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| Once outsourcing began, it was necessary to rethink the company in order to leverage its assets and turn it into a procurement services company able to provide customers serious, sustainable and quantifiable solutions. We have done this in recent years by building on five pillars. |
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- Continuous improvement of our operating model
The operating model - that is, the procedures and tools used to operate, manage and control the company - culminates in the shared platform employed by users, buyers, suppliers, managers, warehouse officials and financial personnel. Continuous improvement of our operating model is critical to ensuring effectiveness and efficiency as well as to generating the data and information needed for supporting customers' management and strategic decisions. Exiros integrates customers' ERPs through a single Exiros ERP, consisting of a repository for all commercial, sourcing, operation and performance information. We have also developed a suite of tools to support end-user decision-making (interplant stock visibility, equivalent materials availability, lead times) and tracking (Exiros Tracking System).
- The Human Resources as a key factor
In order to continually improve the procurement process, both operationally and strategically, it is critical to have the right people with the right skills. In 2002 a thorough HR Remix plan was carried out for the purpose of recruiting high potential professionals and MBAs. As a result, 50% of the organization was remixed without losing technical expertise. Exiros has also put into practice an intensive Training and Rotation Program in order to further develop its human resources.
- An aggressive search for new procurement sources
The search for new procurement sources is what ultimately guarantees Exiros customers long-term cost savings in their purchases. This search for new procurement sources not only allows for constant improvement in the supplier base, it also promotes the development of new skills and tools capable of reacting to an ever-changing global market. Emerging markets are a powerful supply alternative and should be developed. During 2002, Exiros carried out a sourcing project in Brazil to identify Latin American alternatives and to select the best supply sources in the region.
- Continuous service improvement
Exiros is strongly committed to maintaining and improving its service level, since this is the main indicator of the "procurement machine's" ability to meet end users' needs in terms of time, quality and price. The ongoing quest for operational excellence yields greater predictability in the procurement process, which in turn can produce lower inventory levels, better planning and improved cash management for Exiros customers. When measured as the ratio of requirements met by the delivery date (or earlier) and total requirements, Exiros performance level is 80%. This indicator reaches 90%, if one week tolerance is added to the delivery date.
- Expansion of the customer base
In order to increase its negotiating power and improve its competitive position, Exiros continually seeks to expand its customer base. In recent years, Exiros has added 20 customers, both from within and outside the Techint Group, to enrich cross-industry know-how and expand our regional presence. In the medium-term, we expect to substantially increase the purchasing volume with a single specialized organization of more than 500 professionals situated around the world, operating according to common rules and employing state-of-the-art processes and tools.
The whole organization is focused on fostering the right skills and capabilities for the improvement of cost of goods, process efficiency, service levels, transparency and effectiveness in the procurement process for our customers. It is critical for a service company like Exiros to include an ambitious development path that will ensure continuous improvement in procurement operationss, specialized human resources development, negotiating power and supply source development.
Luca Zanotti, Exiros Managing Director
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