Value added logistics in supply and demand chains. Smile. Part 1. eBusiness between global company and itslocal sme supplier network

VALOSADE (Value Added Logistics in Supply and Demand Chains) is the research project of Anita Lukka's VALORE (Value Added Logistics Research) research team inLappeenranta University of Technology. VALOSADE is included in ELO (Ebusiness logistics) technology program of Tekes (Finnish Technology Agency). SMILE (SME-sector, Internet applications and Logistical Efficiency) is one of four subprojects of VALOSADE. SMILE research focuses on case network that is composed of small and medium sized mechanical maintenance service providers and global wood processing customers. Basic principle of SMILE study is communication and ebusiness insupply and demand network. This first phase of research concentrates on creating backgrounds for SMILE study and for ebusiness solutions of maintenance case network. The focus is on general trends of ebusiness in supply chains and networksof different industries; total ebusiness system architecture of company networks; ebusiness strategy of company network; information value chain; different factors, which influence on ebusiness solution of company network; and the correlation between ebusiness and competitive advantage. Literature, interviews and benchmarking were used as research methods in this qualitative case study. Networks and end-to-end supply chains are the organizational structures, which can add value for end customer. Information is one of the key factors in these decentralized structures. Because of decentralization of business, information is produced and used in different companies and in different information systems. Information refinement services are needed to manage information flows in company networksbetween different systems. Furthermore, some new solutions like network information systems are utilised in optimising network performance and in standardizingnetwork common processes. Some cases have however indicated, that utilization of ebusiness in decentralized business model is not always a necessity, but value-add of ICT must be defined case-specifically. In the theory part of report, different ebusiness and architecture models are introduced. These models are compared to empirical case data in research results. The biggest difference between theory and empirical data is that models are mainly developed for large-scale companies - not for SMEs. This is due to that implemented network ebusiness solutions are mainly large company centered. Genuine SME network centred ebusiness models are quite rare, and the study in that area has been few in number. Business relationships between customer and their SME suppliers are nowadays concentrated more on collaborative tactical and strategic initiatives besides transaction based operational initiatives. However, ebusiness systems are further mainly based on exchange of operational transactional data. Collaborative ebusiness solutions are in planning or pilot phase in most case companies. Furthermore, many ebusiness solutions are nowadays between two participants, but network and end-to-end supply chain transparency and information systems are quite rare. Transaction volumes, data formats, the types of exchanged information, information criticality,type and duration of business relationship, internal information systems of partners, processes and operation models (e.g. different ordering models) differ among network companies, and furthermore companies are at different stages on networking and ebusiness readiness. Because of former factors, different customer-supplier combinations in network must utilise totally different ebusiness architectures, technologies, systems and standards.

Value Processingin Organizations - Individual Perceptions in Three Case Companies

