Distribution systems of the food sector in Russia: the perspective of Finnish food industry

Finnish food producers' trade with Russia has experienced profound changes since the collapse of the Soviet Union. Simultaneously, the distribution systems of foodstuffs have changed remarkably. This study sheds some light into these changes and analyses the current situation in distribution systems of foodstuffs in Russia. In addition, the study discusses the possibilities of Finnish food producers to get more of their products to the shelves of Russian food retail stores. Before the 1998 financial crisis, the import of foreign foodstuffs was booming in Russia due to the overvalued rouble. As a result of the financial crisis, food import collapsed. The export of Finnish foodstuffs to Russia has been slowly recovering during the past few years, but in the most important product categories the pre-crisis levels have so far not been reached and maybe will not be reached. In certain product categories the growth has been only marginal. It seems that starting localproduction will become increasingly important in the future. This is further encouraged by the fact that Russian consumers favour domestic food products. Russian consumers are very price conscious and demand quality in food products. The perceived price-quality ratio is an important criterion in the purchase decision.The majority of foodstuff retail is still conducted via unorganised forms of trade (e.g. kiosks and marketplaces) but modern retail chains are developing at a fast pace in Russia. They are also expected to dominate the retail trade in foodstuffs over the unorganised forms of trade in the future. This will change the distribution systems as well. The retail chains are trying to shorten the distribution chain, similarly to what has been seen in the Western countries. This together with the strengthening of retail chains is likely to shrink the role of wholesalers, as the chains increasingly want to work directly with the producers. Many large retail chains are acquiring or have already acquired a distribution centre or centres in order to boost efficiency and control the flow of products. The strengthening of the retail chains also gives them power in negotiations, which the producers and distributors have to adjust to. For example store entry fees and retail chains' own private label products pose challenges to the food producers. In the food production sector the competition is fierce, as large Russianand foreign producers want to ensure their piece of the market. The largest producers utilise their size: they invest in big marketing campaigns and are willing to pay high entry fees to retail chains in order to secure a place on the store shelves and to build a strong brand in Russia. This complicates the situation from the viewpoint of small producers. Currently, the most popular type of distribution system among the interviewed Finnish food producers is based on a network of local distributors. There is, however, a strong consensus on the importanceof starting local production in order to be a serious actor in Russia in the future. Factors that hinder the starting of local production include the lack of local infrastructure and qualified staff, and the low risk tolerance of Finnish firms. Major barriers for entry in Russia are the actions of authorities, fierce competition, fragmented market and Finnish producers' heavy production costs. The suggested strategies for increasing the market share include focusing geographically or segment-wise, introducing new products, starting local production, andcooperation between Finnish producers. Smallness was one reason why Finnish producers had to cut down their operations in Russia due to the 1998 crisis. Smaller producers had fewer resources to tolerate losses during the period of crisis. Smallness is reflected also on trade negotiations with retail chains and distributors. It makes it harder to cope with the store entry fees and to differentiatefrom the mass of products propped up by expensive advertising. Finally, it makes it harder for Finnish producers to start or expand local production, as it is more difficult for a small producer to get financing and to tolerate the increased risks. Compensating for the smallness might become the crucial factor determining the future success of Finnish food producers in the Russian market.

New Operation Model for Maintenance Material Logistics in Paper Industry

This research report illustrates and examines new operation models for decreasing fixed costs and transforming them into variable costs in the field of paper industry. The report illustrates two cases - a new operation model for material logistics in maintenance and an examination of forklift truck fleet outsourcing solutions. Conventional material logistics in maintenance operation is illustrated and some problems related to conventional operation are identified. A new operation model that solves some of these problems is presented including descriptions of procurement and service contracts and sources of added value. Forklift truck fleet outsourcing solutions are examined by illustrating the responsibilities of a host company and a service provider both before and after outsourcing. The customer buys outsourcingservices in order to improve its investment productivity. The mechanism of how these services affect the customer company's investment productivity is illustrated.

