Plans/ My friend provider streamlines procurement. Huge savings.
The year is 2003. The companies of any industrial district, we put ourselves in the Marble area of Carrara in Tuscany, have almost emptied their warehouses of industrial spare parts, raw materials and mutual exchange. Some don't hold anything at all: all it takes is one click and the stocks are replenished from the virtual district provider's virtual warehouse, with the virtual needs of the (real) companies being measured by software that uses complex mathematical algorithms. In three years, the region's companies have achieved a jump in sales, especially in exports, thanks to the greater competitiveness of the virtual district: reduction in operating costs (trained personnel and technical staff) of the warehouse, more efficient use of employee resources, significant price reductions thanks to volume discounts when purchasing inventory, guaranteed by a provider that buys for 400 companies instead of one, drastic reduction in capital tied up in the warehouse. Each transaction in supplies occurs through the district intranet and generates no paperwork, just a cumulative periodic invoice.
The simulation can apply to any district and any product, from the knives of Maniago in Friuli to the citrus trees of Sicily. By thus granting confidence in the outsourcing of warehouse management functions and transforming them into an Internet service, the idea promises to “achieve tens of billions in efficiency gains in the Italian economy”.
The breathtaking estimate comes from Vincenzo Marine, 43 years old, native of Naples, based in Germany, inventor of the first management system for data transfer in the outsourcing of all corporate procurement. His company is Unitec (www.unitec.it). It was founded 12 years ago as a purchasing broker in the field of robotics for automobiles, and today works with around a dozen employees between the center in Augsburg near Munich and the Sabaudia “IT centers” Web, where it also operates as an Internet provider. It boasts customers and contacts such as Piaggio, Iveco, Michelin, Man and Whirlpool. And of the ten billion in sales in 1999, 2000 is expected to be the year of the boom. The germ of the future virtual district developed in the first years of the 1990s. “We discovered – says Marine – that the business operations contained enormous hidden waste, due to the procurement management and the associated office activities that are never regulated”.
The result was what is the main specialization of the small Italo-German group. Unitec takes over the management of 80% of the partner company's suppliers: those non-strategic, which are numerous and therefore expensive to manage, weigh no more than 20% of the stocks. The external manager takes care of all relationships, issues only one invoice to the partner, thereby reducing costs.
From here to the virtual district, thanks to the Internet, the step is small. The principle is to connect competing companies in a virtual network (logon). Ten companies in the same area have similar warehouses; each will hold, for example, ten light bulbs for mutual exchange. But no one will ever need more than one light bulb at a time. Here's the solution: each company only keeps two light bulbs in stock, and every time it needs one, a provider asks to replace it, perhaps sourcing one from the other nine.
The system works under two conditions: that the district's companies cede their complete "sovereignty" over the warehouse to the provider, and that each is encouraged to maintain a minimum inventory. This is done by setting a price that the company that received a reciprocal exchange pays to the one that provided it (the provider, of course, takes care of this). This means that everyone's warehouse is not only reduced to the essentials, but also does not remain idle and at the same time functions as a buffer warehouse for competitors. The whole district, in turn, behaves like a single factory without knowing it. Needless to say, since the warehouse flows are computerized and managed with a click, the provider of the Friulian district could theoretically even be based in Tanzania.
Will it work? It certainly seems tailor-made for over two hundred districts and a wealth of small Italian businesses. In the end it all leads to this Neapolitan-German mix by Vincenzo Marine: “In the age of the Internet – he says – we are forced to make the Italian imagination more efficient”.