Values and value processes are said to be needed in every organization nowadays, as the world is changing and companies have to have something to "keep it together". Organizational values, which are approvedand used by the personnel, could be the key. Every organization has values. But what is the real value of values? The greatest and most crucial challenge is the feasibility of the value process. The main point in this thesis is tostudy how organizational members at different hierarchical levels perceive values and value processes in their organizations. This includes themes such as how values are disseminated, the targets of value processing, factors that affect the process, problems that occur during the value implementation and improvements that could be made when organizational values are implemented. These subjects are studied from the perspective of organizational members (both managers and employees); individuals in the organizations. The aim is to get the insider-perspective on value processing, from multiple hierarchical levels. In this research I study three different organizations (forest industry, bank and retail cooperative) and their value processes. The data is gathered from companies interviewing personnel in the head office and at the local level. The individuals areseen as members of organizations, and the cultural aspect is topical throughout the whole study. Values and cultures are seen as the 'actuality of reality' of organizations, interpreted by organizational members. The three case companies were chosen because they represented different lines of business and they all implemented value processing differently. Sincethe emphasis in this study is at the local level, the similar size of the local units was also an important factor. Values are in 'fashion' -but what does the fashion tell us about the real corporate practices? In annual reports companies emphasize the importance and power of official values. But what is the real 'point' of values? Values are publicly respected and advertised, but still it seems that the words do not meet the deeds. There is a clear conflict between theoretical, official and substantive organizational values: in the value processing from words to real action. This contradiction in value processing is studied through individual perceptions in this study. I study the kinds of perceptions organizationalmembers have when values are processed from the head office to the local level: the official value process is studied from the individual's perspective. Value management has been studied more during the 1990's. The emphasis has usually been on managers: how they consider the values in organizations and what effects it has on the management. Recent literature has emphasized values as tools for improving company performance. The value implementation as a process has been studied through 'good' and 'bad' examples, as if one successful value process could be copied to all organizations. Each company is different with different cultures and personnel, so no all-powerful way of processing values exists. In this study, the organizational members' perceptions at different hierarchical levels are emphasized. Still, managers are also interviewed; this is done since managerial roles in value dissemination are crucial. Organizational values cannot be well disseminated without management; this has been proved in several earlier studies (e.g. Kunda 1992, Martin 1992, Parker 2000). Recent literature has not sufficiently emphasized the individual's (organizational member's) role in value processing. Organizations consist of differentindividuals with personal values, at all hierarchical levels. The aim in this study is to let the individual take the floor. Very often the value process is described starting from the value definition and ending at dissemination, and the real results are left without attention. I wish to contribute to this area. Values are published officially in annual reports etc. as a 'goal' just like profits. Still, the results/implementationof value processing is rarely followed, at least in official reports. This is a very interesting point: why do companies espouse values, if there is no real control or feedback after the processing? In this study, the personnel in three different companies is asked to give an answer. In the empirical findings, there are several results which bring new aspects to the research area of organizational values. The targets of value processing, factors effecting value processing, the management's roles and the problems in value implementation are presented through the individual's perspective. The individual's perceptions in value processing are a recurring theme throughout the whole study. A comparison between the three companies with diverse value processes makes the research complete

Measuring organizational capabilities in the engineering and consulting industry

Tämän työn tarkoituksena oli tutkia kuinka organisaation kyvykkyyksiä voidaan mitata engineering- ja konsultointialalla käyttämällä ns. kyvykkyysauditointimenetelmää. Päämotiivit aineettoman omaisuuden mittaamiseksi tunnistettiin kirjallisuuskatsauksen pohjalta. Erilaisten menetelmien etuja ja haittoja tutkittiin, jotta kyvykkyysauditoinnin suorittamiseen liittyvät haasteet ja vaatimukset tulisivat tunnistetuiksi. Kyvykkyysauditoinnin rakentaminen vaati teollisuudenalan erityispiirteiden tunnistamista. Niiksi havaittiin tietointensiivisyys ja projektikeskeisyys. Auditoinnin implementaatioprosessi koostui neljästä osasta, joista kolmen ensimmäisen suorittamiseen case-yritys antoi merkittävän panoksensa. Kriittisten menestystekijöiden selvittämisen jälkeen voitiin niihin vaikuttavat organisaation kyvykkyydet tunnistaa ja arviointi suorittaa. Arvioinnit kerättiin sisäisiltä ja ulkoisilta arvioijilta, ja ne muodostivat pohjan analyysille, joka selvitti yrityksen kehittämistarpeita. Kyvykkyysauditoinnin hyödyiksi laskettiin kasvanut tietämys yrityksen vahvuuksista ja heikkouksista sekä mahdollisuus tarkkailla säännöllisesti sen kokonaissuorituskykyä ja parantaa sitä.

