Iveta Zolotová
email: iveta.zolotova@tuke.sk

Peter Kubičko
email: 1peter.kubicko@student.tuke.sk

Lenka Landryová
email: 2lenka.landryova@vsb.cz

Rastislav Hošák
email: 1rastislav.hosak@tuke.sk

Innovation Processes -Reference Model, Collaboration via Innovative Zone and Integration into Enterprise Environment

Keywords: innovation process, innovation zone, innovation idea, innovation project, innovation information system, process measuring, reference model, model

The purpose of the paper is to describe existing possibilities and to propose new possibilities for a permanent improvement of an innovation process as an integral part of the core business processes. This article focuses on the definition and design of the draft reference model of the innovation process as a base for developing a methodology for implementation of an innovation reference process in terms of BPM (Business Process Management) and its related standards. The paper also analyzes the methodology and proposes its implementation in business using a common collaboration area and also an innovation zone. Practical verification of implementing the reference innovation process will be demonstrated by its implementation in a particular organization.

Introduction

Innovation has become an integral element of survival and adaptation to the market situations of each company. It is made possible to focus the company activities, affect the actions, control its core processes in accordance with business processes, and minimize the risk of transactions only with a system approach, which allows the company to constantly work out new and innovative topics and process them to obtain a competitive advantage. Submission and processing of innovative topics into implementable forms shall not be understood as an occasional or exceptional activity of individuals, but presented as a system model adaptable to any business whose future depends on the ability of adaptation. In our article we would like to present a process of innovation with measurable changes of resulting values.

The resulting value of an innovative idea can also be considered a new work experience and verification ideas, which are going to be captured in the form of information arising from the implementation of innovative projects. The systematic processing of ideas and creating an environment for innovation and a process innovation in the innovative zone require the selection of an appropriate methodology for processing. After consideration of what is suitable for the company and its environment, since it does not deal with industrial production, but with the supply of IT services, and because of its BPM (Business Process Management) orientation and its project management confirmed by the certificate ISO 9000, it was proposed to design an innovation zone based on business processes, although companies worldwide use other methods to support a systematic approach to innovation process, for example, CREAX, TRIZ, WOIS.

Analyses of the IPA [START_REF]IPA Independent Project Analysis Ltd[END_REF]. in European companies showed the following barriers to innovative projects:

• Lack of a systematic methodology -Innovation is often confused with methods for new product development, marketing or simple creative techniques (brainstorming) • Lack of innovation culture in business • Not suitable model for managing the innovation process • Inappropriate methods for generating new solutions -using the method of trial and error • Lack of knowledge management -up to 70-80% of the knowledge generated in innovative projects is forgotten or lost Neglect of the measurement and evaluation of the benefits of innovation.

Reference model of an innovation process

The essence of an innovation process reference model is to describe the process with its essential attributes (input, output, resources, rules). This process, however, has a special status in a company that is being "protected" by a so called innovative zone, which is supposed to maintain an environment that creates a breeding ground for innovative ideas without prejudging the final outcome. In a classic business environment mainly profit is monitored at every business activity and in every project, where the loss is unacceptable.

An innovation zone deflects the primary goal of business in the form of making a profit from the innovation process. An innovation process can primarily generate an economic loss, but secondarily creates a potential for future values and the creation of profit.

Innovative zone

Under the innovation zone it is necessary to understand the limited space of companies in which the innovative zone is implemented (either enterprise, enterprise group or regional or cluster of networking enterprises) with specific management, performance, evaluation and incentive policies. It serves to accelerate innovation in the company. Its role is also in filtering out the impact of the organization, which is under normal conditions resistant to changes that affects adversely especially in the early stages of an innovative project. The innovation zone must be able to meet increased demands for changes in the environment that must be modeled separately, but without compromising the company's standard processes. The innovation zone should have a separate system of financing, planning, monitoring, evaluating the benefits and communication of results of innovative projects. This article presents the idea of implementation the innovation process that is integrated to other business processes using the innovative zone. By introducing an innovation process in the innovation zone the generation of innovative ideas and acceleration of innovative projects can be achieved in a way that does not to interfere with the normal operation of the company, but its results are positively affecting innovative projects. Projects and activities of an innovation zone must improve the company's standard business processes. Results coming from an innovation zone are implemented in standard processes, supported by the top management of a company. Operating costs of innovative zones are minimized by the fact that resources (human, technical, financial) of processes can be shared. The results of an innovation zone are also shared and provided throughout the company. It is important to apply the principle of openness within the company. An innovation zone cooperates with the organizational units of the organization.

The innovative zone thus provides a space where ideas can take root and where they are protected from the effects of organizational inertia as long as they are able to prove their value. The innovative zone also provides an opportunity to implement the ideas of people who are unable to independently transfer their ideas into reality. The innovative zone contains the building blocks necessary for the existence and survival of the zone within which ideas get through the entire process.

The building blocks of an innovative zone are as follow:

• Ownership of ideas • Evaluation of ideas • Support of ideas • Storage of ideas • Measurement of ideas
Ownership of ideas. Ownership of ideas is difficult to accept and maintain if the organization supports an environment and culture where ideas are freely provided, not registered or carefully protected, in considering theft (unauthorized ownership). In organizations, where an innovative zone is successfully used, the owners of the ideas are well respected and rewarded.

Evaluation of ideas.

Ideas that are generated and expressed need to be thoroughly assessed so the owners trust the processes through which ideas will be implemented.

Organizations need a set of published values together with examples of successful ideas.

Support of ideas.

It defines the way in which the innovative zone will bring together a team who gives the best opportunity for an idea to evolve and be successful. Supporters of the idea are respected members who facilitate the proper parties to bring an idea to success. For this purpose registration and collaboration tools may be helpful, for example templates and clear rules to protect property rights in the future use of the results of the idea.

Storage of ideas.

It's a place where the ideas, which currently are not required, are stored but can be used in the future. Storage should include all of the historical data from their beginning through their evaluation to reasonable storage to ensure that the selected attributes are available for a possible case use idea.

Measurement of ideas.

It is the process of measuring the value of an idea. It is often regarded as too difficult a task, since many ideas can only be a part of an innovation, or can be directly converted to the currency value. The measurement must be approached in a way so that it will take into account the specific conditions of a business (the needs of relevant ideas and their results), but also the social value and market value. Not every business can have for the same result the same rating scale. Therefore an innovative zone must have available the range of values of the organization in which it is implemented.

The innovative zone ensures that the building blocks exist in the organization and that they are combined into a single process that continuously generates new ideas and filters them.

The creation of the innovative zone in organizations is based on management decisions to build and promote sustainability of the innovative zone in the company. Without the creation of conditions in the form of rules of operation and financing, it can be assumed that it is impossible to build and positively operate the innovative zone in any business. Under positive operation it can be understood that the innovative zone serves the purpose of promoting the capture and evaluation of new ideas in the business of the organization. So decision-making and supporting the innovative zone by management should be embedded in the company's strategy, which is the main framework for the control of all business processes, but the innovative zone must have sufficient competence for processing new ideas so that its operation was not impeded by the effects of other processes. Otherwise, there will be a slowdown and the owners will lose their interest.

An innovation zone is an area that can be compared to a catalyst for new ideas. To effectively fulfill this role, it must be accepted by the surroundings, but it needs to consist of all the necessary instructions, templates, adequate budgets and skills of participating managers accelerating its own submission, evaluation and verification, as well as collaboration of its participants. External innovation knowledge is an external source of innovative knowledge, the necessary to link the internal sources of knowledge and their confrontation, the maximum utilization of knowledge for the innovation process, respectively.

External innovation partners are engaged in the innovation process, they have access to the innovative zone and they may be a part of the innovation process in different roles, whether as evaluators or as submitters of ideas.

Innovation development includes all activities related to a promotion of the innovation development of an organization, ensuring resources and training and the acquisition of interests of employees for innovative activities.

The innovation process is owned by an innovative manager who is also in the position to control the innovative zone. An idea is the input of the innovation process and an implementation project with a proven idea is the output.

The production process of the organization provides the main output of the organization. Workers involved in production processes can be participating in the innovation process during their working hours in order to not disrupt the operation of production processes.

Attributes, roles and policies of an innovation process

Input into the innovation process is a new idea that is supported by motivational tools in the form of rewards for owners of successfully implemented ideas. Selection and evaluation of new ideas is made by independent evaluators (at least three reviewers) to minimize subjective views on the continuation of the presented idea. After reaching a certain number of points the innovative idea is developed and the manager of innovation administration asks for an approval of a budget required to implement an innovative project. The total budget for innovative projects is set out at the beginning of a financial year so that it can finance innovative projects. Each already implemented project contributes to this budget with their agreed percentage of profits, which can also fully use the results of innovative projects. It is necessary to distinguish the implementation project and an innovative project. The innovative project usually does not strictly keep the rules of project management, as confirmed by Sergey Filipov and Herman Mooi in [START_REF]CREAX Innovation Suite[END_REF], which indicates that "to specify the idiosyncratic nature of innovative projects as opposed to conventional projects."

