Børge Sjøbakk
email: borge.sjobakk@sintef.no

Ottar Bakås
email: ottar.bakas@sintef.no

Designing an Engineer-to-order Performance Measurement System: A Case Study

Keywords: Performance measurement system, design methodology, engineerto-order

The conventional maxim of "what gets measured gets done" has motivated many companies to systematically measure their performance over the years. From previously being focused solely on financial, backward-looking measures, it is now generally agreed that a performance measurement system (PMS) should align with a company's long-term, strategic objectives. These objectives are largely dictated by the company's production situation, and vice versa. When being approached by a Norwegian engineer-to-order (ETO) company requesting a PMS, the authors could not identify any literature explicitly referring to PMS for ETO. The authors therefore set out to design the PMS from scratch. The purpose of this paper is to illustrate how the PMS was designed in close collaboration with the case company, bearing the general characteristics and competitive priorities of ETO in mind.

Introduction

There is a variety of production situations that can be used to meet demand. Most of the operations management and production literature would classify companies into a manufacturing continuum spanning across four types, depending on the position of the customer order decoupling point (CODP): make-to-stock (MTS), assemble-toorder (ATO), make-to-order (MTO) and engineer-to-order (ETO) [START_REF] Amaro | Competitive advantage, customisation and a new taxonomy for non make-to-stock companies[END_REF]. In the ETO production situation products are manufactured to meet a specific customer's needs by unique engineering or significant customization [START_REF] Amaro | Competitive advantage, customisation and a new taxonomy for non make-to-stock companies[END_REF]. The products are often complex, with deep structures consisting of both customized and standardized components [START_REF] Hicks | Supply chain management: A strategic issue in engineer to order manufacturing[END_REF]. Further, uncertainty in product-and process specifications, product mix and -volume [START_REF] Bertrand | Production control in engineer-to-order firms[END_REF][START_REF] Muntslag | Profit and risk evaluation in customer driven engineering and manufacturing[END_REF] often results in high lead times [START_REF] Pandit | An ontology-based approach to support decision-making for the design of ETO (Engineer-To-Order) products[END_REF] and frequent change orders [START_REF] Riley | Effects of delivery systems on change order size and frequency in mechanical construction[END_REF].

The competitive priorities of a company are largely dictated by its production situation, and vice versa. This should be reflected in the company's performance measurement system (PMS), i.e. the set of metrics used to quantify both the efficiency and effectiveness of actions [START_REF] Neely | Performance measurement system design: a literature review and research agenda[END_REF]. Performance measures should focus on the order winners and market qualifiers for the different processes up-and downstream of the CODP [START_REF] Olhager | Strategic positioning of the order penetration point[END_REF]. This implies that the design of a company's PMS should vary with its production situation, and that a PMS for ETO in some way would differ from a PMS for MTS-, ATO-or MTO. For example, flexibility is regarded as an order winner in ETO, as opposed to price, which is more important in the MTS production situation [START_REF] Olhager | Long-term capacity management: Linking the perspectives from manufacturing strategy and sales and operations planning[END_REF]. As such, flexibility would necessarily have to be emphasized more in a PMS for ETO.

When being approached by a Norwegian ETO company requesting a PMS, the authors initially set out to identify what was already written about PMS for ETO. In this respect, quite a bit of literature on performance measurement in construction, which has the same discontinuity aspects of temporariness, uniqueness and multifunctionality as those found in ETO [START_REF] Caron | Engineer to order'companies: how to integrate manufacturing and innovative processes[END_REF], was identified [e.g. 11, [START_REF] Chan | Key performance indicators for measuring construction success[END_REF][START_REF] Takim | Performance indicators for successful construction project performance[END_REF][START_REF] Robinson | Review and implementation of performance management models in construction engineering organizations[END_REF][START_REF] Navon | Research in automated measurement of project performance indicators[END_REF]. However, as noted by Beatham et al. [START_REF] Beatham | KPIs: a critical appraisal of their use in construction[END_REF] construction performance measures are often lagging measures used mainly as a marketing tool rather than as means for improvement. In ETO, a considerable portion of the manufacturing and assembly processes are carried out at the corporate premises using a production system managed according to established manufacturing policies, unlike the often 'ad hoc' construction projects [START_REF] Caron | Engineer to order'companies: how to integrate manufacturing and innovative processes[END_REF]. As such, there would arguably be elements of repetition in ETO that could be measured using a more complete PMS consisting of both leading and lagging indicators. This PMS could be used as a means for improving the production system and its policies.

No literature explicitly referring to PMS for ETO was identified. The authors therefore set out to design the PMS from scratch, taking a PMS design methodology by Andersen and Fagerhaug [START_REF] Andersen | Performance Measurement Explained: Designing and Implementing Your State-of-The-art-System[END_REF] as a starting point due to their familiarity with this approach. The purpose of this paper is to illustrate how the PMS was designed in close collaboration with the case company, bearing the general characteristics and competitive priorities of ETO in mind. The focus lies at the process of designing the PMS rather than the details of the final PMS.

The remainder of the paper is structured as follows: First, the research method and case company are described. This is followed by some theoretical background, before the process of designing the PMS is described. Finally, the findings are concluded.

Research Method

The research was carried out by a qualitative approach, utilizing the action research method. Action research seeks to generate new knowledge both for the problem holder (in this case the ETO company) and the action researchers, through collaboratively solving problems in real life situations while having a research interest in mind [START_REF] Greenwood | Introduction to action research : social research for social change[END_REF][START_REF] Mckay | The dual imperatives of action research[END_REF]. This research method is different from many other methods in that the researchers actively take part in the context of their research area, shaping a mutual reliance on the problem holder's and the researchers' skills and competences [START_REF] Greenwood | Introduction to action research : social research for social change[END_REF][START_REF] Mckay | The dual imperatives of action research[END_REF]. Due to its nature, action research and its practitioners have met various types of critique over the years: It has been claimed to be nothing more than consultancy in not emphasizing the research in a sufficient (scientific) manner [START_REF] Mckay | The dual imperatives of action research[END_REF]; it is claimed to be inadequate in safely making causal inferences [START_REF] Baskerville | A critical perspective on action research as a method for information systems research[END_REF]; and, the researchers are said to be especially exposed for bias [START_REF] Mckay | The dual imperatives of action research[END_REF]. Further, it is prone to general critique of qualitative research; that it is hard to generalize from this type of research design, and it that it therefore lacks some key criteria for research quality [START_REF] Mckay | The dual imperatives of action research[END_REF]. The authors acknowledge that the idiosyncratic context of working closely with the problem holder restricts the possibility to fully generalize and replicate the research and its results. However; close collaboration was a critical success factor as the PMS needed to be tailored to the company. By investigating the requirements for a PMS for ETO, the research interest was also maintained, as this is a topic that has received little attention in the literature.

About the problem holder. The problem holder is a relatively small, high-tech company that specializes in design, manufacturing, technological development, installation and support of solutions for environmental monitoring. While being part of a larger international group, this particular subsidiary has its main office in the middle of Norway. For the PMS design activity, the production of ocean monitoring platforms was chosen as a case. These contain sensors for measuring various parameters, e.g. meteorological data and water quality. The platforms are categorized in four types based on different sizes and shapes of the floaters. There are some components that are common for all platforms, e.g. data loggers, floater (though different for each platform type) and electronics. Besides this, the platforms can be customized to a large extent. For each single platform that is delivered, the company has to engineer an anchorage system based on the seabed conditions in its area of operations. The production of a platform is triggered by a customer order, often resulting from tendering as the company has a high share of public customers. As is evident, the characteristics of the company coincide with typical characteristics of ETO, making it an interesting case for the design of a PMS for ETO.

Theoretical background

The conventional maxim of "what gets measured gets done"1 has motivated many companies to systematically measure their performance over the years. Earlier, performance was typically measured in terms of one or several financial ratios collectively suggesting how well a company was doing [START_REF] Behn | Why measure performance? Different purposes require different measures[END_REF]. However, since the 1980s and 1990s other non-financial factors contributing to the performance of organizations have gained ground [START_REF] Andersen | Performance Measurement Explained: Designing and Implementing Your State-of-The-art-System[END_REF]. For example, in their balanced scorecard approach Kaplan and Norton [START_REF] Kaplan | Using the balanced scorecard as a strategic management system[END_REF] augment traditional financial measures with performance measures in the three areas of a company's relationship with its customers; its key internal processes; and, its learning and growth -arguing that financial measures and targets are not sufficient in measuring performance against a company's long-term strategic objectives. Today, it is generally agreed that performance measures should be derived from a company's strategic priorities [START_REF] Bourne | Designing, implementing and updating performance measurement systems[END_REF].

