The origin The reduction of stock level that most firms have performed has brought
immediate financial economy results, but has caused an exponential growth of
the number of purchase orders and supplying processes and consequently
an explosion of the related costs. Considering equal facilities, the
efficiency of the internal services is therefore seriously compromised.
Moreover, the fast pace of progress and the constant employment of new technologies
has lead to having to deal with an ever-increasing number of suppliers.
The paradox... Reduction of stocks, reduction of number of suppliers, reduction of costs,
reduction of structures...but increase of efficiency, competitiveness and profits.
And...the solution Proportioning costs to needs in order for the relation between cost and efficiency
of structures to be direct and measurable.
This is today possible by transforming the least profitable, but proportionally more
expensive part of the internal supplying process, into services
to be purchased on the market. This way there is an immediate transformation of
fixed costs into variable costs that will follow the firm's trend.