COBTEC, Research Programme. Petri Kalliokoski, Anna Aminoff, Tiina Valjakka, Tiina Apilo, Jukka Hemilä, Iiro Salkari, Toni Jarimo, Mikko Uoti

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1 COBTEC, Research Programme Petri Kalliokoski, Anna Aminoff, Tiina Valjakka, Tiina Apilo, Jukka Hemilä, Iiro Salkari, Toni Jarimo, Mikko Uoti

2 Executive Summary Research Programme Collaborative Business Networks and Technology Platforms is activated to research and clarify future industrial management methodologies and concepts Research programme is research orientated - connection to real life is assured through practical industrial cases Schedule: 3/ /2007 Main results: New theoretical contribution for industrial management challenges in complex network environment Several doctoral theses that are based on common challenges and partly same cases --> makes possible to cover wide research area (estimates 5to 6theses) Scientific articles and publications Research programme is carried out in VTT Industrial Systems with academic co-operation with leading industrial management professors

3 Industrial Management Research at VTT Industrial Management research and development in VTT is focused on networked business Main research themes are: Strategic management Innovation and knowledge management Product and service concept management Technology management Business models and process development Mathematics in industrial management Research and development approach mostly based on action reseach and case studies

4 Domestic Reference Projects Purso Tools ( ) Puustelli-verkko ( ) Lokotrack-verkko ( ) Soluverkko ( ) JT-verkko ( ) Verkko-E ( ) RAVI ( ) Haka-rengas ( ) JT-kyky ( ) TEKNOPOLI ( ) NORDIC ( ) Verkko E/II-vaihe ( ) VAVE -verkko ( ) Kehitys Kasvuun ( ) Peliteoria (2003) Polku-verkosto ( ) 3G ( ) INTO (2000- ) Koneali (2000-) VERKOSTOREITTAUS ( ) TTEVALU (2001) InElog ( ) VeNet (2001-) PARTNET (2001 -) Prima (2001 TULET (2002 -) Alilogi (2002 -) Opitaan! (2002 -) NiceNet (2002 -) Liike (2002 -)

5 International Reference Projects ADMAN;Advanced Manufacturing in Process Industry ( ) Globeman21; Global Manufacturing in the 21 century Test Case ( ) Full scale ( ) Gnosis; Knowledge Systematisation - configuration systems for design and manufacturing Test Case ( ) Gnosis-Virtual Factory ( ) GLOBEMEN; Global Engineering and Manufacturing in Enterprise Networks ( ) EXPIDE; Extended Products in Dynamic Enterprises ( ) VOSTER; Virtual Organisations Cluster ( ) VOmap; Virtual Organisations Road Map ( ) MACRO; Mobility Assistance for Customers Relations Based Organisations ( ) ECOLEAD; Virtual Organizations, Integrated EU Project ( )

6 Research Problem How to Manage Dynamic and Technology Intensive Enterprise Networks in Complex Business Environment?

7 COBTEC, Research Areas

8 Research Programme Management Model Management Management Group Group (Financiers (Financiers-Industry -Industry- - Academic Academic Specialists Specialists --VTT) VTT) Industrial Reference Group Research Group (VTT Industrial Systems) Academic Contributors (Finnish, International) Theme Specific Project Groups (Researchers, Industrial Cases)

9 Researchers Researcher Degree PhD Studies Other ongoing studies Petri Kalliokoski Anna Aminoff Iiro Salkari Tiina Valjakka Tiina Apilo Jukka Hemilä Toni Jarimo M.Sc.(Tech.) M.Sc.(Tech.) M.Sc.(Tech.) M.Sc.(Tech.) M.Sc.(Tech.) B.Sc. M.Sc (Tech.) M.Sc.(Tech.) Started autumn 2001, Helsinki University of Technology Started autumn 2000, Helsinki University of Technology Started autumn 2003, Helsinki University of Technology Started autumn 2002, Lappeenranta University of Technology Started spring 2003, Lappeenranta University of Technology Started December 2002, Helsinki University of Technology Due to start autumn 2003, Helsinki University of Technology M.Sc.(Econ) student in Helsinki School of Economics (since autumn 2003)

