Unitec is an outsourcing supplier specialising in supply chain management and logistics.
Founded about 12 years ago as a traditional supplier in the automotive industry, it became a full Internet service provider in the procurement process in 1997.
The company has two offices in Europe, one in Augsburg, Germany, the other in Sabaudia, Italy.
Its turnover was over 5 million Euros in 1999. Unitec digital platform aggregates catalogues from multiple suppliers in order to provide a one-stop shopping site for buyers and a low-cost distribution channel for suppliers.
The software application allows buyers to search a database of more than 44,000 items from over 3000 firms and purchase orders in real time. For non-strategic, low-cost purchasing, cost reductions are evident.
By automating procurement activities, companies streamline internal processes and speed up the order and delivery of goods thus reducing the amount of stock they carry.
Although these services reduce the labour requirements for printing, mailing, faxing and manually entering business documents, such as purchase orders and invoices, the most significant savings are a reduction in data entry errors.
Moreover, by transforming the least profitable (but proportionally more expensive) part of the internal process into services purchased on the market, companies increase process and inventory efficiency by immediately transforming fixed costs into variable ones.
At the same time, outsourcing enables purchasing professionals to spend more time on value-added, strategic work rather than on manual operational processes.
The aggregation on the procurement side allows buyers to aggregate purchases in order to negotiate better exchange conditions due to volume discounts.
Small clients, who once had to run small orders with retailers, can now add their orders to the larger ones thus reaching wholesale counterparts without duplicate processes and warehouses for the same items.
The logistic flow also benefits from an integrated supply. Arrivals can be arranged so that the acceptance of goods may occur in a planned way rather than in fragmented orders (a typical customer has 10,000 or more suppliers).
Warehousing operations are aggregated and accelerated, thereby reducing delivery documentation to a minimum.
As soon as the logistic flow is under control, there is also a sharp reduction in transportation costs.
One of Unitec’s innovative ideas is the ‘virtual warehouse’, a value-added service that divides trend risks between many firms.
Companies in the same market or from different industries often sell similar products or involve the same items in their manufacturing processes.
The software provides an electronic multi-client and multi-product virtual warehouse.
By putting together products and making them available to companies, the amount of stock can be reduced.
If demand unexpectedly grows, requests can be satisfied by accessing other companies’ stock, thus avoiding costs related to over-stocked warehouses.

Steelscreen is the first portal for exchanges between companies in the steel industry, which specifically target the European market.
Founded in Sweden in June 1999, the vertical portal immediately had a positive response.
In the first six months, more than 700 operators registered to sell or buy metal products. Up to now transaction volumes have reached 2.3 million Euros.
Compared to other competitors (Metalsite.com, ESteel. com,…), the goal of this marketplace is to target their services to the European market in order to maintain strong relations. Steelscreen has offices in six European countries (headquarters are based in Sweden, but offices have recently opened in Barcelona, Milan, London, Paris and Duisburg).
There is hardly any information on metal industry sites. Due to costs related to product sales, marketing and distribution, demand often has to face high search costs. Furthermore, there is often demand that suppliers know nothing about.
A digital marketplace enables suppliers to reach all of these potential customers at a lower cost than traditional channels thus accelerating and increasing search efficiency.
It is quite simple to participate in this market and the operating mechanism is similar to that of vertical communities. The buyer makes his request and the software immediately selects suitable sellers according to quantity, quality and price of their offer.
The system automatically provides a list of potential sellers and once the choice has been made, goods are delivered and payment made according to traditional procedures.
Buyers can expand their business opportunities and the rapid comparison and selection of the best offers lowers transaction costs. Because of these opportunities, buyers can freely participate in the marketplace but suppliers must pay a fee proportional to the transaction value.
Even if a digital trading intermediary can potentially bring efficiency to almost every conceivable industry, each business will have its own existing inefficiencies that are the most open to attack.
