Supply chain integration model: practices and customer values

Dissertation to obtain PhD in Industrial Engineering

Influence of Lean and Green on supply chain performance: an interpretive structural modelling model

This work aims to identify and rank a set of Lean and Green practices and supply chain performance measures on which managers should focus to achieve competitiveness and improve the performance of automotive supply chains. The identification of the contextual relationships among the suggested practices and measures, was performed through literature review. Their ranking was done by interviews with professionals from the automotive industry and academics with wide knowledge on the subject. The methodology of interpretive structural modelling (ISM) is a useful methodology to identify inter relationships among Lean and Green practices and supply chain performance measures and to support the evaluation of automotive supply chain performance. Using the ISM methodology, the variables under study were clustered according to their driving power and dependence power. The ISM methodology was proposed to be used in this work. The model intends to provide a better understanding of the variables that have more influence (driving variables), the others and those which are most influenced (dependent variables) by others. The information provided by this model is strategic for managers who can use it to identify which variables they should focus on in order to have competitive supply chains.

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.

Logging residues from regeneration fellings for biofuel production - a GIS-based availability and supply cost analysis

Finland has large forest fuel resources. However, the use of forest fuels for energy production has been low, except for small-scale use in heating. According to national action plans and programs related to wood energy promotion, the utilization of such resources will be multiplied over the next few years. The most significant part of this growth will be based on the utilization of forest fuels, produced from logging residues of regeneration fellings, in industrial and municipal power and heating plants. Availability of logging residues was analyzed by means of resource and demand approaches in order to identify the most suitable regions with focus on increasing the forest fuel usage. The analysis included availability and supply cost comparisons between power plant sites and resource allocation in a least cost manner, and between a predefined power plant structure under demand and supply constraints. Spatial analysis of worksite factors and regional geographies were carried out using the GIS-model environment via geoprocessing and cartographic modeling tools. According to the results of analyses, the cost competitiveness of forest fuel supply should be improved in order to achieve the designed objectives in the near future. Availability and supply costs of forest fuels varied spatially and were very sensitive to worksite factors and transport distances. According to the site-specific analysis the supply potential between differentlocations can be multifold. However, due to technical and economical reasons ofthe fuel supply and dense power plant infrastructure, the supply potential is limited at plant level. Therefore, the potential and supply cost calculations aredepending on site-specific matters, where regional characteristics of resourcesand infrastructure should be taken into consideration, for example by using a GIS-modeling approach constructed in this study.

Developing supply chain performance measurement metrics, case Halton Oy

Tämä tutkimus pyrkii selvittämään, miten toimitusketjun suorituskykyä voidaan mitata kohdeyrityksessä. Supply Chain Council (SCC) on vuonna 1996 kehittänyt Supply Chain Operations Reference (SCOR) – mallin, joka mahdollistaa myös suorituskyvyn mittaamisen. Tämän tutkimuksen tarkoituksena on soveltaa SCOR-mallin suorituskyvyn mittausmallia kohdeyrityksessä. Työ on kvalitatiivinen tapaustutkimus. Työn teoriaosassa on pääasiallisesti käsitelty toimitusketjua ja suorituskyvyn mittaamista koskevaa kirjallisuutta. Mittausjärjestelmän luominen alkaa kohdeyrityksen esittelyllä. SCOR – mallin mittarit on kohdeyrityksessä rakennettu SCC:n ehdotusten mukaisesti, jotta mittareiden tulokset olisivat käyttökelpoisia myös benchmarkkausta varten. Malli sisältää 10 SCOR – mittaria, sekä muutamia muita Haltonin omia mittareita. Lopputuloksena voidaan nähdä, että SCOR – malli antaa hyvän yleiskuvan toimitusketjun suorituskyvystä, mutta kohdeyrityksessä on silti tarvetta kehittää edelleen informatiivisempia mittareita, jotka antaisivat yksityiskohtaisempaa tietoa kohdeyrityksen johdolle.

Supply Risk Management in Pharmaceutical

Fast development in the operating environment and fierce competition have driven companies to pursue efficiency and success through lean and global supply chains. At the same time overall uncertainty has increased in the business environment and supply chains have become a priority in risk management since their vulnerability may endanger business continuity. Although risk management should start at procurement strategy development phase, proactive contingency planning is also essential because it enables correct reaction and fast changes in process execution in the case of risk realization. This thesis is a case study conducted in the pharmaceutical industry where purchasing and materials management organizations face a number of challenges and limitations that have to be considered in supply risk management. The goal of the study was to discuss the operating environment, and identify and analyze supply risks and potential risk management practices. The study was concluded with suggestions for purchasing strategy development that take risk management considerations into account. This copy is the public version of the thesis.

