Supplier Delivery Quality Evaluation in Maintenance Supporting Spare Part Business

The focus of this thesis is the issues related to the operational purchasing level supply chain process. Due to this limitation, the physical product quality issues do not belong to the primary concerns of this thesis, whereas the bilateral processes between the supplier and the purchasing organizations are of interest. Also, the issues related to the delivery timing are excluded from the study. Because the perspective is on the issues involved in the supply chain operations, the bilateral communication issues between supplier representative and purchaser are also considered.

Vuorovaikutuksen merkitys kiinteistöpalvelujen hankinnassa

Tämä tutkielma käsittelee kiinteistöpalvelujen hankintaa hankintaorganisaation ja palveluntoimittajan välisessä rajapinnassa, vuorovaikutuksen ja tiedon näkökulmasta. Tavoitteena on etsiä keinoja laadukkaampaan ja kustannustehokkaampaan palveluun hankintatoiminnan avulla. Tutkimuksen teoreettinen viitekehys rakentuu resurssiriippuvuusteorian, palvelujen ja vuorovaikutuksen ympärille. Tutkimuskontekstina toimii kiinteistöpalveluala ja tutkimus on toteutettu kolmen teemahaastattelun avulla haastateltavien edustaessa suurimpia kiinteistöpalveluja hankkivia tahoja. Tutkimuksen perusteella sekä kiinteistöpalvelujen hankintaprosessit että hankintaosaamisen hyödyntäminen liiketoiminnassa tarvitsevat kehittämistä ja proaktiivista otetta.

Technology selection and group decision support systems: Case studies on supporting strategic technology selection processes

The objective of the dissertation is to increase understanding and knowledge in the field where group decision support system (GDSS) and technology selection research overlap in the strategic sense. The purpose is to develop pragmatic, unique and competent management practices and processes for strategic technology assessment and selection from the whole company's point of view. The combination of the GDSS and technology selection is approached from the points of view of the core competence concept, the lead user -method, and different technology types. In this research the aim is to find out how the GDSS contributes to the technology selection process, what aspects should be considered when selecting technologies to be developed or acquired, and what advantages and restrictions the GDSS has in the selection processes. These research objectives are discussed on the basis of experiences and findings in real life selection meetings. The research has been mainly carried outwith constructive, case study research methods. The study contributes novel ideas to the present knowledge and prior literature on the GDSS and technology selection arena. Academic and pragmatic research has been conducted in four areas: 1) the potential benefits of the group support system with the lead user -method,where the need assessment process is positioned as information gathering for the selection of wireless technology development projects; 2) integrated technology selection and core competencies management processes both in theory and in practice; 3) potential benefits of the group decision support system in the technology selection processes of different technology types; and 4) linkages between technology selection and R&D project selection in innovative product development networks. New type of knowledge and understanding has been created on the practical utilization of the GDSS in technology selection decisions. The study demonstrates that technology selection requires close cooperation between differentdepartments, functions, and strategic business units in order to gather the best knowledge for the decision making. The GDSS is proved to be an effective way to promote communication and co-operation between the selectors. The constructs developed in this study have been tested in many industry fields, for example in information and communication, forest, telecommunication, metal, software, and miscellaneous industries, as well as in non-profit organizations. The pragmatic results in these organizations are some of the most relevant proofs that confirm the scientific contribution of the study, according to the principles of the constructive research approach.

Capability matrix – Identifying and evaluating the key capabilities of purchasing and supply management

Organizations gain resources, skills and technologies to find out the ultimate mix of capabilities to be a winner in the competitive market. These are all important factors that need to be taken into account in organizations operating in today's business environment. So far, there are no significant studies on the organizational capabilities in the field of PSM. The literature review shows that the PSM capabilities need to be studied more comprehensively. This study attempts to reveal and fill this gap by providing the PSM capability matrix that identifies the key PSM capabilities approached from two angles: there are three primary PSM capabilities and nine subcapabilities and, moreover, the individual and organizational PSM capabilities are identified and evaluated. The former refers to the PSM capability matrix of this study which is based on the strategic and operative PSM capabilities that complement the economic ones, while the latter relates to the evaluation of the PSM capabilities, such as the buyer profiles of individual PSM capabilities and the PSMcapability map of the organizational ones. This is a constructive case study. The aim is to define what the purchasing and supply management capabilities are and how they can be evaluated. This study presents a PSM capability matrix to identify and evaluate the capabilities to define capability gaps by comparing the ideal level of PSM capabilities to the realized ones. The research questions are investigated with two case organizations. This study argues that PSM capabilities can be classified into three primary categories with nine sub-categories and, thus, a PSM capability matrix with four evaluation categories can be formed. The buyer profiles are moreover identified to reveal the PSM capability gap. The resource-based view (RBV) and dynamic capabilities view (DCV) are used to define the individual and organizational capabilities. The PSM literature is also used to define the capabilities. The key findings of this study are i) the PSM capability matrix to identify the PSM capabilities, ii) the evaluation of the capabilities to define PSM capability gaps and iii) the presentation of the buyer profiles to identify the individual PSM capabilities and to define the organizational PSM capabilities. Dynamic capabilities are also related to the PSM capability gap. If a gap is identified, the organization can renew their PSM capabilities and, thus, create mutual learning and increase their organizational capabilities. And only then, there is potential for dynamic capabilities. Based on this, the purchasing strategy, purchasing policy and procedures should be identified and implemented dynamically.

