Tomi Solakivi

Effects of geographic dispersion on intra-firm supply chain performance

Purpose – This article aims to quantify and analyse empirically how the geographic dispersion of a firms supply chain impacts on intra‐firm supply chain performance.Design/methodology/approach – Generalised linear modelling is utilised to analyse a sample of 95 large manufacturing companies operating in Finland.Findings – Results indicate that the increased geographic dispersion of the upstream supply chain results in higher costs of warehousing and logistics administration. On the downstream side, inventory costs, inventory days of supply, and cash‐to‐cash cycle time tend to increase due to geographically dispersed sales network. Increased geographic dispersion in the upstream and downstream supply chain results in the decline of perfect orders, and increases order fulfilment cycle time. However, the increased dispersion of the production network reduces order fulfilment cycle time. The results also indicate that the larger the firm, the better it can alleviate the negative implications of dispersion on...

Priorities and determinants for supply chain management skills development in manufacturing firms

Purpose – The purpose of this paper is to find out the current SCM skill development priorities in manufacturing firms and how the structural properties of the supply chain translate into demand for SCM skills in manufacturing firms.Design/methodology/approach – An internet survey was designed and conducted. The responses of 154 manufacturing companies operating in Finland were analysed through descriptive statistics and regression analyses.Findings – The supply chain management skills with an inter‐organisational focus tend to have a higher development priority than the skills with an intra‐organisational focus. The top five skills for development are: demand forecasting and supply planning; sourcing and supplier management; customer and distribution channel management; production planning and control; and information systems for logistics and production planning. Structural properties of the supply chain seem to have an effect on skills that are related to supply chain design and information flow infras...

Logistics outsourcing and company performance of SMEs

Purpose – The purpose of this paper is to explore the current state of and future expectations concerning the usage of the outsourcing of logistics operations in small‐ and medium‐sized enterprises (SMEs), and to analyse and quantify the relationships between logistics outsourcing, costs and performance, financial performance, and the company context.Design/methodology/approach – The data were 223 manufacturing and trading SMEs from the Finnish logistics survey combined with detailed financial report‐based data, both referring to the year 2008. Statistical analyses including ANOVA and factor analysis were applied.Findings – Transport activities are excessively outsourced. Most companies report no outsourcing of order processing and invoicing, and half of them have not outsourced logistics IT systems. Outsourcing is expected to grow in all areas with strongest expectations in materials management, value‐added services, and in IT. The logistics costs for companies engaging in the medium level of outsourcing...

Logistics outsourcing, its motives and the level of logistics costs in manufacturing and trading companies operating in Finland

This article explores the various aspects of logistics outsourcing in companies operating in Finland. The aim is to identify the connection between outsourcing, its motives and logistics costs. The data comprise a survey sample of 299 manufacturing and trading firms. Descriptive statistical analyses, analysis of variance and factor analysis were applied. Transport activities are outsourced to a large extent. The majority of companies manage most other logistics operations in-house. The outsourcing of product customisation, inventory management and warehousing is expected to become more common in the future. Cost savings together with flexibility and customer service were found to be the major motives for outsourcing. A connection between logistics costs and logistics outsourcing was identified: companies with higher levels of outsourcing are experiencing lower levels of logistics costs compared to those with lower levels of outsourcing or none at all.

The effect of low-cost country sourcing on supply chain administration cost

While the key advantage of low-cost country (LCC) sourcing is in low prices, other aspects of conducting sourcing from these countries remain problematic. This research quantifies the effect of LCC sourcing on the cost of supply chain administration, and examines the possible role of firm size and industry in this relationship. The research draws on survey data, with respondents from manufacturing firms operating in Finland. The results indicate that the supply chain administration cost among manufacturing firms seems to rise with the increase in LCC sourcing. The results also suggest that companies in technologically intensive industries experience higher costs, whereas firm size does not have an effect on costs. The research contributes to the debate on the cost-related effects of LCC sourcing, by offering quantified results that can be used as the reference point for managers contemplating the pros and cons in increasing the share of LCC sourcing.

Supply chain development priorities of manufacturing firms: empirical findings from a Finnish national survey

In order to realise the potential of logistics and supply chain management in a firm, relevant strategies and development priorities need to be identified and developed. This research aims to identify the current logistics and supply chain-related strategic development priorities of manufacturing firms that operate in Finland and to identify the key determinants of these priorities. Based on survey data from 317 manufacturing firms, the top five supply chain development priorities for the years 2009–2013 were identified as cutting logistics costs, improving delivery reliability, developing information systems, improving customer service and increasing supply chain transparency. A multinomial logistic regression analysis further highlighted the role of manufacturing strategy and the extent of the geographic dispersion of supply networks as predictors of firms’ supply chain development priority choices.

