مدیریت یکپارچه زنجیره های لجستیک در صنعت کالاهای سفید.تحقیقات میدانی در ایتالیا

After having devoted many efforts and investments in improving their internal capacity to produce the right product at the right price at the right time, companies are now starting to discover that much of the value they deliver to their customers depends not only on their own performance, but also on the performance of all the other companies that belong to the same logistic chain. Thus, the integrated management of logistic chains has gained a large attention in the latest years, as one of the most effective tools to achieve an overall improvement in the economic as well as in the logistic value that is embodied in each product. This paper presents some results of a field research focused on logistic chain management, carried on by means of direct interviews on a sample of Italian companies, shops and final customers belonging to the white goods industry. Questions highlight the main cost and logistic effects that arise among different tiers of the chain when they interact. Here we illustrate the used methodology. Moreover, we discuss some of the empirical results achieved, with the aim of assessing the improvement potential that a tighter integration could achieve. In particular, it is shown that wide space for improving companies profitability is available both by reducing costs and by increasing sales.

In many branches of industry, the last decade has witnessed an unexperienced increase in the environmental complexity that manufacturing companies have to face. This is partially due to the increased customer requirements which usually characterises mature markets. Moreover, the concurrence of the widening of markets and therefore that one of an ever stronger competition has further fostered this trend. In order to cope with global and mature markets, manufacturers have striven not only to increase their product range, but also to enrich their products with a set of features that might create a difference with respect to competitors. This, in turn, has led to the need to master a wider range of manufacturing technologies than before. Given the considerable hurdle that has risen by the need to be the leader in such amount of different technological areas, many companies have preferred to reduce their level of vertical integration and to focus on their core technologies, rather than trying to be excellent in all of them [1]. A typical example of this way of doing is supplied by the PC industry, where each component (motherboard processor, hard drive, screen, operating system, printer, etc.) is usually manufactured by a small number of focused and global companies. In such a context, if customers are to obtain a whole system (e.g. PC, screen, printer and modem) at a reasonable price, with a good quality and within a reduced lead time after the order, this can be obtained owing to the combination of efforts of all the actors connected to this system [2] and [3]. Just to cite some of the well-known brands: Intel will supply the processor and Seagate or IBM the hard drive; Compaq will take care of PC assembly; Sony will provide the monitor; Hewlett-Packard will provide the printer; 3COM the lan board or the modem, Microsoft will supply the operating system and the dealer will do SW installation, product packaging and final delivery. We will call the whole set of companies mentioned above a logistic chain, in that not only these companies perform the logistic phases of the PC value chain, but they also contribute to the “logistic value” that is embodied in the PC. In other words, these companies not only contribute to determine the inherent value of the PC as a product, but they also determine the service parameters that are connected to the delivery process, such as: response time, tardiness, etc. 1.2. Competition among logistic chains Given the remarkable changes in the manufacturing industry that have been outlined in the previous section, companies have started to think how to link themselves inside a logistic chain in a way to generate more value for the customers and ultimately also for themselves. The integrated operations management of a whole logistic chain, is relevant due to two different competitive effects, owing to either different types of customers or the positioning of each industry in its life cycle. Let us think about one customer buying a car. For first-time buyers, the act of buying their first car may well be considered as a “must”, due to the mobility requirements it fulfils. Conversely, when you have already bought your car, buying another one could be just a matter of fashion or status. In this latter case, which refers to a mature customer, the act of purchasing might well be deferred to next year, while the same amount of money might be allocated to something else (e.g. a fashionable dress or suit, a new piece of furniture or even a vacation) or simply saved. In the former case of the first-time buyer, the question to be answered is: which car to buy?, so the competition is within the automotive industry. Thus, each car manufacturer, together with dealers and components manufacturers (e.g. one automotive chain) compete against other ones, inside the automotive industry. On the contrary, the latter type of customer gives rise to a new kind of competition, which is among different industries. In this case, different automotive chains are competing against other chains that deliver furniture, dresses, or eventually anything else. An additional difference between first-time customers and mature customers, is in that the first ones will presumably make their choice based on a combination of features and price (e.g. car within certain dimensions, ensuring given performances, under a pre-determined price threshold). So, given the purchase is needed, they will go ahead searching on the market, until finding the appropriate product. On the contrary, mature customers can give up the purchase, so they are likely to be less focused on functions and price than on other features like design, service or brand name. Furthermore, if they do not find immediately a car fitting their needs, they are likely to change their mind and to switch to another type of product. The above considerations outline the increasing importance of an integrated approach in managing the logistic chains, especially in mature markets and industries. In fact, logistic integration among companies belonging to the same logistic chain may well be the strategy that allows the chain to jointly achieve overall superior performances in terms of: • a superior availability of goods delivered, thus minimizing the loss of sales against other chains within its industry and chains belonging to other industries [4] and [5]; • a lean stock profile, which in turn allows to minimize running capital expenditure, as well as any drawback connected to obsolete items [6], [7] and [8]. 1.3. Objectives of the paper This paper comes as a partial report of a wide research program carried out within a partnership between the Dipartimento di Economia e Produzione of the Politecnico di Milano and the Milan branch of McKinsey & Co. Within this research program, two other branches of industry were investigated together with white goods, namely textile and apparel and books publishing. The standpoint of this research program has been illustrated in 1.1 and 1.2.: given the outlined competitive environment, we make the assumption that the integrated management of logistic chains is one suitable strategy firms should apply in order to jointly improve effectiveness and efficiency along the whole chain, as affirmed by Armistead and Mapes [9] and Davis [10]. This, in turn, should allow them to deliver more value to customers, and, ultimately it should foster the performances of the whole chain. Thus, the objective of the research program is to evaluate the following aspects, in the investigated branches of industry in Italy. 1. To assess companies’ commitment about the integrated management of logistic chains. In other words: to evaluate their knowledge on this subject, the importance they set on it and the specific actions they have taken or that are still in the process of deploying towards this direction. 2. To evaluate the potential improvement which is connected to the integrated management of logistic chains, in terms of cost reduction and/or sales increase. 3. To identify actions and strategies that chains and companies should put in practice in order to actually achieve (part of) the potential that is ensured by an integrated management of logistic chains. 4. To compare different industries' behaviour about the items above, in order to identify similarities and differences and to suggest a cross-fertilisation process. Given the general context of the research within which this paper has been developed, the specific objective pursued by this paper is that one described in point 2 above, regarding the potential improvement that could be gained overall by logistic chains and by each single actor on its own if a tighter coordination among different companies within chains were in place. According to the above-mentioned objective, the rest of the paper is organised as follows: in Section 2 the methodology adopted is discussed. In Section 3, a set of empirical results is presented. Finally, in Section 4 we will discuss the general outcomes of the research and its possible developments.