The innovation process can distinguish the following roles: Innovation manager is the main coordinator of all innovation activities from the submission of an innovative idea through the selection of evaluators to assess the inclusion of an innovative project and its outcomes in the innovation fund. He provides communication with employees on the course of innovation, nominates the members of the commissions, submits proposals for project managers, supervises the running of an innovative information system and prepares quarterly evaluation of the course of innovation activities. It is a role that is constantly busy and for the whole process indispensable. An innovator submits innovative ideas, formalizes the idea of them in writing into an understandable form for further processing. It is the author of the idea, problem solutions or also the author of implementing regulations (e.g. a project), or he may actively contribute to implementation. The role of an innovator can be received by any employee who actively participates in the presentation of innovative ideas formalized through an innovative portal to which employees are encouraged to submit innovative ideas.

A facilitator identifies ideas and supports the authors, to whom he helps to formulate problems or ways of implementing ideas. He may be authorized to represent the innovators (idea authors') in the evaluation process. He informs members of an innovative zone about new innovative ideas, the solutions of the implemented projects and their benefits. He recruits members into the project teams.

An evaluator participates directly in evaluating the innovative proposals. The outcome of an evaluation decides the future of an innovative idea. The evaluator is actively involved in the innovation process and can re-review the idea (after resubmitting, or after specifying details of some parts), or assess the benefits of innovation.

A project leader is the manager of the innovative project after headquarters has authorised the project proposal.

The Production Department is an organizational unit of the company, which uses the result of an innovative project for its commercialization. An innovative information system is the information system supporting the innovation process. Its main function is to collect ideas and record them during the innovation process to the implementation themselves, creating new business value for future use. It allows you to register ideas, helps to tune these ideas with a company's business strategy, supports the evaluation of ideas, creates a business environment and collaboration systems for both authors and evaluators of ideas, but also for implementation and project teams and communicates information directly to a company's management.

Measuring an innovation process

An open question remains for further research and that is the correct setting for innovation process metrics. If we use only the traditional metrics, such as a number of submitted ideas (inputs into the innovation process) and the number of ideas implemented (as a continuous indicator), so we could get a difficult to read benefit which to the short term point of view brings higher overhead costs without generating an immediate sales value for the company. The ratio of the number of ideas and implemented ideas is also misleading, because there is a question: what's better? If the ratio is close to zero or to one? This ratio cannot be evaluated in this way because the main value is in the quality it brings and then in the future usefulness of the results of the innovative project. Our aim is to clarify the indicators of the innovation process especially in terms of future benefits. However, the current metrics (measurable indicators), which were set only in terms of estimated future value creation are: the number of outputs of the innovative project, the usefulness of the implementation project (using the repeatability of output), the number of identified outcomes as a business opportunity, the number of contracts (signed contracts) transformed from the business opportunities created by innovative outputs, etc. Considering the short term history of operating the innovative zone in the company it is not possible to use values of these metrics and indicators, the results will be published in terms of these indicators later in the future work of our team.

Implementation

Organizational arrangements and the creation of an innovative environment for an innovative zone is the role of top management. To create an environment for innovation and flexible collaboration space the portal solution can be used. Suitable for implementation of the innovation process can be company's portal using Microsoft SharePoint in a particular company's environment. The portal includes features in addition to a normal company's site, which are especially dedicated to the presentation of innovative ideas. The innovator completes his ideas in an innovative corporate portal environment, which is used daily in his work, this is very important in order to minimize barriers when he needs to express innovative ideas.

The following figures bring closer the options for collecting ideas, which are accessible also to unregistered users, or just random visitors to the portal. The company, which actually operates the portal, maintains the principle of openness and creates a competitive hub provoking to share ideas with their own innovative topic for outsiders. For the internal staff it may create a feeling of uncertainty and fear by ideas coming from outside, but on the other hand, it encourages and leaves no one asleep, because it is in the interest of each employee that he thinks of actions in terms of enhancing the effect of "your" business through his own ideas.

Conclusion

The presented attempt to create an innovative zone and implement innovation in a business environment has the ambition to eliminate the above mentioned obstacles and to verify the viability of a reference model for an innovative zone in a company. For the first quarter of year of the operation of the innovative zone over 70 new ideas were recorded of which 4 have been implemented and another 10 were approved for implementation. Compared with the previous period of time when new ideas were very rarely introduced, or perhaps even in greater numbers, but with not enough determination and self motivation, and implementation was doomed to failure, because neither the environment and culture in a company was ready for developing the innovative ideas. It was not necessary because the company's operation was secured by long-term contracts, which are now being converted to the short-term. The aim of creating the innovative zone is to enhance the creative potential of employees involved in creating new ideas in line with a company's strategy and thus increase the chances of the company to compete on the market, due to the higher number of transformed ideas into real verification and outputs, respectively. A company will form a reservoir of knowledge and experience of practical verifications, which can be a benefit for the company either by direct trade with the results or their application in specific projects in different forms of benefits (reducing the development cycle of a new product, a cheaper product development, fewer resources required to implement a project or product delivery). With this verification of the reference model the innovation process can be applied in other companies, where this is in line with the company's strategy and the willingness of management of companies to accelerate their capital in favor of the mental agility of the company's future.

Fig. 1 .

 1 Fig. 1. Innovation process.

Fig. 2 .

 2 Fig. 2. The model of an innovation organization with innovative zone. C -Cost, the total cost of innovation is a sum of C1, C2, C3, C4, C5 costs, C=C1+C2+C3+C4+C5, where C1 -cost of access to external sources of innovation know-how, C2 -cost of including external partners into collaboration, C3 -cost of innovation development, C4 -cost of innovation process operation, C5 -cost of ideas, V -Value, added value to innovation is a sum of V1, V2, V3, where V=V1+V2+V3, V1-a standard value expressed in currency which is produced by manufacturing with or without implemented innovations, V2-new values are a combination of a value coming from production and from the innovation process, also expressed in currency, V3 -the value of knowledge newly emerged during the innovation process (innovation knowhow), but not measured in currency.

Fig. 3 .

 3 Fig. 3. A process for administrating an innovation idea.

Fig. 4 .

 4 Fig. 4. Company's portal with a possibility to enter ideas without login (for unregistered users).

Fig. 5 .

 5 Fig. 5. A screen used by authors of submitted innovative ideas.

Fig. 6 .

 6 Fig.6. Overview of all innovative ideas and the webpart Idea evaluation report from the idea evaluators.

Acknowledgments

This work was supported by grant KEGA No. 021TUKE-4/2012 (65%), the project Development of Centre of Information and Communication Technologies for Knowledge Systems (26220120030) supported by research and development operational program financed by the ERDF (25%) and the CP-IP 214657-2 FutureSME, (Future Industrial Model for SMEs), EU project of the 7FP in the NMP area (10%). The team also thanks Novitech Company for a willingness, which allowed us to examine conditions for implementation of innovation zones in the real business environment, especially thank the President and Chairman of the Board (Chairman of the Board of Directors), Dr. Attila Toth, for his inspiring advice and transfer of experience to us.


Ana Maria Munoz-Marin

Astrid Heidemann Lassen

Ana Maria Munoz-Marin

Developing Environmental Thinking in Manufacturing Companies

Keywords: Corporate Social Responsibility, Design for Sustainability, User-Driven strategies, Environmental thinking, Life cycle thinking

de niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.

Introduction

The interest in social and environmental responsibility has been increasing at a high rate in both academia and in practice. Companies are gradually being encouraged to consider the ecological and social consequences of their business activities: Governments are creating stronger regulations but also educating consumers as part of the European 2020 strategy for smart, sustainable and inclusive growth (Europe 2020). As a consequence, social and environmental responsibility is moving from being order qualifying to being an order winning variable amongst consumers.

The EU Commission has defined Corporate Social Responsibility (CSR) as; "a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance" (Commission of the european communities, 2006)

Different reasons lead companies to consider implementing CSR into their activities including ethical, legal, economic and competitive aspects. Such aspects are believed to include benefits such as e.g. 1) giving more options to the customers, 2) being prepared for stronger environmental regulations (legislative and disclosure requirements); 3) positioning the company as market leaders and innovators; 4) being competitive; and 5) developing brand differentiation.

Research shows that "corporate reputation" is one of the most cited drivers, which includes the perception that consumers have on the company's products and services and the company itself. In the same way, the most common barriers to CSR have been identified as "cost/benefit ratio" and "risk" [START_REF] Laudal | Drivers and barriers of CSR and the size and internationalization of firms[END_REF]. Companies and research alike seem to concentrate on the benefits and difficulties of adopting CSR and the importance of communicating and demonstrating their position and business actions towards social and environmental issues: considering internal actions towards the costumers.