10 Academic Advisors Advisor Degree Main Competence Areas Raimo Hyötyläinen PhD Networks, Research Methodologies Rauno Heinonen PhD Technology Management Tapio Koivisto PhD Innovation and Knowledge Management Urho Pulkkinen Professor Industrial Mathematics Karlos Artto Professor International Project-oriented Business Kari O. Koskinen Professor Information and Computer Systems in Automation Kari Tanskanen Professor Logistics Tuomo Kässi Professor Engineering and Technology Management Ahti Salo Professor Applied Mathematics

11 Academic Results Theoretical contribution Several doctoral thesis (4 to 5) Other academic thesis Scientific articles Conference papers International research co-operation Researcher exchange Co-operative research projects International research workshops Domestic research co-operation Co-operation with other research institutes and universities Collaborative seminars and workshops New research topics and projects

12 Utility for Case Companies Through enhanced understanding of future business management practices companies are better prepared for market competition and change Participation to seminars: up-to-date research challenges and results Companies can benchmark their business practices with other participants

13 Preliminary Plan for COBTEC seminars 1 st Phase: 1. Kick-off seminar 2/2004: Industrial Service Business 2. Seminar 6/2004: Creating New Businesses 3. Seminar 11/2004: Organisational Change Management 4. Seminar 4/2005: Demand Supply Networks 5. Seminar 9/2005: The ending seminar for the 1st phase 2 nd Phase: 6. Seminar 12/2005: Information and Communications Technology 7. Seminar 5/2006: Mathematical Modelling in Industrial Management 8. Seminar 11/2006: Discussion over the Doctoral Theses 9. Seminar 5/2007: Discussion over the Doctoral Theses 10. Seminar 11/2007: The ending seminar for the COBTEC-project

14 Further Information Mr. Petri Kalliokoski VTT Industrial Systems, Industrial Management P.O.Box 1301, FIN VTT, Finland Street address: Tekniikantie 12, Espoo Tel , Mobile Fax , Petri.Kalliokoski@vtt.fi

15 Additional Slides - VTT in Brief - - Research Areas -

16 VTT in Brief 2001 Technical Research Centre of Finland Units: VTT Electronics VTT Information Technology VTT Industrial Systems VTT Processes VTT Biotechnology VTT Building and Transport VTT Information Service VTT Corporate Management and Services Staff: Turnover: M Basic govern. funding to research on VTT s own initiative 34 M Jointly funded projects 92 M Commercial activities 88 M Staff breakdown by location: Oulu 323 Outokumpu 37 Jyväskylä 128 Tampere 332 Lappeenranta 12 Espoo Others 21 Total 3 012

17 VTT and VTT Industrial Systems Fields of expertise, customer groups and expertise portals VTT ICT Automation Industry Machine Industry Electronics Industry Mobile Machines Finnish Maritime Administration VTT Transport Defence Forces VTT Pulp & Paper Wood-processing Industry Products Production Safety VTT INDUSTRIAL SYSTEMS products, production, systems, ICT lifecycle management Networking Dependability Logistics Automation Basic Metal Industries VTT Materials Radiation and Nuclear Safety Authority Ministry of the Environment VTT Environment VTT Nuclear Energy Industry Vapo VTT Renewables Chemical Industry Pharmaceutical Industry

18 Industrial Management Research at VTT (1/2) Available Team power VTT VTT Industrial Industrial Systems Systems = Units with special emphasis on industrial management, around 50 researchers Production engineering Product performance Reliability and risk management Production systems Intelligent products and services Materials and structural integrity Research fields Production technology (Espoo) Automation systems (Espoo) Industrial management (Espoo) Process simulation (Espoo) Research groups Enterprise networks Distributed manufacturing Business models & Tech. management Production development (Tampere) Human factors Research teams

