Petri Suomala

Detailed cost modelling: a case study in warehouse logistics

Purpose – The purpose of this paper is to examine the applicability of different drivers for assigning activity costs to products in warehouse logistics environment.Design/methodology/approach – An action research case study in the warehouse logistics of an electronics wholesaler. Data were collected from a single activity which was analysed in depth.Findings – The study illustrates that there may be significant variation in activity costs that cannot be traced with any single transaction‐based driver. Automatic data collection methods can be used to support cost accounting in such a situation. It was clearly demonstrated that in certain environments it is possible to significantly increase the accuracy and versatility of accounting by measuring the actual durations together with other variables.Research limitations/implications – The results are derived from a single company and activity.Practical implications – Gives accountants in environments where data is rich and plentiful examples of methods for an...

Open book accounting in practice – exploring the faces of openness

Purpose - In spite of the increased research activity on inter-organizational cost management (IOCM) and open-book accounting (OBA), detailed evidence on the application of these tools in real-life settings is still relatively sparse. Increased outsourcing and supplier responsibilities call for more thorough understanding on the possibilities and variations of supply chain cost management. As a research avenue, in-depth case studies have been invited to elaborate the cost management interaction between companies. This paper aims to address these issues. Design/methodology/approach - This paper is based on an interventionist research within two supply networks. By making research interventions on the development of cost management practices among the suppliers, the researchers have set the ground for implementation of OBA, which, then, has provided a box seat to observe the process of OBA and its associations with the different forms of control. Within these two networks, this paper focuses on two OBA episodes portraying different facets of openness in IOCM. Findings - This paper presents OBA as an accounting template with a seemingly flexible character. By relying on the empirical study, the paper shows how OBA might be used for mitigating the components price increasing pressures and, thus, controlling the costs of the end product in hybrids resembling very much market conditions. However, the very similar OBA procedures can be applied for achieving the long-term goals of partnering in hybrids resembling to a great extent hierarchical structures. As the paper shows, the best corresponding control archetype for a given OBA application largely depends on the purpose defined for the IOCM activity by participating stakeholders. Originality/value - Thus, far, there are no interventionist studies on OBA and, hence, the research setting provides an interesting new element to the extant literature on OBA and IOCM. However, the research method does not have intrinsic value. Thus, the contribution, and therefore also the originality, of this paper is based on new aspects provided to the theory on OBA.

The effects of customization on spare part business: A case study in the metal industry

Abstract This paper aims to point out the consequences of customization in spare part operations. The spare part business is taken to be the purchasing, warehousing, selling and delivering of spare parts. In addition, customer service, such as handling warranty issues, is seen as a part of the spare part business. The impact of the spare part business on company profit tends to be significant. The case company represents an industry in which customization is a typical phenomenon. Customized products are slight variations of standard configurations and are typically developed in response to a specific order by a customer. Fulfilling individual customer needs in the customization process is likely to increase customer loyalty. The case study conducted in the metal industry takes a constructive approach. At the initial stage of the project, company representatives expected customization to have a negative impact on spare part business profit. By identifying and categorizing different customization cases from the spare part businesss point of view a framework is established to assist R&D and product management in decision-making related to modifications of a standard product. The study suggests that if customization leads to an increase in the number of seldom sold items the personnel costs are in a significant role. The effects on the inventory level were minor.

The patterns of success in product development: a case study

Success in product development can be considered a general aim for any R&D activity. Unfortunately, success is very multidimensional. Which dimensions of success one should include and how one can measure these dimensions is an essential question that must be resolved within R&D management. The aim of the paper is to analyse the multidimensionality of success at R&D project level. Using the evidence from three industrial cases, the paper shows the versatility of the concept of success in product development. On the basis of the evidence, the paper concludes that there is often only a vague correlation between three aspects of R&D success – financial, technical and project management. The focus of the paper is on the development of investment goods for the paper industry.

Relevant interventionist research: balancing three intellectual virtues

This paper argues for a balanced approach to considering the three intellectual virtues of Aristotle, brought forth by Flyvbjerg [2001. Making Social Science Matter: Why Social Inquiry Fails and How It Can Succeed Again. Cambridge: Cambridge University Press] – techne, episteme and phronesis – and links them to recent debates on the relevance of management accounting research. The intellectual virtue of phronesis is viewed as opening an avenue for conducting management accounting research that is societally relevant and the interventionist research (IVR) approach is suggested to form one natural platform for such research. The paper underlines that the intellectual virtue of episteme, being related to theoretical relevance, is a necessary element in all scholarly endeavours and that IVR has so far tended to suffer from being too much focused on the intellectual virtue of techne and thereby practical relevance only. The method of ‘engaged scholarship’ is offered as one fruitful option for balancing the three intellectual virtues and conducting research that is relevant to several dimensions.

