Joint Procurements in Building National Defence : Why Are There So Few?

Economic benefits of joint procurement arise from increased bargaining power relative to the contractor and from economies of scale in production. There is, however, a puzzle: why are such procurements so few? This paper introduces a bargaining model with forward-looking expectations about the scale of delivery contracts. It is shown that the price sensitivity of the scale of acquisition is favourable for the buying partnership as it tends to depress the bargaining price. Several explanations are proposed for why it is hard to align the buyers’ incentives. First, the preferences concerning the properties of the products are country- specific with divergent implications for national security. Second, a country with a low valuation of the product has more bargaining power than a country with a high valuation and may expect a side payment from the partner of the procurement, while the latter may not have sufficient incentives to pay. Third, the gains from cooperative procurement in terms of economies of scale for the producer may not be sufficient to compensate for the conflicting preferences among the contractors. Fourth, while the future unpredictability of technologies or the future risks of deteriorating national security might support longer-term joint procurements, short-term opportunism tends to prevent long-term commitments

Learning Operations Management with Web Based Manufacturing Simulation

Traditional learning methods in operations management are not ideally suited for externalising knowledge. In this paper, an iterative, gaming-like learning approach for practicing OM issues by using discrete event simulation model is proposed. The approach is utilising an existing learning environment called Delfoi Planner EDU. Its web-based architecture supports distance learning that is an asset in the Finnish University culture. The article also describes the current learning content. The environment enables adding new tasks and exercises easily and is designed to support 3rd party simulation models thereby facilitating learning content exchange between content producers. The initial evaluation with a pilot class suggest that the benefits of gaming have been realised but also underlines the importance of a tested, stable environment as a prerequisite for learning

Cooperative Procurement in Building National Defence : Why Are There So Few?

The economic benefits of cooperative procurement derive from, at minimum, increased bargaining power relative to contractors and from economies of scale in production. There is, however, a puzzle: why is this kind of procurement so rare? This paper introduces a bargaining model with forward-looking expectations about the scale of procurement. It is shown that the price sensitivity of the scale of acquisition is favourable for the buying partnership, as it tends to push down the bargaining price. We propose several explanations for why it is hard to align buyers' incentives: First, preferences for the properties of the products are country-specific, with divergent implications for national security. Second, countries that place a low value on the product have more bargaining power than those that value it highly, and may require a side payment in order to enter a partnership, while the partner may not have sufficient incentives to make such a payment. Third, the gains from cooperative procurement for the producer may not be sufficient to compensate for conflicting preferences among contractors. Fourth, while the future unpredictability of technologies or the future risks of deteriorating national security might support longer-term cooperative procurement, short-term opportunism tends to prevent long-term commitments.Peer reviewe

Optimization of the first coating layer on TOC-based coil coatings

Traditional coil coated steel product consists of two layers of coating, which are applied on top of a pretreated hot-dip-galvanized steel coil. In other fields of industry the TOC coating method is quite widely used and it has attracted attentions also in the coil coating industry. The economically and environmentally sound alternative designed to replace the traditional pretreatment and the base coating layer has increased research and development of the TOC method. Thin organic coatings in coil coating applications have been studied quite scarcely in SSAB. This thesis is a part of the HYBRIDS – Hybrid Materials program, which studies among other subjects the potential of the TOC-method. In this thesis the goal was to optimize a coating layer on top of two separate TOC-substrates. The objective of the thesis was to find the most suitable binder, film thickness and curing cycle combination for the first coating layer of the TOC based product. The chemistry of the studied binders was mainly based on polyester and PVdF chemistry. With isocyanate crosslinked binder system, a polyurethane-chemistry based binder was also introduced to the studies. With all of the previously mentioned binder systems, the film thicknesses and curing cycles were varied to test a wide variety of property combinations. The optimization started with the results of the accelerated environment exposure testing, with which the first elimination of binders was based. The mechanical testing data was analyzed with statistical method ANOVA. With the statistical analyzing method the most potential binder, film thickness and curing cycle for each TOC was selected from both of the binder categories. The final products were compared to reference samples, which were treated with the same paint process. The samples used for the references were traditionally pretreated and untreated HDG-steels. The final conclusions on the optimized products were done based on accelerated environment exposure testing and mechanical testing. With the optimization process a clear indication was observed, that the film thickness variations and binder selection affects the properties of the product significantly. The thickest dry films performed with best results. A significant difference was not observed with the curing cycles, but marginally better results were observed with double curing with the TOC 2 substrate. 70 % PVdF / 30 % PMMA ratio binders performed with best results with both of the TOC substrates. TOC 2 had significant difficulties with polyester-chemistry, which led to a series of separate studies. Isocyanate (instead of melamine) crosslinked binder worked perfectly with the said substrate. Accelerated humidity exposure testing results and mechanical resistance testing results reveal a significant importance of the pretreatment or TOC-layer. HDG steel with any sort of binder suffers a significant amount of damage and deterioration during exposure to humidity in elevated temperatures. Mechanical resistance results show a similar trend. The traditionally pretreated samples and TOC based samples, when compared against each other, showed notable but not significant differences on behalf of the TOC based samples. A conclusion from the testing in this thesis is that the TOC based product can perform at least as well as the traditionally pretreated product. Although the results are quite encouraging and positive for the TOC based products, the results are not unequivocal and can only be considered as a guideline towards future studies and research projects