19 Research Summary (1/6) 1. Business Opportunity Identification and Creation of New Businesses Research Problems and questions What are the factors that support and enable generating new business in company networks What kind of co-operation modes and processes are used in examining and generating new business opportunities? What are the changes in the operations model of the network? Contribution to the research programme Recognizing and defining the mechanisms the multilateral strategic networks generate new business Responsible & preliminary name of the study Tiina Valjakka: Generating New Business trough Company Networks

20 Research Summary (1/6) 1. Business Opportunity Identification and Creation of New Businesses Concepts / Approaches Models of SME networks Managing strategic networks Development of strategic networks Network strategy References Hyötyläinen, R Development Mechanisms of Strategic Enterprise Networks. Learning and Innovation in Networks. Espoo: VTT Publications 417. Jarillo, J Strategic Networks. Creating Borderless Organization. Oxford: Butterworth-Heinemann. Hines Child, J. & Faulkner, D Strategies of Cooperation. Managing Alliances, Networks, and Joint Ventures. Oxford: Oxford Universitys Press. Nooteboom, B Learning and Innovation in Organizations and Economics. Oxford: Oxford University Press.

21 Research Summary (1/6) 1. Business Opportunity Identification and Creation of New Businesses CONTRACTORS PARTNER COMPANIES STRATEGIC NETWORK CUSTOMER CORE COMPANY VIRTUAL ENTERPRISE

22 Research Summary (2/6) 2. Product and Service Platforms Life Cycle Management Research problems / questions How to define and conceptualize service-oriented business in Finnish enterprises and enterprise networks? What are the innovation models and cycles behind the profitable service business models and what co-operation between enterprise network companies enables new and innovative co-operation models? What kind of business models and organizational approaches enable profitable business between network companies? How should organizations manage their business systems and processes to ensure capability and competence to apply new service business-related technology? What kind of development process companies should implement to service business-oriented businesses? Contribution to the research programme The research contributes new knowledge on how to benefit from the concept of service business management It defines service business development framework and model for Finnish industry Responsible & preliminary name of the study Petri Kalliokoski: Service Business Platforms in Finnish Industrial Companies

23 Research Summary (2/6) 2. Product and Service Platforms Life Cycle Management Concepts / Approaches Strategic management of business Management of innovation processes and systems Management of value networks Development of solutions (combined products and services) Customer requirements management Technology implementation References Jacgues Horovitch. Seven Secrets of Service Strategy. Prentice Hall / Financial Times Cagan J., Vogel C. M., Creating Breakthrough Products - Innovation From Product Planning to Program Approval. Prentice Hall / Financial Times Hyötyläinen, R., Kalliokoski, P. & Suokas, J. New Dimensions of Networking in Service Business. International Research Journal of VTT Industrial Systems in 2002.

24 Research Summary (2/6) 2. Product and Service Platforms Life Cycle Management The Concept of Extended Product LOGISTIC SERVICES - mode of delivery - customers stock management PACKAGE DFMA, DFT - fast ramp-up PRODUCT DEVELOPMENT PRODUCT HISTORY -on-line documents BRAND QUALITY CORE PRODUCT PRODUCT FEATURES PRODUCTION PROCESS RESEARCH & DEVELOPMENT AFTER-SALES - upkeep - service parts - updating, etc.

25 Research Summary (3/6) 3. Agile Demand Supply Network Management Research problems / questions What DSM means to different lines of businesses? With what kind operating models regarding to demand supply management can networks become more efficient? What kind of supply strategies and models lead to best performance in supply chain? Contribution to the research programme The research contributes new knowledge on how to benefit from the concept of demand supply management It defines, what kind of demand supply models can be used in dynamic business and technology platforms to achieve best performance Responsible & preliminary name of the study Anna Aminoff :Operation models in context of demand supply management in different environments