There exist a lot of general methods for designing a PMS [e.g. [START_REF] Neely | Performance measurement system design: a literature review and research agenda[END_REF][START_REF] Andersen | Performance Measurement Explained: Designing and Implementing Your State-of-The-art-System[END_REF][START_REF] Bourne | Designing, implementing and updating performance measurement systems[END_REF]. Andersen and Fagerhaug [START_REF] Andersen | Performance Measurement Explained: Designing and Implementing Your State-of-The-art-System[END_REF] present an eight-step methodology: (1) Understanding and map-ping business structures and processes; (2) developing business performance priorities; (3) understanding the current PMS; (4) developing performance indicators; [START_REF] Pandit | An ontology-based approach to support decision-making for the design of ETO (Engineer-To-Order) products[END_REF] deciding how to collect the data; (6) designing reporting and performance data presentation formats; [START_REF] Neely | Performance measurement system design: a literature review and research agenda[END_REF] testing and adjusting the PMS; (8) implementing the PMS.

To assess organizational goal attainment, performance indicators play an important role in a PMS. A performance indicator is a variable that expresses quantitatively the effectiveness or efficiency (or both) of (part of) a process or system against a given norm or target [START_REF] Fortuin | Performance indicators-why, where and how?[END_REF]. Over the years, the list of available performance indicators has grown extensively, and for many companies step 4 in the methodology by Andersen and Fagerhaug [START_REF] Andersen | Performance Measurement Explained: Designing and Implementing Your State-of-The-art-System[END_REF] may be more a task of 'deciding' rather than 'developing' performance indicators. Further companies should decide on a few key performance indicators (KPIs), i.e. a set of performance indicators focusing on the aspects of an organization's performance that are most critical for the organizations present and future success [START_REF] Parmenter | Key performance indicators (KPI): developing, implementing, and using winning KPIs[END_REF], in order to make reporting and follow-up manageable.

Finally, the purpose of having a PMS generally exceeds that of "getting things done". Other stated purposes include motivation, promotion, celebration, learning and improvement, and performance measures should be chosen accordingly [START_REF] Behn | Why measure performance? Different purposes require different measures[END_REF].

Designing the Performance Measurement System

In designing a PMS for the problem holder, the methodology by Andersen and Fagerhaug [START_REF] Andersen | Performance Measurement Explained: Designing and Implementing Your State-of-The-art-System[END_REF] was taken as a starting point; however, it was not followed to the letter. First, the company's current PMS was mapped, referring to Step 3 in the methodology. Thereafter, five workshops with different departments in the company generated suggestions for necessary performance indicators, which were further refined by the researchers (Step 4). In this process, a brief evaluation of the measurability of the different indicators was carried out (Step 5). A preliminary set of performance indicators was then sent out to the management and other parts of the company for feedback. In this way a top-down cascading method was combined with a bottom-up design process, which is in line with what Andersen and Fagerhaug [START_REF] Andersen | Performance Measurement Explained: Designing and Implementing Your State-of-The-art-System[END_REF] recommend.

Aligning the PMS with the problem holder's strategic priorities. As noted in theory, a PMS should be derived from a company's strategic priorities. When the researchers were approached by the problem holder, the company had formulated a vision in its management system; however, it was agreed that it needed to be made easier to communicate both internally and externally. This realization served as an opportunity to rethink and reformulate the company's strategic priorities into something shorter and easier to remember for all stakeholders. Based on their experience with the company, the researchers were able to propose a vision and five strategic business goals with which the PMS could be aligned (Step 2). The strategic business goals were: (1) Safe and stimulating workplace; (2) efficient delivery; (3) high quality products and services; (4) preferred partner; and (5) sustainable production. In order to ensure balance of the PMS and measurements of relevance, these strategic business goals were further itemized into the following measurement dimensions: Customer focus; flexibility; safety; people; delivery time; delivery precision; quality; innovation and R&D; financial performance; and environment. Most of these dimensions would prove valuable for all production situations; however, flexibility, innovation and R&D are especially important for ETO due to the production situation's high product complexity and uncertainty in specifications and demand. Workshops were carried out to secure the company's ownership to the new vision, strategic goals and measurement dimensions. As such, a byproduct of the PMS design process was that the researchers and the problem holder together developed a new vision for the company -concretizing its strategic priorities.

Understanding the business environment. The aforementioned workshops were further used to ensure that the main activities of the company were understood correctly (Step 1). These were structured in five business processes: (1) Sales; (2) planning; (3) engineering; (4) source and make; (5) delivery. Interestingly, the problem holder illustrated this as a 'customer journey', which in a neat way links the orderdriven ETO business processes, the business functions responsible for each process and inherent handover activities (Fig. 1). This is important for the use and follow-up of the PMS, as this should be distributed over the many business functions involved in ETO production, with especially planning and engineering arguably being more important in ETO than in other production situations due to all operations being orderdriven and the share of engineering done to every product. In collaboration with the case company, the performance indicators (PIs) were structured in accordance with the business processes of the company, as outlined in the customer journey: Sales (10 PIs); planning (6 PIs); engineering (10 PIs); source and make (13 PIs); delivery (9 PIs). Several indicators were found to occur in every process. These were gathered in a separate group coined 'common for all' (9 PIs). Both project-and production oriented indicators were considered in this process.

Based on the large number of relevant performance indicators, a limited set of KPIs was created to make the PMS more manageable. Such KPIs should in a simple and intuitive way display the current status in locations readily available for all employees, for example through a traffic light system. The KPIs should be easily linked with their underlying information in a drill-down manner. The previously developed strategic business objectives and measurement dimensions guided the task of creating KPIs, which were compound indexes calculated based on the status of underlying PIs. For example, the preferred partner index is aggregated based on the status of three underlying PIs: customer satisfaction measurement, percentage of re-sales to existing customers and tendering hit-rate.

Fig. 2 below illustrates the connection between the vision, the strategic business goals, the measurement dimensions, the business processes and the key performance indicators.

Conclusion

The complex process of designing a PMS requires structure and methodology. Even though a step-wise waterfall model by Andersen and Fagerhaug [START_REF] Andersen | Performance Measurement Explained: Designing and Implementing Your State-of-The-art-System[END_REF] was applied, the researchers experienced going back-and-forth in the design process. To ensure that the PMS was derived from the company's strategic priorities in a consistent and integrated manner, four principles were applied: (1) Define strategic business goals supporting the company's vision; (2) construct measurement dimensions covering the strategic business goals; (3) relate performance indicators to business processes and measurement dimensions; (4) ensure that KPIs cover all measurement dimensions. Involving employees and managers from main business functions is critical.

The design process itself provided several unforeseen side effects. First, the 'customer journey' was found to be a helpful tool to structure the business processes andfunctions within the company. Second, the PMS design process can serve as a catalyst for clarifying the vision and strategic objectives of the company. Third, the process can spur a number of improvement suggestions to existing processes and procedures.

Feedback from the problem holder supports the usefulness of the proposed PMS. However, as it has not yet been fully implemented at the company any numerical data to quantitatively assess its effects has not yet been made available. The researchers acknowledge that the findings are based on a single case, and that working closely with the problem holder limits the generalizability of the research and its results. Nonetheless, the case should be useful for others struggling to design their own PMS.

The topic of designing a performance management system for ETO companies is an area with much potential for further research, having received little attention in academic literature. The researchers therefore call for more studies describing the design process itself, and the actual resulting performance indicators that should be tailored to customer-specific and engineering-oriented production situations. Finally, as these may vary significantly, a minimum stability or degree of repetition required for an ETO company to fully exploit a PMS should be identified.

Fig. 1 .

 1 Fig. 1. The 'customer journey' showcasing responsibilities and handovers

Fig. 2 .

 2 Fig. 2. Structural overview of PMS

Peters and Waterman attribute it to the organization theorist Mason Haire. In: Peters, T., Waterman, R.H.: In search of excellence: lessons from America's best-run companies. Harper & Row, New York(1982)

Acknowledgements. This work has been conducted within the MARGIN project (Integrated and responsive maritime supply chains) funded by the Regional Research Fund Mid-Norway and the SFI Norman (Norwegian Manufacturing Future) programme supported by the Research Council of Norway. The authors would like to thank the participants of the projects for providing valuable empirical data.


Murshid Jan Frick
email: jan.frick@uis.no

M Ali

The importance of emerging markets for petroleum technology companies in Norway: Management and entry operation strategies

Keywords: petroleum industry, competitive advantage, globalization

The petroleum industry today are characterised by local companies emerging to other markets. This paper evaluates from cases the importance of these markets, and how many actually export to them. The offshore technology petroleum industry is one of Norway's largest industry sectors. The main competitive advantage of this sector is its knowledge base. An important part of the industry supplies platforms and other highly specialised equipment to the petroleum industry. Constraints to achieving success in these markets are many; official data may be unreliable, corruption might flourish, there will be large cultural differences and the political and legal risks might be high. Prejudice against different societies can also be an obstacle in creating and developing organizations that promote trade.

Introduction

Multinational companies from developed countries are enhancing their presence in emerging markets because they see the impact on growth and related bottom-line effects of their decisions and actions. They have increased their competitiveness by engaging in emerging markets performance enhancing activities. Growth in any market opens up the necessity for exchange of knowledge and technology. Especially in the postfinancial crisis era, companies from developed countries can spot opportunities in emerging markets.

