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FAMA. a small company Pordenone

CASE HISTORY FAMOUS Ltd
A development path enterprise: from subcontracting to the final market

FERDINAND AZZARO


The history and development company

Company Ltd Zoppola Fame (a town near Pordenone) starts now to make its first ten years of life. It was born in 1990, intuition and conviction of Mr. Gustavo Bomben processes that are considered "poor" and have no meaning for large companies in the Pordenone (such as Electrolux, Zanussi or Ilpea) could become reality in the medium term and interesting market niches to exploit.
Mr. Bomben was then a brilliant young designer Zanussi-Electrolux with a strong will and a strong entrepreneurial character tended to create something of their own. Created Fama srl \u200b\u200bIlpea when he realized that he wanted to get rid of a micro-production phase (the smear of rubber) that had low margins and a lot of repetitive manual and automated processing only through a policy of high investment. He rented a factory near Ilpea and with little financial investment in equipment and hired the first employees. Soon Ilpea - always in a logic of outsourcing - outsourcing another micro-production phase: the joint of rubber profiles. The company consolidated
soon three basic beliefs: the first was to work on contract, initially for one company (Ilpea) operating in the network-Electrolux Zanussi. This ensures a customer in the sales and finance from the banks. The second was working on "niche products", particularly in the initial trimming of the rubber hand (considered unattractive by the large producers and profitable as non-standard) and then, working with more expertise. The third, sustaining growth with low initial investment, in order to minimize business risk.
These three lines of development have always been the engine of growth, thanks to the choice of two trusted employees working on different functions allow the continued defense of production and cost control.
growth by "small steps" typical of each of the subcontracting company produces significant results, in fact, the company develops in the decade up to: buy a factory of 1200 square meters.; Increase (almost doubling) the turnover of 1995 increased from 2 billion lire to the current 3.8 billion, largely depreciate the equipment acquired, and investments in machinery and innovative high-tech, in order to increase the speed of the production process, increase the number of players (mostly operating and dedicated to the machines), to the current 38 employees.

This growth is the result of a careful diversification strategy implemented by the company that led to the rise of the product portfolio, which increased the portfolio-clients. With regard to the size
product portfolio that we can highlight that the company currently operates almost exclusively as a contractor in the joint account of rubber, is planning for the coming months a real strategic change. Fame has two areas of business activity: the first (that we could define the current core business) is the profile of rubber, in which it operates as a contractor account, the second (which we define as the business of the future) is the assembly of doors appliance industry, a process that is already giving some satisfactory results in terms of turnover, but that in the near future will require the expansion of the company. The realization of this fact will lead to product Fama purchase all the components for the construction of ports in the appliance and will introduce at the same time, significant innovations in the components, both in form and material used.
As for the wallet-size customers, we emphasize the evolution took place in 90 years: from the original single-customer (Ilpea) we moved quickly to a variety of clients, including Iseo (Lake Iseo), Complastex (Lucca), Atel (Milan) Meteor (German company). These customers are geographically dispersed in many different areas and weigh their percentage of the annual turnover of fame for almost equal shares, which makes possible the undertaking of Zoppola, to interweave and develop new relationships with partners and quantitative (s) identified on domestic and foreign markets. In particular, it is important to emphasize the strategic turning point that will be implemented in the coming months: the definition of new and important business relationships with customers worldwide total (eg AEG regarding the assembly and sale of doors for household appliances) will cause a strong growth market and will lead the company to operate in the export market, with its own brand and defined. This project is being fast definition and application.

The organization and human resources

Fame Ltd is structured in the form of elements (see Figure 1) and is divided into:
























· Area production: make production plans within the time specified by customers;
·
· Area Technical: innovative products or work customer needs;

· Area Administrative: generate - through an ad hoc software program - monthly reports of costs and revenues;

· Area commercial developments will create new staff soon and important business relationships.

Mr. Bomben is the sole director and acts as overall co-ordination, formulation and implementation of operational strategies.

The company processes are very focused on specific customer needs: from delivery to product quality, everything is based on maximizing customer satisfaction. In fact, the
manufacturing process is simplified because it does not appear purchases and management of raw materials but only work in progress and handling of products supplied by the customer with pre-defined and agreed timelines. The logic of the entire production process is geared to maximizing efficiency, or optimization of the timing of machines and personnel entry.

The company is well organized thanks to the detailed formalization of orders and other procedures with a clear focus on efficiency and quality of the entire production process.

The company has dedicated the past ten years in all, a great attention to innovation information that led two years ago to set up an integrated information system that streamlines information and creates a relational database and reporting very advanced.

