Martin Rudberg
email: martin.rudberg@liu.se

Duncan Maxwell

Exploring logistics strategy in construction

Keywords: Logistics strategy, Construction management, Case study

The purpose of this research is to explore logistics strategies in construction. There are very few studies on logistics and SCM practices in construction, especially when it comes to the long-term strategic work of construction companies. Therefore, this research takes a contractor's perspective and addresses logistics strategy based on the empirical examination of two case companies in the construction industry. The main focus is the contents of the strategy and possible components of the logistics strategy are identified through a literature review. Also the process of the strategy is treated through exploring logistics strategy in two case companies exemplifying two strategic approaches to construction logistics. However, the approaches differ, implying a spectrum that at one end responds in a standardized manner to a pre-determined design solution and at the other reveals a re-configurable modular approach. The main contributions of this study lie in exploring logistics strategy in construction and providing examples of how construction companies work with logistics strategies, adding empirical knowledge to the field of construction logistics.

Introduction

Construction is essentially a complex industry due to the large number of participants and interactions [START_REF] Winch | Governing the project process: a conceptual framework[END_REF]. Where traditional manufacturing industries can work long-term and strategically in a stable and process-oriented environment, the construction industry is typically characterized by one-off projects, tendering and procuring subcontractors and suppliers on a short term-basis each time a project is launched (Dubois andGadde, 2000, Kristiansen, et al., 2005). This leads to a situation where projects are managed locally, in a tactical manner, becoming disconnected from the strategic company level (cf. Dubois andGadde, 2002, Kristiansen, et al., 2005). This in turn affects how logistics and supply chains are managed within construction companies, where it is uncommon to find logistics strategies defined at the company level that are implemented as logistics plans at the project level. Recent research has demonstrated that the principles of supply chain management, particularly when focused on logistics, offer a potential means of overcoming this complexity and improving productivity [START_REF] Vrijhoef | The four roles of supply chain management in construction[END_REF], yet achieving this in practice is far from straightforward. While some progress has been made, the nature of the industry and the scale of relationships involved cause barriers to progress [START_REF] Meng | Change in UK Construction: Moving Toward Supply Chain Collaboration[END_REF]. This indicates the need for a 'big picture' view of construction logistics and supply chain management, one that is more strategic than operational in nature. The purpose of this research is therefore to explore how logistics strategies can be developed in construction companies, and how they can be a platform for developing effective logistics plans for individual projects. There are very few studies on logistics and SCM practices in construction [START_REF] Bankvall | Interdependence in supply chains and projects in construction[END_REF], especially when it comes to the long-term strategic work of construction companies. This research takes the perspective of the contractor and focuses on the empirical examination of the contents of logistics strategy in the construction industry. In so doing, the following research questions are addressed:

1. What are the typical components of a logistics strategy? 2. What constitutes logistics strategy in construction?

Building on these research questions the following section describes the research design. Thereafter the literature review is introduced, with a focus on investigating research question 1. Research question 2 is then addressed through case studies followed by case analysis and discussion. The paper is then concluded, and possible further research is identified.

Research design

There is a lack of studies on logistics strategies in construction, therefore this study is explorative, using a case-based research method. The research design is divided into two phases. The first phase is a literature review taking a stance in the traditional logistics and operations management literature, searching for suitable factors for describing and defining the contents of a logistics strategy.

The second phase of the research is based on an empirical study focusing on two case studies representing construction companies that have developed logistics strategies for their operations. One of the case companies has a logistics strategy that is standardized and deployed for all of the company's construction projects, whereas the other case represents a construction company employing a modularized logistics strategy that forms the basis of configurable specific logistics plans for individual projects. As such, we use two contrasting cases to identify and describe critical variables [START_REF] Stuart | Effective case research in operations management: a process perspective[END_REF]. Contextual variables and project specific characteristics are identified and coded to facilitate the use of pattern matching and logical models [START_REF] Yin | Case Study Research Design and Methods[END_REF] for a cross-case analysis, and for contrasting the case studies with the results from the literature review. The main sources of data are: archival records (logistics strategy statements, internal reports, project documents, master's thesis reports) and semi-structured interviews (strategists, logistics managers, project managers).

3

Literature review

The construction industry setting

The productivity in the construction industry is considered relatively low [START_REF] Abdel-Wahab | Trends of productivity growth in the construction industry across Europe, US and Japan[END_REF][START_REF] Fulford | Construction industry productivity and the potential for collaborative practice[END_REF][START_REF] Josephson | Use and non-use of time in construction of new multidwelling buildings in sweden[END_REF], but the construction industry also faces unique settings that to some extent can explain the low level of productivity and the high costs. This uniqueness is characterized by the construction site that creates a temporary factory around the product [START_REF] Bygballe | The logic of innovation in construction[END_REF], since these products are typically large and immobile, meaning they must be built on the site of use. Therefore, construction work is carried out in temporary organizations with temporary supply chains [START_REF] Behera | Understanding construction supply chain management[END_REF]. Typically, a construction project is dependent on many, often small, firms acting as subcontractors [START_REF] Dubois | The construction industry as a loosely coupled system: implications for productivity and innovation[END_REF][START_REF] Miller | Harmonization between main contractors and subcontractors: A prerequisite for lean construction[END_REF]. As a result of the construction industry setting, many studies report on poor performance that originates from poor logistics management [START_REF] Meng | The effect of relationship management on project performance in construction[END_REF], e.g. high costs [START_REF] Hwang | Measuring the impact of rework on construction cost performance[END_REF], waste [START_REF] Josephson | Slöseri i byggprojekt. Behov av förändrat synsätt[END_REF], and waiting time [START_REF] Thunberg | Using the scor model's performance measurements to improve construction logistics[END_REF]. This is one of the reasons why some authors (e.g. [START_REF] Bankvall | Interdependence in supply chains and projects in construction[END_REF]; Department for Business Innovation and Skills, 2013; [START_REF] Thunberg | Using the scor model's performance measurements to improve construction logistics[END_REF][START_REF] Vrijhoef | The four roles of supply chain management in construction[END_REF] argue that many of the problems in construction could be mitigated through better managed supply chains and better logistics management.

Logistics strategy

There are surprisingly few clear definitions of what a logistics 'strategy' is, even outside of construction in its more traditional domain of manufacturing. According to the Financial Times Lexicon, a logistics strategy is "the set of guiding principles, driving forces and ingrained attitudes that help to coordinate goals, plans and policies between partners across a given supply chain." (Financial Times Lexicon, n.d.). Seeking their categorization, [START_REF] Autry | A Logistics Strategy Taxonomy[END_REF] defined logistics strategies as "…directives formulated at the corporate level … used to guide more efficient and effective logistics activities at the operational level of the organization". This establishes the important separation of logistics as a strategic activity at the company-level, compared to its implementation at an operational, or in construction's case, project-level (see Fig. 1). Fig. 1 also shows that logistics strategy is divided between the strategy contents and the strategy process. The main focus of this study is the strategy content, including how the contents are transferred into detailed descriptions of logistics components in logistic plans for each individual project. However, the empirical part of the study also includes the strategy process, including parts of the formulation and implementation of the strategy when the strategy is realized into logistics plans at the project level. As such, the unit of analysis is the logistics strategy content and process, taking a contractor's perspective. [START_REF] Clinton | Logistics Strategy: Does it Exist?[END_REF]. Relying on the division between the contents and the process of a strategy, it is possible to identify a set of logistics components that make up the strategy content and some examples of this from the literature review is presented in Table 1.

