Drivers and Barriers of Collaboration in the Value Chain of Paperboard-Packed Consumer Goods

Value chain collaboration has been a prevailing topic for research, and there is a constantly growing interest in developing collaborative models for improved efficiency in logistics. One area of collaboration is demand information management, which enables improved visibility and decrease of inventories in the value chain. Outsourcing of non-core competencies has changed the nature of collaboration from intra-enterprise to cross-enterprise activity, and this together with increasing competition in the globalizing markets have created a need for methods and tools for collaborative work. The retailer part in the value chain of consumer packaged goods (CPG) has been studied relatively widely, proven models have been defined, and there exist several best practice collaboration cases. The information and communications technology has developed rapidly, offering efficient solutions and applications to exchange information between value chain partners. However, the majority of CPG industry still works with traditional business models and practices. This concerns especially companies operating in the upstream of the CPG value chain. Demand information for consumer packaged goods originates at retailers' counters, based on consumers' buying decisions. As this information does not get transferred along the value chain towards the upstream parties, each player needs to optimize their part, causing safety margins for inventories and speculation in purchasing decisions. The safety margins increase with each player, resulting in a phenomenon known as the bullwhip effect. The further the company is from the original demand information source, the more distorted the information is. This thesis concentrates on the upstream parts of the value chain of consumer packaged goods, and more precisely the packaging value chain. Packaging is becoming a part of the product with informative and interactive features, and therefore is not just a cost item needed to protect the product. The upstream part of the CPG value chain is distinctive, as the product changes after each involved party, and therefore the original demand information from the retailers cannot be utilized as such – even if it were transferred seamlessly. The objective of this thesis is to examine the main drivers for collaboration, and barriers causing the moderate adaptation level of collaborative models. Another objective is to define a collaborative demand information management model and test it in a pilot business situation in order to see if the barriers can be eliminated. The empirical part of this thesis contains three parts, all related to the research objective, but involving different target groups, viewpoints and research approaches. The study shows evidence that the main barriers for collaboration are very similar to the barriers in the lower part of the same value chain; lack of trust, lack of business case and lack of senior management commitment. Eliminating one of them – the lack of business case – is not enough to eliminate the two other barriers, as the operational model in this thesis shows. The uncertainty of the future, fear of losing an independent position in purchasing decision making and lack of commitment remain strong enough barriers to prevent the implementation of the proposed collaborative business model. The study proposes a new way of defining the value chain processes: it divides the contracting and planning process into two processes, one managing the commercial parts and the other managing the quantity and specification related issues. This model can reduce the resistance to collaboration, as the commercial part of the contracting process would remain the same as in the traditional model. The quantity/specification-related issues would be managed by the parties with the best capabilities and resources, as well as access to the original demand information. The parties in between would be involved in the planning process as well, as their impact for the next party upstream is significant. The study also highlights the future challenges for companies operating in the CPG value chain. The markets are becoming global, with toughening competition. Also, the technology development will most likely continue with a speed exceeding the adaptation capabilities of the industry. Value chains are also becoming increasingly dynamic, which means shorter and more agile business relationships, and at the same time the predictability of consumer demand is getting more difficult due to shorter product life cycles and trends. These changes will certainly have an effect on companies' operational models, but it is very difficult to estimate when and how the proven methods will gain wide enough adaptation to become standards.

The role of emotions in value creation for families in pediatric health care

The purpose of this study was to analyze emotions related to a child’s critical illness from the perspective of the family and discuss the link those emotions might form with value creation. High quality service is of paramount importance in hospital care, especially when a child is diagnosed with critical illness. Through the analysis of patient family emotions and their triggers, the study was aiming to deepen the understanding of value creation for customer. Therefore, the research sought to find answers to the following three sub-questions: 1. What are the emotions experienced? 2. What triggers them? 3. How are the emotions linked to amelioration or aggravation of value for patient and family? The theoretical background of this research is built on two core concepts: emotions and value creation. As both concepts are wide and multifaceted, the research concentrates on viewing emotions from the applicable cognitive angle, identifying and categorizing emotions in a general level. Value creation is studied from the service perspective, discussing the possible relations between emotions and value creation. Moreover, the suitability of views regarding customer value co-creation to health care encounters is analyzed. Qualitative approach was selected as the most appropriate methodology for conducting the empirical research. The empirical data was collected from public blogs, for which a total of 18 blogs were reviewed. Five blogs were selected for the analysis, which had the intent of identifying the emotions experienced by patient families and deepening the knowledge of their role in value creation during health care service encounters. The empirical study of this research discovered a wide range of positive and negative emotions, which denotes that a severe life situation does not prevent the feeling of positive emotions. Furthermore, by combining the empirical findings to the theoretical background, this study concludes that recognizing and treating the patient family as a partner and value creator is essential. The high quality technical aspect of care is vital, but it is not the sole attribute for service quality, as the interpersonal communication plays a large role in the customer’s overall assessment of the health care performance. The patients and their families largely evaluate the service encounter based on their perceptions, thus emotions play a significant role. Depending on the service experience, value maybe created or destructed. Hence, this study posits emotion at the core of the service encounter, indicating towards the importance of active assessment of customer perceptions and the recognition of the emotional states

Creating and measuring customer value in digital businesses

Most economic transactions nowadays are due to the effective exchange of information in which digital resources play a huge role. New actors are coming into existence all the time, so organizations are facing difficulties in keeping their current customers and attracting new customer segments and markets. Companies are trying to find the key to their success and creating superior customer value seems to be one solution. Digital technologies can be used to deliver value to customers in ways that extend customers’ normal conscious experiences in the context of time and space. By creating customer value, companies can gain the increased loyalty of existing customers and better ways to serve new customers effectively. Based on these assumptions, the objective of this study was to design a framework to enable organizations to create customer value in digital business. The research was carried out as a literature review and an empirical study, which consisted of a web-based survey and semi-structured interviews. The data from the empirical study was analyzed as mixed research with qualitative and quantitative methods. These methods were used since the object of the study was to gain deeper understanding about an existing phenomena. Therefore, the study used statistical procedures and value creation is described as a phenomenon. The framework was designed first based on the literature and updated based on the findings from the empirical study. As a result, relationship, understanding the customer, focusing on the core product or service, the product or service quality, incremental innovations, service range, corporate identity, and networks were chosen as the top elements of customer value creation. Measures for these elements were identified. With the measures, companies can manage the elements in value creation when dealing with present and future customers and also manage the operations of the company. In conclusion, creating customer value requires understanding the customer and a lot of information sharing, which can be eased by digital resources. Understanding the customer helps to produce products and services that fulfill customers’ needs and desires. This could result in increased sales and make it easier to establish efficient processes.

Increasing value add in white collar work using lean methods

The efficient indirect office work brings competitive advantage for companies in a rapidly changing business environment. The direct work methods in factory floors have been developed already for decades, but the office work is an area where the potential to improve the value add has not been studied and utilized systematically so far. The first objective of the thesis work is to find useful method for identifying and managing value add using literature. The usefulness of the method is validated in the case company`s environment. The second objective of the work is to understand what kind of effort is required to create more efficient target setting for the white collar employees. The operative level targets should be linked more tightly to the company strategy. Lean methods are selected as a tool for the improvement, since they are widely used in all kinds of industries and they are already familiar in other functions in the case company. Based on the literature review, suitable improvement methods are selected. The core of the lean is to identify the value add of a customer and eliminate the waste. Also visual control, cross functional work team, flow office and continuous improvement are used. The methods are tested in one production line and the results and feedback indicate that methods are useful in the studied environment.