In product design is well known the importance of considering the users as the main source of information, not surprisingly, innovation management literature also mention it as a considerable advantage [START_REF] Chesbrough | Open Innovation: The New Imperative for Creating and Profiting from Technology[END_REF]. This could also be used towards the integration of environmental issues into the business operation. Involving the users directly into the environmental thinking process will allow understanding the end-users' needs and wishes, which combined with the company strategies, processes and capabilities, will minimize the identified barriers on implementing CSR; resources can be used more effectively and the uncertainty risk can be reduced because the information comes directly from the potential costumers.

However, this inside-out approach leads to a gap in the understanding of CSR as a responsible action that can also bring tangible and intangible benefits to the business if its inputs come from the users unmet needs and desires. The research study reported in this paper targets this gap directly by answering the research question:

RQ1: How could a process for manufacturing companies be developed to facilitate environmental thinking by understanding the end users' perceptions, drivers and limitations, wants and preferences on green products?

This research allows for the development of a general understanding of the company environmental impacts during the product life cycle, involving employees and endusers to find possible solutions. Hereby, the company can detect environmental improvements options that are feasible to achieve and which consumers are interested in buying at the same time, and thereby be able to invest resources more effectively in CSR and work in-depth on the choices which prove valuable.

Methods

As outlined above, this research builds on the assumption that the premise of obtaining direct benefits for the business while "doing good" is the involvement of the users in the process. In order to research the correctness of such assumptions, the outlined research question is addressed through the following methodological approach.

Data selection

In order to address the above stated lacks in knowledge, the research addressed in this article takes its point of departure in the research project InnoDoors. The InnoDoors project has the purpose of developing a systematic approach to engaging in userdriven innovation. Amongst others, one of the initiatives in InnoDoors is the aspect of CSR and environmental thinking based on user-integration. The InnoDoors project was initiated with the focus on the Danish supply chain surrounding the design, production, sales and implementation of inner doors. InnoDoors has a unique possibility to work with CSR activities and user-integration.

The selected data for the present paper is based on a work package with the purpose of developing a green product-line of doors. This is divided in two different stages: User activities and Internal activities in order to identify the interplay between insideout and outside-in planned CSR activities.

Data collection

The data collection was conducted over a period of 1 year, from the summer of 2010 to the summer of 2011, and included a number of different approaches and types of interaction. The different processs of data collection were chosen based on their ability to take the specificities of the industry into consideration, to capture different needs and competences of the users, and to develop the joint comprehension of the new approach to CSR and environmental thinking. In Table 1 is an overview of data collected.

Table 1. Sources of evidence

Sources of evidence

Interviews Individual interviews with selected informants, experts on each topic. Informants represented product management, technology management, environmental specialist, production technical area, quality management and logistics (8 interviews with experts and 6 users) Participant observation

Two "workshops" were executed for the User, Internal and Networking activities. Participants covered users, network partners and internal actors.

Questionnaires

One Physical (20 respondents) and one Web-based questionnaire (with 116 respondents) on user perceptions of green products

Each interaction was documented on video, photos and/or recorder. Conversations were recorded and subsequently discussed with the interviewees, before synthesizing into the frame of case scenarios. Furthermore, the interviews were conducted following the same protocol in order to ensure the reliability of the results as well as reflect the validity of the differences emerging [START_REF] Yin | Case Study Research. Design and Methods[END_REF]. Relevant documentation was additionally provided by the respondents both prior to and after the interviews. This included; strategic documentation, product development roadmaps, customer segmentations and funding proposals. This data has been used to cross reference findings from the interviews and to provide added historical background. The longitudinal approach allowed for a gradual development of the understanding of the industry specificities as well the needs for CSR.

Data analysis

The data has been analyzed both in collaborative environments at workshops with project partners and more theoretically. Analytic induction was the main method in the workshops. These results were jointly discussed in order to create a joint understanding. The web based survey was analyzed based on descriptive statistics, as this provided the most meaningful presentation of the results.

Analysis and Discussion

Reduction of energy consumption along with reduction in other emissions (like CO2 or NOx gasses) (Mortensen, 2011) is a central aspects of the CSR activities in focus in this article. In the context of the construction industry [START_REF] Pohlmann | Energy use across the Lifecycle of a house[END_REF] finds that the Use stage is the most significant for energy consumption. This further underlines the importance of understanding the Use stage and how to impact users.

Approaching CSR from the environmental perspective it emphasizes the relevance of designing and manufacturing products taking into consideration their environmental impacts. Hence the Design for Sustainability (D4S) was considered. The D4S consists of three parts, the first explains the importance of design for sustainability and product innovation; the second presents how to do it in practice; and the third presents reference information like case studies and creativity techniques. Design for sustainability, as its name implies, attempts to go beyond of making "green" products to include the social and economic aspects embraced by the sustainable approach [START_REF] Crul | D4S-Design for Sustainability[END_REF]. Using the D4S approach facilitates an environmental awareness of the selected product impacts during its life cycle and integrates the users into the innovation process to gain knowledge about their wishes and demands, giving the option to think in possible solutions for environmental impacts that at the same time fulfil the user wants.

In order to develop this environmental thinking and integrate it into the business operation, the data obtained from the workshops, questionnaires and interview were analyzed comparing the actual results with customer perception theory on environmentally friendly products and similar research findings on the field as well as the manufacturing company's strategies in order to obtain coherent results that were aligned with their plans in order to combine efforts and investment in the same direction.

Below, the data is analyzed following the initial conceptual argument; User driven innovation should be conducted in parallel to internal development activities in order to develop environmental CSR initiatives which create an actual impact in the market. We first report the findings of the user analysis conducted, next we report the internal development activities conducted, and thirdly we argue how such activities jointly amount into an agenda for relevant environmental CSR activities.

User analysis

The web-based surveys show that the most important reason when buying environmentally friendly non-food products is "To save money during its use". It was further found that men are more sensitive to the savings during the purchase, while women tend to think more in the saving during use. The second highest prioritized reason was "Contributing to the environment".

Price must be a careful decision according to the target group and should not interfere with the green door purchasing, offering variety in green alternatives, providing clear information about the product environmental performance and the product benefits, and last but not least: ensuring reliability. From the survey results there were identified "energy efficiency during use" as the characteristic with higher priority that consumers would like to find in a green door.

This result confirmed the findings from previous research by Muñoz (2010) on this topic where users prioritized: "The door increases energy efficiency" and "the process uses fewer natural resources". This is a positive finding taking into consideration the efforts governments have made on this matter to reduce, or cut, CO2 emissions and fuel consumption and the tendency of consumers to show a clear preference for the characteristics from the Use stage in the Product life Cycle. Without a doubt, energy efficiency is a characteristic which is very significant for electronic devises or products that have high consumption of energy during its use.

For exterior doors this characteristic can be reflected, for instance, in insulation capabilities. However, when the product in consideration is an interior door, the reduction in energy consumption, although possible, is not significant; therefore other characteristics of the life cycle should be taken into consideration.

The second concept selected as first priority was "The process uses renewable sources (controlled forest, wind energy)". In the case of controlled forest, the case company has already started with the FSC certification, and can continue emphasizing different programs that support it, such as planting new trees or considering the option of including "clean energy" into its process. These options have relation with the second priority selected by end-users: "uses fewer natural resources" and "The door is made locally" which is an alternative for reducing CO2 emissions during transportation.

Limitations are another way to identify what consumers value when buying green products, by analyzing why they do not. The term intention-behavior gap (Sustainability in action sports, 2011) is when consumers have an intention to purchase but find barriers (personal or external) to do it. For the general respondents, the five most important limits are:

Higher price, Limited product range, Lack of information about the product environmental characteristics, Lack of information about the product benefits, I don't trust that the products are really environmentally-friendly A very important result was found when the information was analyzed for the group that corresponds to the case company end-users target group (women between 31-50); although the five limitations are the same as the general respondents, the con-cept "limited product range" is considered less important than the other four, giving more importance to the concepts associated with lack of reliability: "I don't trust that the products are really environmentally friendly" and lack of information on product benefits and environmental characteristics. The case company, as a company that wants to be recognized for reliability should ensure that, especially its target group trusts the greenness of its doors by offering real environmentally friendly products.

Fig. 2. Limitations to buy more green products. General respondents and the case company end-users actual target groups

In total the user analysis of drivers and limitations provides us with the results outline in table 2. These results will be applied when evaluating the internal development efforts.

Table 2. Drivers and limitations to buy green products

End-user

Reasons to buy green products

Environmental characteristics

Save money during its use

Men are more sensitive to the savings during purchasing Women tend to think more in the saving during use Contribute to the environment

Limitations to buy green products

Limitations to buy green 1.Higher price, 2.Limited product range, 3. Lack of information about the product environmental performance, 4. Lack of information about the product benefits, The door environmental impacts related with root causes products 5. I don't trust that the products are really environmentallyfriendly (Number 2 for actual the case company target costumers -women between 31-50 years old)

Internal development activities

The next part of the data analysis focuses on the internal development activities conducted in relation to environmental CSR activities in the case company.