The identified components reveal a list of areas where strategic logistics decisions must be made and executed as logistics plans and decisions, these components help companies to work actively to define logistics strategies. [START_REF] Mcginnis | A Longitudinal Study of Logistics Strategy: 1990-2008[END_REF] identify that companies working intensively with their logistics strategy show significantly better performance than more passive companies, especially when it comes to logistics coordination effectiveness and customer service commitment. These performance indicators, in turn, are argued to positively affect overall company competitiveness [START_REF] Mcginnis | A Longitudinal Study of Logistics Strategy: 1990-2008[END_REF].

Case studies

The two case companies, referred to as company A and B, operate mainly in the Swedish market. Company A, a commercial construction company, shows a construction logistics 'strategy' that is focused upon a narrow 'product-type'commercial office buildings in dense, urban areas of Sweden. Their projects are mostly new-builds, with some renovations, and typically have budgets up to 500m SEK (US$53.8m at March 2019). Utilizing traditional construction methods, the company only undertakes a handful of projects at one time. Company A's logistics strategy is highly standardized in order to meet the pre-defined demands of these projects.

Table 1. Examples of components of the logistics strategy contents identified in the literature.

Traditional logistics textbooks 1

Autry et al ( 2008) Sing ( 2016) Oakden ( 2016

Logistics targets and metrics

Logistics Social Responsibility Company B, a larger construction company than A, undertakes projects all over Sweden in urban and sub-urban locations. The projects that they have developed a logistics strategy for are residential in nature and almost exclusively new-builds. The structures are built using a mix of traditional and prefabricated methods, with a typical cost between 50m-300m SEK (US$5.4m-$32.3m at March 2019). Being a large company, they have many projects running concurrently around the country.

As for the contents of the logistics strategies, both company A and B have clearly defined the components of their strategies. Company A demonstrates that a clearly defined logistics strategy can be put in place that responds to a fixed 'product' through a pre-defined, standardized logistics approach at the project-level. Company B's logistics strategy has created a reconfigurable 'modular' approach, meaning that components of the strategy are defined and then a range of solutions within these components are defined for selection based upon the nature of the specific project's context when logistic plans are developed. A summary of the logistics strategy components for the case companies is provided in Table 2.

Table 2. Summary of components making up the logistics strategy content for the two cases. Understanding the detailed design requirements of a project from a logistics perspective On-site Materials Handling Team -Dedicated and specialized team for efficient materials movement and task planning

Site logistics planning solutions

Marking and labelling of goods Overlaps between company A and B appear in the content of these strategies. However, rather than focusing on the content (that is specific to each company's business model), instead the two approaches reveal distinct ways of approaching a logistics strategy and its implementation at the project-level. Company A has a standardized logistics strategy, where the logistic plans are strictly based on what is defined in the components of the strategy contents. Basically, all logistics plans look the same, since the strategy is adjusted to the narrow focus of the projects that company A is bidding for, with the only variable being the site conditions. Company B uses the components of the strategy contents as decision-making areas that must be dealt with when developing their logistics plans for their different projects. Since the projects vary so much in location, design, structure, size, etc., company B's strategy must be more flexible and can be seen as a modularized strategy, where the modules (components) are adjusted to the contextual factors as logistics plans are developed.

Discussion

Case studies A and B demonstrate that construction logistics strategies emerge in response to specific contextual factors. This context extends beyond the physical construction site and includes factors that are related to the specific business models of the companies themselves, responding to their technical platform (construction method), product offering (type of building), and target market (customer profile or budget), in line with [START_REF] Brege | Business models in industrialized building of multistorey houses[END_REF] definition of construction business models. Case Studies A and B reveal the possibilities of a strategic approach to construction logistics. These approaches establish a spectrum that at one end responds in a standardized manner to a pre-determined design solution (as in A) and at the other uses a reconfigurable modular approach (as B shows).

The main contribution of this study lies in establishing an exploration of logistics strategy in construction, drawing attention to logistics as a strategic activity for contracting companies. Furthermore, this study provides examples of how construction companies work with logistics strategies, identifies that a spectrum of approaches exists, adding empirical knowledge to the field of construction logistics. Relating to the two research questions, a possible set of components of the logistics strategy contents have been listed in Table 1 ( RQ1) and examples of what constitutes logistics strategies in construction (RQ2) have been provided through the case studies, especially through Table 2.

The research presented here is exploratory and a starting point to research logistics strategy in construction. There are a number of ways to continue this research, of which some are: to extend the literature review to further define the logistics strategy components; to increase the number of cases and also the number of projects within each case organization where logistics plans, anchored in logistics strategies at corporate level, have been implemented; and to extend the cases to countries outside of Sweden.

Fig. 1 .

 1 Fig. 1. Logistics strategy and plans divided into content and process aspects of strategy.

  strategic suppliers and sub-contractorsdevelopment of relationships for continual improvement Long-term relationships with suppliers and development of these relationships Use of a Construction Consolidation Centre (CCC)a centralized distribution center to help manage material flows The use of Construction Consolidation Centre (CCC) or Distribution Terminals Integrated Planning Processclear and related production and delivery planning Planning of transport and distribution activities Planning Rolesdedicated organizational management roles for: transport co-ordination, in-bound co-ordination, and IT co-ordination Delivery planning and scheduling Dedicated IT System (Cloud-based) -All project participants must use this system (contractors, suppliers, transport companies etc.)

  )

	Customer	service	Customer Service	Customer Services		Customer	service
	policy						policy
	Supply network de-	Procurement (incl.	Channel Design		Inventory location
	sign (nodes)		supplier selection)				policy (Supply Net-
							work Nodes)
	Transport and distri-	Coordination & Col-	Network Strategy		Transport and distri-
	bution (links)		laboration activities				bution policy (Sup-
							ply Network links)
			Transport Manage-	Transport Manage-
			ment	ment
	Inventory policy	Inventory & Order	Warehouse Opera-	Inventory Policy
			Management	tions
			Operational Controls Materials manage-	Cost plan
				ment
	IT, information shar-	Technology/Infor-	Information Tech-	IT and Communi-
	ing and communica-	mation System	nology			cations capability
	tions
			Storage	Policies & Proce-
				dures
	Logistics organiza-	Strategic Distribu-	Facilities & Equip-	Logistics organiza-
	tion structure		tion Planning	ment			tion structure
	Logistics targets and	Order Processing	Organization	&
	metrics (KPI)			Change	Manage-
				ment

This is a summary of the components mentioned in the most common textbooks on logistics and supply chain management. Due to the page limit it was not possible to include them all.


Alireza Ashrafian
email: alireza.ashrafian@ntnu.no

Daryl J Powell

Jonas A Ingvaldsen

Heidi C Dreyer

Halvor Holtskog

Peter Schütz

Elsebeth Holmen

Ann-Charlott Pedersen

Eirin Lodgaard

Sketching the Landscape for Lean Digital Transformation

Keywords: Lean Management, Digital Transformation, Organization Design, Supply Chain Planning, Decision Systems, Supplier Relationships

Lean management remains the most popular approach to operational excellence within industry. The next wave of industrial improvement is widely considered to be driven by the application of digital technologies. Organizations are seeking to understand how the two approaches can be utilized synergistically. This paper aims to sketch the landscape for current theories and managerial challenges facing Lean and digital transformation based on Lean principles with respect to organizational design, supply chain planning, decision systems and supplier relationships. We raise fundamental questions that should be addressed by future research in the field of digital lean manufacturing and lean digital transformations.