Value added logistics in supply and demand chain. Smile. Part 2. eBusiness in a service business. Case: A maintenance and operations network in forest industry

VVALOSADE is a research project of professor Anita Lukka's VALORE research team in the Lappeenranta University of Technology. The VALOSADE includes the ELO technology program of Tekes. SMILE is one of four subprojects of the VALOSADE. The SMILE study focuses on the case of the company network that is composed of small and micro-sized mechanical maintenance service providers and forest industry as large-scale customers. The basic principle of the SMILE study is the communication and ebusiness in supply and demand networks. The aim of the study is to develop ebusiness strategy, ebusiness model and e-processes among the SME local service providers, and onthe other hand, between the local service provider network and the forest industry customers in a maintenance and operations service business. A literature review, interviews and benchmarking are used as research methods in this qualitative case study. The first SMILE report, 'Ebusiness between Global Company and Its Local SME Supplier Network', concentrated on creating background for the SMILE study by studying general trends of ebusiness in supply chains and networks of different industries. This second phase of the study concentrates on case network background, such as business relationships, information systems and business objectives; core processes in maintenance and operations service network; development needs in communication among the network participants; and ICT solutions to respond needs in changing environment. In the theory part of the report, different ebusiness models and frameworks are introduced. Those models and frameworks are compared to empirical case data. From that analysis of the empirical data, therecommendations for the development of the network information system are derived. In process industry such as the forest industry, it is crucial to achieve a high level of operational efficiency and reliability, which sets up great requirements for maintenance and operations. Therefore, partnerships or strategic alliances are needed between the network participants. In partnerships and alliances, deep communication is important, and therefore the information systems in the network also are critical. Communication, coordination and collaboration will increase in the case network in the future, because network resources must be optimised to improve competitive capability of the forest industry customers and theefficiency of their service providers. At present, ebusiness systems are not usual in this maintenance network. A network information system among the forest industry customers and their local service providers actually is the only genuinenetwork information system in this total network. However, the utilisation of that system has been quite insignificant. The current system does not add value enough either to the customers or to the local service providers. At present, thenetwork information system is the infomediary that share static information forthe network partners. The network information system should be the transaction intermediary, which integrates internal processes of the network companies; the network information system, which provides common standardised processes for thelocal service providers; and the infomediary, which share static and dynamic information on right time, on right partner, on right costs, on right format and on right quality. This study provides recommendations how to develop this system in the future to add value to the network companies. Ebusiness scenarios, vision, objectives, strategies, application architecture, ebusiness model, core processes and development strategy must be considered when the network information system will be developed in the next development step. The core processes in the case network are demand/capacity management, customer/supplier relationship management, service delivery management, knowledge management and cash flow management. Most benefits from ebusiness solutions come from the electrifying of operational level processes, such as service delivery management and cash flow management.

Value added logistical support service Part 2. Outsourcing process of spare part logistics in metal industry

The aim of this research study was to find out guidelines for outsourcing of logistics processes. The study was outlined to spare parts and `business-to-business' (B2B) markets in metal industry. This study can be applied as a manual for outsourcing especially warehousing and transportation activities. The study also touches other important areas of spare part logistics like manufacturing, customer service, procurement, quality control, reverse and recycling logistics, logistics technologies and valueadded services. The method of study consisted of three areas. Firstly exchanging views with logistics experts in participating companies, and secondly compiling material based on author's practical experience in logistics business with several international and domestic logistics service providers and vendors. Thirdlythe study includes also references to literature material. Due to the fact thatthe outsourcing of logistics functions can be handled widely and from differentpoint of views, in this study it is concentrated mainly on giving general levelguidelines for defining logistics strategy, hints both for tendering process and implementation project, and not forgetting the aftercare of business partnership.

