Developing competitiveness of a company using a new business process engineering concept

Suomessa ja muissa länsimaissa yritysten toimintaympäristössä on tapahtunut 2000-luvulla kaksi laajaa ja merkittävää muutosta. Ensinnäkin länsimaiset yhteiskunnat ovat siirtyneet jälkiteollisesta aikakaudesta kohti informaatioajan aikakautta, ja toiseksi yritysten välinen kilpailu on muuttunut laajempien kokonaisuuksien, verkostojen väliseksi kilpailuksi. Näiden muutosten voidaan nähdä kulkevan rinnakkain toisen suuren yhteiskunnallisen muutoksen, globalisaation kanssa, jossa suuryritykset toimivat maailmanlaajuisesti yli maanosien ja valtioiden rajojen. Tämä tapaustutkimus luo taloudellisesti ja teknisesti kilpailukykyisen liiketoiminnan hallintajärjestelmän tehokkuuden ja laadun suorituskyvyn parantamiseksi keskikokoisessa elektronisia tuotteita valmistavassa yrityksessä. Tutkimus keskittyy yritysten kilpailukyvyn tutkimiseen ja tutkimustulosten pohjalta kehittää kohdeyrityksen kilpailukykyä toteuttamalla prosessijohtamisen lähestymistapaa haastavassa ja dynaamisessa globaalissa liiketoimintaympäristössä. Teoriaosassa käsitellään liiketoimintaprosessien kehittämiseen liittyviä menetelmiä yrityksen strategisesta, asiakkaan kokeman laadun ja asiakkaan saaman lisäarvon näkökulmasta. Teorian pohjalta laaditaan liiketoimintaprosessien kehittämiskonsepti, joka koostuu vaiheittain etenevistä kehitystoimenpiteistä kilpailuedun kehittämiseksi ja ylläpitämiseksi case-yrityksessä. Tutkimus vahvistaa olemassa olevaa teoriaa liiketoimintaprosessien kehittämismenetelmästä (business process reengineering, BPR) ja sen toimivuutta kilpailukyvyn parantamisessa yleisesti. Sen lisäksi tutkimus vahvistaa liiketoimintaprosessien kehittämismenetelmän toimivuutta 2000-luvun kilpailussa dynaamisessa ja verkostoituneessa toimintaympäristössä.In Finland and other Western countries, companies’ operating environments have faced two broad and significant changes in the 2000s. Firstly, Western societies have moved from the postindustrial age towards the information society age and, secondly, for larger entities, competition has changed from that between enterprises to that between networks. These changes can be seen to run in parallel with another major social change, globalization, under which large enterprises operate on a global scale across continents and state borders. This case study involves the creation of an economically and technically competitive operating management system so as to improve efficiency and quality performance in a midsized electronics manufacturing company. The study focuses on enterprise competitiveness and, based on the research findings, develops the case company’s competitiveness by implementing a process management approach to its challenging and dynamic global business environment. The theoretical part of this thesis deals with business process development methodology for the company's strategy, the customer's perception of quality and perspectives on added value creation. On the basis of the theory, a process development concept is drawn up, comprising a number of sequential stages for developing and maintaining the case company’s sustainable competitive advantage. The study confirms the existing theory of business processes development (business process reengineering, BPR) and its functionality for improving competitiveness in general. In addition, the study will strengthen the BPR’s functionality in the competitive, dynamic and networked business environment of the 2000s.fi=vertaisarvioitu|en=peerReviewed