Designing resilient military logistics with additive manufacturing

Purpose In this study, the authors explore how novel and relevant technologies can change the overall design of systems, and which factors influence the design of resilient systems in particular. After evaluating the effects of these factors, the authors describe the potential role of AM-supported maintenance operations in military logistics and draw broader conclusions regarding designing for resilience. Design/methodology/approach The authors build a simulation model of the AM-supported maintenance capability of a mechanised battalion to analyse factors affecting its resilience. AM production capacity specifically refers to metal printing and was verified by data generated from 3D printing of the actual APC parts. Findings The current AM speed is not able to increase resilience at the depot level, so at present, increasing the spare parts inventory is a better way to improve resilience. However, with future improvements in speed the AM may become feasible in battlefield maintenance. Practical implications AM holds great promise in increasing resilience of especially the spare part logistics. At present technology, it is not yet fully realised in the case. Originality/value The authors suggest a concrete system performance measure, where reaching a concrete limit, system resilience is lost. The authors present arguments for a definition of resilience where pre-disruption activities are not part of resilience. The authors maintain that simulation, with its ability to include detail, is well-suited in design-for-resilience because supply chains are context dependent and disruptions unexpected

Yhteishankinnat ja hankintatoimen kehittäminen suomen turvallisuusorganisaatioissa

The security budgets in general have been declining and the recent era of austerity together with the Ukraine and migration crises has not yet changed this trend. Security organizations are facing situations where purchasing cooperation might be the solution for getting more performance out of decreasing budgets. In the literature review the motives and enablers for successful cooperation are reviewed, such as reduction of transaction costs and increased professionalism. The different organizational roles for cooperation are discussed following Schotanus and Telgen (2007). Empirical data is collected from the organizations engaging in purchasing cooperation through twelve interviews from Defence Forces, Police and Frontier Guard. The main benefits were found to include shared responsibilities in purchasing process that saves individual organization resources, interoperability between organizations and cost savings. The main organizational roles that were identified: “hitchhiking”, “bus rides”, “carpooling”, “F1-team” and “political F1-team”. Cooperation opportunities need to be identified early on and for this purpose, ministry of the interior has a committee where Police and Border Guard were discussing material projects and purchasing cooperation. At the end of the article ways to enhance cooperation are suggested

PUOLUSTUSMATERIAALIN HINTAKEHITYS – TEHOKKUUTTA RAHALLA

Abstract Finnish MoD has stated that the price of modern defence equipment is estimated to double in every seven years. The article separates conceptually price increases as measured by price indexes and unit price escalation, as seen by the buyer. The former is not found to increase at a rate higher than general inflation. The latter, based on several empirical studies, is found to increase at rate exceeding inflation. The rate is found to vary between classes of equipment. The explanation for this in the literature is technological change together with performance competition with adversaries. A case study with XA armoured personnel carrier is presented with the aim of bridging the viewpoints of price indexes and buyer. It is also shown in the case that indeed a rational buyer can make equipment selection choices that result in high unit price increase rate. In the end, the relevance of unit price increase and its consequences to a small nation is discussed