Using different creativity processs during the workshop, the participants from the case company identified their Product environmental impacts during each of the product's life cycle stages: Material (Raw material and Component material), In-house manufacture, Distribution, Retail, Use and Disposal. After discussion in the internal team, supported by the environmental specialist, each environmental impact detected was addressed to its root causes: Material use, Energy use, Solid waste or Other emissions. This information was analysed using a qualitative method called Impact Matrix. [START_REF] Crul | D4S-Design for Sustainability[END_REF] which relates the environmental impacts in each stage of the product life cycle stages (what are the most relevant impacts and where are generated); and their Root cause (collecting them in main problems). See table 3 Table 3. Root causes

In order to find ideas to reduce the door environmental impacts detected, there were conducted two different Idea Generation workshops. The first one was performed in the focal company with representatives from Material, Manufacture, Product, Quality, Logistics, and Environmental specialist; and the second one, with one representative from the partners according with their capabilities to influence the product value.

Considering the environmental impacts detected, each participant of the internal team selected individually the areas where they consider the case company should focus its efforts. The three priority areas (that obtained the majority of answers) correspond to:

Material Use Emissions Energy consumption

Added value through environmental thinking

By understanding that "Saving money during use" and "Contributing with the environment" are the end-users' most important characteristics to buy green products, and their specific requirements for green doors are "Energy efficiency during use" and "Use of fewer and renewable Natural resources"; combined with the analysis of the Product life cycle workshop performed during the internal activities which defined "Material use",, "Emissions" and "Energy consumption" as their environmental priorities; and the concepts resulting from the Idea generation workshop; an environmental thinking was developed and expressed in terms of Green Values and Initial concepts.

In addition, using the information collected from the end-users about their limitations for buying green products and the communication of environmental characteristics, it was possible to reflect the environmental thinking in terms of concepts for communication and service.

Conclusion

Using the suggested approach to environmental CSR, it was possible to collect and analyse information from the end-users and align this with internal capabilities in order to facilitate an environmental thinking into the manufacturing company that led to the understanding of the "green door" meaning and guided to the identification of green values and initial concepts for products and services in order to integrate the environmental concerns into their business operations according to CSR guidelines.

Given the results of the research, we conclude that the suggested process when applied by manufacturing companies facilitates environmental thinking by understanding the end users' perceptions, drivers and limitations, wants and preferences on green products. As mention before, these Green values and initial concepts were inspired in the results obtained throughout the development of different activities during the carrying out of the designed process by combining the users' wishes and demands with the internal possibilities of reducing environmental impacts. With these results, the manufacturing company has an understanding of what green door means for the interested users and is aware of the relevant information that needs to be consider to develop green products. In this way, this process gives them the possibility to create the green values that are feasible for the company to contribute with their Corporate Social Responsibility and at the same time that are significant for the costumers.

Fig. 1 .

 1 Fig. 1. Most important characteristics for green doors (1st and 2nd)


Frank Asche
email: frank.asche@uis.no

Kristin H Roll
email: kristin.h.roll@uis.no

Ragnar Tveteras
email: ragnar.tveteras@uis.no

Innovations and productivity performance in salmon aquaculture

Keywords: Innovation, productivity growth, salmon aquaculture, translog cost function

Since the 1980s a large number of innovations have radically transformed the production process in salmon aquaculture. Increased degree of control with the production process, increased scale of plants, and more intensive use of farm locations are some of the consequences. Until the mid 1990s the industry also experienced rapid productivity growth leading to production costs to be reduced to 1/3 of their initial levels in Norwegian salmon aquaculture. But thereafter productivity has been stagnant. This paper analyses the innovation process and productivity growth in the Norwegian salmon industry, and discusses the challenges for the future.

Introduction

A growing global population requires increased production of marine proteins, and this can only come from aquaculture since global wild fish stocks are generally fully exploited or over-exploited [START_REF] Asche | Farming the Sea[END_REF]. Consumers will not only demand more seafood but also increased product quality and diversity as they become wealthier [START_REF] Jensen | Changes in seafood consumer preference patterns and associated changes in risk exposure[END_REF]. Aquaculture is better positioned than fisheries to provide the product quality and diversity that future consumers will demand. But with scarce farming areas, high local environmental impacts and limited marine feed raw material sources global aquaculture cannot continue to expand with current technologies. Aquaculture sectors need to innovate in several key areas to be able to satisfy the increasing global demand for seafood [START_REF] Guttormsen | Innovations and Structural Change in Seafood Markets and Production[END_REF]. This is also the case for salmon aquaculture, one of the technologically leading sectors.

Our study focuses on salmon aquaculture, which has increased its degree of control with the production process through many innovations in key technologies such as fish feed, feeding equipment, IT based monitoring of live fish, vaccines and genetics [START_REF] Asche | Environmental Problems, Productivity and Innovations in Norwegian Salmon Aquaculture[END_REF], [START_REF] Tveteras | Industrial Agglomeration and Production Costs in Norwegian Salmon Aquaculture[END_REF], [START_REF] Tveteras | Agglomeration Externalities, Productivity and Technical Inefficiency[END_REF]. Salmon production has moved from a technological regime with poor degree of control of many processes to one that can be described as approaching 'biological manufacturing'. Many of the tasks that before was manual, such as fish monitoring, fish feeding, fish harvesting and equipment maintenance, have now been automated to a large extent. This has contributed to significantly increasing productivity and improving the quality of farmed salmon since the 1980s.

This paper discusses the past innovations and accompanying productivity effects (section 2), estimates how the rate of technological progress changes over time in salmon aquaculture using an econometric cost model specification on a large data set of salmon firms, and links the estimated rates of technological change over time to innovations in key technology areas (section 3). Finally, the paper discusses the future innovation challenges for the salmon industry, several which it share with other aquaculture sectors (section 4).

Innovations and the Innovation System in Salmon Aquaculture

Innovations in salmon aquaculture include technology areas such as feed, fish health and equipment, but also regulatory innovations. Examples of innovations are presented in Figure 1.

Fig. 1. Examples of innovations in salmon farming over time

As a consequence of these innovations, salmon aquaculture has evolved from a technological regime with poor degree of control of many processes to one that can be described as approaching 'biological manufacturing' [START_REF] Asche | Environmental Problems, Productivity and Innovations in Norwegian Salmon Aquaculture[END_REF], [START_REF] Tveteras | Industrial Agglomeration and Production Costs in Norwegian Salmon Aquaculture[END_REF], [START_REF] Tveteras | Agglomeration Externalities, Productivity and Technical Inefficiency[END_REF]. The industry has moved from a labor-intensive production where workers had few formal skills, to a production which is more capital-intensive and where computer hardware and software based technologies have replaced several of the manual tasks of labor. At the farms the monitoring of the salmon, feeding, and environmental variables are based on sophisticated information technologies. Labor input has become more specialized; workers now tend to have certificates, and there is a much higher proportion of labor with a variety of specialized university educations.

Salmon feeds, which represent over 50% of farms' production costs, have experienced radical innovations partly due to large investments in R&D. Formulation of salmon feeds are now based on extensive knowledge of how different ingredients influence salmon growth and health and interact with each other. R&D has also played a significant role in disease management, where a number of targeted vaccines have been developed to combat various diseases. To some extent these have replaced curative medication such as antibiotics. Salmon farming now uses much less antibiotics per kilo of meat produced than is the case in terrestrial meat production such as pork and poultry.

Innovations in key technologies have contributed to a significant productivity growth in salmon farming. The cost of producing farmed salmon has declined to less than 30% of production costs in the late 1980s, as shown later in Figure 3. However, productivity growth in the salmon industry as measured by the cost of production per kilo of live salmon has stagnated in the recent decade. In the innovation system [START_REF] Carlsson | On the Nature, Function, and Composition of Technological systems[END_REF], [START_REF] Freeman | The 'National System of Innovation' in historical perspective[END_REF] related to salmon aquaculture technology the Norwegian government, particularly the Ministry of Fisheries, has been a central actor through legislation, policies and funding. A technological innovation system can be defined as 'a dynamic network of agents interacting in a specific economic/industrial area under a particular institutional infrastructure and involved in the generation, diffusion, and utilisation of technology' [START_REF] Jensen | Forms of knowledge, modes of innovation and innovation systems[END_REF]. The private actors in the innovation system include the salmon farming companies and their suppliers, feed companies, equipment and software suppliers, pharmaceutical companies, etc. Universities have also been important actors both as suppliers of trained labor and researchers, but also through the R&D they have undertaken. Independent research institutions that are predominantly funded by the public sector is another group of actors that have played a pivotal role through their R&D activities.

Many innovations in salmon aquaculture that have contributed to productivity growth have been made possible by R&D that has been at least partly funded by the Norwegian government. The public sector has played an active role both in financing and in carrying out R&D through public research institutions and universities. In the private sector fish feed companies and pharmaceutical companies have also played important roles in financing and carrying out R&D related to salmon feed, fish health, vaccines etc. According to Figure 3 the private sector funded 53% of R&D in aquaculture in 2009, and did around 40% of the R&D activities, while the remaining 60% was undertaken by universities and research institutions.