Purchasing portfolio analysis and supplier classification

The purpose of the thesis is to classify suppliers and to enhance strategic purchasing in the case company. Supplier classification is conducted to fulfill the requirements of the company quality manual and international quality standards. To gain more benefit, a strategic purchasing tool, Kraljic’s purchasing portfolio and analytical hierarchy process are utilized for the base of supplier classification. Purchasing portfolio is used to give quick and easy visual insight on product group management form the viewpoint of purchasing. From the base on purchasing portfolio alternative purchasing and supplier strategies can be formed that enhance the strategic orientation of purchasing. Thus purchasing portfolio forces the company to orient on proactive and strategic purchasing. As a result a survey method for implementing purchasing portfolio in the company is developed that exploits analytical hierarchy process. Experts from the company appoint the categorization criteria and in addition, participate in the survey to categorize product groups on the portfolio. Alternative purchasing strategies are formed. Suppliers are classified depending on the importance and characteristics of the product groups supplied.

Assessment of purchasing maturity in spare parts supply chain

To describe the change of purchasing moving from administrative to strategic function academics have put forward maturity models which help practitioners to compare their purchasing activities to industry top performers and best practices. However, none of the models aim to distinguish the purchasing maturity from the after-sales point of view, even though after-sales activities are acknowledged as a relevant source of revenue, profit and competitive advantage in most manufacturing firms. The maturity of purchasing and supply management practices have a large impact to the overall performance of the spare parts supply chain and ultimately to the value creation and relationship building for the end customer. The research was done as a case study for a European after-sales organization which is part of a globally operating industrial firm specialized in heavy machinery. The study mapped the current state of the purchasing practices in the case organization and also distinguished the relevant areas for future development. The study was based on the purchasing maturity model developed by Schiele (2007) and investigated also how applicable is the maturity model in the spare parts supply chain context. Data for the assessment was gathered using five expert interviews inside the case organization and other parties involved in the company’s spare parts supply chain. Inventory management dimension was added to the original maturity model in order to better capture the important areas in a spare parts supply chain. The added five questions were deduced from the spare parts management literature and verified as relevant areas by the case organization’s personnel. Results indicate that largest need for development in the case organization are: better collaboration between sourcing and operative procurement functions, use of installed base information in the spare parts management, training plan development for new buyers, assessment of aligned KPI’s between the supply chain parties and better defining the role of after-sales sourcing. The purchasing maturity model used in this research worked well in H&R Leading, Controlling and Inventory Management dimensions. The assessment was more difficult to conduct in the Supplier related processes, Process integration and Organizational structure –dimensions, mainly because the assessment in these sections would for some parts require more company-wide assessment. Results indicate also that the purchasing maturity model developed by Schiele (2007) captures the relevant areas in the spare parts supply as well.

IFRS 9 ‘Financial instruments’: Anticipated effects of the standard change at Kesko Group

IFRS 9 Financial instruments presents the classification and measurement, the impairment and the hedge accounting requirements for accounting of financial instruments. The standard was set by the International Accounting Standards Board to replace IAS 39 Financial instruments: Recognition and Measurement on 1 January 2018. Hence, the long-criticized and complexly experienced requirements for accounting of financial instruments will undergo the most significant reform. This thesis addresses anticipated effects of IFRS 9, focusing on the challenges the new classification and measurement requirements bring forth in the case organization Kesko. This thesis was conducted as an action research, in which, a case study method was applied. The thesis was conducted with a twofold manner, which involved general analysis of IFRS 9 and further covered distinct ambitions related to the case organization. For the general part, empirical data was gathered by interviewing two IFRS experts from KPMG and PwC, while the interviews within the case organization constituted for the case study. Further, the literature on the IFRS 9 was such scant that the theoretical examination was merged with the IFRS experts’ quotations that also strived to contribute to the overall objective of reinforcing the body of research related to the subject. This thesis indicates that IFRS 9 will most fundamentally reform the impairment and the hedge accounting requirements of financial instruments. Regard to impairment, the changes are anticipated to increase the amount of loan-loss provisions, whereas the relaxed hedge accounting requirements are expected to encourage more companies to commence the application of hedge accounting. The thesis provides empirical support on that the term business model for managing financial assets, introduced in IFRS 9, is ably hard to comprehend and remains ambiguous. It goes on to argue that the most prominent issue in defining the business model for managing financial assets is the limits set in IFRS 9 for selling financial assets. In consideration of Kesko, this thesis finds that the key effects of IFRS 9 are anticipated to be the reshaping of the organization’s treasury policy and further examination of the possibility to apply hedge accounting for foreign exchange derivatives. What is more, the thesis presumes that complying the requirements of IFRS 9 Kesko will apply the hold to collect and sell model for managing financial assets in future.