Aspects on Process Engineering in the Finnish Pulp and Paper Industry : Thesis for the Degree of Licentiate in Science of Technology

Process development will be largely driven by the main equipment suppliers. The reason for this development is their ambition to supply complete plants or process systems instead of single pieces of equipment. The pulp and paper companies' interest lies in product development, as their main goal is to create winning brands and effective brand management. Design engineering companies will find their niche in detail engineering based on approved process solutions. Their development work will focus on increasing the efficiency of engineering work. Process design is a content-producing profession, which requires certain special characteristics: creativity, carefulness, the ability to work as a member of a design team according to time schedules and fluency in oral as well as written presentation. In the future, process engineers will increasingly need knowledge of chemistry as well as information and automation technology. Process engineering tools are developing rapidly. At the moment, these tools are good enough for static sizing and balancing, but dynamic simulation tools are not yet good enough for the complicated chemical reactions of pulp and paper chemistry. Dynamic simulation and virtual mill models are used as tools for training the operators. Computational fluid dynamics will certainlygain ground in process design.

Challenges in packaging waste management: A case study in the fast food industry

The main research problem of this thesis is to find out the means of promoting the recovery of packaging waste generated in thefast food industry. The recovery of packaging waste generated in the fast food industry is demanded by the packaging waste legislation and expected by the public. The means are revealed by the general factors influencing the recovery of packaging waste, analysed by a multidisciplinary literature review and a case study focusing on the packaging waste managementof McDonald's Oy operating in Finland. The existing solid waste infrastructure does not promote the recovery ofpackaging waste generated in the fast food industry. The theoretical recovery rate of the packaging waste is high, 93 %, while the actual recovery rate is only 29 % consisting of secondary packaging manufactured from cardboard. The total recovery potential of packaging waste is 64 %, resulting in 1 230 tonnes ofrecoverable packaging waste. The achievable recovery potential of 33 %, equalling 647 tonnes of packaging waste could be recovered, but is not recovered mainly because of non-working waste management practises. The theoretical recovery potential of 31 %, equalling 583 tonnes of packaging waste can not be recovered by the existing solid waste infrastructure because of the obscure status of commecial waste, the improper operation ofproducer organisations, and the municipal autonomy. The sorting experiment indicated that it is possible to reach the achievable recovery potential inthe existing solid waste infrastructure. The achievement is promoted by waste producer -oriented waste management practises. The theoretical recovery potential can be reached by increasing the consistency of the solid waste infrastructure through governmental action.

The effects of productivity on profitability: a case study at firm level using an activity-based costing approach

Productivity and profitability are important concepts and measures describing the performance and success of a firm. We know that increase in productivity decreases the costs per unit produced and leads to better profitability. This common knowledge is not, however, enough in the modern business environment. Productivity improvement is one means among others for increasing the profitability of actions. There are many means to increase productivity. The use of these means presupposes operative decisions and these decisions presuppose informationabout the effects of these means. Productivity improvement actions are in general made at floor level with machines, cells, activities and human beings. Profitability is most meaningful at the level of the whole firm. It has been very difficult or even impossible to analyze closely enough the economical aspects of thechanges at floor level with the traditional costing systems. New ideas in accounting have only recently brought in elements which make it possible to considerthese phenomena where they actually happen. The aim of this study is to supportthe selection of objects to productivity improvement, and to develop a method to analyze the effects of the productivity change in an activity on the profitability of a firm. A framework for systemizing the economical management of productivity improvement is developed in this study. This framework is a systematical way with two stages to analyze the effects of productivity improvement actions inan activity on the profitability of a firm. At the first stage of the framework, a simple selection method which is based on the worth, possibility and the necessity of the improvement actions in each activity is presented. This method is called Urgency Analysis. In the second stage it is analyzed how much a certain change of productivity in an activity affects the profitability of a firm. A theoretical calculation model with which it is possible to analyze the effects of a productivity improvement in monetary values is presented. On the basis of this theoretical model a tool is made for the analysis at the firm level. The usefulness of this framework was empirically tested with the data of the profit center of one medium size Finnish firm which operates in metal industry. It is expressedthat the framework provides valuable information about the economical effects of productivity improvement for supporting the management in their decision making.