Salmon farming companies have historically played a smaller direct role in undertaking and financing R&D themselves. Initially, the industry was dominated by small companies with limited financial and human resources. Their role in innovation processes was often to adopt innovations made by suppliers to the industry, such as feed companies, equipment suppliers and pharmaceutical companies. However, the industry has since the early 1990s developed an industrial structure which also includes large scale multinational companies. Salmon companies should be expected to have a more prominent role in future innovation processes due to industry consolidation that should increase their ability to both finance and manage R&D.

Estimation of Productivity Growth

In this study we estimate the rate of technological change in salmon farming. This is done by econometric estimation of a translog cost function on a data set of 4904 observations on individual salmon firms from 1985 to 2008. We are able to separate the effects of input prices, scale economies and technical change on real costs.

The long-run translog cost function is specified as:

lnC = α 0 + Σ i α i lnw i + 0.5Σ i Σ j α ij lnw i lnw j + α y lny + 0.5α yy (lny) 2 (1) + Σ i α iy lnw i lny + Σ t α t D t + Σ t Σ i α it lnw i •D t + Σ t α yt lny•D t + u.
In this model C is inflation-adjusted cost of production, y is output level, w i is the inflation-adjusted price of input i (i = Feed, Labor, Capital), D t is a vector of time (year) dummy variables (t = 1986, …, 2008) for the years after the base year 1985, u is a stochastic error term, and α are parameters to be estimated. To improve the efficiency of the parameter estimates, the cost function is estimated together with the cost share equations S i = ∂lnC/∂lnw i , using Zellner's [START_REF] Zellner | An Efficient Method for Estimating Seemingly Unrelated Regressions and Tests for Aggregation Bias[END_REF] seemingly unrelated regression technique. The above econometric model specification allow us to decompose technological progress into three components: (1) neutral (Σ t α t D t ), (2) input biased (Σ t Σ i α it lnw i •D t ), and (3) scale biased (Σ t α yt lny•D t ) components. The rate of technical change (TC) with these three components is specified as:

TC = (α t -α t-1 ) + Σ i ((α it •-α it-1 )lnw i ) + ((α yt •-α yt-1 )lny). ( 2
)
If there is technical "progress" this cost based measure is negative. The rate of technical change is our measure of how innovations and other factors influence productivity growth. It is not possible to obtain a "pure" measure of the effects of innovations as it is hard to identify variables that measure innovations and the adoption of these. Moreover, in a biological production sector such as salmon farming the TC measure will also be influenced by biophysical shocks such as diseases. It is therefore possible to obtain negative rates of technical change.

From the cost function one can also derive returns to scale, which are defined as RTS = 1/(∂lnC/∂lny). The conditional own price elasticity of demand for input i is defined as E i = (α ii + S i 2 -S i )/S i (i = Feed, Labor, Capital) [START_REF] Binswanger | A Cost Function Approach to the Measurement of Elasticities of Factor Demand and Elasticities of Substitution[END_REF]. Table 1 presents sample mean elasticity estimates from the estimated translog cost function. The full set of parameter estimates can be obtained from the authors. Sample mean returns to scale (RTS) is increasing with a value of 1.152. The conditional ownprice elasticities (E i ) all have the expected negative sign, with feed input having the lowest elasticity. They are within the range of estimates from previous econometric studies of Norwegian salmon farming [START_REF] Tveteras | Agglomeration Externalities, Productivity and Technical Inefficiency[END_REF], [START_REF] Guttormsen | Input Factor Substitutability in Salmon Aquaculture[END_REF], [START_REF] Andersen | The Price Responsiveness of Salmon Supply in the Short and Long Run[END_REF], [START_REF] Asche | Economic Inefficiency and Environmental impact: An application to Aquaculture Production[END_REF]. However, this technical progress varies considerably over time, as shown in Figure 3, where we have plotted the development in the annual average rate of technical change (the negative of TC) together with the development in real production costs including feed, labor and capital. We see that the highest rates of technical progress were experienced from 1987 to 1995. After that technical progress, as measured by our econometric model, has been low. This is mirrored in the development in real production costs per kg produced fish, which declined rapidly until the middle of the 1990s, but has since experienced a much smaller decline, and been more or less stable around 12-13 NOK/kg since 2000.

An important explanatory factor behind the decline in technical progress is the inability to reduce salmon mortality rates, which have fluctuated around 20-30% of the stock of live salmon since the 1990s. The growth in salmon production has lead to an increase in disease pressure among the fish, as fish population densities have increased both at the regional and farm site level. The salmon industry has not been able to innovate sufficiently fast to reduce disease losses. Innovations in automation, such as automated feeding and fish monitoring, and other areas have contributed to increasing production per employee by several times the levels in the 1990s. But this has not been sufficient to compensate for the lack of innovations in fish health and disease management.

Future Innovation Challenges

The future technological bottlenecks that need to be resolved in global aquaculture in general and salmon aquaculture in particular will be more complex than those faced historically. One can argue that each of the bottlenecks on average will require higher investments in R&D, reflecting more input of researcher man-hours and higher expenditures on equipment and materials. Furthermore, the R&D projects will have a higher level of technical and organizational complexity, and thus increased risk of failure or low returns to R&D investments. The implications of these assertions is that in order to produce innovations at a sufficient rate, the industry needs higher D&D funding and increased quality of human capital involved in the R&D projects, and the organization of the projects.

In order to understand important aspects of the innovation challenges salmon aquaculture faces it is necessary to understand the nature of innovation processes in the industry. The innovation literature distinguishes between two modes of innovation. One, the 'Science, Technology and Innovation' (STI) mode, is based on the production and use of codified scientific and technical knowledge. The other, the 'Doing, Using and Interacting' (DUI) mode, relies on informal processes of learning and experience-based know-how [START_REF] Jensen | Forms of knowledge, modes of innovation and innovation systems[END_REF]. One can find many examples of both modes of innovation in salmon aquaculture. But it can be argued that STI based innovation processes generally have led to more radical innovations than DUI processes in salmon aquaculture. This is the case for several innovations related to e.g. feed and vaccines. Also in the future should we see both modes of innovation. However, the more radical innovations that the industry needs to increase its productivity and grow have to be based on STI processes. But it should be pointed out that STI processes can have different characteristics, including what types of agents fund R&D and what types of agents perform the R&D activities. For Norwegian salmon aquaculture a major actor in selection and funding of research projects has been the government's Norwegian Research Council (NRC), a body dominated by scientists from academia, where projects have been largely selected on the basis of the academic credentials of the applicants. Publication of results in international peer-reviewed scientific journals have generally been regarded as an important indicator of success for NRC funded projects, and innovation outcomes have received less attention. Innovations in salmon aquaculture have often been based on results from NRC funded projects, but have been made in separate, later projects with commercialization objectives.

There may to some degree be complementarities between the research focused on creating new knowledge and publication in peer-reviewed journals funded by the government through the NRC and R&D funded by the private companies with more direct commercial objectives. However, one important question for the future is who should decide on the allocation of NRC funding -how much influence should the academic sector have and how much influence should private sector have in the formulation of NRC research program objectives and selection of projects? Until recently the dominance of academia can be explained by the lack of sufficiently trained candidates from the private sector. But the private sector is increasingly recruiting employees with scientific training, and this should facilitate a change in the balance between the academic and private sector in the future.

In the future innovations are required in all key technology areas. For salmon feed, which represents over 60% of total costs, it is necessary to continue the replacement of scarce marine ingredients with vegetable ingredients to reduce ingredient costs. The industry faces several salmon diseases which require improved vaccines and other strategies to reduce mortality. There are also other more environmental challenges which may not affect productivity directly, but will have consequences for the industry's ability to expand, as future expansion is dependent on its environmental impacts. Salmon farm cages and other structures need to be further improved to reduce the likelihood of salmon escaping. Innovations are also required to reduce the presence of salmon lice in the surroundings of salmon farms.

It is necessary to increase the productivity of salmon aquaculture R&D in the sense that it should lead to more innovations per million Norwegian kroner invested in R&D. R&D financed by the government and undertaken by government institutions have been highly necessary in the past to develop key technologies. But in the future it may be essential to have greater proximity between those who finance and undertake R&D and the industry to increase the innovation rate. This is to an increasing the degree possible as the industry itself has much greater financial and human resources today than in the past to finance, manage and undertake R&D.

Fig. 2 .

 2 Fig. 2. R&D by performing sector and funding source in million Norwegian kroner (Source: NIFU-Step)

Fig. 3 .

 3 Fig. 3. Production cost including feed, labor and capital per kg produced fish (Cost/kg) and the estimated rate of technical change (TC).

Table 2 .