Using a business game concept to enhance servitization: a longitudinal case study

Purpose – The purpose of this paper is to examine the potential benefits of a business game on customers’ business in enhancing servitization. The concept is proposed to be helpful in the phases of defining the servitization initiative and gaining shared understanding about it at a manufacturer.Design/methodology/approach – The paper is based on a longitudinal case study at a manufacturer (2003‐2008), with a focus on the business game concept on customers’ business. The researchers and approximately 140 company representatives contributed to both early and later phases of the development of the concept.Findings – The business game concept appeared to serve the purpose of generating and sharing ideas about the customers’ business and the desired role of the OEM in it, as a potential outcome of servitization. The concept synthesizes the previously fragmented customer awareness across the business units and provides useful information for various stakeholders. The presence of personnel across the different b...

Downstream shift at a machinery manufacturer: the case of the remote technologies

Purpose – The purpose of this paper is twofold. First, it aims at defining the concept of the downstream shift in the context of the machinery manufacturers. The second aim of the paper is to analyze the potentially enabling role of remote technologies in that shift.Design/methodology/approach – Besides examining the development of the supply chains based on the literature and a case company, the paper refers to the case of the remote technologies developed and used by the case company for the years of 2003‐2008.Findings – The key finding of this paper is that no consensus exists on the favourable scope and content of the downstream shift aimed at by the machinery manufacturers. Respectively, the potential role of the technologies in the shift can also vary on a case‐by‐case basis. Based on the case study, instead of new sources of service revenues, the information processed with the help of the remote technologies may provide an opportunity for the machinery manufacturer to learn from its customers, thus...

Management accounting roles in supporting servitisation: Implications for decision making at multiple levels

Purpose – The purpose of this paper is to analyse the potentially supportive roles of management accounting (MA) in the servitisation of manufacturers.Design/methodology/approach – The paper is a conceptual analysis supported by empirical examples.Findings – The potentially supporting roles of MA are here connected to the process of justifying, defining, and controlling servitisation. The potential units of analysis for MA in such a process are explored by going through the different viewpoints regarding service. The actual roles of MA within the process are examined both conceptually and in light of empirical experience. The paper acknowledges MA as a social phenomenon, taking multiple roles in supporting decision making. Essentially, MA can be used as a source of restricting and enabling, and the roles of MA may range from that of “answer machine” to the subjective and interactive use of MA information.Research limitations/implications – The paper represents a starting point for studying the variety of ...

Boundary subjects and boundary objects in accounting fact construction and communication

Purpose This paper aims to elaborate the concepts of boundary subjects and boundary objects in constructing and communicating relevant accounting facts for managing product development (PD). Boundary subjects as reflective actors benefit effective accounting enactment, by building a shared understanding about different actors’ roles and information needs, and by helping to respond to these needs with new boundary objects. Design/methodology/approach The paper uses a longitudinal interventionist case study of a machinery manufacturer. The focus of this case study was the production ramp-up phase at the end of a PD program. Different actors’ needs were first collected and elaborated by interventionist researchers (boundary subjects). Then accounting prototypes (boundary objects) provided new means of communication. Findings The findings show that dealing with boundaries is crucial in accounting development. The role of boundary subjects was fundamental in the process of choosing, constructing, elaborating and communicating accounting facts. During this process, accounting prototypes integrated new accounting facts, the boundary subjects mitigated the boundaries and the boundary objects focused and restricted communication about accounting facts. Research limitations/implications The paper tests the pragmatic constructivism approach by examining accounting enactment under uncertainty and ambiguity. The study refines pragmatic constructivism in terms of boundaries, boundary subjects as actors and boundary objects. Practical implications The intentional use of boundary subjects and objects as communication platform could push a more active inclusion of business controllers as active business partners. Originality/value The paper contributes to the literature on accounting development by highlighting the use of boundary subjects and boundary objects as fundamental mechanisms in constructing and communicating accounting facts.

Effects of combining product-centric control and direct digital manufacturing

A case study points to an interesting new area of application for intelligent products.Combining product centric control and direct digital manufacturing enable preparing kits directly to order.The case indicates how to use product centric control in Make-to-Order manufacturing to simplify logistics and handling. The case study presents the effects of combining product-centric control and direct digital manufacturing (DDM) in the preparation of customized assembly kits. The theoretical contribution of the paper is in describing a combinatorial innovation in operations and production management: how to use product-centric control to make DDM highly efficient when there are many generic and partly generic production resources. Evidence is found of many beneficial outcomes such as waste reduction, simplified planning, and improved customer responsiveness for the case of preparing customized assembly kits for hydraulic hoses.