Permanent magnet synchronous motor for industrial inverter applications - analysis and design

During the latest few years the need for new motor types has grown, since both high efficiency and an accurate dynamic performance are demanded in industrial applications. For this reason, new effective control systems such as direct torque control (DTC) have been developed. Permanent magnet synchronous motors (PMSM) are well suitable for new adjustable speed AC inverter drives, because their efficiency and power factor are not depending on the pole pair number and speed to the same extent as it is the case in induction motors. Therefore, an induction motor (IM) with a mechanical gearbox can often be replaced with a direct PM motor drive. Space as well as costs will be saved, because the efficiency increases and the cost of maintenance decreases as well. This thesis deals with design criterion, analytical calculation and analysis of the permanent magnet synchronous motor for both sinusoidal air-gap flux density and rectangular air-gapflux density. It is examined how the air-gap flux, flux densities, inductances and torque can be estimated analytically for salient pole and non-salient pole motors. It has been sought by means of analytical calculations for the ultimate construction for machines rotating at relative low 300 rpm to 600 rpm speeds, which are suitable speeds e.g. in Pulp&Paper industry. The calculations are verified by using Finite Element calculations and by measuring of prototype motor. The prototype motor is a 45 kW, 600 rpm PMSM with buried V-magnets, which is a very appropriate construction for high torque motors with a high performance. With the purposebuilt prototype machine it is possible not only to verify the analytical calculations but also to show whether the 600 rpm PMSM can replace the 1500 rpm IM with a gear. It can also be tested if the outer dimensions of the PMSM may be the same as for the IM and if the PMSM in this case can produce a 2.5 fold torque, in consequence of which it may be possible to achieve the same power. The thesis also considers the question how to design a permanent magnet synchronous motor for relatively low speed applications that require a high motor torqueand efficiency as well as bearable costs of permanent magnet materials. It is shown how a selection of different parameters affects the motor properties. Key words: Permanent magnet synchronous motor, PMSM, surface magnets, buried magnets

Design of axial-flux permanent-magnet low-speed machines and performance comparison between radial-flux and axial-flux machines

This thesis presents an alternative approach to the analytical design of surface-mounted axialflux permanent-magnet machines. Emphasis has been placed on the design of axial-flux machines with a one-rotor-two-stators configuration. The design model developed in this study incorporates facilities to include both the electromagnetic design and thermal design of the machine as well as to take into consideration the complexity of the permanent-magnet shapes, which is a typical requirement for the design of high-performance permanent-magnet motors. A prototype machine with rated 5 kW output power at 300 min-1 rotation speed has been designed and constructed for the purposesof ascertaining the results obtained from the analytical design model. A comparative study of low-speed axial-flux and low-speed radial-flux permanent-magnet machines is presented. The comparative study concentrates on 55 kW machines with rotation speeds 150 min-1, 300 min-1 and 600 min-1 and is based on calculated designs. A novel comparison method is introduced. The method takes into account the mechanical constraints of the machine and enables comparison of the designed machines, with respect to the volume, efficiency and cost aspects of each machine. It is shown that an axial-flux permanent-magnet machine with one-rotor-two-stators configuration has generally a weaker efficiency than a radial-flux permanent-magnet machine if for all designs the same electric loading, air-gap flux density and current density have been applied. On the other hand, axial-flux machines are usually smaller in volume, especially when compared to radial-flux machines for which the length ratio (axial length of stator stack vs. air-gap diameter)is below 0.5. The comparison results show also that radial-flux machines with alow number of pole pairs, p < 4, outperform the corresponding axial-flux machines.

The effects of potentiallydisruptive technology on business model - a case study of new technologies in ICT industry

This study examines how firms interpret new, potentially disruptive technologies in their own strategic context. The work presents a cross-case analysis of four potentially disruptive technologies or technical operating models: Bluetooth, WLAN, Grid computing and Mobile Peer-to-peer paradigm. The technologies were investigated from the perspective of three mobile operators, a device manufacturer and a software company in the ICT industry. The theoretical background for the study consists of the resource-based view of the firm with dynamic perspective, the theories on the nature of technology and innovations, and the concept of business model. The literature review builds up a propositional framework for estimating the amount of radical change in the companies' business model with two middle variables, the disruptiveness potential of a new technology, and the strategic importance of a new technology to a firm. The data was gathered in group discussion sessions in each company. The results of each case analysis were brought together to evaluate, how firms interpret the potential disruptiveness in terms of changes in product characteristics and added value, technology and market uncertainty, changes in product-market positions, possible competence disruption and changes in value network positions. The results indicate that the perceived disruptiveness in terms ofproduct characteristics does not necessarily translate into strategic importance. In addition, firms did not see the new technologies as a threat in terms of potential competence disruption.