But these results would not have been possible without the help of a special ability, the ability to manage customer relationships.
The development of customer relationships during the 90s, was driven by three main factors. On the one hand, the ability to create what the customer wants, including new parts or new parts, for a low cost. On the other hand, anticipating what the customer wants, through a continuous business improvement, often linked to innovation processes. Finally, rapidly changing what the customer wants. So innovative creation, anticipation, and changes seem to be the three paradigmatic pillars of this small, but interesting, Pordenone company.

Particular attention needs to also manage the production process through all phases of work. The three main products (profile rubber gaskets dryer, tumbling) are the stages of cutting or press and then splice or trimming: for all the products there is a final quality control. A concise but comprehensive, the main processing shown in Table 1. Table 1 emphasizes the process of process innovation occurred in the past decade, during which Fame has invested heavily, not only in technology but also in applied research, to transform manual processes into automated processes.
This process of technological innovation turns out to be far from over for the foreseeable future, is planning to introduce a totally new plant in tumbling: control by artificial vision. The artificial vision system is equipped with special optical instruments by which the traditional quality control phase, centered on the observation and direct continuous operator, will replaced with a working automatic analysis of the finished product.

Fame is going to make it another step forward that will enable it to become a small company with high innovation process.


Table 1: Products and processing stages in FAMA Ltd
Product Processing Work phases present future work
profile rubber gasket
automaticaautomatica tagliogiuntura ic or selectable hand dryer felt ic or selectable tagliogiunturaincollaggio hand hand hand automaticaautomaticaa
tumbling stampasbavaturacontrollo automaticaautomaticamanuale automaticaautomaticavisione in artificial
Source : ns. processing of corporate data


Concluding

Over the past decade the company has grown thanks to the ability to understand, and in many cases anticipate customers' needs.

The strategic lines of development (transition from account terzismo market outlets under its own brand) provide new human resources, with common features of entrepreneurship, bringing together products and charged to create an orderly growth.

We believe that the challenges of the future will be linked Fama srl:

· the production: with programs defined by end users who use new operational methods different from those taken by existing customers;

· the logistics with purchase programs defined but with the ability to manage time and suppliers' prices, capacity up to now rarely used;

· to market with new operational methods and contact with customers;

· in finance: with a flow of income and expenditure more than the current that can generate "tension" to the previous economic and financial balance.

balance in addressing these challenges will be the beginning of fame for growth of revenues, markets and production volumes. This will allow the company to free themselves from the account work creatively to develop innovative products in a market much larger than the final and certainly challenging.

Sbi Power Of Attorney Account Opening

Case IPF

CASE HISTORY IPF spa
Outsourcing: how to combine business efficiency with production efficiency

Piero and Ferdinand Azzariti Petrecca



History, products, markets

printing industry Friulane polygraphy is a spa management, located in Maniago (Pordenone) became part of the Fir Group and Ventura since 1997. Previously the company had the name of LEMA, after the two founding members, and Leonarduzzi Mazzoli.
The new property has since undergone three set of strategic:

1 - operate in the European and U.S. markets, while developing the Italian market, with high quality products especially in the two main catalogs and commercial printing business;
2 - work on "Production of high quality and quantity" means a comparison with a competitor that (equal to turnover) IPF made 800 orders per year compared to about 8000 of its competitor;
3 - working with large investments in machinery, in order to speed the production process and the time of delivery.

And these lines of development were found to be the real turning point and growth over the past three years: this comes largely from the turnover data (see Table 1) and the breakdown of turnover by markets (see Table 2)

Table 1: Turnover IPF Spa
Years Revenues (in billions. £)

1997 13 1998 18 1999 22

2000 23 (budget)
Source: company data


Table 2: Breakdown of Revenues for 1999 IPF Spa
markets
Markets Breakdown of Turnover
USA, Canada, England, Germany 50%
Northeast
Italy Italy 25% (excluding North-East) 25%
Source: company data


The organization and human resources

IPF Spa is structured in functional form (see Figure 1) and is divided into:

· Area estimate: prepare the production budget and committed, in close cooperation with the Trade Department to enable a strong synergy with the client;

· Area Technical: Performs the following products and converters;

· Area Administrative: generate - through an ad hoc software program-monthly reports of costs and revenues;

· Area commercial identify, manage and develop business relations, foreign and domestic.

The CEO carries out the function of general coordination and execution of operational strategies. Through
management courses are is going toward an organization to process, with process owners defined capital committed.



