A.P.J. Vepsäläinen

IS outsourcing practices in the USA, Japan and Finland: a comparative study

With increasing cost-reduction pressures, outsourcing of information systems (IS) functions has emerged as an important option for managers in companies around the world. In this paper we present the results of our exploratory, empirical research comparing practices of domestic and global IS outsourcing in the USA, Japan and Finland. The research methodology of a mail survey with similar questionnaires was used in all three countries. The paper provides new empirical evidence comparing these countries on the types of functions being commonly outsourced, the extent to which these functions are outsourced, views of Chief Information Officers (CIOs) on the desired cost savings and the comparative ratings of the advantages and disadvantages of IS outsourcing. Also compared are the roles played by different executives in making outsourcing decisions. The implications of these results for IS managers and directions for future research are presented in the conclusions.

Trends in Industrial Supply Chains and Networks

Asks what really has changed for and what to expect from future supply chains. Most surveys rank activities related to sourcing, operations, customer services and marketing in terms of their importance to, or degree of hindrance for, successful supply chain management (SCM). In this explorative study, analyzes the change of SCM both in terms of operational practices and organizational capabilities in some industrial companies. A focused survey traces the development of supply chains and networks over two decades. Observes the expected growth in use of supporting IT systems, extent of information sharing and scope of coordination efforts. Characterizes the different stages supply chain evolution on the basis of supply chain integration and changing roles and responsibilities of the companies. It seems that due to the continuous structural change of the business environment the very concept of supply chain, let alone the best practice of managing one, should be subject to re‐examination in a wider context. In order to reach the current ideal of SCM practices, the strategic preconditions for innovative networking also need to be in place.

A model for strategic repositioning of service processes

The restructuring of service channels, driven by deregulation, intensifying global competition and emerging information technology, is forcing every company to re‐evaluate the adequacy of current customer services. Introduces a normative model, called service process analysis (SPA), that properly differentiates the concept of service from the specification of the delivery channel so as to facilitate the analysis of repositioning strategies. In SPA, efficient matching of services and channels is determined on the basis of the trade‐off between production costs and transaction costs involved. Compares the SPA model with some well‐known frameworks and measurement schemes and illustrates its implications for the repositioning of service strategies in selected industries.

Procurement strategies for information systems

A general framework of different procurement strategies is introduced to help managers review their project portfolio to find more effective ways of using both internal and market resources in information systems development. Major decision criteria--the specificity of system design and the uncertainty involved in requirements specification--are adopted from transaction cost economics to determine what procurement strategies should be used in different situations. According to our Procurement Principle, systems that are company-specific and involve high uncertainty have to be internally developed because they require both the specific knowledge and intensive interaction between developers and users. More standard requirements indicate the use of outside consultants or software contractors who have experience and knowledge about a similar type of systems. For routine systems common in many organizations, acquisition and tailoring of a software package provides the most efficient procurement strategy. The Procurement Principle is also empirically tested with data from recent system development projects in major Finnish companies. Partial support was gained for the framework, but some interesting deviations were also detected, such as a tendency to rely on in-house development of even routine systems.

MEASURING DELIVERY PROCESS PERFORMANCE

The focus on reengineering in the early 1990s, and the more recent emphasis on process management and change management have increased both practitioners and researchers interest in the issues of measuring processes. The contradictory results of process change projects reported in the literature and our observations from research suggest conflicting requirements for measurement systems. In this article, we review process measurement schemes with particular emphasis on the measures of time, quality, costs and efficiency. With five case studies, we illustrate process structures and related measurements for both customized and standardized deliveries. A framework for setting objectives for different process types is proposed. The result is a normative scheme for different processes that suggests ways to set meaningful objectives for time, quality, costs and efficiency. Finally, conclusions and implications are presented.

Multiperiod Production Planning Carrying over Set-up Time

Set-ups eat production capacity time and continue troubling production planning, especially on bottlenecks. The shortening of production planning periods to days, shifts or even less has increased the relative length of set-up times against the periods. Yet, many production planning models either ignore set-up times or, paradoxically, split longer multiperiod batches by adding set-ups at breaks between planning periods. The MILP-based capacitated lot-sizing models that include set-up carry-overs, i.e. allow a carry-over of a set-up of a product to the next period in case a product can be produced in subsequent periods, have incorporated fixed set-up fees without consideration of capacity consumed by set-up time. Inspired by production planning in process industries where set-up times still remain substantial, we incorporated set-up time with associated cost in two modifications of carry-over models. Comparison with an earlier benchmark model without set-up carry-over shows that substantial savings can be derived from the fundamentally different production plans enforced by carry-overs. Moreover, we show that heuristic inclusion of carry-overs by removal of set-ups from non-carry-over solutions is inefficient.