According to the United Nations there are over sixty thousand firms operating internationally controlling at least half a million foreign affiliates. Together they produce goods worth more than eleven trillion USD. The trade between these companies have increased faster than the world trade overall (World Economic Forum, 2008). Private companies, through efficient organizations and capitalistic principles implement faster routines to enter new markets than others. These companies are now the global economy and drive the growth of different countries (UNCTAD, 2004). At the same time the largest economic growth of today is based in emerging countries. There is a shift in the world's economic power, from the West to the East [START_REF] Enderwick | Responding to global crisis: the contribution of emerging markets to strategic adaptation[END_REF]. Usually globalization has been mentioned to describe free trade in goods and services, but the fast expansion of today's technological development has created a global arena of transfers of jobs and skills across borders, outsourcing and off shoring in order to cut costs. Part of the fastpaced globalization has occurred because companies find it hard to achieve growth in the already developed world. So they tend to turn against emerging markets, realizing that they yield better sales growth than can be found in the developed world [START_REF] Pacek | Emerging Markets: Lessons for Business Success and the Outlook for Different Markets[END_REF].

Business operations in emerging markets are a concept that is gaining popularity among many multinationals today. For many organizations it is not only a way of expanding their business, but also a part of the globalization that takes place around us today. Emerging markets accounted for about half of the world's GDP in 2006 and these markets continue to demonstrate a tremendous growth that outpaces those of the already developed markets [START_REF] Pacek | Emerging Markets: Lessons for Business Success and the Outlook for Different Markets[END_REF]). As a result, many companies see the ability to sell effectively to these markets as integral to their long-term survival in an ever-increasing competitive environment. Business conducted in emerging markets enables companies to achieve lower production costs, gain access to new customers, obtain access to information or resources and spread business risk. This will also help companies react more quickly to changes in the market, and respond more promptly to customer requests.

Characteristics of emerging markets

! Countries generally considered to be emerging markets, possess some, but not necessarily all of the following ! Per capita income of less than US $10,725 (the current World Bank definition of low and middle income economies) ! Recent or relatively recent economic liberalisation ! Debt ratings below investment grade by major international ratings agencies ! Recent liberalisation of the political system and a move towards greater public participation in the political process Studies of the different emerging markets have become more and more important, and several leading organizations have conducted studies on the subject and gives out yearly rankings. The most well-recognized and popular ranking of competitiveness of countries is the Global Competitiveness Rankings and World Competitiveness rankings.

The World Economic Forum conducts the Global Competitiveness Rankings study. Competitiveness is defined as the collection of factors, policies and institutions that determine the level of productivity of a country and thus determine the level of prosperity that can be attained by an economy.

The annual World Competitive Index is given by IMD. Competitiveness of nations could be described as an integrative process of all policies in a country in order to have a blueprint to increase prosperity (IMD, 2006). The World Competitiveness Index has four components, namely, economic performance, government efficiency, business efficiency and infrastructure. Knowledge has emerged and is accepted as the most critical resource [START_REF] Bartlett | Beyond the M-form: toward a managerial theory of the firm[END_REF][START_REF] Moffet | International Business[END_REF][START_REF] Pillania | Leveraging knowledge for sustainable competitiveness in SMEs[END_REF]. The main producers of wealth are information and knowledge generators [START_REF] Moffet | International Business[END_REF]. Knowledge has an important role in advancing economic and social wellbeing and poor countries differ from rich ones not only because they have less capital, but also because they have less knowledge (World Economic Forum, 2008). Management scholars today consider knowledge and the ability to create and utilize knowledge to be the most important source of a firm's sustainable competitive advantage (Pillania, 2005).

How important is emerging markets in the oil industry today?

To understand the importance of emerging markets for Norwegian companies within the petroleum industry, we should assess the upstream sites of one of the largest oil producers in the world. ExxonMobil is the largest oil company in the world, having a turnover of 1515 billion USD in 2013, and over 70 000 employees. An overview of the upstream activities shows that most of activities in production stem from emerging markets, and most of the major sites and new additions are also in connection to emerging markets. This indicates future activity that is expected to rise in these areas. These activities are also centred and mainly focused on emerging markets. For petroleum technology companies that offer new and more efficient technology, this is valuable information in order to understand where the future market for their products and services will be. The end-client for all of the case companies in this paper is eventually the petroleum operators such as BP, ExxonMobil, ConocoPhillips, Statoil and so forth.

Strategies to enter emerging markets

When companies go global they will have to establish a global distribution system and an integrated manufacturing capability, and these factors gives the company a competitive advantage. However, going global poses also a lot of challenges, such as variety of commercial invoices, different bills of lading, and inspection certificates and in addition the company needs to comply with new domestic and international regulations. This will be discussed in the following chapters. According to Hisrich and al., there are different modes of entering or engaging in international business, these modes can be divided into three categories: Exporting, non equity arrangements as in turn-key contracts and licensing, and direct foreign investment as in joint ventures and wholly owned subsidiaries (see table under).

Entry Mode Advantage Disadvantage

Exporting • Ability to realize location and experience curve economies

• High transport costs The most common way of starting an international venture is through exporting. Exporting is when a company or an organization sells and ships products or services manufactured in one country to another country. Towards the emerging market, Norwegian companies needs to have an emerging market agent that purchases the products or the services, and then sells them to the end costumer. Non-equity arrangements consist of licensing and turnkey projects. Joint ventures and wholly owned subsidiaries makes the Norwegian companies obliged to invest in Emerging markets, and be a part of the economical sphere there, thus an direct foreign investment.

Methodology

This paper is based on data collected through interviews of 40 different companies in oil industry in near proximity to Stavanger. In addition all of the companies are characterised as Petroleum technology, this was also a prerequisite in order to be able to participate in the analysis. The primary source for this study was a semi-structured interview with 10 questions, in addition to an open and informal interview style in order to understand and get to know the organization and management on a deeper level. A typical interview lasted for about 60 minutes, with additional open-ended questions in order to understand the importance of sales and marketing in emerging markets for these companies.

Case companies

Case study objectives

1) To understand if Norwegian petroleum technology companies are expanding to emerging markets. 2) Which emerging markets they operate in.

3) What kind of entry-strategy they use when entering into emerging markets. 4) Who in the organization are responsible for the export and establishment effort in emerging markets?

Study results

All of the interviews done with the top management of of the companies. Top management is characterized by being one of the owners, CEO, CTO or others with key supervisory responsibilities. has given this paper a unique insight into the management patterns of highly entrepreneurial companies during export to foreign countries, effectively mapping the most relevant countries.

• Top management gave 100% of the interviews.

• 75% of the companies operate within upstream, 25% within downstream. • 100% of the companies export to foreign countries.

• 82% of the companies export to emerging markets.

• The most important emerging market was listed to be Middle East, with Brazil following closely afterwards. • Only 25,5% has an office in an emerging market. Of these average age in the markets were 3,5 years. • When exporting to emerging markets, these where the statistics on the different entry-modes:

Entry Mode Total companies

Exporting 100%

Turn-key contracts 12,5% Licensing 57,6%

Agent 55%

Joint Ventures 63,5%

Wholly owned subsidiaries 25,5%

• 72,5% cited that emerging markets were very important for their business, 17,5% said it was important, while approx. 10% claimed it to be less important. • In of all case companies, the top management were in charge of the operations towards emerging markets.

It is quite evident that emerging markets are important for most of the companies surveyed. A surprising fact is also that all companies have, at least once, exported products or services to foreign countries. One of the groups interviewed, Roxel Group, consists of several daughter companies who all fall under the SME and technology definition. In addition BR Industries were surveyed. This industrial group is one of the largest in Rogaland. Several of the companies surveyed belong to BR Industries. The case studies and interviews suggests that the oil technology companies have been clever in following the footsteps of the larger oil operators. We can refer back to our assessment and analysis of ExxonMobil and their focus of expanding operations. Interestingly but not surprisingly the Middle East were the most common emerging market to expand into. Norwegian companies are eager to investigate possibilities and expand into new international markets as their own market space is becoming more and more competitive. Emerging markets has a good impression of Norwegian companies and is interested in cooperating with them in order to do business and create new opportunities. However, another interesting fact from the research shows that many of the companies just recently have established a link or a connection to emerging markets. The average age of being established were only 3,5 years for those companies who had an office in these markets. This suggests that our case companies just recently have acknowledged the importance of the emerging markets. Our discussions with those companies that have established themselves in emerging markets thus suggest that the Norwegian companies needs to invest in emerging markets for the long run and cannot expect to "take over" the market space in matter of months. The competition in emerging markets is fierce, but the benefits are great for the companies that think tactically and plan accordingly. Large cultural, religious and language differences are also often a barrier, however with time they are overcome.