26 Research Summary (3/6) 3. Agile Demand Supply Network Management Concepts / Approaches CPFR (Collaborative Planning, Forecasting and Replenishment ) and other collaborative methods End to end visibility Strategic supplier management and partnership Lean supply Logistics' competitive weapons: responsiveness, agility, leanness, intelligence References Martin Christopher: Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service. 2nd ed. England, Prentice Hall. 294 p. Gattorna (ed) 1998 Strategic Supply Chain Alignment: Best practice in supply chain management. Hampshire, Gower Publishing Limited. p Hines, P., Lamming, R., Jones, D., Cousins, P. & Rich, N. (eds.) (2000) Value Stream Management: Strategy and Excellence in the

27 Research Summary (3/6) 3. Agile Demand Supply Network Management Agile demand supply network Sales forecast Efficient Replenishment Order forecast VMI, CMI Reliable operations SMI Integrated suppliers Enabling Technologies

28 Research Summary (4/6) 4. Strategic ICT Exploitation Research problems / questions: How to exploit all the capabilities of ICT and use ICT as a strategic part of dynamic enterprises? Business opportunities created by ICT and new technologies Is IT strategy part of business strategy and is IT strategy supported by business strategy How ICT supports the Strategic Management in Multilateral Networks? How provide visibility in multilateral networks with ICT? Contribution to the research programme How business strategy management meets technology management and how to utilise main technologies to managing multilateral networks creation of flexible and visibility enterprise networks Responsible & preliminary name of the study Jukka Hemilä: Strategic ICT Exploitation in Enterprise Networks

29 Research Summary (4/6) 4. Strategic ICT Exploitation Concepts / Approaches ICT in Supply Chain Management Enterprise Nervous Systems in networked organisations Strategy planning References Hyötyläinen, R. (2000), Development Mechanisms of Strategic Enterprise Networks. Learning and Innovation in Networks. VTT Publications 417. Espoo: Valtion teknillinen tutkimuskeskus. 142 p. (In Finnish) Laudon, Kenneth, C., Laudon, Jane, P. (2000), Management Information Systems Organization and technology in the networked enterprise. New Jersey: Prentice-Hall. 588 p. O'Leary, Daniel E. (2000), Enterprise Resource Planning Systems - Systems, Life Cycle, Electronic Commerce, and Risk. Cambridge: Cambridge University Press, 232 p. Ptak, Carol, A., Schragenheim, Eli, (2000), ERP Tools, Techniques and Applications for Integrating the Supply Chain. Boca Raton: CRC Press St. Lucie Press. 456 p.

30 Research Summary (4/6) 4. Strategic ICT Exploitation Enterprise Business Strategy Enterprise ICT Strategy Enterprise Legacy systems ERP SCM CRM PDM ENTERPRISE NERVOUS SYSTEM Enterprise Legacy systems Enterprise Legacy systems Co-operation Partner VIRTUAL ENTERPRISE Co-operation Partner

31 Research Summary (5/6) 5. Development Project Management by Portfolios Research problems / questions How to manage a project portfolio consisting of business development projects in company networks? What kind of network business development project portfolio management practices ensure that participating companies support projects? What kind of are the relationships and dynamics between companies business development project portfolios and networks similar portfolios? => Projects have commonly agreed and in-line objectives, no effort for overlapping nor contradicting projects Contribution to the research programme New knowledge on how to implement network objectives by managing development projects in (networked) industrial business systems. New knowledge on dynamics and relations between network s and networking companies development project portfolios. It defines, how dynamic business and technology platforms can be managed by utilising project portfolio management (tools) for development projects. Responsibles & preliminary name of the studies Iiro Salkari: Implementing strategies through development projects in company networks - portfolio management approach Tiina Apilo: "Development projects in strategy implementation - successful project portfolio management"