Introduction

For several decades, improvement efforts in organizations have built on the concept of "Lean Thinking" and related ideas of process standardization and continuous improvement [START_REF]The Routledge Companion to Lean Management[END_REF]. The next wave of industrial improvement is widely consideredwithin industry and academia aliketo be driven by the application of digital technologies [START_REF]Recommendations for implementing the strategic initiative Industrie 4[END_REF][START_REF] Pinho | IT in Lean-based manufacturing industries: systematic literature review and research issues[END_REF]. Hence, there is growing appreciation among managers of the need to understand how these new digital technologies can be put to good use in order to improve efficiency and competitiveness.

Digital Lean manufacturing refers to the application of digital technology in order to enhance the Lean and learning transformation in manufacturing organizations. Ekanbans, digital problem solving, or kaizen in digital collaborative environments are some examples. In a recent article, Romero et al. [START_REF] Romero | Digital Lean Cyber-Physical Production Systems: The Emergence of Digital Lean Manufacturing and The Significance of Digital Waste[END_REF] discussed the emergence of Digital Lean Manufacturing and the significance of digital waste that may that may come into existence in the cyber world due to the non-use (e.g. lost digital opportunities) and/or over-use (e.g. abused digital capabilities) of new digital/smart manufacturing technologies.

On the other hand, industrial experience suggests that too often technology adoption happens according to a "technology push" model: some technological component is developed or bought, and work processes are adapted to fit the technology. Technology pushes often contradict the key Lean principle that technology should serve the people and the processes [START_REF] Liker | The Toyota way: 14 management principles from the world's greatest manufacturer[END_REF]. Lean digital transformation, therefore, refers to the application of Lean principles to digitalization processes in order to achieve a digital transformation that creates less waste.

Management research on Lean and digitalization is still in its infancy [START_REF] Cattaneo | Lean Thinking in the Digital Era" Product Lifecycle Management and the Industry of the Future[END_REF][START_REF] Sanders | Industry 4.0 implies Lean manufacturing: Research activities in industry 4.0 function as enablers for Lean manufacturing[END_REF], as it remains poorly understood which organization models and principles make possible the best utilization of the new digital technologies [START_REF] Bodrožić | The Evolution of Management Models: A Neo-Schumpeterian Theory[END_REF]. This paper aims to sketch the landscape for Lean and digitalization joint transformation. We propose that novel theoretical insights can be developed by framing the relationship between the two.

2

Frontiers of knowledge and technology

Lean Management

Lean management, as popularized by Womack et al. [START_REF] Womack | Lean thinking: Banish waste and create wealth in your corporation[END_REF], was ultimately a description of the philosophy and production system of the Japanese car manufacturer Toyota. Lean was subsequently presented as the global solution to improve efficiency and quality [START_REF] Holweg | The genealogy of Lean production[END_REF]. Lean has evolved over time and been embraced by other industries and in other cultures than that of its origin [START_REF]The Routledge Companion to Lean Management[END_REF]. Five fundamental principles have been claimed to be universally applicable [START_REF] Womack | The Machine That Changed The World[END_REF]: specification of value, identification of value streams, continuous flow, customer pull and striving for perfection. Netland & Powell [START_REF]The Routledge Companion to Lean Management[END_REF] recently proposed a further abstraction in that Lean, cut to the core, is about continuous improvement and three essential Ls: Learning, Leadership, and Long-term perspective. In their recent book, Ballé et al. [START_REF] Ballé | The Lean Strategy[END_REF] challenged organizations' traditional understanding and practicing of Lean by putting forward the Find-Face-Frame-Form strategy as a fresh new approach to understand the "true" Lean vs. the "false" one, i.e., Lean without learning. Yet, the practical application of Lean usually involves using a set of techniques such as just-in-time logistics, standardized work procedures, supplier feedback, reduction of set-up times, total quality management and statistical process controls [START_REF] Shah | Defining and developing measures of Lean production[END_REF].

Digital manufacturing technologies

As a result, from a future-oriented project, the German government coined "Industry 4.0" at the Hannover trade fair in 2011. New concepts, like Cyber-Physical System, Internet of Things, Big Data, Digital Twin, Block Chain and collaborative robot were introduced. Some of these concepts are old technologies recombined in new ways, and often incorporated with new technologies [START_REF] Holtskog | Coping with Technology -A future of Robots?[END_REF]. The overreaching goal of Industry 4.0 is to create highly flexible, yet high volume production lines, making processes more efficient and robust as well as reducing costs and improving the quality [START_REF] Lee | The Past, Present and Future of Cyber-Physical Systems: A Focus on Models[END_REF].

All of these technologies are powerful by themselves and create new opportunities, however, the core value of digitalization remains in true value creation for the customers, and at its core, to enhance "connectivity". This connectivity can be divided into two dimensions, internal and external. Internal connectivity deals with how to connect seamlessly different technologies and work processes inside the organization [START_REF] Pinho | IT in Lean-based manufacturing industries: systematic literature review and research issues[END_REF][START_REF] Sanders | Industry 4.0 implies Lean manufacturing: Research activities in industry 4.0 function as enablers for Lean manufacturing[END_REF]. The external connectivity relates to data flows, system integration, etc. between companies. Important and essential quality information can be shared using the Internet of Things technology [START_REF] Büyüközkan | Digital Supply Chain: Literature review and a proposed framework for future research[END_REF].

3

The Landscape

The topic of Lean and digital transformation is fairly new and complex and it requires insight from several disciplines. In order to bring further clarity into challenges associated with Lean and digitalization interactions, a fairly extensive literature review was performed during the course of this study. As a result, four categories for further research are proposed. These categories correspond to four theoretical domains that are: organization theory, operations management, operations research and inter-organizational business relationships. In this section, each of these categories are briefly explained and some outstanding questions that ought to be addressed by further research are put forward.

Organizational design

The Lean work organization is characterized by both functional integration and integration of performance and control [START_REF] Christis | Lowlands Socio-technical Design Theory and Lean Production[END_REF][START_REF] Ingvaldsen | Lost in translation? The role of supervisors in Lean production[END_REF]. Extensive involvement of operators is premised on this organization design, as it empowers the shop floor vis-à-vis specialist functions. Digital technologies can support such an organization design, by providing faster and more reliable information for operational decision-making and continuous improvement activities [START_REF] Sanders | Industry 4.0 implies Lean manufacturing: Research activities in industry 4.0 function as enablers for Lean manufacturing[END_REF]. If the technology is designed with this purpose, the relationship between Lean and digitalization may be synergistic. However, these synergies are not realized if the digitalization drives an organization-wide redistribution of decision-making power in favor of ICT-specialists organized in staff functions. For several reasons, such a redistribution of power is a likely development. Firstly, knowledge about how to design, configure and maintain the technologies will be a scarce resource, making the shop floor more dependent on outside expertise. Secondly, the big investments associated with digital technologies call for organization-wide standardization of technology, limiting the shop floor's discretion on the choice of technology and how to operate it. Thirdly, when continuous improvement becomes more analytical and datadriven, it relies more heavily on theoretical knowledge and require a deeper understanding of statistics. Hence, it may likely become the domain of experts, rather than shop floor workers [START_REF] Ingvaldsen | Organizational Learning: Bringing the Forces of Production Back In[END_REF]. These tendencies clearly contradict the Lean principles of creating functional integration at the shop floor.