Teollisuuden palveluyrityksen pysyvä kilpailuetu

Over the last 20 years, Finland’s industrial service business – specifically its electrical and telecom network services and industrial services – has undergone a remarkable transformation. Network owners have outsourced these functions to newly established service companies, and a remarkable new service industry has resulted. After undergoing a rapid growth phase, it has faced numerous challenges, such as decreasing volumes and profitability, as well as new competitors. However, this service business transformation has not yet been the subject of theoretical nor practical research. This thesis examines this transformation from the perspective of service companies and their customers. The research questions are as follows: How can a sustainable competitive advantage for industrial service businesses be created? Do conflicts between service providers’ and customers’ targets exist? Can a win–win position be found? The research utilized theoretical approaches that were based primarily on deductive theory development, qualitative and quantitative methodologies, and a cross-sectional time horizon. The theoretical aspect of the research related to firm strategies, models of competitive and sustainable competitive advantage, conceptual frameworks, and methods and tools, all of which are applicable to the achievement of a sustainable advantage. The information was collected via questionnaires, in-depth interviews, and public reports. Based on the results, customers were very satisfied with service outsourcing and the larger service packages to come. However, service company volumes and profitability decreased, marginal business and competence development methods and investments were applied, and there was no service differentiation between competitors. Conflicts between service providers’ and customers’ competitive advantage targets were marginal and related solely to financials. A sustainable competitive advantage business model called ‘Smart Service’ was developed, and it comprises four sub-processes: profitability/growth, market analysis/customer proximity, critical competence/ resource, and service business development plans. The researched industrial service companies need to employ these new business approaches to recover their sustainable and profitable service business.Sähkö- ja televerkkojen sekä teollisuuden kunnossapitopalvelujen rakenne on muuttunut merkittävästi viimeisen 20 vuoden aikana Suomessa. Verkkoyhtiöt ovat ulkoistaneet näitä palveluliiketoimintoja uusille perustetuille palveluyhtiöille. Uusi merkittävä palvelutoimiala on syntynyt. Nopean kasvujakson jälkeen palveluyhtiöt ovat kohdanneet monia haasteita kuten liikevaihdon ja kannattavuuden laskemisen sekä uusien kilpailijoiden tulon markkinoille. Tämä väitöskirja tutkii tätä liiketoimintamuutosta sekä palveluyhtiöiden että niiden asiakkaiden näkökulmasta. Tutkimuskysymykset ovat: miten kehittää palveluyritysten pysyvä kilpailuetu; ovatko palveluyhtiöiden ja niiden asiakkaiden tavoitteet ristiriidassa keskenään ja voidaanko yhteinen win-win asetelma luoda? Väitöskirja rakentuu teoreettiseen deduktiiviseen viitekehitykseen, kvantitatiiviseen ja kvalitatiiviseen analyysiin sekä poikittaistutkimusmenetelmään. Teoriaosa koostuu yritysstrategiaosuudesta, yrityksen johtamisteoria osasta, kilpailuetu- ja pysyvän kilpailuedun malleista sekä pysyvän kilpailuedun menetelmistä ja työkaluista. Lähtötietojen keruussa käytettiin kyselyjä, syvähaastatteluja sekä julkisia yritysten tietolähteitä. Tutkimustyön päätulokset olivat: asiakkaat olivat erittäin tyytyväisiä palveluliiketoimintojen ulkoistukseen ja jatkossa isompia palvelukokonaisuuksia siirtyy palveluyrityksille. Palveluyritysten liikevaihdot ja kannattavuudet ovat laskeneet, liiketoimintojen ja osaamisen kehittämiseen ei panosteta juuri ollenkaan eikä erottautumista palveluissa kilpailijoiden kesken ole tapahtunut. Palveluyhtiöiden ja niiden asiakkaiden tavoitteissa ei ole juurikaan eroavaisuuksia, taloustavoitteissa luonnollisesti jonkun verran. Väitöskirjassa kehitettiin pysyvän kilpailuedun liiketointamalli, joka pohjautuu tutkittuun teoreettiseen ja konseptuaaliseen viitekehykseen ja työkaluihin sekä tutkimuksen empiirisiin tuloksiin. Liiketoimintamalli sai nimen ’Älykäs palvelu -työkalu’. Se koostuu neljästä osaprosessista: Kannattavuus/Kasvu, Markkina-analyysi/Asiakasläheisyys, Kriittiset Osaamiset/Resurssit ja Palvelujen Kehittämissuunnitelmat. Tutkittu palveluliiketoiminta selkeästi tarvitsee uutta liiketoimintamallia parantaakseen pysyvää kilpailukykyä ja kannattavuutta.fi=vertaisarvioitu|en=peerReviewed

Design outsourcing in the high-tech industry and its impact on supply chain strategies