 2 Sample Mean Elasticity Estimates from Estimated Translog Cost Function* Our main variable of interest is the rate of technical change. According to Table 1 the overall sample average rate of technical change is -0.034, i.e. an annual average 3.4% rate of technical progress.

	Variable	Mean	St.Dev.	Min	Max
	RTS	1.152	0.076	0.924	1.527
	E Feed	-0.155	0.045	-0.329	0.018
	E Labor	-0.387	0.210	-0.435	12.124
	E Capital	-1.062	0.052	-1.256	-0.913
	TC	-0.034	0.060	-0.257	0.247
	*No. of observations is 4904, except for TC (N=4723) due to omission of observations in 1985.


Dag E Gotteberg Haartveit

Marco Semini
email: marco.semini@sintef.noerlend.alfnes@ntnu.no

Erlend Alfnes

Integration Alternatives for Ship Designers and Shipyards

Keywords: Supply Chain Management, Vertical Integration, Engineer-to-Order, Shipbuilding

The offshore oil industry in Norway has for decades required advanced special purpose equipment for its operations. Norwegian shipbuilders have supplied the offshore industry and specialized in producing customized and technologically advanced ships. Shipbuilding is a typical Engineer-to-Order (ETO) industry. While the ship concept and design continues to be developed in Norway, ship production is increasingly performed at foreign yards. This characteristic makes the industry an interesting case for studying integration between actors. This paper presents a typology of different integration alternatives for ship designers and shipyards. The three alternatives presented are ownership, partner yard and market yard. The paper also identifies and discusses industry-relevant business factors that are affected by the choice of integration level.

Introduction

Despite the fact that Engineer-to-order (ETO) manufacturing is widespread in many industries, and customization has been promoted as a source of competitive advantage [START_REF] Amaro | Competitive advantage, customization and a new taxonomy for non-make-to-stock companies[END_REF], operations and supply chain management have mainly focused on high-volume manufacturing. In contrast to high-volume manufacturing, ETO manufacturing is characterized by low-volumes, high degrees of customization and project-based processes. Research addressing the design and management of supply chains with those characteristics is scarce [START_REF] Gosling | Engineer-to-order supply chain management: A literature review and research agenda[END_REF]. This paper addresses collaboration and integration between supply chain actors in the archetypical ETO industry: shipbuilding. The shipbuilding industry is by definition concerned with the production of vessels above 100 gross tones. The industry is characterized by site production, temporary work organization, high degrees of customization and project organizations. The shipbuilding process is usually an endeavor lasting several years. During the process customer specifications, technological advances and other factors change the design of the ship. These changes demand collaboration between, and integration of, actors in order to be successful. Different levels and types of integration affect crucial business factors which imply different advantages and drawbacks. Choosing the right integration alternative should therefore be made in a systematic, informed way. There is however a lack of research addressing this issue.

The purpose of this paper is to develop a typology of different integration alternatives between two key actors in shipbuilding, the ship designer and the shipyard, and to identify the effects of different integration choices. The outcome should support managers in their effort to align supply chain strategy with overall business strategy and priorities.

The stated purpose is achieved by performing a literature review and several exploratory case studies at a Norwegian shipbuilder. The specific advantage of case studies is that great insight can be achieved by means of direct contact with key informants.

The case company produces customized and technologically advanced ships. The ships are tailor made to customer needs and especially attractive to customers providing services for the offshore oil industry. While the ship concept and design still are developed by the case company in Norway, ship production is increasingly performed globally; in countries and regions such as China, Brazil and the Middle East. This characteristic makes the case company an interesting case for studying integration between ship designer and shipyards. The topic of this paper is relevant to the case company and the study was conducted through frequent interviews and discussions with key personnel.

The remainder of this paper is structured as follows: First, the shipbuilding industry is briefly introduced. This introduction focuses on aspects relevant for the purpose of the present paper. Next, existing literature on vertical integration and supplier relations is reviewed. Chapter four contains this paper's main contribution; three different integration alternatives between designers and yards are introduced and their effect on industry-relevant factors highlighted. The paper is finalized by a conclusion and suggestions for further research.

Shipbuilding

This chapter will introduce shipbuilding characteristics relevant to the topic at hand. The characteristics are based on the case study. Ships for other market segments are often built differently.

Main Processes

Ships are complex engineered systems, and building ships is similar to building heavy machinery, capital goods or buildings. Such undertakings are usually organized as projects, and shipbuilding can therefore be considered as a project-based industry. A typical shipbuilding project includes the following main processes:

• Concept design • Purchasing • Assembly • Contract design • Engineering • Commissioning • Basic and functional design • Production • After-sale
The different processes often overlap and their borders are blurred. Even the order and amount of effort put into each process can vary. Note that contract signing happens after Concept -, Contract -, and Basic and functional design. These nonphysical processes are considered core capabilities for ETO companies [START_REF] Hicks | Supply chain management: A strategic issue in engineer to order manufacturing[END_REF].

Main Actors

The processes presented in the previous section are often not carried out by a single company, but a network of geographically dispersed actors. The processes carried out by each actor vary and so does the level of integration and coordination between them. This is an important characteristic of shipbuilding. At an aggregated level our case study revealed the following main roles, which may or may not belong to the same company:

• The ship designer • Main equipment suppliers • The shipyard • The ship owner
There is a need for actors holding these roles to communicate and collaborate. This paper focuses on the ship designer and the shipyard which are presented in more detail below. Collaboration between them is needed to ensure effective, high quality production according to specifications.

The Ship Designer. The ship designer has the overall responsibility of concept design and basic and functional design. These two processes are the ones that determine the physical shape, performance and capabilities of the ship. These are ultimately the most important factors to the customer, thus the ship designer usually also carries out the marketing and communication efforts towards customers. The Shipyard. The shipyard's main responsibility is production and assembly. In addition, it carries out purchasing and engineering, which are typically split between the ship designer and the yard to varying degrees. The shipyard is either chosen by the customer or in collaboration with the ship designer.

Literature Review

The literature review conducted for the paper covers design and management of supply chains with a focus on vertical integration and supplier relations, as this is relevant theory when discussing different levels of integration between companies. Special attention is given to literature concerning ETO companies and supply chains.

Research in this field is not nearly as comprehensive as that of the high volume industry, but there is some relevant literature addressing the engineering and construction industry [START_REF] Venkataraman | Project Supply Chain Management: Optimizing Value: The Way We Manage the Total Supply Chain[END_REF][START_REF] Yeo | Integrating supply chain and critical chain concepts in engineer-procure-construct (EPC) projects[END_REF].

Vertical Integration Decisions

Vertical integration decisions are of strategic importance. These decisions determine how much of the supply chain the company will own and which activities it will perform. Companies usually vertically integrate to achieve one of two goals: To increase profit margins or to improve control over their business environment [START_REF] Hayes | Restoring our competitive edge[END_REF].

The result of vertical integration decisions affects companies on many levels. Porter [START_REF] Porter | Competitive Strategy: Techniques for Analyzing Industries and Competitors[END_REF] and Hayes and Wheelwright [START_REF] Hayes | Restoring our competitive edge[END_REF] explained the advantages and disadvantages of vertical integration. More recently, Beckman and Rosenfield [START_REF] Beckman | Operations Strategy[END_REF] gathered the current body of knowledge and found four main sets of factors to be considered when making vertical integration decisions. The factors and their effects are summarized in Table 1. -Access lower production or service delivery cost. -Minimize investment costs.

Hicks et al. [START_REF] Hicks | Supply chain management: A strategic issue in engineer to order manufacturing[END_REF] found that levels of vertical integration varied considerably between ETO companies and that these variations were consequences of the varying factors they were subjected to. At the same time they saw a trend towards vertical disintegration driven by financial pressure and cost reduction efforts.

Enterprise collaborations

A company not completely vertically integrated must necessarily interact with other actors in a supply chain. This interaction varies depending on the relationship between the actors. According to Jagdev and Thoben [START_REF] Jagdev | Anatomy of enterprise collaborations[END_REF] the collaboration between actors ranges from Market transactions to Integrated company. Deciding what kind of relationship the company should have to other actors is a decision of strategic importance and should differ according to the role of the actor [START_REF] Persson | Supplier segmentation-when supplier relationships matter[END_REF][START_REF] Bensaou | Portfolios of buyer-supplier relationships[END_REF]. That role depends upon a number of factors including supply risk and impact on profit. These were identified by Kraljic [START_REF] Kraljic | Purchasing must become supply management[END_REF] as the main determinants for a suitable sourcing strategy. When considering supplier relations Hicks et al. [START_REF] Hicks | Supply chain management: A strategic issue in engineer to order manufacturing[END_REF] found that an ETO company could have the whole spectrum of relationships to its suppliers due to differing integration levels, the supply risk and impact on profit of the sourced product, and levels of desired concurrent engineering, to name a few. They also caution about the lack of transferability of supply chain management practices from the high volume sector. In the next chapter, the reviewed theory will be applied to shipbuilding with this warning in mind.