To address these challenges, the following questions can be put forward:

 How are the collaboration between the shop floor and ICT-specialists reconfigured considering digitalization?  How can digital technology be designed to support functional integration at the shop floor?  How may shop-floor workers and managers be trained to master the digital technologies, so that they retain participation in continuous improvement activities?

Supply chain planning

Supply chain planning aims to improve performance in operations by mitigating uncertainty through managing operations and customer demand, and coordinate supply chain activities with business strategy. With principles leading to elimination of waste, improving quality, cost reduction and increasing flexibility, the Lean concept has strongly influenced existing planning models and made planning highly sensitive to disturbance and variability [START_REF] Chopra | Supply Chain Management Strategy, Planning, and Operations[END_REF][START_REF] Fisher | What Is the Right Supply Chain for Your Product?[END_REF]. However, driven by technology combined with shifting supply and market complexity such as globalization, customization and serving individual needs instead of market categories [START_REF] Büyüközkan | Digital Supply Chain: Literature review and a proposed framework for future research[END_REF], variability and uncertainty increases. While planning is becoming more demand and event driven (real-time, increased frequency, shorter planning horizon and cross functional), and turned into a process within the supply chain rather than in individual companies, the complexity and uncertainty increases [START_REF] Ivert | Contingency between S&OP design and planning environment[END_REF].

Information technology strongly facilitates planning models by efficiently allowing access to information, advanced analytics and integrating operations between supply chain partners and across functions, which is crucial in most Lean programs [START_REF] Martínez-Jurado | Lean Management, Supply Chain Management and Sustainability: A Literature Review[END_REF]. However, technology may also come into conflict with Lean or in short of unlocking the potential by a standardized functionality and design, hindering the support of complex planning environment and interaction between the partners in the supply chain [START_REF] Rudberg | Centralised supply chain master planning employing advanced planning systems[END_REF].

To address these challenges, these questions can be raised:  Why and how are digital technologies influencing supply chain planning?  How do digital technologies affect roles and responsibilities in supply chain integration?  How can digital technologies be designed to support supply chain planning?

Decision systems

Quantitative models and methods have been used for decades to provide decision support within operational production and logistics planning (see e.g., [START_REF] Graves | Logistics of Production and Inventory[END_REF]). Many of these models have been made available to companies through commercially available Advanced Planning Systems [START_REF] Lebreton | Architecture of Selected APS[END_REF]. Traditionally, most models for operational production, inventory, and distribution planning assume centralized decision making [START_REF] Clark | Optimal Policies for a Multi-Echelon Inventory Problem[END_REF][START_REF] Simchi-Levi | Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies[END_REF]. Lean principles, however, advocate decentralized planning at the lowest possible planning level [START_REF] Christis | Lowlands Socio-technical Design Theory and Lean Production[END_REF].

Digitalization and advances in information technology will make more data faster available to a decision maker, for example, through the extensive use of sensors monitoring state and surroundings of a production system (or product), or the Internet of Things (see §2.2). This will lead to more and more data-driven decisions, taking into account a much more comprehensive view of the production system [START_REF] Brynjolfsson | Big Data: The Management Revolution[END_REF].

To evaluate the impact these developments have on Lean principles, the following questions should be addressed:  Will digitalization lead to more centralized decisions? It has long been recognized that systems need to be optimized as an entity, rather than optimizing subsystems [START_REF] Ganeshan | A Taxonomy of Supply Chain Management Research[END_REF]. Using large amounts of data in order to provide decisions for the entire system may push towards more centralized decisions.

 How can local decisions be coordinated in order to optimize the entire production system? Local decision makers may not only need access to vast amounts of data, but also help in understanding the consequences of their decisions. This applies especially in situations where e.g. local maximization of capacity utilization is counterproductive with respect to total cost within the production system.

Supplier relationships

While most research on Lean management has focused on intra-organizational applications of Lean principles [START_REF] Jasti | A critical review of Lean supply chain management frameworks: proposed framework[END_REF], some attention had been paid to inter-organizational applications, e.g. to develop Lean suppliers and supply networks [START_REF] Dyer | Creating and Managing a High-Performance Knowledge-Sharing Network: The Toyota Case[END_REF][START_REF] Macduffie | Creating Lean Suppliers: Diffusing Lean Production through the Supply Chain[END_REF]. Digital communication and decision making with the need for and advantages of personal communication and participative decision making at both the suppliers and buying firm are, therefore, very important. Furthermore, while some efforts have aimed at offering assistance to suppliers in order to improve their performance in the short run, strategic supplier development efforts have aimed at encouraging and enabling suppliers to develop their Lean capabilities by means of which the suppliers can continuously improve their Lean practices and performance [START_REF] Sako | Supplier Development at Honda, Nissan and Toyota: Comparative Case Studies of Organizational Capability Development[END_REF]. Suppliers have been encouraged to find their "own Lean way" [START_REF]The Routledge Companion to Lean Management[END_REF], thus preserving the autonomy of the suppliers. Finally, the development of Lean supplier networks has considered challenges of competitive rivalry, and for example, Toyota has taken care to create separate arenas for interaction with suppliers who are in direct competition [START_REF] Sako | Supplier Development at Honda, Nissan and Toyota: Comparative Case Studies of Organizational Capability Development[END_REF], whereas Honda has had joint arenas.

The potential of digital technologies to transform performance is now widely recognized, and a few contributions connect efforts at digital transformation with Lean supply principles [START_REF] Pinho | IT in Lean-based manufacturing industries: systematic literature review and research issues[END_REF], however, how digitalization can facilitate as well as hamper the manner in which manufacturing firms encourage, enable and enforce the development of Lean practices in their supplier relationships and networks is still challenging.

To address these challenges, the following questions can be raised:

 How can the key characteristics of Lean supplier relationships and networks be reconfigured considering digitalization, with the aim to improve the cost efficiency and the of such efforts?  How can digital technology be used for enabling and enforcing interaction, mutual trust, and knowledge-sharing routines between the suppliers and a buying customer, and between suppliers who may cooperate and compete?  How can the integrity and autonomy of suppliers be preserved when they become connected in supplier networks by means of digital technologies with requirements for standardization?

Conclusion

In this paper, we have sketched the landscape for Lean and digital transformations. Interactions between the two improvement strategies and associated challenges are poorly understood in the current literature. This contribution sheds light on the landscape by classifying various challenges in four areas and proposing key questions for future research. The four areas are organizational design, supply-chain planning, decision systems, and supplier relationship. Although these areas correspond to established management disciplines, Lean-and digital transformations are multidisciplinary in their nature. Therefore, in addition to doing in-depth research within each area, researcher might work together in multidisciplinary team to create workable knowledge addressing practical challenges more holistically.

We hope our framework and research questions will trigger further discussions and research that aims to help organizations obtaining a correct strategy in their pathway towards Lean, learning and digital organization. For practitioners such a framework might be instrumental in clarifying the different aspects of a complex problem.


Erik Gran

Erlend Alfnes

Practical guidelines for production planning and control in HVLV production

Keywords: Make-to-order, planning and control, coordination for assembly

In this paper we will propose a set of considerations and guidelines we believe are critical to achieve efficient flow in non-repetitive production. The proposed factors are insights gained through application of lean principles to two cases of non-repetitive manufacturers.

