Timo Pirttilä

Sharpening logistics customer service strategy planning by applying Kano's quality element classification

This paper presents how logistics customer service requirements can be analysed by using Kanos model of quality element classification, and discusses the potential benefits that can be achieved by applying this approach to a logistics customer service planning process. According to the model of Kanos, quality elements should be classified into three classes depending on their ability to create customer satisfaction or cause dissatisfaction: elements of expected quality, attractive quality, and one-dimensional quality. This study suggests that logistics customer service elements could be classified analogously with Kanos model to identify the most important customer service elements, and to effectively distinguish the differences between customer groups. Differences between traditional approaches and Kanos classification are discussed.

Activity-based costing and distribution logistics management

Abstract Most of the research papers and articles dealing with activity-based costing (ABC) have their focus on manufacturing operations, although the ABC approach can be applicable across the spectrum of company functions. This paper discusses activity-based costing in context with distribution logistics management. The procedure of calculating activity-based costs of a distribution warehouse in a case-company is presented in detail.

Lateral coordination in a logistics outsourcing relationship

Abstract This paper studies the coordination of activities between two different organizations. The object of analysis is a logistics outsourcing relationship and its inter-organizational coordination requirements. The possibilities of using different forms of lateral coordination mechanisms – informal coordination, formal inter-organizational teams, and integrating roles – are discussed. The main conclusion is that developing of lateral organizational capability through practicing the presented lateral coordination mechanisms, and actively promoting it to customers, can become a potential source of competitive advantage for logistics service providers.

The choice of replenishment policies in an MRP environment

This paper studies the choice of replenishment policies in an MRP environment. It discusses the classification of items and the criteria to use in the classification especially in a general assemble-to-order company. The paper presents a stepwise procedure to classify items into five general groups. The stepwise classification saves work by excluding items from further analysis in each step.

An approach to link customer characteristics to inventory decision making

Abstract Differentiation of logistics services through distinct inventory policies is analyzed. A framework is presented in which product-based information is supplemented by customer-specific characteristics when deciding on the inventory policy for a specific product. Product-based information includes sales volume and variation by product. Customer information consists of purchase volume and its growth potential, and evaluation of the effects that service level has on purchases. Delivery time is used as service measure and inventory policy consists of selecting the production mode from make-to-order, make-to-stock, or one of their variations. As a result, distinct inventory policies are formed.

A framework for cost-service analysis in differentiation of logistics services

Abstract The purpose of this paper is to emphasize the importance of the differentiation of logistics services in creating logistics customer value, and to clarify the meaning and roles of the competitor-based external differentiation and the internal differentiation. Especially, this paper addresses the question of how the internal differentiation of logistics services could be used in the strategic planning of distribution logistics. First, a tentative process model of decision making of logistics service differentiation is suggested. The stages of the process are described, and arising opportunities and problems are discussed. Also, some guidelines are suggested as to how different analytical methods could be used at various stages of the process. Secondly, the common features and differences of external and internal differentiation are considered within the context of the logistics decision-making process. Lastly, the main perceptions are summarized, and a few research targets associated with this topic are raised.

An overview of the state and problems of inventory management in Finland

Abstract In this study we examine the current state of inventory management in Finland by reviewing fifteen case studies made at the Lappeenranta University of Technology. In this paper several aspects of inventory management are considered. In greater detail we have tried to answer questions such as: what is the role of inventory management in corporate planning, and how are inventory decisions made in manufacturing organizations? In addition particular attention is directed at the goal setting and performance measurement in inventory management. We have found out, that important decisions concerning inventories are usually made at a low level in the organizational hierarchy without any guidelines from top or middle management. Furthermore, companies lack accurate, real-time and suitably aggregate information of material flow and stock levels. This makes setting precise quantitative goals for inventory management difficult. Some companies have had financial pressure to decrease inventories and because of the lack of proper inventory control this had led to both external and internal stockouts.

Cross-functional decision-making in improving inventory management decision procedures

Abstract We present how an organizational design tool called decision rights matrix (DRM) can be used for the cross-functional decision-making procedures of the inventory management. The DRM method can be applied both in re-designing of an existing logistics process and in designing of a new process. A case example is presented concerning the use of the DRM method in clarifying inventory management decision structures in a complex organizational setting.

Manufacturing strategy and capital budgeting process

Abstract This paper integrates the concepts of manufacturing strategy theory with the ideas of capital budgeting process theory. This combination of concepts deepens capital budgeting process theory by giving a contents base to the strategic dimensions of manufacturing investments. The manufacturing strategy concept is an efficient tool when the investment process of a company should be studied and improved. The manufacturing strategy steers the numerous individual decisions connected to the development of the manufacturing system of the company. The integration of concepts complements also manufacturing strategy theory with ideas from capital budgeting theory.

Price dynamics on the recovered paper market

Abstract The significance of recovered paper as one of the main raw materials in paper making has increased steadily during the recent decades, currently covering almost 40% of the total fibre furnish globally. The deep market changes in the recent years, the complexity of the market dynamics and the increasing importance as a raw material, together with minor existing research in this sector have brought up needs for an analytical tool to facilitate decision making in the recovered paper businesses. In this paper one possible way of analysing the structure of the recovered paper market is discussed and a statistical approach supported with a qualitative market analysis is suggested with the objective of getting a view of the short-term price trend. Also the obstacles encountered in the modelling efforts are discussed.