Virtual platforms and real logistics for small businesses

Editorial by Giancarlo Corò

In the crowded landscape of junior web operators, affordable and viable logistics solutions are beginning to make their way also for SMEs. These are inter-company virtual warehouses, managed by specialized operators, which based on low investment costs, allow a significant reduction in supply management expenses. But what conditions are necessary for the implementation of these plans?

One of the most concrete forms of integration between electronic commerce and logistics is the one carried out through virtual platforms. However, this is not the only modality through which logistics meets network technologies. The possibility of optimizing supplies and reducing purchasing and supply costs through access to inter-company information systems can be a notable result, especially for SMEs. The idea on which these solutions are based is typical of logistics: warehouses and supplies enjoy high economies of scale, so that if several companies share these activities, each one obtains a gain in terms of technical efficiency with respect to the solutions that characterize them. In fact, beyond greater market power and lower administrative operating costs guaranteed by the concentration of purchases, it is known that, with the same level of service, the cost of supplies is an increasing function of the number of warehouses. Why then do small businesses, especially in industrial districts, not provide warehouses and common supply services? The answer is that small companies, precisely, not only seek technical efficiency but also maintain their own management autonomy (irreplaceable source of flexibility) and are very reluctant to directly share critical information about their own markets, both supply and distribution. Furthermore, the creation of common logistics platforms faces high investment costs, which are difficult to recover in the event of a change in strategy by a single company.

Virtual platforms overcome this obstacle and also greatly reduce the first one. In fact, to optimize supplies and supplies it is not necessary to build a common warehouse, but it is enough to have a specialized operator manage information on the status of existing warehouses and reorder activities related to the desired purchases. Not all categories of supplies can be managed in this way. But for many types of purchases and supplies of basic products the operation is viable.

The determining condition is, therefore, that companies manage to share a logistical-communicative standard in which the virtual platform is implemented. Solutions of this type are today offered by some operators, such as Datilog and Unitec (for a review see the open 2000 issue of Systems & Enterprise magazine), which have developed open information systems that, once adopted by several companies, allow them to save on supplies (thanks to economies of scale) and simplify administrative management (through the advantage of a single invoice related to repeated purchases).

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