Introduction

High-variety, low volume (HVLV) manufacturing aims at providing manufacturing services tailored towards a variety of customised products. The level of product customisation offered by HVLV manufacturers can vary significantly ranging from standard products made to order to pure customisation where the entire product is designed and manufactured according to customer specification [1] There is no clear consensus in extant literature as to the actual characteristics that constitute a HVLV manufacturer. Many definitions of HVLV production environments are related to supply chain structures and the customer decoupling point. [START_REF] Wikner | Integrating production and engineering perspectives on the customer order decoupling point[END_REF], however, propose decoupling of the engineering and production dimensions with a separate engineering dimension ranging from Engineer-To-Order, where a new product is designed, to Engineer-To-Stock, where a specific design is already "in stock". Between ETO and ETS engineering modifications are used in varying degrees [START_REF] Gosling | Engineer-to-order supply chain management: A litterature review and research agenda[END_REF]). In accordance with this, a definition of HVLV as non-repetitive manufacturing [START_REF] Katic | The flexibility paradox: Achieving ambidexterity in high-variety, low-volume manufacturing[END_REF] is used here without distinguishing different degrees of engineering change or redesign. This to avoid the ambiguous characterisation of an ETO producer depending on the level of engineering content and the confusion surrounding the amount of design standardisation [START_REF] Gosling | Engineer-to-order supply chain management: A litterature review and research agenda[END_REF].

In this paper we will propose a set of considerations and guidelines we believe are critical to achieve efficient flow in non-repetitive production. The proposed factors are insights gained through application of lean principles to two cases of nonrepetitive manufacturers.

Literature on non-repetitive manufacturing tend to focus on creating flow through either Work Load Control (WLC) or a card-based system, such as Conwip [START_REF] Spearman | Conwip; a pull alternative to kanban[END_REF], Polca [START_REF] Suri | The practitioner's guide to polca: The production control sysstem for high-mix low-volume and custom products[END_REF] and latest Cobacabana [START_REF] Thürer | Card-based workload control for job shops; Improving COBACABANA[END_REF]. We find however that the challenge in producing products with complex structures, often is in coordinating the different flows of parts in order to assemble finished products. We have found little support in existing literature on how to synchronize the flow of unique parts from fabrication to assembly with the possible exemption of Polca [START_REF] Suri | The practitioner's guide to polca: The production control sysstem for high-mix low-volume and custom products[END_REF]. By synchronization we understand the necessary coordination of fabrication lines for customized parts in order to have all parts available at assembly. The presence of synchronization constraints at assembly stations results in intractable analytical models for throughput estimation of fabrication/assembly systems [START_REF] Rao | Performance analysis of an assembly station with input from multple fabrication lines[END_REF]. This paper however proposes some practical guidelines for achieving better synchronization.

Cases

Case A is a manufacturer of ETO equipment for offshore and maritime industries.

The company offers a wide range of tailor-made packages of different equipment for propulsion, manoeuvring and control systems for medium speed configurations. Their main products and spare parts for maintaining earlier installed equipment, are all manufactured at the same plant. The plant produces less than 500 units a year in a large variety of sizes and configurations.

In recent years the company has experienced a shift in demand towards increased physical size and configurations with more and larger machined parts. As a result, the workload of the plant per delivered unit has increased significantly as a result of more machined parts that also require more time for machining due to their size.

Case B produces customized hydraulic cylinders and dampers in a variety of configurations and sizes. The customization ranges from relatively simple modifications of rod and cylinder mountings to complete design of new cylinders according to customer technical specifications. About 50% of the revenue of the factory comes from producing large cylinders of more than 200 mm diameter, but this segment only makes up about 15% of the total number of cylinders. The company has quite recently invested in new machinery for machining large size cylinders and other parts and aims at creating more business in this segment.

Both case companies produce customized products that need to be managed like projects. The degree of customization in a product might vary, but all products contain some parts that are either unique to the customer order due to customization or some parts/components where demand is too low for stock-keeping, ie. made-toorder.

The typical product structures for both case companies are complex with multiple level BOMs. The parts for several different products/projects are produced simultaneously utilizing the same production resources. All products include both fabrication of parts and assembly of finished products. The fabrication process is a mix of ETO/MTO (project specific) parts and more generic MTS parts. The product structures usually contain subassemblies with similar synchronization constraints as the main assembly. The necessary synchronisations have so far been achieved by routing all parts to stock before (sub-)assembly. This practice is not very lean.

Load distribution between products varies greatly. Many factors influence the choice of which resources to apply for a task, but these choices are often made during the engineering phase. The typical choice of resource is the most technically efficient in terms of processing time. In both companies there are few opportunities to reroute production through other resources with lesser load depending on the current situation although alternative routes are described in some cases.

Scheduling challenge

With the fall in oil prices both case companies have experienced serious changes in the demand for their products. Most of their customers used to be in the oil exploration industry so the subsequent decline in activity forced the case companies to look for other markets at a time when many other companies were in a similar situation.

Even for highly customised products/producers the typical trends today are:

• Increasing need for shorter delivery times • Increasing product variety • Capacity utilisation is still important for cost efficiency Meeting these requirements implies a balancing act for scheduling: How to create shorter throughput time for all projects, and still maintain satisfactory capacity utilisation from a cost perspective?

Considerations

Uncertainty and variations

A common feature of the production in both case companies is that many parts are Made-To-Order. Parts are made for a specific product/customer and there is only limited opportunity for using stocks as buffers. Non-repetitive manufacturing is inherently uncertain as there will always be limited experience in making parts that are sufficiently similar for comparison and guiding towards production time estimates. That some of the products will even be Engineer-To-Order will only add to this uncertainty.

Production buffers against variations are necessary but are limited to either time buffers or slack capacity (underutilisation of machinery) for non-repetitive production. Traditionally this type of industry has solved this by defining slack time either directly as extra time in the manufacturing process or indirectly by adding to process times.

According to [START_REF] Suri | The practitioner's guide to polca: The production control sysstem for high-mix low-volume and custom products[END_REF] the use of slack time is a self-increasing spiral where long lead times imply the need for expediting jobs which in turn delay "normal" jobs and thereby increase the need for additional defined slack time. [START_REF] Suri | QRM and Polca: A winning combination for manufacturing enterprises in the 21st century[END_REF] proposes the use of capacity buffers and points to complex series of dysfunctional interaction that results from focus on the 100% capacity utilization. Adequate slack capacity is also an important condition for lean production.

The start/release of the assembly process should ensure the availability of all parts and the assembly operations thus require high inbound delivery precision. A special characteristic of this type of join operations is that the resulting variation on start-up time for the assembly will depend on the worst outcome of the preceding tasks and the likelihood of a long delay increases with the number of parts that should be assembled [START_REF] Baccelli | Queueing models for systems with synchronisation constraints[END_REF]. In practice this means that a buffer/slack time is required. The challenge is then to keep control of this buffer without having to resort to standard stock keeping practises. After all, these are non-standard parts assigned to a specific project.

Shifting bottlenecks and capacity utilization

Customization implies that both product structure and routing as well as workload will change from project to project. This creates shifting bottlenecks in fabrication depending on the product mix. These bottlenecks determine the possible throughput of the production system and thus determine the response-time for the project.

Ideally you would want to plan and release workorders to the shop floor that balances workload between the available resources [START_REF] Germs | Workload balancing capability of pull systems in MTO production[END_REF] The result of a balanced workload will be the overall fastest throughput of the production system, but the lack of synchronization between the different value streams may lead to a lot of parts and no finished product.