Strategic supply chain alignment to customer buying behavior

In search for competitive advantage, designing and managing supply chain networks have become a necessary competence for organizations. The target of this thesis is to answer a question, how to design a multiple supply chain network. The purpose is to study, what kind of different supply chain designs exist and, how to choose appropriate supply chain designs for a company. In the thesis, the focus is on the supply chain alignment to customers, more specifically to customer buying behavior. The research method was a case study. A framework for measuring customer buying behavior was developed based on the literature and it was used in the study of customer buying behavior in the case environment. In the case company structured interviews and data records were used as sources of evidence. Persons working in the customer-interface were interviewed face-to-face and through an e-mail questionnaire. When analyzing the data, a Quality function deployment matrix was used as one analysis method. As a result of the thesis, supply chain network of the case company is proposed to be divided into three separate supply chains, which focus on different areas and they could be called lean, agile and continuous replenishment supply chains. In conclusion, in the supply chain alignment to customer buying behavior several aspects have to be studied from different perspectives. According to the results, a multiple supply chain strategy is recommended to be implemented in the case company, since the diversity of the customer needs cannot be managed efficiently through a single supply chain.

Approaches to Supply Chain Risk Management: Identification, Analysis and Control

Supply chain risk management has emerged as an increasingly important issue in logistics as disruptions in the supply chain have become critical issues for many companies. The scientific literature on the subject is developing and in many respects the understanding of it is still in its infancy. Thus, there is a need for more information in order for scholars and practitioners to understand the causalities and interrelations that characterise the phenomenon. The aim of this dissertation is to narrow this gap by exploring key aspects of supply chain risk management through two maritime supply chains in the immediate region of the Gulf of Finland. The study contributes to the field in three different ways. Firstly, it facilitates the identification of risks on different levels of the supply chain through a systematic analysis of the processes and actors, and of the cognitive barriers that limit the actors’ visibility and their understanding of the operations and the risks involved. There is a clear need to increase collaboration and information exchange in order to improve visibility in the chain. Risk management should be a collaborative effort among the individual actors, aimed at obtaining a holistic picture. Secondly, the study contributes to the literature on risk analysis through the use of systemic frameworks that illustrate the causalities and linkages in the system, thereby making it easier to perceive the vulnerabilities. Thirdly, the study enhances current knowledge of risk control in identifying actor roles, risk visibility and risk controllability as being among the key factors determining risk-management effectiveness against supply-chain vulnerability. This dissertation is divided into two parts. The first part gives a general overview of the relevant literature, the research design and the conclusions of the study, and the second part comprises six research publications. Case-study methodology with systematic combining approach is used, where in-depth interviews, questionnaires and expert panel sessions are the main data collection methods. The study illustrates the current state of risk management in multimodal maritime supply chains, and develops frameworks for further analysis. The results imply that there are major differences between organizations in their ability to execute supply chain risk management. Further collaboration should be considered in order to facilitate the development of systematic and effective management processes.

Improving business processes in a globally dispersed make-to-order supply chain. Case study on outbound logistics in a Multinational Corporation

The purpose of this thesis is to find out how outbound logistics process can be improved by reducing unnecessary waste in a globally dispersed make-to-order (MTO) supply chain. The research problem was addressed by a multinational corporation that aims to find a solution for reducing unnecessary waste in their outbound logistics process. The focus is on customized products that are delivered via sea transportation. Theoretical framework for improving outbound logistics processes in globally dispersed MTO supply chain was created based on business process management, Porter’s value chain theory, value stream mapping and current reality tree. The empirical research was conducted by using constructive approach due to its ability to research a practical problem and to improve the existing practices. The data was collected from ten semi-structured interviews and three non-participant observations. By analysing the data and applying the theoretical framework, five types of waste were detected in the process that were seen to derive from six root causes. Practical solution was constructed to reduce the waste in the process by combining the existing literature with the ideas raising from empirical data. The results of this thesis suggest that a MNC with a globally dispersed MTO supply chain can improve its outbound logistics process by applying activities that enhance internal and external integration, collaboration and coordination, and increase predictability of the process. This research has practical relevance both for the case company as well as for other MNCs with globally dispersed MTO supply chains that aim to improve their outbound logistics processes. This research contributes to the BPM and CRA research by providing an evidence for their applicability in the new context.

Developing Supply Chain Process Management and Measurement in Global Manufacturing Company

The objective of this research is to create a current state analysis of pulp supply chain processes from production planning to deliveries to customers. A cross-functional flowchart is being used to model these processes. These models help finding key performance indicators (KPIs) which enable examinations of the supply chain efficiency. Supply chain measures in different processes reveal the changes need processes that affect the whole supply chain and its efficiency and competitiveness. Structure of pulp supply chain differs from most of the other supply chains. The fact that there are big volumes of bulk products, small product variations and supply forecasts are made for the year ahead make the difference. This factor brings different benefits but also challenges when developing supply chain. This thesis divides pulp supply chain in three different main categories: production planning, warehousing and transportation. It provides tools for estimating the functionality of supply chain as well as developing the efficiency for different functions of supply chain. By having a better understanding of supply chain processes and measurement the whole supply chain structure can be developed significantly.