Integration Alternatives

Different forms and levels of integration exist between actors in shipbuilding. Despite the importance of selecting appropriate integration alternatives between different actors, the literature lacks frameworks addressing this issue. The purpose of this chapter is to develop a typology of integration alternatives for the ship designer and the shipyard, and to discuss consequences of different integration choices. The results are presented in table 3.

Market Factors

Market Access. Ship production contracts are won on cost and political considerations. The yard industry is highly competitive and governments have been setting up tax schemes and local content regulations to promote production in their country. In order to benefit from those incentives customers will in many cases require a specific location/ yard. (Quality and perceived risk also influence choice of yard) Production constrained to one or a small number of yards reduce market access.

Production, limited to a number of yards reduces market access.

Production can be at any yard and does not reduce market access.

Product and Technology Factors

Intellectual Property. A shipyard with full access to detailed design drawings and the experience gained by building an offshore vessel is a potential competitor.

No investment requirements.

Transaction Costs. Shipbuilding characteristics drives costs and integration between functions is identified to facilitate cost control [START_REF] Venkataraman | Project Supply Chain Management: Optimizing Value: The Way We Manage the Total Supply Chain[END_REF].

Coordination costs and contract negotiations should be low or not existing.

Long-term relationships facilitate collaboration and ease of coordination.

High transaction costs due to contract negotiations and complex coordination

By taking the perspective of the ship designer, the integration alternative with the yard can be classified as ownership, partner yard, or market yard. This division is inspired by the work performed in the MODNET-project [START_REF] Longva | Teknisk rapport, DP1 -Konkurransekraftutvikling[END_REF]. A similar division was mentioned but not further elaborated.

Ownership. Ownership implies that the designer and shipyard are part of the same company. The functions are thereby vertically integrated. This integration alternative also includes functions that are integrated through joint ventures. Ownership usually implies the highest level of collaboration.

Partner Yard. The partner yard alternative implies that long-term, contractual agreements or strategic alliances between the ship designer and the shipyard are in place. The ownership and partner yard alternatives imply that the ship designer will collaborate with specific yards several times. This creates incentives for improving collaboration.

Market Yard. The market yard alternative implies no long-term relationship. Contrary to the two other alternatives, this category implies a one-project-at-the-time focus for the collaboration between the actors. A ship designer will in practice have a limited number of vertically integrated yards or partner yards. For market yards, there are basically no restrictions.

Each pair of designer and yard can be characterized by its integration alternative. In practice, different shipbuilders adapt different strategies. Some build ships mainly through the ownership model, others pursue a more diversified strategy. The case company has for example evolved from being a shipbuilder in the ownership category to being in all three categories.

The three integration alternatives can be further characterized by how they affect various industry-relevant business factors. Such factors were identified in collaboration with the case company. They were structured into strategic, market, product and technology, and economic factors, as Beckman and Rosenfield [START_REF] Beckman | Operations Strategy[END_REF] do in the context of vertical integration decisions (Table 1). Even though the division between partner yard and market yard is not a matter of vertical integration, the factors have been found relevant for comparing all the three integration alternatives.

Conclusion and Further Research

In this paper we have identified three different levels of integration between ship designers and shipyards. Industry-relevant business factors are identified and combined with the three integration alternatives in table 3. The table exemplifies consequences of the three integration choices. The theoretical contribution of this paper is thus a typology of different integration alternatives for ship designers and shipyards and the industry-relevant factors identified. The paper will hopefully contribute to managers' ability to take structured and informed decisions. The results should support efforts to align supply chain strategy with overall business strategy and priorities by presenting implications of each integration alternative.

The results presented in this paper rest mainly on case studies of several ship projects undertaken by a shipbuilder producing ships for the offshore industry. The proposed typology and industry-relevant factors should be validated by means of additional case studies from other shipbuilders, as well as surveys covering a larger number of shipbuilders. After validation the results could be generalized for all ETO industries. An additional opportunity for further research is to create a framework for deciding on integration levels between ship designers and main equipment suppliers.

Table 1 .

 1 Factors For and Against Vertical Integration[START_REF] Beckman | Operations Strategy[END_REF]

	Factors	Vertically Integrate to:	Vertically Disintegrate to:
	Strategic	-Develop and retain core and	-Access a core or essential
	Factors	essential competences.	capability externally while
			working on its development
			internally.
	Market	-Control cost, quality, availability,	-Leverage competition among
	Factors	features/innovativeness and	suppliers to access best-in-class
		environmental performance in	performance.
		unreliable markets.	-Aggregate demand at suppliers
		-Shift power relationships in the	thus generating economies of
		industry.	scale and improved
		-Reduce dependency on suppliers.	responsiveness to variability in
			demand.
	Product and	-Control integral or critical	-Access current technologies not
	Technology	technologies.	available internally.
	Factors	-Integrate design and production or	-Obtain leverage available from
		service delivery under certain	modular product architectures.
		conditions.
	Economic	-Minimize transportation and
	Factors	logistics costs.
		-Minimize transaction costs.

Table 2 .

 2 Table2illustrates the spectrum of relationships between two supply chain actors in which one acts as the supplier to the other. The level of formalization, commitment and duration of relationship increases downwards in the table. Spectrum of Relationships with Supply Chain Actors (Adapted from Jagdev and Thoben[START_REF] Jagdev | Anatomy of enterprise collaborations[END_REF])

	Type of Collaboration	Description
	Market Transaction	Relationship strictly transaction based.
	Non-Contractual Agreements	Long lasting market transactions based on trust.
	Contractual Agreements	Long-term supply contracts or agreements between
		companies providing complementary products.
	License Agreements	License provided to supplier in technology that host
		firm develops. Example: franchising.
	Joint Venture	Companies supplying complimentary products or
		services join forces for mutual benefit.
	Integrated Company	A single company owns the activity.

Table 3

 3 Industry-Relevant Business Factors and How Integration Alternatives Affect Them

		Ownership	Partner Yard Market Yard
	Strategic Factors
	Capacity. Access to the right production	Full access to	Access to capacity	Access to capacity
	capabilities and capacity is essential and can	capacity.	depends on	depends on yard
	be scarce in high demand market situations.		contractual	availability and can
			agreements.	lead to lost sales.
	Core Capability -Project Execution. Ships	Integration	Long-term	Project changes
	are customized and adapted to customer	between functions	relationships	require
	requirements throughout the project period.	creates flexibility	facilitate	collaboration
	Being able to comply with changes customers	through	collaboration and	between functions
	require in an efficient manner is considered a	collaboration and	coordination.	with no experience
	capability for shipbuilders, like the case	coordination.		collaborating and
	company.			coordinating.
	Core Capability -Knowledge. Designs are	Integration	Long-term	Knowledge sharing
	to a large degree sold by referring to	between functions	collaboration	on a project-to-
	previously built ships and the designers'	secures knowledge	facilitates	project basis.
	ability to develop solutions which exactly fits	sharing.	knowledge sharing.
	customer needs. Designing technologically
	advanced ships requires being able to
	integrate complex sub-systems and state-of-
	the-art technologies. This requires knowledge
	and experience acquired by building ships.


Daryl Powell
email: daryl.j.powell@ntnu.no

Erlend Alfnes

Jan Ola Strandhagen

Heidi Dreyer

ERP Support for Lean Production

Keywords: Lean production, Enterprise resource planning, Action research

In the traditional sense, IT has often been viewed as a contributor to waste within lean production. However, as the business world changes and competition from low-cost countries increases, new models must be developed which deliver competitive advantage by combining contemporary technological advances with the lean paradigm. By applying an action research approach, this paper evaluates the support functionality of ERP systems for lean production. We address the fundamental principles of lean production in comparison with the functionality and modules of a contemporary ERP system.