Coopetitive advantage – How firms create and appropriate value by collaborating with their competitors

Collaboration between competing firms (coopetition) has emerged as an important issue forn business practice in many industries. Extant literature has examined coopetition on many levels of analysis, but lacks clarity in distinguishing it explicitly from cooperation between noncompeting organizations. Because of this, the performance implications of coopetition from the perspective of an individual firm are still ambiguous – some research suggests positive results whereas other studies suggest detrimental outcomes. The aim in this dissertation is to narrow these gaps by exploring how firms create and appropriate value through collaboration with their competitors. The dissertation is divided into two parts. The first part comprises an overview of the relevant literature, as well as the conclusions of the whole study, and the second part includes six research publications. Both qualitative and quantitative methodologies are utilized. The results suggest that coopetition embodies the distinctive logic of value creation and appropriation from the perspective of an individual firm, and thus differs in terms of performance implications from cooperation between non-competitors. The distinction comes from the fact that competitors have somewhat similar understanding, capabilities and interest related to certain markets, which is potentially both challenging and beneficial in terms of the individual firm’s competitiveness. It appears from the findings that there are distinctive firm-external and firm-specific factors affecting the success of a coopetition strategy. This study makes three main contributions. First, on the conceptual level it shows the distinction between coopetition and cooperation between non-rivals as a collaborative inter-organizational relationship. Secondly, it sets out a framework and propositions that enhance understanding of how value is created and appropriated in coopetition from the perspective of an individual firm. Thirdly, it offers empirical evidence of how coopetition affects firms’ innovation and market performance, and identifies the focal internal and external factors involved. In general terms, the thesis adds to our knowledge of how a firm can successfully utilize a coopetition strategy in its pursuit of improved performance.

Organizational learning from customer interaction

In the fierce competition of today‟s business world an organization‟s capacity to learn maybe its only competitive advantage. This research aims at increasing the understanding on how organizational learning from the customer happens in technology companies. In doing so it provides a synthesized definition of organizational learning and investigates processes of organizational learning within technology companies. A qualitative research method and in-depth interviews with different sized high technology companies, as applied here, enables in-depth study of the learning processes. Research contributes to the understanding of what type of knowledge firms acquire, how new knowledge is transferred and used in a learning firm‟s routines and processes. Research findings show that SMEs and large size companies also, depending on their position in the software value chain, consider different knowledge types as most important and that they use different learning methods to acquire knowledge from their customers.

Applying organizational core values in everyday delivery work - case Accenture

The purpose of this thesis is to study organizational core values and their application in practice. With the help of literature, the thesis discusses the implementation of core values and the benefits that companies can gain by doing it successfully. Also, ways in which companies can improve their values’ application to their everyday work are presented. The case company’s value implementation is evaluated through a survey research conducted on their employees. The true power of values lies in their application, and therefore, core values should be the basis for all organizational behavior, integrated into everything a company does. Applying values in practice is an ongoing process and companies should continuously work towards creating a more value-based organizational culture. If a company does this effectively, they will most likely become more successful with stakeholders as well as financially. Companies looking to turn their values into actions should start with a self-assessment. Employee surveys are effective in assessing the current level of value implementation, since employees have valuable, first-hand information regarding the situations and behaviors they face in their everyday work. After the self-assessment, things like management commitment, communication, training, and support are key success factors in value implementation.

The demand for global student talent: Capitalizing on the value of university-industry collaboration

The university sector in Europe has invested money and effort into the internationalization of higher education. The benefits of internationalizing higher education are fuelled by changing global values, choices and practices. However, arguments that serve the internationalization of higher education tend to stress either local organizational or individual interests; seldom do they emphasize the societal benefits. This dissertation investigates how collaboration between university and industry facilitates a shift in thinking about attracting and retaining global student talent, in terms of co-creating solutions to benefit the development of our knowledge society. The macro-structures of the higher education sector have the tendency to overemphasize quantitative goals to improve performance verifiability. Recruitment of international student talent is thereby turned into a mere supply issue. A mind shift is needed to rethink the efficacy of the higher education sector with regard to retaining foreign student talent as a means of contributing to society’s stock of knowledge and through that to economic growth. This thesis argues that academic as well as industrial understanding of the value of university-industry collaboration might then move beyond the current narrow expectations and perceptions of the university’s contribution to society’s innovation systems. This mind shift is needed to encourage and generate creative opportunities for university-industry partnerships to develop sustainable solutions for successful recruitment of foreign student talent, and thereby to maximize the wealth-creating potential of global student talent recruitment. This thesis demonstrates through the use of interpretive and participatory methods, how it is possible to reveal new and important insights into university-industry partnering for enhancing attraction and retention of global student talent. It accomplishes this by expressly pointing out the central role of human collaborative experiencing and learning. The narratives presented take the reader into a Finnish and Dutch universityindustry partnering environment to reflect on the relationship between the local universities of technology and their operational surroundings, a relationship that is set in a context of local and global entanglements and challenges.