The steel industry is a typical scale industry with a high manufacturing process standardisation, but extremely complex individual interactions.
Even if the steel is a commodity, product customisation in terms of size, width, length, shape and thickness requires significant information exchanges at certain stages of the supply chain.
Rigidities in the production capacity of companies at the beginning of the value chain limit complete plant exploitation and lead to cost pressure in the channel.
High fragmentation at different stages across the steel supply chain also multiplies the risk of channel inefficiency. Steelscreen provides a central location for interaction that helps establish rapid connections in the industry.
Networking opportunities at different stages in the value chain can reduce bottlenecks in supply processes and enable producers to find alternative buyers.
Moreover, a previously inefficient supply chain can bring gains by bypassing traditional intermediaries and automating processes.
By collecting and organising hard-to-find information, the infomediary acts as a gateway to centralise, organise and deliver the right information to participants, thus certifying the participant's reliability.
This significantly contributes to decreasing transaction costs, reducing opportunism and adverse selection, and increasing market reach by facilitating many-to-many communications.
This can have a strong impact on the trust resources and relational commitment of e-market participants.
Steelscreen is an independent market player and is neutral in relation to the buying and selling side.
In markets characterised by high fragmentation on both the supply and demand sides, b2b exchanges greatly benefit from a third independent intermediary while company-side solutions are inefficient and less convenient.
Moreover, an independent market maker is especially attractive for SMEs seeking a broader reach and greater visibility since it reduces the impact leader companies have on market mechanisms.

Marketplaceitaly is a multi-community b2b portal, specifically targeted to SMEs. The project was announced in November 1999 and is the result of a partnership between I2I (one of the major US trading communities) and Athos (an Italian strategic consulting company).
Three functional areas are currently operating in Marketplaceitaly.com.
Exchangeitaly is the dynamic trading platform that enables companies to trade through different operational mechanisms.
Classified is a bulletin board in which sellers publish offers and buyers bid; the transaction is made offline.
Auction is a temporal matching of buyers and sellers. Exchanges defines processes for good and service trading.
Buyers and sellers choose to trade in a restricted or expanded market and select a specific geographical area, industrial sector or group of companies as counterparts.
Business Services is the broad area devoted to supplying goods and services to SMEs.
Companies are provided with logistic services to support transactions and many other operational needs such as transportation, insurance, legal and tax consultancy.
Translating, job recruiting and distance learning are other services offered through partnerships with other operators.
Access to these services is free, but a fee is due on every transaction made, in proportion to the amount and depending on the traded product and the sector in which the operation took place.
Business Community is the area that supports different vertical b2b trade communities.
Each community focuses on a single industrial sector or local area and acts as a comprehensive and specific source of information, interaction and electronic commerce.
It can combine product information, proposal requests, discussion forums, e-commerce opportunities, industry news, directories, job listings, and online educational courses.
The main objective is to exploit the interactive features and global reach of the Internet to enable companies to discover new business opportunities.
One of the differences between Marketplaceitaly and other online intermediaries is that it manages a diversified portfolio of vertical communities.
In addition to spreading bids in many markets, this portfolio approach gives management the opportunity to try out a concept in one or several verticals before a portfolio- wide rollout.
With this approach, economies of scale result from sharing technology, marketing, sales, and infrastructure costs across vertical communities thus avoiding the limits of concentration.
Three communities are currently active. Gateitaly is a community of SMEs from industrial districts located in the Italian Northwest areas. Machinetools is the most recent community built around the machine tool industry.
Artigianinet is a portal set up in collaboration with the Association of Artisans which offers a wide range of services to small local firms.
In this sense, new technologies offer SMEs the opportunity to manage their internal relationships more efficiently and broaden their network by benefiting from external knowledge and mixing it with internal knowledge assets.
If previous examples mainly highlighted the impact on logistic and relational resources, Marketplaceitaly demonstrates the potential impact on knowledge resources.