Conclusions

Our research shows that the Norwegian companies surveyed are expanding and exporting to emerging markets, thus shown that they have acknowledged the importance of these markets to their companies. The emerging markets that they choose to expand to, and do business in -are mainly markets where large and known petroleum operators already do business. This is quite common in the petroleum industry, as our research also supports. Smaller companies, such as technology intensive SME, follows the larger corporations out into the rest of the world. For many of the companies that were investigated, much of their revenues, to an increasing extent came from emerging markets. The most popular mode of entry for most companies is exporting directly to the different markets. The importance of emerging markets are also evident for these companies, due to that almost all companies have assigned the task of expansion in these markets to someone in the top management of each company. The emerging markets are quite important for Norwegian SME technology companies within the petroleum industry, and that they are quite good in expanding to these market and that they have highly prioritized their operation strategies towards emerging markets.

Further research

The authors of this paper recommends further research on the topic, especially in order to understand if there are differences in strategies when operating in different emerging markets.


Edison Sotolani Claudino
email: edisonclaudino@ufgd.edu.br

João Gilberto Mendes

Dos Reis

Supply Network Complexity: an Approach in a Global Aeronautic Industry in Brazil

Keywords: Globalization, Transnational companies, Aeronautic industry competition

Operation management strategies have evolved from individual firms to clients and suppliers along the supply chain management. Concomitantly, the use of information technology, outsourcing and globalization has increased the complexity of these chains which have been recognized as supply networks. The aim of this study is presenting the supply network complexity, which are networks in which are involved products of high complexity encompassing global suppliers and clients as well. For this purpose, we performed a study about the theme and also presented a successful case related to the management of such network complexity in a Brazilian aeronautic industry.

Introduction

In the last decades, world has evolved ever faster due to the constant improvement of the so-called Information and Communication Technology (ICT) which together with the outsourcing of the production activities and feedstock supply -and globalization as well -have significantly changed the scenery of the strategies in management operations [START_REF] Gunasekaran | The future of operations management: An outlook and analysis[END_REF], making them exceed the boundaries of the individual firm. In this sense, the concepts of Supply Chain Management (SCM) and Supply Networks [START_REF] Corra | Gesto de Redes de Suprimento: Integrando Cadeias de Suprimento no Mundo Globalizado[END_REF] spring, using these new technologies for creating opportunities of business and efficiency income through the management of their two networks: upstream and downstream.

To follow these changes, Production and Operations Management (POM) has developed several systems and methodologies which allow a more strategic management, from which we highlight: Just-in-Time (JIT), Total Quality Management (TQM), Flexible Manufacturing Systems (FMS), Computer Integrated Manufacturing (CIM), Agile Manufacturing (AM), Lean Production (LP), Business Process Reengineering (BPR), Quick Response Manufacturing (QRM) and Clean Production (CP) [START_REF] Gunasekaran | The future of operations management: An outlook and analysis[END_REF]. However, SCM springs as a major branch encompassing all these systems and methodologies aiming to increase the profitability of companies and to respond the requests from final clients.

In this context, it is worth mentioning that supply chains have been named as supply networks, due to the innumerous relationships among them. Furthermore, supply networks have become even more complex because of (i) the high unit cost, (ii) the high intensity of engineering, (iii) the characteristics of the products, which are developed to meet specific demands from customers and (iv) for the high capacity to integrate knowledge and skills [START_REF] Oliveira | The development of complex systems projects in the aeronautical industry: the case of integrated management applied to the program embraer 170[END_REF].

In this work we named such networks as Supply Networks Complexity and they are characterized by the complexity of the final product and the relationship between global customers and suppliers. The main aim of this study was to analyze the dynamics of these complex supply chains by studying the strategies used by a Brazilian aeronautic industry in order to manage its network complexity as well as the accomplishments of this enterprise related to the management of products.

In order to develop this work a literature review on supply chain management and supply networks was performed. Based on this study, the concept of Supply Network Complexity was established, so that it was possible to examine a case study in a Brazilian aeronautic industry that succeeded in reducing design time and costs in the production of aircrafts through the management of its suppliers and global customers.

Supply Network Complexity

The most significant change in the paradigm of the modern business management consists in the concept that individual organizations do not compete among themselves as unique entities, but as supply chains [START_REF] Lambert | Issues in supply chain management -don't automate[END_REF]. The study of these supply chains allowed us to follow the strategies of relationships among companies, suppliers and clients. The following Figure [START_REF] Gunasekaran | The future of operations management: An outlook and analysis[END_REF] illustrates this evolution, suggesting it was developed to reflect the real business practices in a growing evolution.. As its possible to observe, in Figure 2 theres a deepening of the management activities and material flows (i.e. supply chains seen as centered processes). Moreover, recent approaches focus on supply chain management as a system (i.e. management members and their mutually beneficial relations) with clear strategic intention [START_REF] Braziotis | Supply chains and supply networks: distinctions and overlaps[END_REF].

Supply chains have been conceptualized as a simple linear system represented by an event which depends on a series of companies interacting through dyadic relation [START_REF] Cox | Supply chains and power regimes: Toward an analytic framework for managing extended networks of buyer and supplier relationships[END_REF]. However, the linear concept of sequential dyadic relationships simplifies and distorts the realities of modern supply chains.

Modern supply chains can be considered complex and the adaptation to changes are required. Thus, there is a need to re-conceptualize the lines of a simple linear system to a complex adaptive system of supply networks [START_REF] Pathak | Complexity and adaptivity in supply networks: Building supply network theory using a complex adaptive systems perspective*[END_REF], [START_REF] Li | The evolutionary complexity of complex adaptive supply networks: A simulation and case study[END_REF].

The complexity of a supply chain can not be consider a simple linear structure where a small change often results in a chain reaction. When supply chain complexity increases, monitoring and managing the interaction between different elements of the chain becomes more difficult [START_REF] Cheng | An analysis of the structural complexity of supply chain networks[END_REF].

Hearnshan and Wilson cited a complex approach of networks in which they propose that a supply chain is like a scale-free network (Figure 2) [START_REF] Hearnshaw | A complex network approach to supply chain network theory[END_REF]. Thus, to reduce the vulnerability of the supply chain, the authors emphasize the need for managing constructions in redundancy, to undertake a strategy of multi-sourcing or intermediation among hubs companies, in other words, organizations that assume the responsibility of network management, either for the knowledge of the whole process, or for its economic power in the network relationships. More information about the model and BA scale-free network can be found in the work of [START_REF] Braziotis | Supply chains and supply networks: distinctions and overlaps[END_REF].

Empirical models of the central-peripheral structure is observed in social systems of the real-world, including the flow of information in collaborative systems of researches in which pharmaceutical and biotech hubs companies collaborate closely sharing information for their mutual benefit. [START_REF] Hearnshaw | A complex network approach to supply chain network theory[END_REF]. While all types of connections among hubs companies are possible to be found, the existence of a central-peripheral structure is further connected to the information flow since they have a closer triad structure [START_REF] Hearnshaw | A complex network approach to supply chain network theory[END_REF].

In addition to the possible configurations and governance mechanisms for the supply networks, a company must currently not only manage its supply chain via active nodes, but also must have an adequate supervision on the supply network [START_REF] Cheng | An analysis of the structural complexity of supply chain networks[END_REF]. Thus, the identification of active and inactive members can be a strategic consideration for all the organization and part of its contingency plan Core struture Hub form -highly connected node

Transitive triadic clusters

Peripheral firm -part of network Fig. 2. Scale-free topology. Source: Adapt [START_REF] Hearnshaw | A complex network approach to supply chain network theory[END_REF] related to supplier. One way to illustrate the differences between supply chains and networks can be seen in Figure 3.

The supply chain is characterized by a perceivable linear structure (from raw material to final product), thus it is not totally complex, and its management is concerned to coordinate relevant flows as information, physical product and finance.

Supply networks, in turn, are an improved view of one or more supply chains, so the focus is on the net of relationships. As an example, an organization may have a connection with another company through a previous supplier who is not currently working. The integration in the supply network is more ad hoc, making it a complex, dynamic, nonlinear, based on trust and not-planned.

Moreover, supply network globalization of supply networks combined with the complexity of certain products makes the process of managing suppliers and customers a difficult task, which can only be accomplished through the use of ICTs.. Thus, such global networks of complex products that make a maximum use of these ICTs are named in this work as Supply Network Complexity.

Finally, the existing approaches towards complexity management in supply chains that can be found in literature can be structured into three essential process steps: identifying complexity drivers, measuring and evaluating the existing complexity, and developing strategies for managing complexity [START_REF] Aelker | Managing complexity in supply chains: A discussion of current approaches on the example of the semiconductor industry[END_REF]. So, this study aim presents a case study that can show better these steps.