Automated Purchase to Pay Process Value Modeling and Comparative Process Speeds

The importance of efficient supply chain management has increased due to globalization and the blurring of organizational boundaries. Various supply chain management technologies have been identified to drive organizational profitability and financial performance. Organizations have historically been concentrating heavily on the flow of goods and services, while less attention has been dedicated to the flow of money. While supply chains are becoming more transparent and automated, new opportunities for financial supply chain management have emerged through information technology solutions and comprehensive financial supply chain management strategies. This research concentrates on the end part of the purchasing process which is the handling of invoices. Efficient invoice processing can have an impact on organizations working capital management and thus provide companies with better readiness to face the challenges related to cash management. Leveraging a process mining solution the aim of this research was to examine the automated invoice handling process of four different organizations. The invoice data was collected from each organizations invoice processing system. The sample included all the invoices organizations had processed during the year 2012. The main objective was to find out whether e-invoices are faster to process in an automated invoice processing solution than scanned invoices (post entry into invoice processing solution). Other objectives included looking into the longest lead times between process steps and the impact of manual process steps on cycle time. Processing of invoices from maverick purchases was also examined. Based on the results of the research and previous literature on the subject, suggestions for improving the process were proposed. The results of the research indicate that scanned invoices were processed faster than e-invoices. This is mostly due to the more complex processing of e-invoices. It should be noted however that the manual tasks related to turning a paper invoice into electronic format through scanning are ignored in this research. The transitions with the longest lead times in the invoice handling process included both pre-automated steps as well as manual steps performed by humans. When the most common manual steps were examined in more detail, it was clear that these steps had a prolonging impact on the process. Regarding invoices from maverick purchases the evidence shows that these invoices were slower to process than invoices from purchases conducted through e-procurement systems and from preferred suppliers. Suggestions on how to improve the process included: increasing invoice matching, reducing of manual steps and leveraging of different value added services such as invoice validation service, mobile solutions and supply chain financing services. For companies that have already reaped all the process efficiencies the next step is to engage in collaborative financial supply chain management strategies that can benefit the whole supply chain.

“Valley co-creation” – exploring the emergence of a cultural product in an entrepreneur-driven value network: Case study: Black Weekend festival

The interconnected domains are attracting interest from industries and academia, although this phenomenon, called ‘convergence’ is not new. Organizational research has indeed focused on uncovering co-creation for manufacturing and the industrial organization, with limited implications to entrepreneurship. Although convergence has been characterized as a process connecting seemingly disparate disciplines, it is argued that these studies tend to leave the creative industries unnoticed. With the art market boom and new forms of collaboration riding past the institution-focused arts marketing literature, this thesis takes a leap to uncover the processes of entrepreneurship in the emergence of a cultural product. As a symbolic work of synergism itself, the thesis combines organizational theory with literature in natural sciences and arts. Assuming nonlinearity, a framework is created for analysing aesthetic experience in an empirical event where network actors are connected to multiple contexts. As the focal case in study, the empirical analysis performed for a music festival organized in a skiing resort in the French Alps in March. The researcher attends the festival and models its cocreation process by enquiring from an artist, festival organisers, and a festival visitor. The findings contribute to fields of entrepreneurship, aesthetics and marketing mainly. It is found that the network actors engage in intimate and creative interaction where activity patterns are interrupted and cultural elements combined. This process is considered to both create and destruct value, through identity building, legitimisation, learning, and access to larger audiences, and it is considered particularly useful for domains where resources are too restrained for conventional marketing practices. This thesis uncovered the role of artists and informants and posits that particularly through experience design, this type of skilled individual be regarded more often as a research informant. Future research is encouraged to engage in convergence by experimenting with different fields and research designs, and it is suggested that future studies could arrive at different descriptive results.