Performance outcomes of environmental collaboration: Evidence from Finnish logistics service providers

Firms that need to address growing concerns about the environmental impact of their activities could benefit from collaborating internally and externally. The purpose of this paper is to develop and empirically test a theoretical model of the effects of internal and external environmental collaboration with customers on the firm performance of logistics service providers (LSPs).,Hierarchical multiple regression and generalised linear modelling are utilised to analyse 311 LSPs offering road transport services in Finland. The data set was collected from a Finnish nationwide logistics survey in 2012 and financial reports-based data.,External environmental collaboration with customers seems to be the most effective way to improve operational and financial performance, while internal environmental collaboration does not yield similar benefits.,Research limitations include the concentrated geographic origin of the respondents and the exclusion of potential indirect effects of environmental collaboration on operational and financial performance through environmental performance.,Managers planning to implement environmental initiatives should extend their focus from internal operations to external partners in the supply chain.,This research is one of the first attempts to focus on performance outcomes with regard to the environmental activities of LSPs. The research provides quantified insights using both self-reported and financial reports-based data.

Trade credit dynamics during the phases of the business cycle – a value chain perspective

Purpose The purpose of this paper is to provide evidence of how the business cycle affects net-trade-credit and its components in firms on different tiers of the value chain, including retail, wholesale and two consecutive manufacturing tiers. Design/methodology/approach Data were collected by the means of four surveys in the years 2006, 2009, 2012 and 2014, representing different phases of the business cycle, that is, from strong economic growth to a deep recession and on to slow recovery and finally into decline. Descriptive statistics and three ANOVA models were used in the analysis of the data. Findings The distinctive profile of each value chain tier appears to have an effect on tier-specific trade credit dynamics. Overall, upstream positioned firms and small firms are likely to experience a decline in the net-trade-credit during uncertain economic times. The type of task interdependence between tiers also appears to affect trade credit dynamics in some tiers of the value chain. Furthermore, initiated by recession, certain trade credit dynamics in the value chain suggest a mechanism that transmits an increased working capital burden from customers to suppliers along the value chain. Research limitations/implications Results are based on survey research with a limited amount of respondents and geographical coverage, implying limited generalisability. The use of implicit measures limits the conclusiveness of the research. Originality/value The conventional perception of the power-based determination of trade credit policies is complemented with a value chain-related task interdependence perspective. The results of this paper also highlight that a more holistic value chain perceptive on working capital management would be more sustainable in comparison to firm-centric approaches.

Supply chain collaboration and firm performance in manufacturing

Supply chain collaboration is often referred as a way to integrate business processes up- and downstream the supply chain. Information systems tend to be important enablers for such collaborative actions. This paper presents empirical evidence on how supply chain collaboration and information systems support is connected with firm performance. Here firm performance is defined as financial performance and intra-firm supply chain performance including logistics costs, service performance and asset utilisation. For the analysis, survey data from 86 manufacturing firms operating in Finland were gathered and merged with financial reports data. The data-set was analysed through correlation analyses, confirmatory factor analyses and generalised linear models. The findings suggest that lower logistics costs and better financial performance are associated with increased collaboration in the supply chain. The results also imply that practitioners should perhaps opt more for collaborative actions in the supply chain than the technical capabilities of their information systems.

The impact of ice class on the economics of wet and dry bulk shipping in the Arctic waters

ABSTRACT Shipping in Arctic waters is subject to technical requirements posed by harsh ambient conditions. Vessels operating in ice-infested waters need reinforced hulls and more powerful engines, for example. These requirements are reflected in the vessel’s ice class, which has specific implications not only for operational issues but also for shipping economics. This article examines the extent to which the shipping costs of wet and dry bulk vessels compliant with the International Association of Classification Societies (IACS) Polar Class rules exceed those of vessels without an ice class. Descriptive statistics and multiple regression analysis were used to estimate differentials in capital and fuel costs, as well as in cargo-carrying capacity. The applied dataset, obtained from two major shipping registries, includes technical details of 21,352 bulk vessels, of which 711 possessed a PC, and the remaining 20,641 comprised the reference category. The results show that Polar Class compliant vessels could be up to three times more expensive to build than vessels without an ice class. Moreover, the respective increase in fuel costs may account for up to 150 per cent given the additional engine power and the increased hull weight. Finally, the reduction in cargo-carrying capacity amounts to 20 per cent compared to the reference category.