Case study: aeronautic industry

The analysis of the Supply Networks Complexity leads us to a case of successful management of these networks, which is connected to a large Brazilian aircraft Supply Chain Supply Network Fig. 3. Supply chain versus supply network. Source: Adapt [START_REF] Braziotis | Supply chains and supply networks: distinctions and overlaps[END_REF] manufacturer. The Company is today one of the largest aviation industries in the world, acting onto the steps of project, development, manufacture, sale and after-sale support of aircrafts for both commercial and executive aviation, besides offering integrated solutions for defense/security and systems.

With offices and factories in many parts of the world the company is a leader in the commercial jet market with up to 120 seats, and the fifth largest manufacturer of business jets worldwide and the largest company of defense and security solutions in Brazil [START_REF] Embraer | Global presence[END_REF]. Figure 4 demonstrates the international factories and offices of the company.

The evolution of the company related to product development engineering, held jointly with suppliers resulted in the management of supply network in a strategic way, which was crucial to its competitive success [START_REF] Corra | Gesto de Redes de Suprimento: Integrando Cadeias de Suprimento no Mundo Globalizado[END_REF]. The industry was vertically integrated, but since the '90s, has substantially altered its strategy to supply network to broaden its partnerships with key suppliers.

To illustrate this, in the '80s, the company worked with more than 500 component suppliers without substantial sharing of engineering effort and development. The aircraft development was done internally, making the resource constraints take a long period -around 8 years -for the product to be placed on the market.

However, trying to strategically manage their supply network, the organization sought for technologically strong partners around the world who were committed to a more cooperative relationship among suppliers and company from product design sharing risks and costs of development. Several companies have already been selected to develop and supply structure equipments and inside parts of the aircraft, allowing suppliers reduction from 500 to 350. This new model of supply management has generated a more technologically advanced product whose development period was reduced to five years. In the '90s, the supply network managers of this company continued to evolve in their strategic effort to increase the speed of product launches, technological upgrading and flexibility in responding the market [START_REF] Corra | Gesto de Redes de Suprimento: Integrando Cadeias de Suprimento no Mundo Globalizado[END_REF]. The development of the aircraft project called ERJ 170, was innovative in several ways, either by engineering and institutional management of risk partnerships; or by the products integrated development tools (IDT) and the new management philosophy of codesign; as well for the built-edge technologies in the product, such as navigation systems fly-by-wire; and new production technologies, whose references are the techniques of lean production [START_REF] Oliveira | The development of complex systems projects in the aeronautical industry: the case of integrated management applied to the program embraer 170[END_REF].

In project ERJ 170 one adopted the concept of group technology whose advantage is the commonality among the aircrafts and the co-design system for the development of the new aircraft project with risk partners. These two strategies are global trends, stimulated by technological nature of the product, market structure, high development cost and risk and rate of return on longterm investments, requiring from the risk partners a solid financial capacity for the investments supply. Table 1 highlights the risk partners of the project 170.

The set of risk partners to integrate the 170 -program were selected from the analysis of 85 potential partners. From these, 58 were qualified, but only 12 were chosen. Aiming to manage the project, a directory exclusively dedicated was established to organize two central working groups: (i) first group, named Integrated Program Teams (IPT), charged to ensure functional vision and quality of the design of the aircraft subsystems; (ii) the second group, named Design Build Teams (DBT), was responsible for each physical segment of the aircraft [START_REF] Oliveira | The development of complex systems projects in the aeronautical industry: the case of integrated management applied to the program embraer 170[END_REF]. As a result of this new management model of this complex supply network, the company reduced the development period of the product to less than four years [START_REF] Corra | Gesto de Redes de Suprimento: Integrando Cadeias de Suprimento no Mundo Globalizado[END_REF].

Other initiatives undertaken by the company to strengthen its relationships with the suppliers were: (i) the creation of the SAC (Suppliers Advisory Council) to improve communication, share strategic and tactical decisions and improvement of the trust level in the relationship; and (ii) the annual world congress with its suppliers, SC (Supplier Conference). The company currently has a collaborative and effective relationship with suppliers, sharing risks and benefits from the development of the product, which makes the organization a success in managing the Supply Network Complexity.

Conclusion and Outlook

Globalization has allowed companies to have customers and suppliers around the world which makes the supply network management a complex task. Manufacturers of products that require a large number of parts and raw materials, skilled labor and high levels of security have increased this complexity and the management would not be possible without the use of modern Information and Communication Technologies. This study aimed to present that which was named Supply Network Complexity in order to represent networks that encompass this scenario.

The case study conducted in a Brazilian aeronautic industry has highlighted the results arising from the efficient management of these networks. Thus Brazila country where companies are generally multinational and whose main products are commodities -managed to develop a company capable of producing high-tech aircraft, security and international competitiveness.

Clearly, further studies on these Supply Network Complexity need to be performed and analyzed other segments of industrial production so that we can effectively consider this term in Production and Operations Management.

Fig. 1 .

 1 Fig.1. Chronologic Evolution of the SCM competitive Elements. Source: Adapt[START_REF] Braziotis | Supply chains and supply networks: distinctions and overlaps[END_REF]

Fig. 4 .

 4 Fig.4. The global operation of aeronautic industry, with assembly lines in Brazil, China, Portugal and the USA and service operations in other locations. Source: Adapt[START_REF] Embraer | Global presence[END_REF]

Table 1 .

 1 170 Projects risk partners (country and component)

	Country	Component
	Spain	Stabilizers and aft fuselage
	Belgium	Slat / Central Fuselage II (Manufacturing)
	USA	Interior
	USA	Power generation system / APU, Tail Cut / air management system
	USA	Flight control, fuel system and hydraulic system
	USA	Avionics
	Germany	Landing gear
	Japan Wings (board fixed attack, board fixed trail, stub, pylon, control surfaces
	France	Central fuselage I/III / doors
	USA	Engine / Nacelle
	France	Providing the coating instrument panels and rib wings
	USA	Production of transparencies / Windows
	Source: Adapt [3]


João Gilberto Mendes

Sivanilza Dos Reis

Teixeira Machado

Pedro Oliveira

Costa Neto

Rogério Monteiro
email: monteiro.rogerio@globo.com

José Benedito Sacomano
email: jbsacomano@gmail.com

João Gilberto Mendes Dos Reis

Sivanilza Teixeira Machado

Pedro Luiz De Oliveira Costa Neto

Supply Chain Quality Management in Agribusiness: An Approach of Quality Management Systems in Food Supply Chains

Keywords: TQM, Six Sigma, ISO Standards, Hoshin Kanri, Agribusiness companies

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

Introduction

A major current focus on agriculture and livestock supply chains is how to ensure quality and food safety. The importance of quality and food safety increases due to consumers' information about products and services. Supply Chain Quality Management (SCQM) has been considered an adequate approach to manage quality among organizations. Moreover, SCQM is a system for performance improvement that leverages opportunities created by suppliers and customers [START_REF] Foster | Towards an understanding of supply chain quality management[END_REF].

SCQM consists in the adoption of Quality Management Systems (QMS) along the whole supply chain. However, little attention has been provided to quality issues in supply chains [START_REF] Mellat-Parast | Supply chain quality management: An inter-organizational learning perspective[END_REF]. In agribusiness, for example, researchers and firms are interested in achieving quality through the product characteristics and food safety [START_REF] Troy | Consumer perception and the role of science in the meat industry[END_REF], [START_REF] Dora | Food quality management system: Reviewing assessment strategies and a feasibility study for european food small and medium-sized enterprises[END_REF], [START_REF] Aung | Temperature management for the quality assurance of a perishable food supply chain[END_REF], [START_REF] Aung | Traceability in a food supply chain: Safety and quality perspectives[END_REF] and [START_REF] Chen | Quality control in food supply chain management: An analytical model and case study of the adulterated milk incident in china[END_REF]. Therefore, it is difficult to find traditional quality management systems applied in food supply chains. This research identified that only a few authors reported applications of Total Quality Management (TQM), Six Sigma and ISO standards in food companies [START_REF] Holt | Quality assurance management in small meat manufacturers[END_REF], [START_REF] Kumar | Comparing the quality management practices in UK SMEs[END_REF] and [START_REF] Mensah | Implementation of food safety management systems in the UK[END_REF].

TQM, Six Sigma, ISO standards and Hoshin Kanri (Police Deployment) have been studied for many years and they are used by different industrial companies. However, agriculture and livestock systems prefer to incorporate best practices, traceability, animal and crop control, government regulations and certifications to quality guarantee. Dora et al. argue that they did not find studies which integrate all concepts of quality like assurance, improvement, control, design and police in the food sector [START_REF] Dora | Food quality management system: Reviewing assessment strategies and a feasibility study for european food small and medium-sized enterprises[END_REF] and they established a Food Quality Management System (FQMS) to small and medium-size enterprises. Trienekens and Wognum studied the requirements of supply chain management in pork supply chains, which show the importance of quality for integrating supply chains and improve consumer confidence [START_REF] Trienekens | Requirements of supply chain management in differentiating european pork chains[END_REF].

Although these approaches improve quality of food products, they avoid the adoption of traditional quality management systems. As a result, the chains can not be provided with knowledge and practice of these QMS.

