as asynchronous machines. They have a mature production process and a robust rotor construction. However, in the world pursuing higher energy efficiency with reasonable investments not every application receives the advantage of using this type of motor drives. The main drawback of induction motors is the fact that they need slipcaused and thus loss-generating current in the rotor, and additional stator current for magnetic field production along with the torque-producing current. This can reduce the electric motor drive efficiency, especially in low-speed, low-power applications. Often, when high torque density is required together with low losses, it is desirable to apply permanent magnet technology, because in this case there is no need to use current to produce the basic excitation of the machine. This promotes the effectiveness of copper use in the stator, and further, there is no rotor current in these machines. Again, if permanent magnets with a high remanent flux density are used, the air gap flux density can be higher than in conventional induction motors. These advantages have raised the popularity of PMSMs in some challenging applications, such as hybrid electric vehicles (HEV), wind turbines, and home appliances. Usually, a correctly designed PMSM has a higher efficiency and consequently lower losses than its induction machine counterparts. Therefore, the use of these electrical machines reduces the energy consumption of the whole system to some extent, which can provide good motivation to apply permanent magnet technology to electrical machines. However, the cost of high performance rare earth permanent magnets in these machines may not be affordable in many industrial applications, because the tight competition between the manufacturers dictates the rules of low-cost and highly robust solutions, where asynchronous machines seem to be more feasible at the moment. Two main electromagnetic components of an electrical machine are the stator and the rotor. In the case of a conventional radial flux PMSM, the stator contains magnetic circuit lamination and stator winding, and the rotor consists of rotor steel (laminated or solid) and permanent magnets. The lamination itself does not significantly influence the total cost of the machine, even though it can considerably increase the construction complexity, as it requires a special assembly arrangement. However, thin metal sheet processing methods are very effective and economically feasible. Therefore, the cost of the machine is mainly affected by the stator winding and the permanent magnets. The work proposed in this doctoral dissertation comprises a description and analysis of two approaches of PMSM cost reduction: one on the rotor side and the other on the stator side. The first approach on the rotor side includes the use of low-cost and abundant ferrite magnets together with a tooth-coil winding topology and an outer rotor construction. The second approach on the stator side exploits the use of a modular stator structure instead of a monolithic one. PMSMs with the proposed structures were thoroughly analysed by finite element method based tools (FEM). It was found out that by implementing the described principles, some favourable characteristics of the machine (mainly concerning the machine size) will inevitable be compromised. However, the main target of the proposed approaches is not to compete with conventional rare earth PMSMs, but to reduce the price at which they can be implemented in industrial applications, keeping their dimensions at the same level or lower than those of a typical electrical machine used in the industry at the moment. The measurement results of the prototypes show that the main performance characteristics of these machines are at an acceptable level. It is shown that with certain specific actions it is possible to achieve a desirable efficiency level of the machine with the proposed cost reduction methods.

Determinants of capital expenditures: Evidence from oil and mining sectors in Russia

This master’s thesis investigates the significant macroeconomic and firm level determinants of CAPEX in Russian oil and mining sectors. It also studies the Russian oil and mining sectors, its development, characteristics and current situation. The panel data methodology was implemented to identify the determinants of CAPEX in Russian oil and mining sectors and to test derived hypotheses. The core sample consists of annual financial data of 45 publicly listed Russian oil and mining sector companies. The timeframe of the thesis research is a six year period from 2007 to 2013. The findings of the master’s thesis have shown that Gross Sales, Return On Assets, Free Cash Flow and Long Term Debt are firm level performance variables along with Russian GDP, Export, Urals and the Reserve Fund are macroeconomic variables that determine the magnitude of new capital expenditures reported by publicly listed Russian oil and mining sector companies. These results are not controversial to the previous research paper, indeed they confirm them. Furthermore, the findings from the emerging countries, such as Malaysia, India and Portugal, are analogous to Russia. The empirical research is edifying and novel. Findings from this master’s thesis are highly valuable for the scientific community, especially, for researchers who investigate the determinant of CAPEX in developing countries. Moreover, the results can be utilized as a cogent argument, when companies and investors are doing strategic decisions, considering the Russian oil and mining sectors.

Improving Cost-Efficiency and Reducing Environmental Impacts of Intermodal Transportation with Dry Port Concept – Major Rail Transport Corridor in Baltic Sea Region

Transportation plays a major role in the gross domestic product of various nations. There are, however, many obstacles hindering the transportation sector. Cost-efficiency along with proper delivery times, high frequency and reliability are not a straightforward task. Furthermore, environmental friendliness has increased the importance of the whole transportation sector. This development will change roles inside the transportation sector. Even now, but especially in the future, decisions regarding the transportation sector will be partly based on emission levels and other externalities originating from transportation in addition to pure transportation costs. There are different factors, which could have an impact on the transportation sector. IMO’s sulphur regulation is estimated to increase the costs of short sea shipping in the Baltic Sea. Price development of energy could change the roles of different transport modes. Higher awareness of the environmental impacts originating from transportation could also have an impact on the price level of more polluting transport modes. According to earlier research, increased inland transportation, modal shift and slowsteaming can be possible results of these changes in the transportation sector. Possible changes in the transportation sector and ways to settle potential obstacles are studied in this dissertation. Furthermore, means to improve cost-efficiency and to decrease environmental impacts originating from transportation are researched. Hypothetical Finnish dry port network and Rail Baltica transport corridor are studied in this dissertation. Benefits and disadvantages are studied with different methodologies. These include gravitational models, which were optimized with linear integer programming, discrete-event and system dynamics simulation, an interview study and a case study. Geographical focus is on the Baltic Sea Region, but the results can be adapted to other geographical locations with discretion. Results indicate that the dry port concept has benefits, but optimization regarding the location and the amount of dry ports plays an important role. In addition, the utilization of dry ports for freight transportation should be carefully operated, since only a certain amount of total freight volume can be cost-efficiently transported through dry ports. If dry ports are created and located without proper planning, they could actually increase transportation costs and delivery times of the whole transportation system. With an optimized dry port network, transportation costs can be lowered in Finland with three to five dry ports. Environmental impacts can be lowered with up to nine dry ports. If more dry ports are added to the system, the benefits become very minor, i.e. payback time of investments becomes extremely long. Furthermore, dry port network could support major transport corridors such as Rail Baltica. Based on an analysis of statistics and interview study, there could be enough freight volume available for Rail Baltica, especially, if North-West Russia is part of the Northern end of the corridor. Transit traffic to and from Russia (especially through the Baltic States) plays a large role. It could be possible to increase transit traffic through Finland by connecting the potential Finnish dry port network and the studied transport corridor. Additionally, sulphur emission regulation is assumed to increase the attractiveness of Rail Baltica in the year 2015. Part of the transit traffic could be rerouted along Rail Baltica instead of the Baltic Sea, since the price level of sea transport could increase due to the sulphur regulation. Both, the hypothetical Finnish dry port network and Rail Baltica transport corridor could benefit each other. The dry port network could gain more market share from Russia, but also from Central Europe, which is the other end of Rail Baltica. In addition, further Eastern countries could also be connected to achieve higher potential freight volume by rail.