Ucisap meeting: Italian mold-makers learn how to be resilient

Despite dealing with an often hostile business environment, affected by an unfavorable fiscal policy and record-high labor costs, players in the segment still display encouraging numbers and manage to compete in the global arena thanks to their quality and skills, as industry association Ucisap said.

foto A da elaborare OKRepresenting a significant part of the overall plastic and steel molds segment in Italy, industry association Ucisap has recently staged its traditional bi-annual meeting in Pozzolengo, Brescia, in front of a numerous audience of managers, entrepreneurs and sponsoring partners. It was chairman Lino Pastore, sales manager at Giurgola Stampi, to open up the event with a speech that focused on the great need the mold-making industry has for some wishful thinking. Optimism is the keyword, then, but Pastore also warned: «We have to ask ourselves», ha pointed out, «whether the strategies we have been rolling out are right and effective enough to fulfill the global market’s requests, by realizing that sometimes we have been lacking of a broad long-term vision and we did not pay the attention needed to such aspects as communication, digitalization, web-marketing and training too». The latter of the above-mentioned issues brought a series of foreign producers or raw materials providers, such as Austrian-based steel specialist Meusburger, to sign agreements with Italian professional schools or institutes in order to update their students’ skills in line with the industry and market’s ever-changing requirements. It is now mandatory for the mold-making tri-colored companies to implement new business models, partnering up with former competitors to acquire a stronger and heavier critical mass to better negotiate with customers. This is the networking pattern Lino Pastore has been praising and promoting in a number of interviews and events, but that still most part of companies in Italy are reluctant to adopt. According to the chairman, the expression of wishful thinking also translates into the ability to get prepared for the re-shoring or back-shoring phenomenon: «It is a global trend», chairman Lino Pastore considered, «by the means of which a large amount of previously offshored manufacturing operations are now being brought back from Asia, or other low-cost manufacturing countries, to the Western World. But business conditions are going to be extremely different than the ones we were used to and we have to get ready for the change, by gaining greater effectiveness and possibly consolidating our overall industrial structure».

In crisis, opportunity

As John Fitzgerald Kennedy once stated, in the Chinese alphabet the word crisis is made up by two different symbols or ideograms, one indicating danger; the other meaning opportunity. It is then on opportunities the mold industry has to focus in order to succeed in times of crisis. And this is what companies in the arena have apparently been doing so far, given the good results they were able to achieve on global markets in the last few years. It was Ucisap’s director Giovanni Corti, nearly a debutant in this role, to show the audience how, despite the Chinese record-high growth rate, the Italian industry could display a 1.7 billion euros production value in the plastics and rubber segment alone, at the end of 2012, also thanks to the major importance overseas sales have gained (42%). Exports in the steel sector account for 50% of the industry’s total annual revenues, thus heavily contributing to a production value that topped 380 million euros less than two years ago. Data clearly suggest that «the national market is back to the values it used to display in 2003», as Corti considered, «whilst shipments and budgets in the first two quarters of this year showed significantly higher compared with the same period in 2013. Bad news», Giovanni Corti continued, «come from constantly declining margins and employment, but the entrepreneurs’ sentiment is optimistic on both sides; and companies in the plastic and steel arena forecast new investments and recruitments». Looking forward to improving their competitiveness Italian mold makers should invest in automation, a major driver of change and effectiveness in Giovanni Corti’s opinion; and identify a series of higher added value niche markets, at the same time strengthening their research and development activities. Services and assistance are as well about to play a prominent role for the mold makers’ evolution, which is to be driven by a broader introduction of ICT solutions in their production plants, in order to gain a complete control on processes and products; and by reliable cost management systems. «Italian mold makers should turn their artisan-like business models», Corti stated, «into an industry-oriented paradigm with a strong workflow and production control».

How to become (more) successful

Allianz Bank SA’s private partner Claudio Manganelli focused, at Ucisap’s most recent convention, on Matteo Renzi’s government policies and showed how such nations as Portugal or Ireland have been growing after suffering from the global crisis’s impact thanks to a courageous reforming action, still unseen in the Peninsula. A reformation of the national fiscal policy, especially when it comes to trade taxes, is largely expected in the country, whilst productivity rates are constantly falling. But it has to be said that a number of good management practices comes from Italy too, and those were for instance brought to the audience’s attention by GF Machining Solutions’ sales manager Giovanni Rimoldi, who described the way the company’s Italian branch could become one of the most profitable in the company’s business after a dramatic slowdown, thanks to the original and successful strategies the Milano-based offices were able to deploy. Reasons to believe in a resurgence of the tri-colored business and evidences of its resilience were given by professor Marina Puricelli, from the Luigi Bocconi university’s Technology and Management department. According to Mrs. Puricelli, nothing is wrong with the small and medium enterprise and family-company dominated Italian mold-making business model, being this, instead, the very reason for the national mold-making long-time success. «You represent the very core of the Italian way to business», professor Puricelli stated, «leveraging the values of family, manufacturing excellence, small-sized firms. But some examples we collected from other, different segments, show how a change of strategies could give this industry few important competitive advantages». With its investments and development roadmap Northern-Italian cardboard producer Ghelfi, a typical family business that only recently turned to hiring an independent manager, carved the portrait of a firm whose business plans until 2027 are already defined in detail; and that never refrained from addressing parts of its budgets to innovation, looking forward to implementing revolutionary 3D printing technologies, among others, to differentiate its offer and capabilities. «Strong companies», Puricelli observed, «show no fear in competing in a most challenging arena and they are proud to serve the most demanding client-companies and need competitive suppliers». The other significant example came from the experience of a small Milano-based bakery, Princi, that after realizing it could not keep up with such a rivalry as the major department stores’, decided to move from the suburbs to the very heart of the City, giving thus birth to what looks more like a bread-boutique than an ordinary shop. Leveraging quality and excellence, Princi then proved even more ambitious and teaming up with a Chinese partner, he managed to unveil his first 24×7 flagship store in the Soho area, in London. «Customers cueing up outside his shop», Puricelli said, «do not just witness the fact that Princi managed to turn bread into fashion, but much more than this show us he could succeed because he continued in doing the things he could do best. To talk about differentiation is today common sense: instead, I think specialization could prove the real winner». If size should not be an issue for the Italian small and medium business, then creativity is, and that implicates the ability to implement new business models in order to respond to new market challenges. That is precisely what the DicoNet network did, as Marina Puricelli recalled, enrolling a series of third party and private label manufacturers to turn them into a massive network with production plants both in Italy and Romania, to better serve the needs of such packaging giants as Tetrapak, and finally becoming one of the multi-national’s top notch European partners. All of the companies of which the DicoNet network is built are small sized, but thanks to a complete and visionary strategy they could enhance their strength and skills in order to play as leaders worldwide.

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