This work examines a poultry productive chain and seeks to analyze the application of traditional QMS in problems resolution. With this aim the paper explores the production process in a Poultry Slaughterhouse. The hypothesis is that the adoption of QMS may solve the problem in an accurate way and allow company to ensure high levels of quality of products and food safety. In addition, this paper contributes to understanding of the small applicability of SCQM across food supply chains and agribusiness companies.

Quality Management Systems

Total Quality Management

There is a large volume of published studies describing the role of total quality management. These studies discuss and analyze the applications of TQM in industries and service operations with the purpose to show the advantages of this concept to ensure quality of products and services. TQM is applied in many organizations with the objective to improve product quality and increased customer satisfaction [START_REF] Koilakuntla | A research study on estimation of TQM 'Factors ratings' through analytical hierarchy process[END_REF] and is divided into six elements: top management commitment; customer focus; supplier quality management; people management; continuous improvement; and process management [START_REF] Abusa | Experiences of TQM elements on organisational performance and future opportunities for a developing country[END_REF].

TQM has its origin in Total Quality Control (TQC), and an administrative system improved in Japan from American ideas. Initially developed by Armand Feigenbaum, TQC practiced in Japan is different from that originally proposed by Feigenbaum, because it is based on the participation of all sectors of the company and all the employees in studying and performing quality control.

Six Sigma

Six Sigma program is credited to Dr. Mike Harry, a statistician who was the principal founder of the Six Sigma Academy in Scottsdale, Arizona, United States. Motorola was the first U.S. company to adopt the system, followed by other organizations such as General Electric (GE) and Texas Instruments [START_REF] Mehrjerdi | Six-sigma: methodology, tools and its future[END_REF]. The idea behind the application consists of using statistical tools to reduce process variability.

The objective of the Six Sigma consists of search zero defect condition of services and products. However the goal is to reach 3.4 defects per million of opportunities and it uses a structure method named DMAIC (Define, Measure, Analyze, Improve and Control) [START_REF] Lin | Continuous improvement of knowledge management systems using six sigma methodology[END_REF].

ISO 9001 Standards

The ISO 9001 series is a designation given to quality management systems standards emerged in 1987 and became a worldwide phenomenon showing tremendous growth and dissemination across different countries [START_REF] Sampaio | ISO 9001 certification research: questions, answers and approaches[END_REF]. In 2010, ISO 9001 was implemented in 1.109.905 companies in 178 countries [START_REF] Priede | Implementation of quality management system ISO 9001 in the world and its strategic necessity[END_REF]. ISO standards represent an international consensus on good management practices with the purpose of ensuring the supply of products that meet customer requirements and with a focus in continuous improvement [START_REF] Quirós | A comparative analysis between certified and noncertified companies through the quality management system[END_REF]. Moreover, the ISO 9001 standard allows certification by assessed companies, which meets its requeriments.

Hoshin Kanri (Policy Deployment)

Policy deployment, known in Japan as Hoshin Kanri, is an administrative system for strategic management [START_REF] Witcher | Hoshin kanri: how xerox manages[END_REF]. It was originally developed in Japanese industries as alternative to the concept of management by objectives [START_REF] Tennant | Hoshin kanri: Implementing the catchball process[END_REF]. To implement Hoshin Kanri, companies need (1) to provide a focus on corporate direction by setting, annually, a few strategic priorities; (2) to align the strategic priorities with local plans and programs; (3) to integrate the strategic priorities with daily management; (4) provide a structured review of the progress of the strategic priorities [START_REF] Witcher | Hoshin kanri: how xerox manages[END_REF] and [START_REF] Tennant | Hoshin kanri: Implementing the catchball process[END_REF].

Methodology

This research was conducted in a company of food processing code PS (Poultry Slaughterhouse). The company was selected in Mato Grosso do Sul State, which is located in the center-western of Brazil. This region concentrates 10.6% of poultry production in the country [START_REF]Banco Central do Brasil: Evolução regional da atividade pecuária[END_REF].

The company was well characterized in the poultry respective supply chain and informations were collected from company, downstream and upstream partners. The company was evaluated with the purpose of identifying traditional QMS practices. Using traditional quality management approaches, a production process was chosen to check the advantages of implementing a QMS. After, TQM, Six Sigma, ISO standards and Hoshin Kanri were correlated with this process, emphasizing possible results of its application.

This method allows food companies to understand importance of traditional QMS in operations management. Similarly, it enables firms to simulate the adoption of QMS providing a way of evaluating the system efficiency. A case study approach is used to permit an analysis in a real situation.

It is recognized that sample is quite small to characterize the application of the QMS in the food supply chains and unavoidable future work will be necessary. However, as the research is a case of study, this small sample does not invalidate the work results.

Case Study

The company operates in the frozen meat market (poultry and pork) and processing meat foods, dairy margarine, pasta, pizza and frozen vegetables. It is present in all regions of Brazil with 49 plants and its products reach consumers in 98% of Brazilian territory. Its international market involves more than 110 countries on the five continents. The company net sales in 2013 was 9,957 million Euros, where 56% in domestic market and 44% in international market. It is responsible for 20% of world trade in poultry [START_REF]BRF: Annual and sustainability report 2013[END_REF].

In this study, a plant located in Brazil center-western was analyzed. It process 170 thousand poultry per day and animals are supplied by different farm producers in the region, that follow procedures established by PS. A simplified supply chain can be seen in Figure 1.

Poultry Slaughterhouse Farm Producer

Internal Market

Foreign Market

Fig. 1. Poultry Slaughterhouse supply chain

Figure 1 illustrates the main steps in this chain. Farm producers receive feed and pullets from PS and other sources. Then, the farm producers, after finishing process, send Poultry to PS where the company transforms these animals in fresh meat and industrialized products. Afterwards, these products are shipped to internal and international markets.

The company is responsible for ensuring product quality from the source to the consumer market. In the production process the quality of products is guaranteed by practices applied by company and by the Federal Inspection Service (SIF, in Portuguese language). SIF is a control system within the Ministry of Agriculture and Livestock that aims to assure quality and food security through meat origin and physical characteristics.

However, in this study, the purpose is to establish an example of the importance of application of the traditional QMS in this organization. Thus, the problem of the variability of temperature in freezing process was analyzed. To understand more clearly the problem, it is important known steps of the production process that can be seen in Figure 2. The frozen meat is produced in a freezing tunnel (ACT. Automatic Control Tunnel), which works at temperatures between -40 • C and 35 • C (Celsius degree). Products for the domestic market are shipped when the temperature reach -12 • C, and the foreign market, only after -18 • C. As operation of the freezing tunnel is automatic, company shell respect a standard time so that the products reaches the ideal temperature. Figure 3 shows na illustrative picture of a freezing tunnel.

The company's tunnel begun to change the temperature and time for freezing products, increasing the variability of the process. For some years, the company Fig. 3. ACT. Source: [START_REF] Scheidt | O problema do tunel de congelamento[END_REF] bored the problem, but the rise of demand forced it to try solve the problem. Now they are studying, an expansion of the plant and analyzing the possibility of change the ACT.

Our hypotheses are that, if the company had adopted a traditional QMS in the production process, they would be able to solve this issue many time before. Bellow are presented some ideas about the relationship of traditional QMS and the problem discussed.

TQM: Tools of TQM as control charts, Ishikawa's diagram and circles of quality, allowing to identify problems in a specific matter and possible corrective actions. Using TQM, PS could be able of finding out the variations in the process caused by ACT and applying solutions based on TQM tools. Moreover, tools like PDCA cycle (Plan, Do, Check and Act) should permit the company to make a continuing evaluation of its production process and consequently find answers and solutions to quality issues.

Six Sigma: Is a quality management system that aims to solve quality problems through the elimination of variation. In this specific case, the ACT presented variations in freezing temperature in comparison to the correct pattern. This variation between pattern time and real time might have been identified by quality control members of Six Sigma Belts and the corrective actions would be taken to resolve the issue.

ISO 9001 Standard: Represents a quality management system that aims to standardize process, ensuring quality of products and production processes. In this case, the variation of the ACT modifies the parameters of tunnel operation and generate ISO non-conformance, that needs to be solved by the company. Consequently the obligation of company in solving the non-conformance would permit the resolution of this problem.

Hoshing Kanri: Is a business management that can guarantee quality, because influences in the guidelines and goals set by management. Thus, these guidelines established for the production are directly related to process efficiency. So, failures in the ACT would need to be solved to ensure service guidelines and hence the quality of process and products.

Conclusion

The agribusiness enterprises have assured the quality of its products through sensory analysis made by consumers. Thus, the processes and activities are designed and crafted to ensure characteristics of the products to attend consumers' requirements. However, the control of the quality and food safety through physical characteristics of products does not indicate that the processes and products are controlled by quality management practices. QMS can increase the process efficiency and guarantee quality and food safety.

