Subcontract or verticalize the work? Let's see how it was for us

luglio 28, 2022

Today, we would like to talk you about a process in which GSI has been involved in past months: subcontract the work or verticalize everything in the company? Obviously, there is no universally correct answer. What we can say is that of course it depends on the production and type of company you have.

If you find yourself having problems managing the various phases of the production cycle of your core business with related possible delays, it may make sense to verticalize today.

Historically, the Italian mechanical districts have always differentiated, but above all they have always been chosen from abroad for their extreme fragmentation. You ca confirm me, that in other countries it is more common to find companies that have all the internal production phases.

Why have we always made different choices in Italy?

Essentially, because the volumes were sustainable and we have always preferred to specialize in a specific process. In fact, in the Motor Valley territory, there are many small and medium-sized companies that are extremely specialised both for machines and for technical knowledge.

Obviously, choosing to invest more in specific and always new technologies has its advantages. Especially if I think about the quality of execution and therefore customer satisfaction. However, there are also several negative sides, especially thinking about delivery times and possible mistakes in choosing the best supplier for the project we are following. Obviously, having most of the processing in-house allows you to organize production and give more reliable delivery times.

On a commercial point of view, having the support of a supply chain is very beneficial for staying price competitive. Certainly, making an offer with prices given by others decreases the possibility of risk and economic loss. Therefore, no investments are necessary and there is greater certainty of the amount of money spent and consequently of operating margins.

What should be done today?

Taking into account the reasoning just made, it seems very clear that to be successful you need to focus everything on the fragmentation of the processes. After all, it was one of the main reasons for the success of the Italian mechanical manufacturing companies. Unfortunately, there is no correct answer, every business choice involves a risk.

Market needs have dramatically changed over the past 10-15 years. Think about your lifestyle, elements that were once not so important, today are essential. For example, when we buy a car, today we want it to be safe, efficient, durable, low in fuel consumption and on time.

We, the producers live in a frenzy, with increasingly shorter delivery times, because the end customer has been used to having everything immediately. All this is possible only with a good organization that foresees the possible bottlenecks in the supply chain. Obviously, collaborating with different companies with their own work management is difficult to have a precise production.

For this reason, we have chosen to verticalize, investing in new technology that allows us to fully manage all the mechanical processing phases for the construction of gears. In this way, we can guarantee the delivery times foreseen at the confirmation, scheduling the work.

After months of reflection, last week we decided to purchase a Studer S33 universal internal and external grinding machine with 1000 mm table. With this last investment we can guarantee the complete execution of the cycle internally with the exception of the heat treatment.

Subcontract or verticalize the work? Let's see how it was for us

Why have we always made different choices in Italy?

What should be done today?

ARCHIVES PAGE

BLOG CATEGORIES