Figure 1: Organization of IPF spa


















Source: company data










The production process is structured as follows:

Figure 2: The value chain of IPF Spa


Product Working Steps Pre-press Processing
FotografieComposizione testiImpaginazioneProva esternaesternaesternaesterna
color printing house printing
Post-press legatorialogistica Part internainterna




There is a business network with offices in Milan, Udine, London, New York.

The organizational culture is transforming from owner to manager to create clear responsibilities and spread in the value chain are able to ensure appropriate focus on core business quickly.

The employees are 63, whereas the company's contractors who work mainly for IPF (but not exclusively) include 27 other people.

transfer outside bindery department


Organizational aspects

The outsourcing deal is the sale of the bookbinding department who will be transferring its manufacturing to a company already supplies of IPF and to which the machines will be sold including a specific folder in the lease.
staff will direct part (four people) transferred to the supplying company and partly (three people) will be reused in other departments.

Managing binding (from internal to external) will lead to a lengthening of the time order management. This will require the creation of a figure that follows is specific to that account workers and, with a logic efficiency, to optimize the flow of information, in particular:

§ §
Order Processing (work in progress)
§ Administration and Finance (bills of loading and unloading, accounts payable, payments, cash flows)

assessment strengths and weaknesses of the operation is summarized in the table below:

Table 1 Summary

Strengths and Weaknesses economic and financial benefits and costs of coordination emergentiNecessità
Variabilizzazione logistical complications with possibileallungamento bindery costs of production time
Certainty of external costs than internal costs of transport costs, phone and staff time
Deferred payment with respect to the payment of the supplier's employees Estimating perhaps slower
also lower overall costs than our direct cost only
Estimating that, perhaps, accounts for fewer resources. Faster?
Reclamation space (storage)
Divestiture assets with its cash generation
greater concentration on the printing business



Economics

The transaction will involve the elimination of all direct costs of bookbinding, namely: Ü

direct labor (seven persons)
supplies
ü ü ü amortization specific machines sold
lease payments sold

folding machine is considered, as a precaution, the other fixed manufacturing costs (staff, space occupied by the binding, heating, etc..,) are not eliminated, although in reality the space will be occupied by warehouse and human resources will find a more appropriate structure in place to change and, therefore, some costs will be lost for the activity of bookbinding.

Thus, the assessment of affordability is it possible to compare the direct cost of bookbinding planned for 2000 including specific fixed costs (depreciation and lease payments) with the external cost of the same quantity of work.

In making this comparison it was necessary to analyze a sample of orders placed to the supplier and for which it was at that time prepared a cost estimate procedure.
From this analysis, it appears that the price charged by the supplier is less than the cost estimate includes direct IPF-specific fixed costs. As a precaution but we estimate that costs the same, namely that the external cost is the same as internal cost estimate is no longer supported in the case of outsourcing. In this case the transaction would be financially neutral unless the strengths and weaknesses shown in the table attached brief1.
However, considering that the estimates for IPF processes bookbinding take into account the best possible working condition, with no slowdowns and more efficient machines of various kinds, it was considered appropriate to compare, through analysis of a significant sample of purified cases with large deviations to large inefficiencies, a series of estimates with their statements of orders made directly from IPF. This analysis shows an increase in processing time compared to the estimates which led to an average inefficiency of 25%, so we considered the external cost of not less than 75% of the internal cost estimate.

Table 2 Summary of Comparing
annual costs in the two alternatives (Lire / million) Direct cost
internal
289 Specific costs (including depreciation) 48 Total cost of annual earnings
337
external cost of 75% of direct cost
Internal more specific 252
Annual saving 85



The forecast cash flows specific transaction is not significant compared to the volume of total sales: There'll be, even in short, a heavier but a lightening of the current financial management.

Strategic orientation of the


The data above are evidence of a classic work of outsourcing where all stakeholders will derive economic benefits and creates the conditions through a reduction of costs (IPF) and an increase in sales (the company that finds binding), for a total of activity resulting from increased competitiveness, without thereby affecting employment.

The operation is also in line with the enterprise's strategy, which aims to concentrate all his energies in pursuit of core business, namely the production of high quantities requiring Investment to improve production efficiency.

We believe that IPF represents a case in point and interesting study (see summary Tables 1 and 2 attached) and shows how an enterprise can create a network of outsourcing and improve significantly at the same time, not only business but the effectiveness especially operating efficiency thanks to the introduction of a new Property Management with a circumspect and is oriented to results, and business processes, whether to change the corporate culture.