The case study showed that Poultry Slaughterhouse does not adopt traditional QMS. It seeks to assure quality of its products by having a SIF certificate. This certification is an obligation for the animal products in Brazil. However, this certificate was not enough to correct na ACT problem, as a consequence of the temperature variation, effect on the meat quality. If the company had implemented a traditional QMS, it would be able to solve the variation in ACT, thus ensuring quality of products and efficiency of process.

The analysis performed in this article shows that the hypotheses of adoption of QMS should solve the problems in PS in an proper way and ensure high levels of quality products and food safety is true.

One of the limitations of this paper is that only one case was be presented, which avoid the feasibility of establish a generalization of this study. So, the next steps of this research is to analyze other companies to validate the hypotheses presented.

The research about the quality in agribusiness is still in progress and is expected to interact with producers, researchers and industries in order to better understand this gap and find out solutions to guarantee improved quality of products in agribusiness companies.

Fig. 2 .

 2 Fig. 2. Poultry slaughterhouse production process


Nivaldo Luiz Palmeri
email: nivaldoluiz@uol.com.br

Oduvaldo Vendrametto
email: oduvaldov@uol.com.br

João Gilberto Mendes

Dos Reis

Development of the Auto Parts Industry in Brazil

Keywords: Auto part, Automobile industry, Inovar-Auto program

The purpose of this article is to demonstrate the evolution of the auto part industry regarding the Brazilian Automobile Industry. In 2013, even as Brazil ranked as the fifth largest producer of vehicles in the world, the commercial balance reached a new level of deficit. The studied hypothesis is that the national auto part industry is producing items of lesser technological value and importing items of greater value. This research highlights the importance of the technological development and the strengthening of competitiveness in the autopart industry for the success of the Inovar-Auto program.

Introduction

The Inovar-Auto program, developed by the Brazilian government [1] aims to reduce the number of imported auto parts in a growing domestic vehicle production. For that, the law offers tax incentives for companies that replace imported for auto parts produced in Brazil. The goal is to launch technology development in the country.

However, it can be noted in recent years that the complex auto parts tend to be imported from developed markets such as Europe, USA and Japan, while the domestic industry is responsible for complementary parts, such as the peripheral supplier. The Inovar-Auto program, implemented in 2012, still does not allow its effects to be fully observed.

Throughout its history, Brazil has been a country that tends to buy technology and not develop them; the automobile industry is an example of this behavior. Corporations throughout the whole country are all transnational. All the developed technology, even by Brazilian engineers, are linked to and patented abroad. The lack of long-term well-defined policies, development, and control stimulates import. In addition, there are difficulties in the development of technology, poor qualification of the workforce and low level of education in the country. Of the 100 largest Brazilian companies of this sector, only five develop technology and one is of national origin [START_REF] Reis | Method for quality appraisal in supply networks[END_REF].

This research studies the automobile and auto parts industry in Brazil from 2001 to 2012, featuring a pre-Inovar-Auto panorama. For this, the billing of the automotive and auto parts industry located in the country are evaluate, along with the volume of the import of parts.

Methodology

For this study, data was collected from the directories of ANFAVEA (National Association of Automobile Manufacturers) [START_REF]Centro de Documentação da Indústria Automobilistica -CEDOC[END_REF], DIEESE (Department of Statistics and Socioeconomic Studies) [START_REF] Dieese | A indústria automobilistica no Brasil: diagnóstico do setor e análise do novo regime automotivo[END_REF], and SINDIPEC ¸AS / ABIPEC ¸AS (National Association of Automotive Components Industry / Brazilian Association of Automotive Parts Industry) [START_REF]da Indústria de Componentes para Veículos Automotores Sindipeças[END_REF].

Once the data was identified, the next stages of the research were as following: (1) evaluation of the progress of vehicles manufacturers net sales in Brazil, including cars, light commercial vehicles, trucks and buses; (2) evaluation of the income and import of auto parts evolution, including the automobile industry, the aftermarket, exports, and intersectorial (other manufacturers) to determine the behavior of the Brazilian auto parts industry.

Objective evaluation findings have led to the billing growth of automobiles in the reference period, 2001/12 (Eq.1)

P = va vb * 100 (1)
Where, vb corresponds to the billing in 2001 and va in 2012.

Thus the development of the billing of vehicles in 2012 was given by:

P = 83.676 45.818 * 100 = 182.6 (2)
The choice of the period between 2001 and 2012 for conducting the research is justified due to the global emphasis Brazil has been receiving, becoming the fifth largest producer of vehicles in the world. Furthermore, the crescent income of the Brazilian population favored the sales of vehicles, growing year by year, while the other sale areas find themselves stagnated. Finally, in 2012, the Inovar-Auto program was announced by the Brazilian government as a way to boost the domestic industry and stimulate the thickening of the Brazilian automotive chain.

It is important to emphasize that in the period between 2002 and 2012, the total production of automobiles (excluding CKD -Complete Knock Down) went from 1.63 million to 3.41 million units, a growth of 108.5%; with highlight to the light commercial vehicles segment that grew 251.4% during the cited period, followed by the truck sector, that presented a 216.4% growth during the same period [START_REF] Dieese | A indústria automobilistica no Brasil: diagnóstico do setor e análise do novo regime automotivo[END_REF].

Based on the data obtained from survey and the comparative calculations performed with the indicators of the automobile and auto parts industry, an analysis will be made of the Brazilian auto parts industry technological development.

Inovar-Auto

The Brazilian government's attempt to create the Inovar-Auto program is to promote technological research and enable the country's production to make more modern parts and components for the automobile industry, reducing the dependence on exportations and its consequences.

The automotive sector, due to its high competitiveness, continually invests in research and innovation. It is the third among the sectors that most invests; from 3% to 5%. Modestly, in 2013, the Inovar-Auto program proposed an initial investment of only 0.15% over the gross profit, reaching 0.5% in 2017 and furthered the application in engineering and basic technology to 0.5%, also in 2013, with a limit of 1% in 2017. Unlike to this logic, system suppliers, who are responsible globally for 60% of innovations in the segment, do not participate in the incentive to boost technological research. Therefore, the expectation of effective technological evolution is reduced [START_REF] Kutney | Inovar-auto protege o lucro de montadoras ineficientes[END_REF].

The collected data leads to the hypothesis that the Brazilian industry (automakers and auto parts) are directing their production to items of smaller technological value, while they search for item of greater value available in centers such as Japan, European Union and the United States.

The main targets of the Inovar-Auto program are: (1) create favorable conditions of competitiveness for companies that produce cleaner and safer vehicles;

(2) invest in the local supply chain and industrial engineering; (3) increase actions of the local R&D [START_REF]Centro de Documentação da Indústria Automobilistica -CEDOC[END_REF] and [START_REF] Dieese | A indústria automobilistica no Brasil: diagnóstico do setor e análise do novo regime automotivo[END_REF].

The consolidation of the country's competence is a necessary to maintain and improve their competitiveness. To follow this evolution, the existence of qualified suppliers in great quantities and development of global technologies is necessary, without, which the system would become fragile and dependent. Therefore, the national auto parts industry should be a priority in a proposition such as the Inovar-Auto [START_REF]Estudo prospectivo setorial automotivo[END_REF].

Automobile and Auto Parts Industry in Brazil

The Brazilian automobile industry represents, in 2014, almost 25% of the industrial GDP and 5% of the total GDP, with billings above 100 billion dollars.

Brazil has 61 industrial units among 46 cities in 10 states; with these numbers tending to increase [START_REF]Centro de Documentação da Indústria Automobilistica -CEDOC[END_REF].

The industry moves a chain that includes manufacturers, suppliers of raw materials, auto parts distributors, gas stations, insurance companies, repair shops, tire repair shops, media companies, and advertising agencies, among others, all interconnected and employing millions of workers [START_REF]Centro de Documentação da Indústria Automobilistica -CEDOC[END_REF].

The auto parts industry is directly related to the automobile industry. Their activities were initiated in the 1930s, and vigorously expanded in the 1950s. It was driven by the pioneer plan established by President Juscelino Kubitschek, who sought the introduction of a national automotive industry [START_REF] Rocha | Industrial warehouse under computerized customs control regime: some evidences from brazil[END_REF].

In 1990, the Brazilian auto parts industry began to face the scenario called globalization. The release of imported goods and economic stability encouraged the entrance of foreign products of better quality [START_REF] Rocha | Industrial warehouse under computerized customs control regime: some evidences from brazil[END_REF].

In the beginning of the XXI century, the process of global automobile industry restructuring repositioned brands and manufactures, expanding its global characteristics and enabling businesses to compete profitably in different regional markets. Taking the automakers as an example, the auto parts, machinery and equipment industry intensified its strategy of global competition, aiming to take the place of local suppliers [START_REF] Dieese | A indústria automobilistica no Brasil: diagnóstico do setor e análise do novo regime automotivo[END_REF].