32 Research Summary (5/6) 5. Development Project Management by Portfolios Concepts / Approaches Portfolio and especially project portfolio management Project programmes and project programme management Strategic supplier management and partnership Business development process and projects References Artto, K.A.; Martinsuo, M. & Aalto, T. (eds.). Project Portfolio Management. Strategic Management through Projects. Project Management Association Finland PMA. Helsinki (2001) Dye L.D., Pennypacker J.S. (eds), Project Portfolio Management Selecting and prioritizing Projects for Competitive Advantage. pp. xi xvi. West Chester: Center for Business Practices. 417 p. Ebers, M. (Ed.). The Formation of Inter-Organizational Networks. Oxford University Press, Oxford (1997) Hyötyläinen, Raimo. Development of Mechanisms of Strategic Enterprise Networks - Learning and Innovation in Networks. VTT Publications. Espoo (2000) Ollus, M; Ranta, J. & Ylä-Anttila, P (Eds.). Yritysverkostot - kilpailua tiedolla, nopeudella ja joustavuudella. Taloustieto Oy. Vantaa (1998)

33 Research Summary (5/6) 5. Development Project Management by Portfolios The focus area and idea of this study are depicted in the below figure: Company A Strategy Network s objectives Company C Company B Strategy Company level development project portfolio Network dev. project portfolio Company level development project portfolio Unit level dev. project portfolio Unit level dev. project portfolio Unit level dev. Unit level dev. project project portfolio portfolio Unit level dev. Unit level dev. project project portfolio portfolio Unit 1 Unit 2 Unit 3 Unit 4 Unit 1 Functions Development projects

34 Research Summary (5.2/6) 5.2 Development Projects in Strategy Implementation Research problems / questions How company strategy actuates the selecting of development projects? How strategy and development projects are linking to each other? What is the significance of the portfolio management to stand for development projects in accordance with the strategy? Does the development project act as means of the strategy implementation? Contribution to the research programme The research contributes new knowledge on how business strategy can implement through R&D and process development projects how to manage development projects portfolio Responsible & preliminary name of the study Tiina Apilo: "Development projects in strategy implementation - successful project portfolio management"

35 Research Summary (5.2/6) 5.2 Development Projects in Strategy Implementation Concepts / Approaches Portfolio management Innovation management Change management Business strategy Strategy implementation References Cooper. R.G., Edgett S.G. and Elko J. Kleinschmidt E.J Portfolio management for new products. Saravirta. A Project success through effective decisions : case studies on project goal setting, success evaluation and managerial decision making. Lappeenrannan teknillinen korkeakoulu. Artto, K. A, Martinsuo M., Aalto T. (eds) Project Portfolio Management Strategic Management through Projects. Helsinki: Project Management Association Finland.

36 Research Summary (5.2/6) 5.2 Development Projects in Strategy Implementation STRATEGY PRODUCTS Development PROCESSES Development Projects Projects Projects Projects... Project Portfolio IT Project Portfolio Development Project Portfolio R&D Project Portfolio

37 Research Summary (6/6) 6. Network Mathematical Modelling Using Game Theory: Formal Models for Decision Making in Network Economy Concepts / Approaches Classification of network control problems Distribution of information among partners, risk sharing, uncertainty management, development portfolio management, selection of partners, etc. Bargaining problems Identification of suitable game theory models for each class of network control problem Decision analysis; scenario analysis, Distributed control, Stackelberg games, incentive strategies Equilibrium strategies (Nash), Co-operative games, bargaining games, negotiation problems

38 Research Summary (6/6) 6. Network Mathematical Modelling Using Game Theory: Formal Models for Decision Making in Network Economy References Corbet, C.J., Karmarkar, U.S. Competition and Structure in Serial Supply Chains with Deterministic Demand. Management Science, Vol. 47, No 7, July 2001, pp Nash, J. F. (1953), Two Person Cooperative Games, Econometrica 21 Responsible Toni Jarimo: Decision-Making Models for Enterprise Networks: A Game Theoretic Approach

39 Research Summary (6/6) 6. Network Mathematical Modelling Using Game Theory: Formal Models for Decision Making in Network Economy Game Theory cost, risk and utility sharing rules for cooperation advantages of networking win-win situations Probability calculus uncertainties expectation values Decision Analysis strategic decision making Optimisation players have their own goals Risk Management risk attitudes

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