The sequence of a given mix of project orders has a major impact on the workload distribution on resources and the location of the bottleneck(s). The Cobacana cardbased system for workload control [START_REF] Thürer | Card-based workload control for job shops; Improving COBACABANA[END_REF] claims to achieve a better balance of workloads through managing workloads for the different work-centres when orders are released to the shop floor. Orders with workloads that doesn't fit the current reservations of capacity on the shop floor will sit in a pre-shop pool until the situation changes or the order must be released for due date adherence. Coordination between the fabrication of different parts are however not addressed directly and seems to be dependent on the order release and priority in dispatching jobs between work-centres.

Critical time path/critical chain of production activities

For all products there exists a critical time path indicating the value stream that takes the longest time to finish. All activities on this path must be completed in time or the throughput time of the product will increase. All other activities on the other hand have slack time.

A machine resource is often used to make more than one part for a project. Finding the critical time path thus involve mapping the production as an activity network with the extra restriction that each resource can only process one part at a time.

When several projects are combined in a workflow, the critical paths do not necessarily coincide with the critical chain of activities. The critical chain of production activities will all be located at the present bottleneck resource while the critical time path by definition is related to the throughput time of the project. The sequence and mix of projects will determine which potential bottleneck is active.

Most non-repetitive manufacturers that do both fabrication and assembly, produce modifications on a small number of basic designs. Each product is thereby unique but contain many of the same parts and subassemblies as other projects based on the same basic design. The different basic designs can be thought to generate product families with enough similarities as to routings and estimated workloads. A structured method to define and use product families in designing production control is found in [START_REF] Duggan | Creating mixed model value streams[END_REF]. Using the routings and workload-norm of the product families we can investigate the limitations and resulting bottlenecks for possible production mixes. Changing the product family mix will give rise to shifts in bottleneck resource. Templates based on product families may in other words form the basis for rough-cut capacity planning.

Proposed guidelines

We propose takt based planning and control as the planning and control principle for non-repetitive manufacturing. Takt defines how many customized products of a certain type or family the manufacturing system will complete in a fixed time period.

Each product family has a defined takt based on prior investigation of how the mix will affect sequencing and resource utilization at the resulting bottlenecks.

5.1

All parts and subassemblies must be finished before final assembly of a product.

In our interpretation this means finishing the products one-by-one in each assembly cell. There is no 90% finished when it comes to preparing for assembly. Missing one part will stop the assembly process and it will need to be restarted when the part becomes available later. Final assembly might not be the final activity in the production process, but it's usually the last point where the separate value chains come together (marriage point). Activities that follow the final assembly may be successfully controlled by FIFO chains.

5.2

Develop a takt-based plan using product family.

We propose that rough-cut capacity plans are made using product families as templates. As pointed out earlier the templates may serve to identify the bottlenecks in producing a certain mix of products. The bottleneck resource defines the maximum output from the production system. Changes in the mix may move the bottleneck to a different resource but the idea is that for a time period the mix of products can be estimated and will also be quite stable. The maximum output for each of the product families will that way be coordinated through the identified bottleneck resource. The next question is then how to sequence the different production orders. We propose takt time control because takt in addition to levelling activity at the bottleneck also provides opportunities for control and coordination at predictable points in time. For non-bottleneck resources the time leading up to final assembly will include some slack. How much slack depend on the total workload from all products that are produced simultaneously but this excess production capacity may also be utilised for MTS production of generic parts or service parts. Having predictable time limits thus offer other opportunities for fabrication that will not interfere with production of customised products.

5.3

Insert time buffers before join operations in the production process.

Before assembly all parts must be available, and this will in our opinion require a buffer before assembly. With takt-based planning and control assembly occurs at regular intervals for each product family and the size of the buffer may reflect the size of normal variations in processing times for that family. A buffer for variations in real processing times can be achieved either through establishing time buffers/WIP, the use of capacity buffers (excess/unplanned production capacity) or a combination of both. With takt time control the size of the WIP buffer translates directly to available time for fixing variations in processing times. Major disruptions will still have to (and should) be handled outside the production lines.

Plan the sequence of projects in production (Operation plan)

Having excess production capacity (slack) for non-bottleneck resources does not ensure that deliveries can be made to the schedule set by Takt. A plan for latest start of all production activities timed to deliver parts according to takt, will often show conflicts in allocation of capacity between the different products. Often this can be fixed by starting some activities earlier but sometimes the routings prohibit earlier start. However, these sequencing problems may be resolved in various ways including extra/slack capacity, rerouting of parts, etc. The point is that many of these options are available at the planning stage but are more limited when executing the plan. Some of the concerns are shown in Figure 1. The figure shows capacity usage by different machine centres (lines in the fig). The plan is for fabrication of all parts of 8 products belonging to two different product families/assembly lines. Each colour bar represents capacity usage for fabrication of a product at each machine centre. Parts should be delivered to assembly line 1 at the end of each day (16 hrs) and to assembly line 2 each 1,5 day. The plan shows a situation with almost 2 bottleneck resources but the capacity usage at both are within the limit of what can be accommodated. Changes in the production sequence on non-bottleneck machines will however in many cases lead to delayed delivery for assembly.

We propose that an operations plan is made using the real estimates for all products. The objective of this planning activity is to identify these conflict areas and plan how this should be resolved before production is started.

Execute and evaluate the operations plan

Planned times and resource utilization are estimates and deviations will occur. Disruptive events such as machine breakdowns or scrap production we hold to be beyond the scope of the planning system. These types of problems should be managed as exceptions, maybe using the capacity reserve set aside for those purposes. Deviations are thereby limited to naturally occurring variations and buffers should be used to eliminate the accumulation of delaying effects. The size of the buffers needs to be monitored.

We propose that the sequence of projects/customer orders is maintained in production of all parts and subassemblies, unless there has been a disruptive event that renders the plan impossible to implement. Using slack capacity to produce a part for another product with a later due date will not speed up the finishing of that product unless all the other parts for that product also can be accommodated. Changing the sequence of products in parts or subassemblies production thus seldom has positive impact on throughput times and will increase work in progress and confusion about priorities. The objective should be to find a sequence of products that optimizes the use of production capacity in the first place.

Experience and further work

The considerations and guidelines evolved trying to apply lean principles to the production of case A. Their products are complex with a lot of fabricated parts and subassemblies. Several methodologies for lean production control where considered.

Inspired by the work of Duggan [START_REF] Duggan | Creating mixed model value streams[END_REF] we arrived at using the assembly subprocess as pacemaker and two distinct product families were identified. The process time of the assembly activities did not vary much within each product family which suggested the use of Takt to coordinate fabrication.

The guidelines we propose is not all that different from standard practice in hierarchical planning with ERP. The major differences are: (1) the investigation of how production mix affects production bottlenecks and (2) the use of Takt to regulate deliveries to the chosen pacemakers. Initially the guidelines were quite successful by reducing the throughput time of a whole unit by 50%. However, the change in demand brought on by the reduction of oil prices has changed the dynamics of the production system to the extent that our current model for rough-cut planning doesn't work.

Without a working model for rough-cut capacity planning we are not be able to predict how the mix of products may create other bottlenecks than our assigned pacemaker; the assembly process. We are currently working on a new model for rough-cut planning that can accommodate more product families and describe the capacity constraints of different product mixes. We still believe that template BOM/WBS based on product families are adequate estimates for this purpose.

Investigating product families in case B has shown that 70% of the number of cylinders they make are sufficiently similar to organize their production in separate dedicated lines. In other words, the work involved in applying the guidelines has led to better knowledge about the production system that suggested other improvements.

Other areas that need more research are among several; priorities in release of workorders and in execution, a model for operations planning that supports different routings for different parts, joining the routings at assembly and the fact that a machine normally only can process one at a time. We expect that such a model will be a hybrid between a project model and MRP.