Direct torque control of permanent magnet synchronous machines - analysis and implementation

Thedirect torque control (DTC) has become an accepted vector control method besidethe current vector control. The DTC was first applied to asynchronous machines,and has later been applied also to synchronous machines. This thesis analyses the application of the DTC to permanent magnet synchronous machines (PMSM). In order to take the full advantage of the DTC, the PMSM has to be properly dimensioned. Therefore the effect of the motor parameters is analysed taking the control principle into account. Based on the analysis, a parameter selection procedure is presented. The analysis and the selection procedure utilize nonlinear optimization methods. The key element of a direct torque controlled drive is the estimation of the stator flux linkage. Different estimation methods - a combination of current and voltage models and improved integration methods - are analysed. The effect of an incorrect measured rotor angle in the current model is analysed andan error detection and compensation method is presented. The dynamic performance of an earlier presented sensorless flux estimation method is made better by improving the dynamic performance of the low-pass filter used and by adapting the correction of the flux linkage to torque changes. A method for the estimation ofthe initial angle of the rotor is presented. The method is based on measuring the inductance of the machine in several directions and fitting the measurements into a model. The model is nonlinear with respect to the rotor angle and therefore a nonlinear least squares optimization method is needed in the procedure. A commonly used current vector control scheme is the minimum current control. In the DTC the stator flux linkage reference is usually kept constant. Achieving the minimum current requires the control of the reference. An on-line method to perform the minimization of the current by controlling the stator flux linkage reference is presented. Also, the control of the reference above the base speed is considered. A new estimation flux linkage is introduced for the estimation of the parameters of the machine model. In order to utilize the flux linkage estimates in off-line parameter estimation, the integration methods are improved. An adaptive correction is used in the same way as in the estimation of the controller stator flux linkage. The presented parameter estimation methods are then used in aself-commissioning scheme. The proposed methods are tested with a laboratory drive, which consists of a commercial inverter hardware with a modified software and several prototype PMSMs.

Origins of production errors and significance of employee empowerment in reducing production error amount in sheet metal fabricating industry

The market place of the twenty-first century will demand that manufacturing assumes a crucial role in a new competitive field. Two potential resources in the area of manufacturing are advanced manufacturing technology (AMT) and empowered employees. Surveys in Finland have shown the need to invest in the new AMT in the Finnish sheet metal industry in the 1990's. In this run the focus has been on hard technology and less attention is paid to the utilization of human resources. In manymanufacturing companies an appreciable portion of the profit within reach is wasted due to poor quality of planning and workmanship. The production flow production error distribution of the sheet metal part based constructions is inspectedin this thesis. The objective of the thesis is to analyze the origins of production errors in the production flow of sheet metal based constructions. Also the employee empowerment is investigated in theory and the meaning of the employee empowerment in reducing the overall production error amount is discussed in this thesis. This study is most relevant to the sheet metal part fabricating industrywhich produces sheet metal part based constructions for electronics and telecommunication industry. This study concentrates on the manufacturing function of a company and is based on a field study carried out in five Finnish case factories. In each studied case factory the most delicate work phases for production errors were detected. It can be assumed that most of the production errors are caused in manually operated work phases and in mass production work phases. However, no common theme in collected production error data for production error distribution in the production flow can be found. Most important finding was still that most of the production errors in each case factory studied belong to the 'human activity based errors-category'. This result indicates that most of the problemsin the production flow are related to employees or work organization. Development activities must therefore be focused to the development of employee skills orto the development of work organization. Employee empowerment gives the right tools and methods to achieve this.