Veli-Matti Virolainen

Risk analysis and assessment in network environments: A dyadic case study

Abstract The aim of this paper is to describe a conceptual framework for risk analysis of production networks from the points of view of both a buying company and a supplier. The primary objective is to illustrate how a company can analyze and assess the risks associated with networking. Two approaches: internal audit, and computer aided cause and effect analysis, are demonstrated as instruments for the analysis of risk. This study uses case study methodology and qualitative information. Two companies, operating as final assemblers in the electronics and metal industry sectors, and nine of their suppliers have been interviewed.

Filling a gap in traditional transaction cost economics:: Towards transaction benefits-based analysis

Abstract This paper analyzes dyadic partnership formation between asymmetric buyers and specialized suppliers. In the first part of the paper different economics of organization-based approaches are evaluated. Their basic implications concerning the rise of partnerships are derived. In the second part a dynamized transaction cost and benefit model is introduced to analyze the most critical elements of a typical partnership decision. The final part is based on insights from practice and in-depth interviews among 12 specialized suppliers and their four large incumbent partners in the Information and Telecommunications Industry.

A survey of procurement strategy development in industrial companies

The aim of this theoretical study is to create a general framework for procurement strategy formulation and, in particular, present how to create and implement a procurement strategy. The framework suggested in this study will result from a study of various approaches discussed in the literature. The traditional perspective, as presented in the competitive strategy literature, finds the buyer-supplier relationship in terms of both parties competing with each other. The new approaches such as JIT, partnership sourcing and lean purchasing present quite a different perspective in terms of partnership. The central theme of this study is that, to be successful, the procurement management should use both approaches.

Attaining world-class R&D by benchmarking buyer-supplier relationships

Abstract The research and development (R&D) function has become fundamental particularly for companies acting in the high-tech industry sector. It is largely agreed that because of the severe competition, world-class R&D performance can no longer be achieved by a company on its own. Nowadays, meeting customer requirements increasingly needs R&D collaboration in buyer–supplier relationships. The aim of this study is to provide managers a well-defined method by which they will be more capable to improve R&D collaboration with their suppliers. Benchmarking for best practices was first implemented by Xerox in 1979. Since then benchmarking has been applied in several areas by numerous researchers. However, in developing R&D in buyer–supplier relationships, benchmarking applications have been scarce. A case study in Finnish high-tech industry has been conducted in order to apply the benchmarking process in buyer–supplier relationships with the emphasis on R&D development. A case study research expands understanding on the success factors, barriers and potential that the benchmarking method in developing R&D performance in buyer–supplier relationships may reveal.

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.

Supply strategy in the food industry – value net perspective

The role of supply has become more strategic, which has led to changes in supply management. The role of supply strategy has also increased, and it is essential nowadays that companies have supply strategies to define their actions in the supply system. The supply strategy consists of several elements, and its most focal components are examined in this study. Based on transaction cost economics and the resource-based view, we discuss supplier relationships, which form one main element of the supply strategy from the value net perspective. The elements and the role of supply strategy are analysed in a case study of the Finnish food industry value net.

Inventory control and quality system requirements—a case study

Abstract In this study we have examined the requirements of two commonly used quality standards and how the generally approved inventory control methods in two large Finnish paper mills respond to these requirements. We have tried to answer questions such as; do the quality system activities complicate or do they have conflicting goals with the logistics system, or are there supporting activities or goals? The current state of inventory and quality systems in these companies has also been examined. We have found out that, although these two systems have concentrated on different characteristics from inventory activities and they respond at the different level, they support each other. Even so that an appropriate quality system forms a basis to efficient inventory control.

Characteristics of logistics management in 23 Finnish companies

Abstract In this study the current state of logistics decision making and management in Finland is examined by reviewing 23 case studies. Empirical findings are compared with normative theories of how logistics management should be performed. The aim is to identify and outline characteristics and problems of logistics management in order to develop an analytical framework and to indicate the most interesting and potential lines for further empirical analyses.

Emergence of the supply network in Finnish industry: experiment in theoretical reconstruction

This paper analyses the formation of supply chains in the Finnish telecommunications and metal industries using transaction cost theory as an analytical device. The purpose is to cope with different issues associated with networking decisions in such dyad relations where asymmetric large buyers and small subcontracting firms negotiate interfirm cooperation with each other. In the first part of the paper, a transaction cost (TC) framework is introduced in order to grasp theoretically the most critical elements of a typical dyad subcontracting decision. The second part of the paper makes an attempt to shed some new light on the rarely studied empirical transaction cost economics. Our sample consists of 11 Finnish companies from which the data has been gathered through in-depth interviews. Its purpose is to describe how the networks have emerged and developed during the past years using our TC-framework as a theoretical device.