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An Internet-based collaborative transport network in an Italian industrial cluster

Francesco Filippi, Umberto Nanni, and Fabiano Sarracco Centre for Transport and Logistics (CTL) Sapienza University of Rome, Italy

Background

· The Italian Trade Commission (ICE) has a program to assist Italian SMEs through development of their logistics and logistics outsourcing. · The Centre for Transport and Logistics Research of Sapienza University of Rome (CTL) is conducting a number of logistics projects with SMEs on behalf of ICE.

· One of these is in the "chair district" of Manzano

The presentation

· The Italian districts · The Manzano situation · The logistics development project

Italian clusters

156 clusters 1,019,451 SMEs 4,272,255 employed 21% Italian export same sectors

Food Household goods Paper Plastic and rubber Mechanics Jewellery and musical instruments Leather goods and shoes Textiles and clothing

Italian clusters

Textiles and clothing Mechanics Household goods Leather goods and shoes Food Jewellery and musical instruments Paper Plastic and rubber

Total number

45 38 32 20 7 6 4 4 156

The Manzano cluster

The chair-manufacturing district of Manzano is located in the extreme northeast of Italy in an area of about 100 km2. It comprises nearly 1,200 very small and small firms, 26% chair manufacturers and 74% providers of ancillary services, employing 10,000. The entire chair-manufacturing process takes place within the district. Only the raw materials (wood, plastic, steel, glues, paints) and machinery are imported from outside the area.

Innovations

Over the last ten years, a dozen medium-sized end-producers have brought about most innovative changes. Examples: quality certification, individual brands, breaking into emerging markets, de-localisation of sub-components production to Eastern Europe, adoption of CAD CAM technologies. Best practices are quickly adopted by the smallerscale end-producers in the district.

Infrastructures and services

A railway station is located at the very heart of the district. A high-capacity connection links the cluster to the highway. Plans to provide optical fibre connection are being discussed. Private suppliers of support services are present (logistics, technical, legal/fiscal consultancy, data processing, catering, etc.).

Logistics services

Many small firms offer transport and shipping services; few offer warehousing. Only a few, larger, firms, or local affiliates of national firms, offer logistics services. Few firms offer multimodal and intermodal transport services.

Trade contracts

Small enterprises usually use ex-works (EXW) contracts; delivered duty paid (DDP) is an exception used only with few clients . This situation is confirmed by transport operators in the district and limits the possibility of rationalizing transport costs (many small transport companies; less than truckload).

The Logistics System

Inbound logistics Suppliers S

SME

Cluster

SME

Outbound logistics

SME SME

S

Carriers C C

SME

S

SME

S

SME

S S

SME

S

C

The problems

Those companies rely upon independent carriers to deliver their products. Each of the small enterprises has transport demand characterized by low density in time and space. This leads to higher prices and delays in the delivery service ("wait until a full load is ready"). In addition, the typical customers, large organized distributors, suffer an annoying fragmentation of both interfaces and delivery planning.

The project goals

The aim of the project is to consolidate shipments and produce an optimized distribution schedule. The goal is to reduce the system's costs and delays and improve the quality of service for the customers. The main actors of the project are enterprises in the cluster, customers, and carriers. A broker has been introduced to orchestrate the activity.

Main activities

The establishment of a shipper community with a large number of SMEs to improve the shippers' transport performance. Sharing among shippers in the community of information on shipping requirements. An Internet-based communications system. A collaborative transport network to bring together shippers and carriers.

The benefits

The shippers benefit from the consolidation of their shipments if they transact a large percentage of their shipments within the community. The carriers benefit by gaining access to a large pool of shippers. The communications needed with both carriers and customers would be reduced.

The new logistics system

Cluster

S S

SME SME SME

C

SME

S

SME

S

SME

C Broker

S S

SME

SME

S C

The broker

The shipper community assigns the management of the transport needs to a broker. The broker facilitates the use of the system for the shipment community and to the carriers. The broker is a "trusted third party" of the shipper community. CTL has developed a web-based software system to support the broker's work. CTL's system offers personalized interfaces for all actors and relieves the broker of many tasks.

The role of the broker

Collect the transport demand from the production companies. Generate an aggregated plan for shipments with goods from all companies. Contact carriers and negotiate shipment details. Maintain customer relations with clients.

The actors in the system

Each firm can upload data with transport demand with instant diagnostics and check shipments. Data visibility is limited to their own goods. The broker can select the set of shipments to be planned and generate an optimized shipment plan. The output can be adjusted manually. The carrier's interface allows fixing the sequence of stops of the proposed schedule. The customers can get a full list of the planned delivery integrating all the shipments from the various producers.

Main system functions

The system shows the current state of transportation needs and automatically generates an optimized shipment plan. It is integrated with the existing SME information system. The system maintain the privacy of the data and communications. The architecture is open and scalable.

Logical Architecture

SME X Broker Carrier Y

Agreement tel, fax, e-mail

Web Interface

Display update

Web Interface

Web Interface

Display & print Load schedule

Information System

Application Algorithm Server Insert Module Batch shipments DBMS interface

Data Base

Information

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