Figure 1

 1 Figure 1 Operation plan for a week


Bjørn Jaeger

Simen Alexander Pedersen

A blockchain application supporting the manufacturing value chain

Keywords: Manufacturing Value Chain, Inter-Organizational Processes, Blockchain

Blockchain applications supporting the manufacturing value chain are beginning to appear; early adaptors are testing blockchain technology for applications like trace and track, life cycle management by digital twins, protection of intellectual property rights, enforcement of licensing agreements, and trading platforms for 3D printed parts. The aim of this paper is to discuss the use of blockchain applications in the value chain of manufacturers followed by a case study of a blockchain application used in the value chain of a Norwegian furniture manufacturer involving the manufacturer, a third-party service provider, a retailer, and the end-customer. The application supports a product configurator providing product selection and customization, a delivery planner and a product tracker using an open public blockchain for inter-organizational data-sharing.

Introduction

This paper presents a case study using blockchains to support business-to-business operations. The complexity of business networks makes interoperability across organizations a challenging task. Blockchains have been seen as a potential solution to enforce intellectual property rights of information, as well as offering a way of sharing information in a network without mutual trust between the parties. It is based on algorithms that lead to consensus among the network nodes and market mechanisms that motivate the nodes to behave in a non-opportunistic manner [START_REF] Mendling | Blockchains for business process management-challenges and opportunities[END_REF]. This is recognized by the business environment as well as the research community as illustrated by the quote from Mendling et al.: "the emerging blockchain technology has the potential to drastically change the environment in which inter-organizational processes are able to operate" [START_REF] Mendling | Blockchains for business process management-challenges and opportunities[END_REF]. For companies, this puts forward a need to explore blockchain technologies for their external business operations. This paper presents the use case of how a furniture manufacturing company explore blockchain technologies for tracking furniture in their distribution chain consisting of a third-party service provider, a retailer, and an end-customer.

2

Literature review

Blockchains

A blockchain, is an overlay network on top of the internet. The blockchain technology is the underlying technology for the Bitcoin cryptocurrency designed by [START_REF] Nakamoto | Bitcoin: A Peer-to-Peer Electronic Cash System[END_REF] who stated that the purpose of the Bitcoin cryptocurrency was "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.". The design was realized shortly after when the original Bitcoin network started on January 3, 2009. The network has since then seen a rapid growth, both in value and in the number of transactions, and a lot of other blockchain-based networks are being developed and deployed. This paper is based on the use of an open public blockchain (OPBC). Any OPBC could be used, but we selected the latest version of the original blockchain by Nakamoto, the Bitcoin Satoshi's Vision called Bitcoin SV [3] [4]. The main reasons for using an OPBC are; they include a free, open for all, and shared distributed database infrastructure on top of the internet, they become more reliable as they grow, they are immutable for all practical purposes, they can store arbitrary data including user-defined computer programs (smart contracts) using Bitcoin script, and they have an embedded run-time environment that executes the smart contracts stored in the blockchain [START_REF] Antonopoulos | Mastering Bitcoin: Programming the open blockchain[END_REF].

Inter-Organizational Processes

Recent developments show a growing erosion of traditional organizational bounds [START_REF] O'mahony | Organizations in the Shadow of Communities[END_REF].

Work is mostly done within organizations. However, work can increasingly be coordinated through formal arrangements among institutions like consortia, institutes, and partnerships, and through more informal communities of practice, and multi-team systems that cross or even exist outside of the boundaries of traditional organizations. As an example, consider the manufacturing industries. A single company traditionally executed the major portion of manufacturing operations needed to create a final product [START_REF] Magal | Essentials of business processes and information systems[END_REF]. Over the years, companies found it cost efficient to specialize in core competencies while outsourcing supporting activities, and thus adding an increasing number of connections, resulting in a global network of manufacturers. Now the major part of a product comes from many collaborating manufacturers, as can be seen from the large portion of the value creation that goes to purchasing. The 2.1 million enterprises classified as manufacturers in the European Union, spent on average 74% of their turnover on purchases of goods and services [START_REF]European Commission: Statistics for the European Union's (EU) manufacturing sector[END_REF]. Hence, the manufacturing of products has become a networking endeavor. However, these business-to-business network operations are not supported by standard information system solutions. Business-to-business operations involve a myriad of companies and organizations, manufacturers, third-party logistics providers (3PLs), freight forwarders, transportation providers, banks, insurance companies, and authorities. While ERP systems support and automate the business processes of each enterprise, the support and automation of business-to-business processes of the extended value network are missing. Contemporary networked operations depend on partly manual processes involving spreadsheets, email, Electronic Data Interchange (EDI) and proprietary software solutions. Integration, synchronization and a system of record and transparency that are taken for granted within enterprises by ERP systems are not attended to in a systematic manner in the external value network. Any changes in the business-to-business operations are costly to follow up on for trading partners. The data latency is high, and the ERP systems of companies involved must be consolidated and eventual disputes resolved [START_REF] Nadler | Electronically-mediated dispute resolution and e-commerce[END_REF][START_REF] Savelyev | Copyright in the blockchain era: Promises and challenges[END_REF]. IBM reports that they need to resolve around 27 000 disputes yearly related to invoices alone in their financial service sector, even if that amounts to just under 1% of the total number of invoices handled per year, the cost is substantial since they require manual intervention and delay [START_REF]Real world examples of blockchain projects[END_REF].

In analogy with ERP systems for intra-organizational process integration and data sharing, the open public blockchain can be seen as a database shared among companies for inter-organizational process integration and data sharing.

3

Case Study

Background

Ekornes ASA is the largest furniture manufacturer in Norway and owns such brand names as Ekornes © , Stressless © , Svane © , and IMG © . Manufacturing takes place at the group's nine factories, five of which are located in Norway, one in the USA, two in Thailand and one in Vietnam. Ekornes was acquired by Qumei Home Furnishing Group in 2018 [START_REF] Ekornes | Annual report 2017[END_REF].

Ekornes has an ongoing project to establish a new digital platform that will allow them to showcase products online, either through their own websites or through their distributors' websites. The platform is intended to enable online sales of products as well, directly to customers, in combination with retailers, or completely through the retailer's online sales channels. Regardless of the sales channel selected, Ekornes has the strategy to establish a strong digital platform to support their retailers, while at the same time they prepare for direct communication with the end-customers both in sales and to gain insights into customer needs [START_REF] Ekornes | Annual report 2017[END_REF].

Ekornes started looking at the blockchain technology in 2018. They have been engaging master students to investigate the theme as their thesis topic, and Ekornes has started the development of a demonstrator as part of the business case presented here involving the use of blockchain technology partly funded by Manufacturing Networks 4.0, a research project by the Norwegian Research Council.

Ekornes has always been focused on adopting the latest technology to develop the company. The business idea is the development, manufacturing, and sale of furniture. They recognize the need to adopt new technology and new competence to stay competitive, especially regarding the fast progression of digitalization. Traditionally, Ekornes has been at the forefront with regards to the automation of production with extensive use of industrial robots. Now Ekornes believe the biggest benefits of digitalization are to be found on the sales side: "The customer's entire journey, from the moment she first becomes interested in a product until it has been bought and paid for, is changing radically as a result of digitalization. The first thing many people do now when they are looking to buy a new piece of furniture, is to scour the internet. Online sales of furniture are rising sharply. New players have entered the market, and existing players are evaluating new business models to adapt to this new reality." [START_REF] Ekornes | Annual report 2017[END_REF].