The research methodology illustrated in Section 2, allowed us to collect and analyse some very meaningful data regarding the white goods logistic chain. The resources available to this research program have not ensured an adequate number of interviews, in order to achieve a statistical significance with reference to the collected data. However, a satisfactory level of consistency and completeness is granted by the fact that numerical values were achieved by means of direct interviews, immediately checked and eventually discussed directly with the interviewed people. Results presented in Section 3 allow us to point out three main concluding remarks. First, evidence is shown about the overall importance of logistic costs for the white goods industry, both in terms of their impact on the operating costs and the consolidated turnover of the average logistic chain within this industry. To this regard, strong evidence is set on the fact that the sum of logistic costs and lost sales costs account for almost 30% of the overall chain turnover, while chain profitability is very low, around 5%. Thus, if only the overall sum of logistic costs and lost sales costs could be reduced by one fifth, profits could be more than doubled. If we accept the assumption made in Section 1.3, that the integrated management of logistc chains is a suitable tool to jointly improve both efficiency and effectiveness of the whole chain, we can conclude that this strategy can gain conspicuous advantages both in terms of reduced costs, and increased sales, with the possibility to improve dramatically the overall profitability of the whole chain and of each of its actors. Second, data collected in field show that almost 80% of total logistic costs, and a large chunk of lost sales effect are concentrated at the distribution phase. In particular, the performed analyses outlined that almost half of costs found at that phase are lost sales and nearly one third are due to transportation. This tier of the Italian white goods logistic chain emerges therefore as one evident criticality of the whole system. The apparently inconsistent occurrence of large efficiency logistic costs (i.e. stock, obsolete products, transportations) together with large effectiveness cost (i.e. lost sales) at the sales level can be understood by considering the combination of the large amount of different products that are put on the market by modern white goods producers (around 1.000 stock keeping units per business in Italy) and the particularly small dimensions of the average Italian dealer of such items (on average around 1.000 units sold per annum). Due to this combination, we can explain the simultaneous presence of seemingly exaggerated stock levels, frequent urgent deliveries and relevant lost sales costs. While the mix variety can hardly be controlled by the chain actors, as being an inherent characteristic of white goods current life cycle stage, the structure, size and type of dealers can be changed from within the chain, even if through a major and structural re-engineering of the chain itself. Third, there does not seem to exist much integration among various actors within the white goods logistic chains regarding the exchange of updated sales information, as it was shown by highlighting the large difference among the perceived and actual values of lost sales. This aspect is particularly serious, in that it prevents managers from having a complete vision on the whole chain's cost structure. One has to recall that, the more stocks are increased and moved downstream the chain, the more the chain will experience high-efficiency and low-effectiveness costs, and vice versa. To say it simply, the job of logistic managers within the chain is that one of figuring out the appropriate level and positioning of material stocks, together with the appropriate level of flexibility and readiness, so that both cost classes are minimized for the whole chain. It seems very difficult to achieve this goal if part of the information needed is missing.