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2005.Includes bibliographical references (leaves 131-135).The practice of outsourcing product design to a service provider is prevalent in fast-moving high-tech electronics. Product design affects all subsequent activities such as procurement, manufacturing, logistics and after-sales services. Thus, companies do design for supply chain (DFSC), which is the process of designing products by incorporating such supply chain considerations as supplier selection and integration, single vs. multi-sourcing, component commonality, postponement, variety management, product reuse and recycling, planned obsolescence, etc. Each of these strategies involves tradeoffs which become difficult to evaluate in an outsourced environment. The levels at which companies engage with their service provider such as fully outsourced or joint design, affect the degree of control they can exercise over the design process. The main finding is that when products are fully outsourced, companies have less control and therefore, a lower possibility of implementing DFSC. Certain measures are proposed whereby companies may influence DFSC implementation even in fully outsourced design. When some of the design is kept in-house in a joint design model, the level of control is high.(cont.) Another important finding is that design service providers actually achieve excellence in incremental innovation and do implement DFSC strategies which have cost-saving and revenue-generating benefits for them. The distribution of the resultant savings is primarily a function of the company's ability to understand the service providers' cost structure and its negotiating power in the relationship. Two case-studies are included of products where different outsourcing levels are used and the impact of the level of outsourcing is studied for each supply chain strategy.by Bindiya Vakil.M.Eng.in Logistic

Balancing tax incentives with operational risks in captive overseas production facilities

Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Engineering Systems Division; in conjunction with the Leaders for Manufacturing Program at MIT, 2009.Includes bibliographical references (p. 92-94).Due to the general macroeconomic downturn, many companies have turned to offshoring - sending a function overseas - to reduce production costs. While some companies elect to outsource overseas production to outside companies, many companies choose to keep production in-house and therefore create captive production facilities overseas. In many countries, the government will provide financial incentives (e.g. tax breaks, loans, subsidies) to certain companies in exchange for creating employment opportunities and industry knowledge within their borders. These financial incentives may tempt companies to shift more and more functions overseas; however, in many cases, there are significant operational risks involved with shifting functions overseas. This thesis uses a six-month project as a case study for discussing ways to weigh financial benefits against operational risks. The project was conducted at the European headquarters of Spirit AeroSystems, the largest independent designer and manufacturer of independent aerostructures for the commercial aircraft industry. Spirit Europe recently launched a greenfield factory in Malaysia. Malaysia was selected as the factory site for a variety of reasons; among which was a long term tax incentive. This thesis describes the process and tools used to select an optimal transfer pricing relationship (i.e. scope of work to be performed overseas) and transaction methodology that would best monetize the long-term tax incentive without incurring unacceptable levels of operational risk.(cont.) A comprehensive functional analysis was conducted to understand operational risk and economic value. Next, a Monte Carlo simulation was created to better understand project profitability. The results from the functional analysis and the Monte Carlo simulation are united to identify the optimal transfer pricing structure and methodology. The unintuitive result is that, for both operational and financial reasons, the scope of work transferred to the low tax jurisdiction (in this case, Spirit Malaysia) should be fairly limited for existing contracts.by Audrey Chang.S.M.M.B.A

Developing a case for a more granular examination in the selection of information technology job roles most suitable for outsourcing and offshore placement

This study reviewed shortcomings present in the process of selecting the scope of offshore outsourcing vendor usage. While extensive financial cost information is available to companies considering this alternative, there is little mentioned of the quality of service performance experienced by the internal work teams that act as the primary consumers of these contracted services. Additionally, it is common practice to contract offshore outsourcing on a project or departmental level without granular examination of suitability at the job role level. This study surveyed a representative sample (n = 30) of IT professionals, and addressed two related research questions regarding internal value return. The first questioned whether a satisfactory level of overall job performance is returned by holistically-outsourced IT services to offshore vendors and results were inconclusive. The second examined if differences were present between work teams responsible for various IT functions, indicating a need for more granular consideration and found significant differences between work teams\u27 needs. As to the first research question, results were calculated from the aggregate mean of each departmental review with which the respondent had direct experience. Overall job performance satisfaction was measured using the t-test methodology as minimally sub-par, with insufficient significance to reject the possibility of sampling error, t (22) = 2.57, p \u3e .05. As to the second research question, departmental satisfaction ratings in 10 factors relevant to service delivery were analyzed for variation in order to determine if significant valuation differences were present. Significant variation present in satisfaction levels between teams are representative of variation in factor importance by department. Three discrete departments -- Application Development, Server Operations, & Solutions and Architecture were examined. An analysis of variance showed that the effect of performance factor was significant F (9, 27) = 304.434, p \u3c 1 that the effect of work team was significant at F (3, 27) = 43.190, p \u3c 1. As both performance factor and work team variations were significant above the confidence level (95%) chosen as the threshold, the null hypothesis that there was no variation in factor delivery efficacy was rejected. The results of the second research question of whether a more detailed and granular examination would reveal differences in factor importance -- or the difference in emphasis on one factor over another, a statistically significant finding that such differences are present was found. Significant differences in value perception present between individual work teams and the collective totals indicated that each work team was unique in their expectations -- and valuation -- of services provided.In order, therefore, to provide optimal value, a more granular examination of each position or team to be outsourced should be conducted in order to reserve those positions that do not perform well for in-house performance, and only outsource those positions likely to do well to an offshore vendor. As each company requires its own unique mix of IT management needs appropriate their situation, each IT work team was found to have a level of unique need as well. These needs define work team satisfaction levels with services provided. Additionally, companies that avoid single factor decision-making with regard to offshore outsourced vendor use may see more optimal results. For the same reasons outlined above, the service delivery performance seen by internal work teams reflect the quality of work performed by the vendor. If such value degrades below satisfactory levels, it is possible to erode the savings realized by cost incentives to a negative return