In 2011, the trade balance of the Brazilian automobile industry has reached new level of trade deficit, reaching the 5.88 billion dollars mark: exports totaled 12.78 billion dollars, while imports totaled 18.66 billion [START_REF] Dieese | A indústria automobilistica no Brasil: diagnóstico do setor e análise do novo regime automotivo[END_REF].

In 2013, Brazil appeared as the fourth largest market in sales of light vehicles in the world, behind China, USA and Japan. The country has been consolidating its importance in the global market, with forecasts to double the sales by 2025; significantly increasing its share of the major brands in its market, especially Korean, Japanese and Chinese [START_REF] Dieese | A indústria automobilistica no Brasil: diagnóstico do setor e análise do novo regime automotivo[END_REF].

Among the foreign auto parts companies installed in Brazil, many plan to increase their investments in the country, such as the Continental company, which intends to double its production by 2015, and Magna and Dana who bought companies to strengthen their capacity. New companies are also planning to enter the country, such as the Korean companies DYMOS, Mobis, THN, and several Chinese suppliers [START_REF] Karasawa | The strategy of japanese autoparts companies in Brazil[END_REF].

The new industrial policy of the automotive sector (Inovar-Auto) is part of a long-term plan (2013-2017) with three main goals: (1) to stimulate investment and innovation; (2) to protect the domestic industry and (3) to growth Brazilian market against imports. Over the past five years, a sharp increase in the trade deficit and in the automotive and auto parts industry put in doubt the future of the national supply chain. This is not a small problem and it interferes in the local capacity to design parts, systems, and products. The analysis shows that Brazil's chances of becoming a center for the production and marketing of vehicle lacks technological expertise, as well as local projects with lower prices due to increased competition [START_REF] Ibusuki | Asian automobile manufacturers strategies in Brazil: impact of the new automotive policy (INOVAR-AUTO)[END_REF].

Results and Discussion

Brazilian Production and Sales of Vehicles

The growth in production of vehicles in Brazil grew alongside with the billing, from 2001 to 2012. While the production increased 188.8%, going from 1. [START_REF] Rocha | Industrial warehouse under computerized customs control regime: some evidences from brazil[END_REF]

Revenues of the Automobile Industry versus Auto Parts versus the Import of Auto Parts

When comparing the evolution of the automotive and auto parts industry's income between 2001 and 2012, the motor vehicles obtained a growth of 182.6%, while the auto parts grew 351.3%; sales of auto parts was 1.9 times greater than that of vehicles. During the same period, the imported auto parts presented a growth rate of 410.5%, an increase of 16.9% compared to auto parts and 2.2 times greater than that of the motor vehicles (Table 2)

The main variables used to explain the growth in auto parts import are related to the acknowledgement of the national currency towards the major currencies; increased costs of labor; elevated Brazilian tax revenue, and the relocation of new projects to more competitive countries. The combination of these variables has limited the investments of a large portion of the companies located in Brazil. These persistent factors can lead to de-industrialization of the segment [START_REF]Centro de Documentação da Indústria Automobilistica -CEDOC[END_REF].

Inovar-Auto Program

In an attempt to change this scenario, the federal government issued the 7819/12 -October 3, 2012, creating Program to Encourage Technological Innovation and Intensification of the Production Chain of Motor Vehicles or Inovar-Auto, aiming to support the technological development, the innovation, safety, environmental protection, energy efficiency, and quality of vehicles and auto parts [11].

A review of the government's proposition is premature, but is is possible to observe the repercussion of the program in the following recent publications:

Investments in the nationalization of motor production in industries already installed in Brazil: Toyota seeks to nationalize 65% of Brazilian motor, to be produced in the city of Porto Feliz, with an expectation of attracting 19 new suppliers and producing nationally parts such as block, cylinder head and crankshaft. The new project comes as a direct response to the Brazilian industrial policy, which until the initiation of the new regime, did not demonstrate any interest in fabricating motors in Brazil, even it being the fourth biggest importer of the country, importing 2.5 billion dollars and with a trade deficit of 1.7 billion dollars [START_REF] Kutney | Toyota busca 65% de nacionalizao para motor brasileiro a ser feito em porto feliz[END_REF].

Nationalization of engines and components made by independent developers: With the Inovar-Auto program, Cummins rises nationalization. Most of the car motors sold in Brazil are imported from China and receives only minor national contributions. The focal point before the new automotive regime was always the lowest cost and, often, the nationalization ceased to be a good option. Now the company seeks to offer products and components (turbochargers and after-treatment systems) with higher domestic content. [START_REF] Riatto | Com inovar-auto, cummins eleva nacionalizao[END_REF].

Critics on the success of Auto Innovate program: Inovar-Auto protects the profit of inefficient car makers. So far Inovar-Auto program brought no solution to the lack of competitiveness of the domestic automotive industry. After its first year of operation, the Brazilian government's program, which aimed to increase technological inclusion and competitiveness in the domestic automotive industry, did not solve the efficiency problem. Production costs remain as high as ever, above the main competing countries, and the productivity continues to worsen [START_REF] Kutney | Inovar-auto protege o lucro de montadoras ineficientes[END_REF].

Research and development projects (R&D): are blocked by the Ministry of Science, Technology and Innovation (MCTI), due to the lack of definition of what could be considered by the Lei do Bem (Law of Good). The 'Good Law' consolidates tax incentives that corporations can automatically benefit from, as long as they carry out technological research and development of technological innovation. MCTI blocks car makers in the 'Good Law', in the most recent list, 787 companies had their project approved by the 'Good Law' and 218 were cut off for presenting information inaccurate or inconsistent with the law. No vehicle manufacturer installed in Brazil when through the MCTI analysis, due to doubts on the actual application of resources in processes of R&D. All the initiatives of vehicle manufacturers have been omitted until the release of a better definition of what can be considered research and development for the sector [START_REF] Kutney | MCTI barra montadoras na lei do bem[END_REF].

Conclusion and Outlook

The practice of the Inovar-Auto program already increased foreign investment. However, as more parts are produced on Brazilian soil, more automakers buy parts and components abroad. Without technological inclusion and with the increase in competitiveness among the automotive parts industry, along with the decrease in other factors that undermine the efficiency of the national automotive industry, the chances of the Inovar-Auto program's success is small.

In this scenario, the ability of the Brazilian government in aligning the technological evolution of the domestic industry with the interests of foreign industries, backed by a consistent long-term policy, is fundamental for the reverse the current situation and the promotion of the long-awaited sustainable development.

Table 1 .

 1 million units built in 2001 to 3.4 million in 2012, the income increased from 45,818 million dollars to 83,676 million dollars during the same period of time, maintaining the balance shown in Table 1. Likewise, the profits per automobile remained stable, with a minimum cost of 22,184.77 million dollars in 2005, a maximum of 25,214.68 million dollars in 2001, and an average of 23,732.90 million dollars. Comparison between production and sales of vehicles.

	Year	Production		Billing	Billing/Production
		Units	Growth(%) US$ (*) Growth(%) US$ (*) Growth(%)
	2001	1,817,116	100.0	45,818	100.0	25,214	100.0
	2002	1,791,530	98.6	43,402	94.7	24,226	96.1
	2003	1,827,791	100.6	42,039	91.8	22,999	91.2
	2004	2,317,227	127.5	52,009	113.5	22,444	89.0
	2005	2,530,249	139.2	56,133	122.5	22,184	88.0
	2006	2,612,329	143.8	60,110	131.2	23,010	91.3
	2007	2,980,163	164.0	71,715	156.5	24,064	95.4
	2008	3,216,381	177.0	76,245	166.4	23,705	94.0
	2009	3,183,482	175.2	77,259	168.6	24,268	96.2
	2010	3,646,548	200.7	86,066	187.8	23,602	93.6
	2011	3,442,787	189.5	84,980	185.5	24,683	97.9
	2012	3,430,604	188.8	83,676	182.6	24,391	96.7
	* Million dollars
	Source: Adapted [3]

Table 2 .

 2 Billing and imports in US dollar millions

	Year	Production	Billing	Billing/Production
		Units Growth(%) US$ (*) Growth(%) US$ (*) Growth(%)
	2001	45,818	100.0	11,903	100.0	4,416	100.0
	2002	43,402	94.7	11,309	95.0	4,147	93.9
	2003	42,039	91.8	13,330	112.0	4,504	102.0
	2004	52,009	113.5	18,548	155.8	5,825	131.9
	2005	56,133	122.5	25,263	212.2	7,070	160.1
	2006	60,110	131.2	28,548	239.8	7,237	163.9
	2007	71,715	156.5	35,064	294.6	9,772	221.3
	2008	76,245	166.4	40,992	344.4	13,558	307.0
	2009	77,259	168.6	37,895	318.4	9,508	215.3
	2010	86,066	187.8	49,767	418.1	14,855	336.4
	2011	84,980	185.5	54,512	458.0	17,999	407.5
	2012	83,676	182.6	41,818	351.3	18,129	410.5
	* Million dollars
	Source: Adapted [3]