The actors in the value chain of Ekornes are the skin producers, the transporters, part producers, shipping companies, the logistics service providers, the retailers, the initial customers, and eventual second-hand customers, as illustrated in Fig. 1. In light of the envisioned potential of blockchains for inter-organizational processes and the choice to focus on the sales side, Ekornes decided to explore blockchain in the distribution part of their blockchain. A case study was selected involving four actors in the distribution chain on the right side of Fig. 1; The Ekornes furniture manufacturer, a logistics service provider, a retailer, and an initial customer. Customers want to be able to customize their product and have an exact delivery date. This involves all four parties in the distribution chain. The manufacturer's production strategy is made-to-order for standard products giving delivery times of 4 -6 weeks. In addition, they offer a Quick-Ship segment for a smaller selection following the assemble-to-order strategy allowing delivery within 72 hours.

The AS-IS Scenario

During a workshop discussing potential use cases focusing on the end-customer's journey, the following scenario was described:

A store clerk working in the retail sector has attention given to the conversion process of getting them to select a product and then getting the selection converted to a payment. Visibility might help increase conversion. For some of the failed conversions, retailers lose the potential sales because they cannot provide detailed information on product variety and delivery dates at the point of sale. Take for example a customer who is at a store in a mall in Norway and has asked for item ABC, but that item is with the wrong material in the store and the time-to-delivery is given as a rough estimate of 4-6 weeks. Typically, this is a lost sale and the customer is leaving empty handed. (from workshop discussion).

The current AS-IS process is modeled in Fig. 2 and shows the steps involved in the end-customers journey when purchasing furniture. Each participating actor is represented in a separate lane and has full control of the activities within their lane. Dotted lines represent information flow and solid lines represent process flow.

The end-customers journey starts when a potential customer visits the retailer with an interest in buying furniture. The furniture retailer representative greets the customer and provides product information on the availability and characteristics of the products of interest. The availability information is updated for each manufacturer on a weekly basis.

If the customer decides to order, the retailer subsequently orders by the manufacturer the same day by email. The manufacturer then confirms the order to the retailer by email the same or next day, together with an as-good-as-possible forecast for the delivery schedule. The retailer then forwards the information to the customer by SMS.

After a short delay, the manufacturer starts production and assembles the different components for shipment and orders transportation by the distributor, which picks up and deliver the order to the retailer. At the same time when the order is picked up; the manufacturer informs the retailer by email. If not previously agreed upon, the retailer contacts the customer and agrees on how to deliver the customer order, before the actual delivery takes place. The customer relates only to the retailer, preventing end-customer information from reaching the manufacturer.

Fig. 2.

Inter-organizational process diagram of the AS-IS scenario with each actor operating in a silo fashion with limited information exchange between each other.

3.3

The TO-BE Scenario

The TO-BE scenario starts as the AS-IS scenario, but after the last sentence "Typically, this is a lost sale and the customer is leaving empty-handed. ", the following scenario is added: the inconvenience. Also, we support the QuickShip segment with delivery times within 72 hours … and so on (from workshop discussion).

… With the right visibility tools, the salesperson can give detailed information on the optional materials and detailed delivery date for each selection. Now, when the customer looks disappointed the store clerk brings up the product configurator on his notepad and says "wait one second, I'll show you the optional materials together with a detailed delivery time for each option. And we'll give you a five percent discount for

Based on this it was decided to build a demonstrator of a Product Configurator that would involve all the four parties. The traditional approach would be to build a portal or a hub to share data among the parties. This is costly, time-consuming and require testing. The parties can alternatively use the OPBC as a shared database. It is free, ready to use and very reliable. Thus, the Product Configurator should use an OPBC.

Using the Product Configurator, the sales clerk take the customer on a product tour. The sales clerk start by scanning the product of interest. The product, containing an NFC or a QR code with the unique product ID pops up in a web-app on a notepad. The customer selects options like the type of base, skin, textile, and color. When the product is configured as requested by the customer, the Sales Clerk retrieves exact delivery information directly from the producer. The Sales contract between the retailer and the customer is then ready to be completed directly from within the web-app.

The TO-BE process is modeled in Fig. 3 and from it is it clear that the start of the end-customers journey is near equal to the AS-IS scenario. However, we realize a significant difference in the way the retailer interacts with the customer through the Product Configurator which supports product selection and customization. Furthermore, the delivery planner functionality of the demonstrator ensures consistent delivery information retrieved directly from the manufacturers ERP system via the OPBC.

If the customer decides to place an order, the retailer subsequently places the order at the manufacturer by using the web-app, which store the complete order information as a transaction in the OPBC.

After receiving the customer order, the manufacturer allows for a short delay before the order is released to production and assembly. At any time, the customer and retailer might enquire for production milestones and delivery status via the web-app.

When the product is ready to be shipped, a transportation request is automatically sent to the distributor via the blockchain. The distributor pick-up the shipment and writes transactions into the OPBC at various handling points throughout the distribution process. These transactions can be viewed by all actors at any time.

After the shipment is delivered to the retailer's warehouse, the retailer arranges for the final delivery to the end-customer. A customer requests for a change in the delivery schedule can be handled directly from within the web-app. When the order is delivered to the end-customer, the warranty period is automatically started and registered in the blockchain. In this TO-BE scenario, the manufacturer does have access to end-customer information that can be used for future interactions and sales promotions via e.g. referrals with discounts. Both the AS-IS and the TO-BE process models are simplified for the sake of clarity. Some of the issues left out are the handling of payment, the various technologies and document formats for communication.

Discussion

The key differences between the scenarios are: In the AS-IS scenario no one has the full pictureinformation exists, however it is fragmented and spread between the actors. In addition, the information is uncertain since it must be updated through each process, e.g. delivery information requires multiple messages from retailer to the endcustomer, and delivery times are only updated on a weekly basis. The AS-IS problems include redundancy, lack of data control, a mix of interfaces, delays, lack of reliability and lack of data integration. In the TO-BE scenario, actors get exact information through the shared blockchain, including delivery times that is important for planning purposes and to increase the conversion rate of sales at retailers. If there is a need to keep the information secret, the information in the OPBC can be encrypted and keys distributed to actors that are granted access. The use of a blockchain in this context might seem unnecessarily complex since the small number of actors of four gives little substantiation to justify the added value of using a blockchain. However, a blockchain based solution will be more useful as the number of participants increase, and since it is not controlled by any of the participants the risk of any partner exercising power over other partners is low, increasing the likelihood of the partners being willing to share information. The manufacturer in our case study had a need to build competence in a long-term perspective to explore models suitable for following a product through its entire life-cycle across multiple owners and users as part of their move towards sustainability by circular economy models.

Conclusion

This paper discussed the use of blockchains in the value chain of manufacturers including a case study of a blockchain application used in the distribution chain of a Norwegian furniture manufacturer involving the manufacturer, a third-party service provider, a retailer, and an end-customer. The application utilizes an open public blockchain as a shared data repository for integrating processes across the actors demonstrating how manufacturers can build competence and explore ways to support information sharing in business-to-business networks.

Fig. 1 .

 1 Fig. 1. The Ekornes Value Chain.

Fig. 3 .

 3 Fig. 3. Inter-organizational process diagram of the TO-BE scenario utilizing the open public blockchain as a shared data layer.

Acknowledgments. We thank the Manufacturing Network 4.0 project for support of the research presented in this paper.