Control System as a Service : Standardizing Service Model and Pricing Principles

The service business has aided manufacturers to supplement their new equipment sales across many fields of businesses. The service business has proven to generate steady portions of total revenues, but even larger percentual portion of total profits. Since customers have the tendency to focus more and more on their core competencies and capabilities, services have grown stead-ily day in and out. Not many studies have been made about the potential that a control system as a service can provide to a company. Through market saturation and globally competitive markets, companies meet the challenges to operate effectively in the service business, have a standardized way of working and to price their services optimally. In this master’s thesis I will explain how services and service portfolio can be standardized and what pricing principles are to be considered for them. First, the servitization as a trend in an industrial context is reviewed along with service strategies and service orientation. Also, the pricing contexts around services and the value aspect of it are reviewed. Lastly, the literature review highlights cloud services with a comparison to traditional IT services. Next, I will study how the offerings can be readjusted to offer control systems as a service with the help of cloud services and what costs to take into considerations, and how the pricing of the service could include. By comparing a traditional model and a service model, the total cost of ownership during the lifecycle has different phases. The total cost of ownership is calculated to be less for a traditional model during one traditional lifecycle. However, as a new lifecycle is initialized with a lot of in-vestment costs for software and hardware, thereby making the service model is yet again cheaper for the next couple of years. Consequently, the comparison between the models is dependent on the customer preferences and their IT strategy; the level of outsourcing it wants to practice, what cost structure it wants to pursue, and how much predictability it can have for the future, as a traditional model is not as scalable as a service model.Palveluliiketoiminta on auttanut yrityksiä täydentämään uusien tuotetarjontaansa monilla liike-toiminta-alueilla. Palveluliiketoiminnan on osoitettu tuottavan tasaista, mutta usein jopa muuta liiketoimintaa suurempaa kokonaistuottoa yritysten tuloksista. Asiakkaiden keskittyminen ydin-toimintaansa on kasvattanut muiden osa-alueiden ulkoistamista. Automaatiojärjestelmien tuottamista palveluna ei juurikaan löydy tutkimustuloksia. Markkinoi-den kyllästymisen sekä maailmanlaajuisen kilpailun vuoksi palveluliiketoiminnalla haetaan opti-maalisia malleja kilpailuun ja uusiin ydinkyvykkyyksiin. Tässä tutkielmassa tutkitaan, miten palvelut ja palveluportfolio voidaan standardoida ja mitä hinnoitteluperiaatteita kohdeyritys voisi tarjonnassaan hyödyntää. Ensiksi tarkastellaan palve-lullistamista trendinä teollisessa kontekstissa yhdessä kanssa. Myös palvelujen hinnoittelua ja sen arvoa tarkastellaan. Lopuksi kirjallisuuskatsauksessa korostetaan pilvipalveluja verrattuna perinteisiin IT-ratkaisuihin. Seuraavaksi tutkin, kuinka nykyinen tarjontamalli voidaan muokata tarjoamaan automaatiojär-jestelmää palveluna pilvipalvelujen avulla. Myös kustannusrakennemuutokset sekä palveluhin-noittelu ja sen tulevat menetelmät otetaan huomioon. Vertaamalla perinteistä mallia ja palvelumallia, kokonaiskustannuksilla elinkaaren aikana on eri vaiheita. Perinteisen mallin kokonaiskustannusten lasketaan olevan pienemmät yhden järjestel-män perinteisen elinkaaren aikana. Sen sijaan, heti uuden elinkaaren alkaessa, kohdistuu asiak-kaalle paljon ohjelmistojen ja laitteistojen investointikustannuksia, jolloin palvelumallin kustan-nusrakenteen arvioidaan muodostuvan kustannusnäkökulmasta asiakkaalle muutamaksi vuo-deksi edullisemmaksi. Näin ollen, mallien vertailu riippuu asiakkaan mieltymyksistä ja heidän IT-strategiastaan; kuinka paljon ulkoistamista asiakas haluaa järjestelmälleen ja minkälaista kustannusrakennetta se suo-sii liiketoiminnassaan. Myös ennustettavuus on järjestelmäkontekstissa merkitsevää, sillä palve-lumallin skaalautuvuus tuo paljon etuja perinteisiin investointiprojekteihin verrattuna

