Extending Operational Excellence to a Complete Project Delivery by Applying Cost Management Methods
Permanent address of the item is
Toiminnan tehokkuuden laajentaminen kokonaiseen projektitoimitukseen käyttämällä kustannusjohtamisen menetelmiä
The study was driven in part from Metso’s increasing need to extend its operational excellence to the end part of its supply chain. Simultaneously, the study contributes to management accounting theory. The aim of the study was to find out why and how managers should use management accounting information in the design of a process for delivering portable crushing plants. The study is divided into three parts. The first part comprises cost element mapping that aims to bring transparency to portable deliveries. The second part comprises the strategic choices that need to be considered for the best delivery in terms of costs and risks. In the third part, a process is created that can be used to price and control the delivery. The theory used in this study was based on cost management and supply chain management theory, with the target being to create an effective delivery process. The background of this study is grounded in hermeneutics, and qualitative research methodologies were used. As the aim of this study was to create a new process and to solve a practical problem, the research approach used was constructive. The study was conducted as a single case, embedded case study. The data collection methods used were interviews, observations, and secondary data collection. Management accounting can be used to derive multiple benefits in portable deliveries, such as improved cost efficiency and more accurate pricing. It can also be used to provide tools that measure and control the deliveries. Cost element mapping was the largest part of the study, and it was used to identify the cost structure and the variables behind the delivery. In addition, it also revealed how the costs and benefits were divided between supply chain partners and who controlled the costs. The major finding was that Metso’s pricing was not completely accurate. The most suitable strategy for a portable delivery is based on costs and delivery time. However, quality, technological risks, and risk of damaging the products also need to be considered. The created process comprised different methods for serious and casual inquiries. The process also included templates to price the delivery and to measure the performance of the delivery. The findings of this study can mainly be generalized to similar industrial equipment that can be transported containerized or in break bulk on a Ro-Ro vessel. The processes used are, however, bound to the assessed organization and cannot be generalized to other companies.