Creating an open-books implementation framework for a maintenance-related value-based life-cycle model

This study is a qualitative action research by its nature with elements of personal design in the form of a tangible model implementation framework construction. Utilized empirical data has been gathered via two questionnaires in relation to the arranged four workshop events with twelve individual participants. Five of them represented maintenance customers, three maintenance service providers and four equipment providers respectively. Further, there are two main research objectives in proportion to the two complementary focusing areas of this thesis. Firstly, the value-based life-cycle model, which first version has already been developed prior to this thesis, requires updating in order to increase its real-life applicability as an inter-firm decision-making tool in industrial maintenance. This first research objective is fulfilled by improving appearance, intelligibility and usability of the above-mentioned model. In addition, certain new features are also added. The workshop participants from the collaborating companies were reasonably pleased with made changes, although further attention will be required in future on the model’s intelligibility in particular as main results, charts and values were all reckoned as slightly hard to understand. Moreover, upgraded model’s appearance and added new features satisfied them the most. Secondly and more importantly, the premises of the model’s possible inter-firm implementation process need to be considered. This second research objective is delivered in two consecutive steps. At first, a bipartite open-books supported implementation framework is created and its different characteristics discussed in theory. Afterwards, the prerequisites and the pitfalls of increasing inter-organizational information transparency are studied in empirical context. One of the main findings was that the organizations are not yet prepared for network-wide information disclosure as dyadic collaboration was favored instead. However, they would be willing to share information bilaterally at least. Another major result was that the present state of companies’ cost accounting systems will definitely need implementation-wise enhancing in future since accurate and sufficiently detailed maintenance data is not available. Further, it will also be crucial to create supporting and mutually agreed network infrastructure. There are hardly any collaborative models, methods or tools currently in usage. Lastly, the essential questions about mutual trust and predominant purchasing strategies are cooperation-wise important. If inter-organizational activities are expanded, a more relational approach should be favored in this regard. Mutual trust was also recognized as a significant cooperation factor, but it is hard to measure in reality.

Customer value assessment in business markets

Understanding how firms create, communicate, and deliver value to customers is a key factor when firms seek to differentiate in increasingly competitive and commoditized business markets. As product and price have become less important differentiators in many industries, suppliers are increasingly seeking ways to differentiate themselves based on delivered customer value. Therefore, to gain a holistic understanding on what their offerings are worth to the customer, suppliers need to conduct customer value assessment, which quantifies the impact of a supplier´s offering to customers’ costs and returns. However, from a managerial perspective, customer value assessment is the single most critical challenge for firms in business markets. Consequently, developing holistic frameworks for customer value assessment is seen as one of the most important research priorities for marketing research. The purpose of this study is to explore the process of customer value assessment in business markets. Business markets represent a context where an increasing number of industrial firms are transitioning from basic product offerings towards service-based and solution-oriented hybrid offerings, which emphasize value co-creation and realization in the long term, thus making it difficult to quantify their monetary value. This study employs exploratory and qualitative research design by applying inductive and discovery-oriented grounded theory and multiple case research methods. The empirical data comprise interviews with 61 managers from 12 industrial firms, including seven best practice firms in customer value assessment. The findings of this study show that customer value assessment is essentially a crossfunctional process, which involves several organizational functions. The process begins well before and continues long after the actual delivery, often until the end of a supplier´s offering’s life-cycle. Furthermore, the findings shed light on alternative strategies that firms in business markets can adopt to implement the customer value assessment process. Overall, the findings contribute to customer value research, the sales and organizational management literature, the service marketing and solutions business literature, and suggest several managerial implications on how firms in business markets can adopt a holistic approach to assess value created for customers.