Drivers and tracers of business process changes

Many companies have reported impressive results from their business process reengineering efforts. Based on the analysis of 32 Business Process Reengineering (BPR) projects it became obvious that there is huge diversity among the initiatives. Most of the projects studied were focused on streamlining current business processes, while only in few cases was the business radically redesigned. Internal inefficiency most often resulted in traditional BPR projects, while changing customer and supplier needs led to diversified business processes. However, external and uncontrollable drivers, such as restructuring of industries, can be traced by changes in business and operations strategies. Based on the results, a framework showing efficient ways of implementing different types of BPR projects was constructed. The framework may help managers to analyze the consistency of the alternative strategies for BPR.

Economies of Speed in Sea Transportation

Conventionally, shipping companies have invested in large ships to achieve economies of scale. More recently, high speed ships have been proposed as a means of achieving timely service for customers and improving shipping performance. Yet another solution offered here is to boost the cargo handling speed at port allowing for a higher number of annual round trips. Both the cost efficiency and timeliness of shipping service can be improved. The economic trade‐offs between the investments in cargo handling and ship propulsion technologies are formally analysed by taking the round trip frequency as the key to performance. The theoretical analyses as well as the practical cases studied indicate that investments in cargo handling technology, such as automation of container terminal operations and hatchless self‐loading ships, have indeed considerable profit‐making potential for shipping companies. Other technology investment opportunities appear less promising: ship propulsion due to energy consumption and envi...

Mitochondrial function and energy metabolism in umbilical cord blood- and bone marrow-derived mesenchymal stem cells.

Human mesenchymal stem cells (hMSCs) are an attractive choice for a variety of cellular therapies. hMSCs can be isolated from many different tissues and possess unique mitochondrial properties that can be used to determine their differentiation potential. Mitochondrial properties may possibly be used as a quality measure of hMSC-based products. Accordingly, the present work focuses on the mitochondrial function of hMSCs from umbilical cord blood (UCBMSC) cells and bone marrow cells from donors younger than 18 years of age (BMMSC <18) and those more than 50 years of age (BMMSC >50). Changes of ultrastructure and energy metabolism during osteogenic differentiation in all hMSC types were studied in detail. Results show that despite similar surface antigen characteristics, the UCBMSCs had smaller cell surface area and possessed more abundant rough endoplasmic reticulum than BMMSC >50. BMMSC <18 were morphologically more UCBMSC-like. UCBMSC showed dramatically higher mitochondrial-to-cytoplasm area ratio and elevated superoxide and manganese superoxide dismutase (MnSOD) levels as compared with BMMSC >50 and BMMSC <18. All hMSCs types showed changes indicative of mitochondrial activation after 2 weeks of osteogenic differentiation, and the increase in mitochondrial-to-cytoplasm area ratio appears to be one of the first steps in the differentiation process. However, BMMSC >50 showed a lower level of mitochondrial maturation and differentiation capacity. UCBMSCs and BMMSCs also showed a different pattern of exocytosed proteins and glycoproteoglycansins. These results indicate that hMSCs with similar cell surface antigen expression have different mitochondrial and functional properties, suggesting different maturation levels and other significant biological variations of the hMSCs. Therefore, it appears that mitochondrial analysis presents useful characterization criteria for hMSCs intended for clinical use.

Airline cost drivers: cost implications of fleet, routes, and personnel policies

The aim of the study is to define the factors that offer cost reduction possibilities in airline operations and to assess the impact of different cost reduction measures. It is concluded that fleet structure, route network and company policies on remuneration and work rules are the key factors affecting indirect operating costs, which, in turn, determine the total cost differences between airlines. Particularly for small and medium-sized carriers, concentration with sufficient volume in some traffic type—short-haul, medium-haul or long-haul—would appear to produce marked cost savings. Most airlines would benefit from a more uniform fleet structure and more flexible work rules.