Introduction

Though the theory of lean production is nowadays well understood, the relationship between information technology (IT) and lean production remains a controversial and far less explored topic. While lean is often characterized by decentralized coordination and control, ITs such as enterprise resource planning (ERP) systems are typically best suited to support centralized production planning. However, [START_REF] Powell | Lean Production Vs. ERP Systems: An ICT Paradox[END_REF] identify and explore the lean-ERP paradox, and suggest that there is a synergistic impact to be realised in combining ERP systems within the lean paradigm. [START_REF] Riezebos | Lean Production and information technology: Connection or contradiction[END_REF] also argue that modern IT can indeed be tailored to support lean, but state that further research is required to evaluate the combination of lean production principles and ERP. Therefore, the purpose of this paper is to evaluate the support functionality of a contemporary ERP system for lean production by addressing the following research question:

Theoretical Background

The term lean production was popularized by [START_REF] Womack | The Machine that Changed the World[END_REF] when they compared the mass production principles of the Western world to the very simple production principles of Toyota. However, this philosophy was primarily directed at the organization and less on information technologies [START_REF] Zuehlke | SmartFactory -Towards a factory-of-things[END_REF]. As such, IT has since been viewed as a contributor to the waste to be eliminated, rather than as a tool to help achieve and sustain positive change [START_REF] Bell | Lean Enterprise Systems: Using IT for Continuous Improvement[END_REF]. The increasing rate of development of IT today is constantly increasing manufacturing companies' ability to react quickly and reliably to demand through increased transparency, visualization and processing capabilities. [START_REF] Moody | With Supply Management[END_REF] suggests that, although profitability can be enhanced in any number of ways, one of the most rewarding and direct avenues is through the use of technology. [START_REF] Riezebos | Lean Production and information technology: Connection or contradiction[END_REF] suggest that modern IT (such as contemporary ERP systems) can be tailored to support lean production. ERP is one of the most widely accepted choices to obtain competitive advantage for manufacturing companies [START_REF] Zhang | A framework of ERP systems implementation success in China: An empirical study[END_REF]. ERP systems are designed to provide seamless integration of processes across functional areas with improved workflow, standardization of various business practices, and access to real-time data [START_REF] Mabert | Enterprise resource planning: Managing the implementation process[END_REF]. The fundamental benefits of ERP systems do not in fact come from their inherent "planning" capabilities but rather from their abilities to process transactions efficiently and to provide organized record keeping structures for such transactions [START_REF] Jacobs | Enterprise resource planning: Developments and directions for operations management research[END_REF]. In order to evaluate the support functionality offered by ERP systems for lean production, we use the fundamental principles of lean manufacturing identified by [START_REF] Womack | Lean Thinking: Banish Waste and Create Wealth in Your Corporation[END_REF]: "precisely specify value by specific product; identify the value stream for each product; make value flow without interruptions; let the customer pull value from the producer; and pursue perfection" [START_REF] Hines | The Principles of the Lean Business System[END_REF]. By conducting a study of the extant literature in the form of academic journals, trade journals, textbooks, and white papers; we identify 15 fundamental areas in which an ERP system could be configured to support lean production principles. The 15 areas, which we call the 15 keys to ERP support for lean, are summarized in Table 1:

Research Methodology

In this study we adopt an action research approach by following an ERP implementation project at a case company in Trondheim, Norway. One of the authors has been actively involved at the case company during the introduction of lean practices since 2009, and has also been present during the design and analysis phase of the ERP implementation process since January 2011.

Action research [START_REF] Philips | Action research and development coalitions in health care[END_REF] suggests that there is a broad Scandinavian tradition for action research. Action research can be defined as a participatory, democratic process concerned with developing practical knowing in the pursuit of worthwhile human purposes, grounded in a participatory worldview (Reason and Bradbury, 2006). Essentially, it focuses on bringing about change (action) and contributing to knowledge (research). [START_REF] Mcniff | Doing and Writing Action Research[END_REF] suggest that doing action research involves the following: 1. Taking action (changing something); 2. Doing research (analyzing and evaluating both the change and change process); 3. Telling the story and sharing your findings (disseminating the results).

Action research is considered as an appropriate methodology for this study as both lean production and ERP systems are very much applied in industry, thus a "learning by doing" approach is very suitable.

Client System: Noca AS

Noca is a manufacturing and service supplier within electronics and electronics development. Established in 1986, Noca delivers development, prototypes, batch production, and assembly for customers within innovation and entrepreneurs in high-tech industries. Noca has 50 employees and an annual turnover of €11.5m (2010). The company is currently actively applying lean practices to their operations, having started with value stream mapping (VSM) in 2009, followed by 5S in 2010. Noca has also identified a need to enhance their supporting processes, such as production planning and control, and have therefore chosen to implement a new ERP system, Jeeves Universal (Figure 1). Recognised as "Sweden's most popular ERP system -2009", Jeeves Universal is claimed to be a flexible (customized) standard ERP system (ERPResearch.org, 2010). The ERP implementation process at Noca will consist of three phases -a design and analyse phase (phase zero); an implementation phase (phase one); and an improvement phase (phase two). This paper considers phase zero only.

Figure 1: The "Jeeves Universal" ERP system and selected modules

Results

This paper presents preliminary findings following phase zero of the ERP implementation project, which we call the design and analysis phase. By evaluating the functionality of the chosen ERP system and selected modules (Figure 1) against the lean principles identified by [START_REF] Womack | Lean Thinking: Banish Waste and Create Wealth in Your Corporation[END_REF], we are able to propose a theoretical framework for ERP support for lean production (Figure 2). This framework can be used by researchers and practitioners when combining lean and ERP.

Figure 2: ERP Support for Lean Production -a Conceptual Framework Value

It was identified that a significant element of the ERP system that helps contribute to value creation from the point of view of the customer was the application of a customer relationship management (CRM) module. The ERP system also offered select functionality to automate the necessary, non-value adding activities, such as backflushing (e.g. [START_REF] Hamilton | Maximizing your ERP system: a practical guide for managers New York[END_REF].

Value Stream

In terms of supporting the value stream, it was shown that the ERP system offered process modelling functionality to support the creation of standard work processes, as well as providing a source for easy-to-find product drawings and work instructions. Functionality that enables the sharing of information across the supply chain is also offered with the B2B Portal. The ERP system also supports a number of different levels within the factory, ranging from the individual operation (process level), through production group (work cell level), to flow group (value stream level).

Flow

The main module of the ERP system supporting flow manufacturing was identified as the Workflow (WF) module, which integrated all functions of the enterprise and aided the creation of a "paperless" paper-trail for continuous flow of information supporting the production processes. Functionality is also offered to support line balancing; demand levelling; and orderless rate-based planning through the use of Jeeves planning system (JPS). Finally, and particularly through the use of business intelligence (BI), decision support for shopfloor decision making allows shopfloor workers to become even more empowered in the lean environment.

Pull

Even though the client system is too early in its lean journey to implement a pull system, ERP support for pull production was still taken into consideration. It was noted in particular that the JPS is a very useful visual tool that can be used to support production levelling (heijunka). It is also anticipated that the WF module can be used to support pull production through enabling and supporting material and information flow. JIT procurement can be supported through integrating a product's BOM within both Jeeves Project (for prototyping and ramp-up) and Jeeves manufacturing (for volume production).

Perfection

Finally, in terms of perfection and continuous improvement, it was highlighted how the ERP system can make use of both BI and JPS (as a visual tool) to provide a system for logging and follow-up of quality problems, and to provide a system for highly visual and transparent operational measures.

Conclusion

By considering the functionality of the Jeeves Universal ERP system against the five lean principles, we conceptualized a framework for ERP support for lean production, which we call "the 15 keys to ERP support for lean production". The framework (shown in Table 1) highlights the theoretical support functionality of the Jeeves Universal ERP system for lean production. This can be used by researchers and practitioners for the future integration of ERP systems within the lean paradigm.

Though measures have been taken to increase the validity of this research, a number of limitations do however exist. For example, a commonly cited limitation of the action research approach is the focus upon only one company.

Though it is often not the main goal of action research to generalise results, the results herein can be used as a template for reflecting on new experience [START_REF] Friedman | Action Science: Creating Communities of Inquiry in Communities of Practice[END_REF]. We also only considered an ERP system of one single vendor, Jeeves. We suggest that further investigation with other case companies and/or other ERP system vendors would help to make our framework more generalizable.

A particularly interesting subject that arose as a result of the work was ERP support for pull production. Therefore, the authors suggest that a greater focus should be taken on the role of ERP systems in helping manufacturers to realise JIT production, one of the most important dimensions of lean. Further work should therefore investigate ERP support for pull production, helping to strengthen the validity and contribution of this work.

Table 1 : 15 keys to ERP support for lean production

 1

	No Principle	An ERP system for lean production should:	Reference:
	1 2	Value	Support customer relationship management Automate necessary non-value adding activities (e.g. backflushing)	(Chen and Popovich, 2003) (Hamilton, 2009)
	3		Enable process-modelling to support standard work processes	(IFS, 2008, Prediktor, 2010)
	4	Value stream	Provide a source for easy-to-find product draw-ings and standard work instructions	(Houy, 2005, Tjahjono, 2009)
	5		Support information sharing across the supply chain	(Bjorklund, 2009, Koh et al., 2008)
	6		Create synchronized and streamlined data flow (internal & external)	(Hamilton, 2003)
	7		Support line balancing	(Steger-Jensen and Hvolby, 2008)
	8	Flow	Support demand levelling	(Hamilton, 2009)
	9		Support orderless rate-based planning (e.g. takt-time)	(IFS, 2010)
	10		Provide decision support for shop floor deci-sion making	(Hamilton, 2009)
				(Hamilton, 2009,
	11		Support kanban control	Masson and Jacobson,
				2007)
	12	Pull	Support production levelling (Heijunka)	(Masson and Jacobson, 2007)
	13		Support JIT procurement	(Masson and Jacobson, 2007)
			Provide a system to support root-cause analysis
	14		and for the logging and follow-up of quality	(Bjorklund, 2009)
		Perfection	problems Provide highly visual and transparent opera-
	15		tional measures (e.g. real time status against	(Prediktor, 2010)
			plan)