Managing multi-tiered suppliers in the high-tech industry

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2009.Includes bibliographical references (leaves 131-135).This thesis presents a roadmap for companies to follow as they manage multi-tiered suppliers in the high-tech industry. Our research covered a host of sources including interviews and publications from various companies, consulting companies, software companies, the computer industry, trade associations, and analyst firms among others. While our review found that many companies begin supplier relationship management after sourcing events, we show that managing suppliers should start as companies form their competitive strategy. Our five step roadmap provides a deliberate approach for companies as they build the foundation for effective and successful multi-tiered supplier relationship management.by Charles E. Frantz and Jimin Lee.M.Eng.in Logistic

“Asset Partner” Service model – Challenges and Opportunities for service industry. - A case from Norwegian Continental Shelf (NCS)

The oil and gas (O&G) industry is facing numerous challenges, including fluctuating oil prices, increasing regulatory pressures, and a growing demand for cleaner energy sources. To remain competitive and maximize value creation, companies must adopt customized and flexible approaches to their offshore operations and think of new solutions to solve tomorrow’s challenges. Examining the concept and implications of an Asset Partner reveals various opportunities and challenges for both operator- and service companies. In recent years, operational partnerships have emerged as a strategic solution for companies aiming to optimize their operations, minimize risks, and enhance their competitive edge. The Norwegian Continental Shelf (NCS) presents a unique operating environment, combining harsh climatic conditions, advanced technologies, and stringent safety and environmental standards. Operating in this challenging environment requires specialized knowledge, strong regulatory compliance, and a commitment to sustainable practices. By forming alliances with third-party service providers, O&G companies can leverage external expertise, share risks, and pool resources to achieve common objectives. While partnerships offer several benefits, there are also notable challenges in the collaboration between operator companies and oil service companies on the NCS. This thesis will examine various perspectives, including those of operator companies that typically manage their assets independently, as well as the viewpoints of oil service companies, trade unions, and governmental authorities. The thesis aims to investigate the following research questions: 1. What are the benefits and challenges of implementing an "Asset Partner" model in the Oil and Gas (O&G) industry, and how can it be used to increase competitiveness in the market? 2. How do regulations and authorities, such as the Petroleum Safety Authority (PSA) impact the implementation and success of the "Asset Partner" model in the O&G industry? 3. How does the "Asset Partner" model compare to traditional contractor and partnership models such as Technical Service Provider (TSP) model. 4. What are the specific business models and strategies that can be used to effectively implement the "Asset Partner" model in the O&G industry? A case study was conducted, involving data collection through interviews with professionals representing various roles in the industry. These included individuals from operator companies, oil service companies, trade unions, and government or regulatory authorities. The insights gathered from their responses have served as the base for addressing the research questions. The study reveals the complications and aspects related to the Asset Partner model. It provides a comprehensive understanding of the opportunities, challenges, and potential future implications of this model from the perspectives of operator companies, trade unions, oil service companies, and governmental authorities. It reveals that the Asset Partner model in the O&G industry offers the potential of significant benefits, including increased efficiency, cost savings, and access to specialized resources I terms of competence and capacity. However, challenges such as the loss of control over critical activities and potential erosion of core competencies must be carefully managed. The green transition and technological advancements can also have an impact in the future of the Asset Partner model in the future, emphasizing the need for regulatory adjustments for its sustainable implementation and alignment with environmental goals. To effectively implement the Asset Partner model, clear contractual agreements, open communication, performance monitoring, risk management, and competence development are essential. The research suggests a need for further research and collaboration among stakeholders to develop best practices, guidelines, and regulatory frameworks for the successful operation of the Asset Partner model in the O&G industry