The economic theory of international business: a supply chain perspective

This paper proposes a way of addressing unresolved issues in international business theory by modelling the multinational enterprise as a coordinator of supply chains. It identifies a new market seeking strategy that is an alternative to conventional strategies such as exporting, licensing and FDI, and analyses the conditions under which it will be adopted by firms. The new strategy involves the off-shoring of production and the out-sourcing of R&D, and is implemented through co-operation between a source country firm and a host country firm.

The manufacturing industry in Brazil in the era of global value chains

This article presents a comprehensive and detailed overview of the international trade performance of the manufacturing industry in Brazil over the last decades, emphasizing its participation in Global Value Chains. It uses information from recent available global inputoutput tables such as WIOD (World Input-output database) and TIVA (Trade in Value Added, OECD) as well as complementary information from the GTAP 8 (Global Trade Analysis Project) database. The calculation of a broad set of value added type indicators allows a precise contextualization of the ongoing structural changes in the Brazilian industry, highlighting the relative isolation of its manufacturing sector from the most relevant international supply chains. This article also proposes a public policy discussion, presenting two case studies: the first one related to trade facilitation and the second one to preferential trade agreements. The main conclusions are twofold: first, the reduction of time delays at customs in Brazil may significantly improve the trade performance of its manufacturing industry, specially for the more capital intensive sectors which are generally the ones with greater potential to connection to global value chains; second, the extension of the concept of a “preferential trade partner” to the context of the global unbundling of production may pave the way to future trade policy in Brazil, particularly in the mapping of those partners whose bilateral trade relations with Brazil should receive greater priority by policy makers.

The impact of negative social environmental events on the market value of supply chain partners

The present work analyzes the impact of negative social / environmental events on the market value of supply chain partners. The study offers a contextualized discussion around important concepts which are largely employed on the Operations Management and Management literature in general. Among them, the developments of the literature around supply chains, supply chain management, corporate social responsibility, sustainable development and sustainable supply chain management are particularly addressed, beyond the links they share with competitive advantage. As for the theoretical bases, the study rests on the Stakeholder Theory, on the discussion of the efficient-market hypothesis and on the discussion of the adjustment of stock prices to new information. In face of such literature review negative social / environmental events are then hypothesized as causing negative impact in the market value of supply chain partners. Through the documental analysis of publicly available information around 15 different cases (i.e. 15 events), 82 supply chain partners were identified. Event studies for seven different event windows were conducted on the variation of the stock price of each supply chain partner, valuing the market reaction to the stock price of a firm due to triggering events occurred in another. The results show that, in general, the market value of supply chain partners was not penalized in response to such announcements. In that sense, the hypothesis derived from the literature review is not confirmed. Beyond that, the study also provides a critical description of the 15 cases, identifying the companies that have originated such events and their supply chain partners involved.

The manufacturing industry in Brazil in the era of global value chains

This article presents a comprehensive and detailed overview of the international trade performance of the manufacturing industry in Brazil over the last decades, emphasizing its participation in Global Value Chains. It uses information from recent available global inputoutput tables such as WIOD (World Input-output database) and TIVA (Trade in Value Added, OECD) as well as complementary information from the GTAP 8 (Global Trade Analysis Project) database. The calculation of a broad set of value added type indicators allows a precise contextualization of the ongoing structural changes in the Brazilian industry, highlighting the relative isolation of its manufacturing sector from the most relevant international supply chains. This article also proposes a public policy discussion, presenting two case studies: the first one related to trade facilitation and the second one to preferential trade agreements. The main conclusions are twofold: first, the reduction of time delays at customs in Brazil may significantly improve the trade performance of its manufacturing industry, specially for the more capital intensive sectors which are generally the ones with greater potential to connection to global value chains; second, the extension of the concept of a “preferential trade partner” to the context of the global unbundling of production may pave the way to future trade policy in Brazil, particularly in the mapping of those partners whose bilateral trade relations with Brazil should receive greater priority by policy makers

Short food supply chain as an alternative for promoting family agriculture

In recent years, increasing attention has been given to promoting short agrifood supply chains, not only in Europe and the United States but also in Latin America. This bulletin describes some specific experiences with short food supply chains, both in Latin America and in other parts of the world, which have made it possible to identify success factors and lessons learned. These examples are based on cases discussed at the seminar on short food supply chains recently held by ECLAC, FAO and WHO.