Co-creating value with customers as a new approach of entering new market

Global trends associated with development of information technology, globalization, industrial and economic changes are influencing on company and customer domains and thus transforming company-customer relationship. The company centric paradigm with a strong product focus shifts to a customer oriented one with a strong emphasis on customer collaboration. As a result, the customer role changes from a passive observer to an active player. Moreover, global trends contribute to transformation of competitive environment making it tougher and simplifying an access to resources previously considered as unique. All that factors push the companies towards cooperation with customers in order to identify unarticulated needs and finding the best possible solution to existing customer problems. The Master’s Thesis is done for Outotec (Lappeenranta) which considers extension of dewatering business in Russian coal market. Research aims to identify key features of coal preparation and dewatering of fine coal and tailings in Russian preparation plants; analyze the state of Russian coal market and evaluate market potential for Outotec dewatering solutions. The study has a qualitative nature and implements an action research methodology that involves both creation of knowledge and introduction of changes into the system. The base for taking actions is formed by theoretical framework that targets on describing company - customer interaction and has selected co-creation as the most appropriate method of customer involvement. The integration of co-creation approach into an action research cycle allows not only fulfilling the research objectives but also facilitates organizational learning and intraorganizational collaboration, assists in establishing customer contacts and making the first steps into the market, bringing new joint projects to the company and opening real business opportunities.

Study on Customer Perceived Value of Container Loading Equipment

The goal of the thesis was to gain understanding of organizational buying behavior and its effect from the selling perspective and to generate base for verifying customer value propositions for Actiw Oy. The first objective was to discover the current buying decision criteria of current customers to understand the buying motives which had led to the investment initially. Second objective was to understand how the buying decision criteria and customer experiences can be turned into customer value propositions. Research was done with 16 customer interviews, which were focused on obtaining the information on the buying center and the value of the solution. Thesis goes through the main theories of OBB and the theory behind customer value management. Based on customer interviews, the currently used customer value propositions were tested and categorized into points-of-parities and points-ofdifferences. The interviews confirmed customer behavior in new task and modified rebuy situations and also gave confirmation to the internally done customer value propositions. Main finding of the study was, that as the value propositions are possible to present more specifically to each new case instead of using all benefits at the same time.

Value perceptions of measurement and monitoring system customers

The value that the customer perceives from a supplier’s offering, impacts customer’s decision making and willingness to pay at the time of the purchase, and the overall satisfaction. Thus, for a business supplier, it is critical to understand their customers’ value perceptions. The objective of this thesis is to understand what measurement and monitoring system customers value, by examining their key purchasing criteria and perceived benefits. Theoretical part of this study consists on reviewing relevant literature on organizational buying behavior and customer perceived value. This study employs a qualitative interview research method. The empirical part of this research consisted of conducting 20 in-depth interviews with life science customers in USA and in Europe. Quality and technical features are the most important purchasing criteria, while product-related benefits seem to be the most important perceived benefits. At the marketing of the system, the emphasis should be at which regulations the system complies with, references of supplier’s prior experience, the reliability and usability of the system, and total costs. The benefits that should be emphasized are the better control of customer’s process, and the proof of customer’s product quality

Creating Value for Corporate Sustainability: Stakeholder Engagement

The thesis aims to build a coherent view and understanding of stakeholder engagement’s contribution to corporate sustainability value creation. Theory suggests that corporate sustainability relies on sustainable relationships between the firm and its multiple stakeholders. This study is qualitative and evidence is derived from integrative analysis of literature, secondary data and case study analysis. The findings from the interviews analysis supplement the framework developed as the results of the literature review. The results obtained throughout the thesis research imply that stakeholder engagement helps develop more thorough understandings of issues and alternative perspectives, which in turn facilitates the decision-making processes improvement. The improvement is also achieved through ethical analysis, by weighing the impact of firm’s decisions on all relevant groups. Therefore, clear communication and exchange of information also improve the acceptance of sustainability initiatives amongst stakeholders both in terms of building trust and managing expectations. As practical implications, this thesis presents organizational practices that can be employed by companies to support effective engagement with stakeholders. The described practices could enhance processes such as partnership and co-creation resulting in greater sustainable development.