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issue: October 2006 APPLIANCE Magazine

Ignition Systems and Gas Technology
Igniting Strategic Synergy

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by Lisa Bonnema, Senior Editor

With competition heating up in the global cooking market, manufacturers are taking strategic steps to ensure their appliances are built with the best gas technology available.

Italian appliance maker Tecnogas has signed a supplier agreement with Sabaf, who will be the exclusive supplier of gas components for the OEM’s cooking appliances. The two companies also have plans for joint marketing efforts.

At least that was the goal of Tecnogas when it signed a formal collaboration agreement with its long-time gas component supplier Sabaf. For more than 30 years, the Gualtieri, Italy-based appliance maker worked closely with Sabaf on several innovative cooking projects, but decided this past May it was time to take the relationship to the next level by making it exclusive.
By signing a strategic supplier agreement, Tecnogas says it has gained several competitive advantages, including cost savings, guaranteed deliveries, assured quality, preferential access to new components, and cross-marketing opportunities. “The opportunity of linking the experiences and the analysis and R&D capabilities of the companies creates a point of strength unmatched in the field of gas appliances,” Daniele Giovannini, Tecnogas product manager, tells APPLIANCE. “The partnership will allow us to focus on the details, with the aim of combining Italian aesthetical taste with efficiency in combustion and meeting the ambitious performance targets that Tecnogas and Sabaf have set for their products.”

Expected advantages of the exclusive collaboration are production efficiencies and cost savings. “With co-design, it is possible to fit into the new appliance the most standard component versions and take into account dimensions of future developments that could generate further savings,” says Luca Salvi, marketing and sales director at Sabaf. “In modern economies, the need of joint appliance design with the direct participation of suppliers of the most critical gas cooking components is a must.”

Technology Teaming

Sparks have literally been flying between these two companies since the 1970s, when they developed a unique thermostat for the Sorriso line of free-standing cookers. Luca Salvi, marketing and sales director at Sabaf in Ospitaletto, Italy, says that to this day, the supplier is selling thermostats using the same technology to Tecnogas factories in Egypt and other Middle East countries. The companies also claim to have co-developed the first 30-mm cooktop back in the 1980s.
Under the new agreement, Tecnogas will commit to exclusive use of Sabaf gas components, including taps, thermostats, burners, and hinges. In fact, the companies already have a major project in the works. Tecnogas is currently considering the use of Sabaf’s Series III burner in a new line of cookers. “Tecnogas received the first prototypes of the Series III burners and immediately started to analyze the possibility to introduce them in their new cooker project,” Salvi says.
Giovannini says that the new cookers will focus on energy efficiency and low emissions, making the Series III burner a good candidate. The burner claims to have 65-percent efficiency with close to zero emissions thanks to a redesigned upper flame spreader and lid, as well as a new combustion chamber.
The project could create new market opportunities as well: The Series III line includes a dual stacked model specifically designed for the U.S. market—an untapped opportunity for Tecnogas. “The ability of Sabaf to develop specific products for the needs of specific target markets will allow Tecnogas to plan the entries into markets where it is not present at he moment,” Giovannini says.
The companies also have plans to work together to fulfill a new European Union directive that encourages manufacturers to assess the energy consumption of a product from the design phase to its end of life. “Tecnogas and Sabaf will contribute their products to reduce emissions both in the external environments and the internal kitchen environment for a better life,” Salvi says.

Kindling a Strong Connection

Before signing the agreement, Tecnogas had some specific requirements. “The first goal was to rationalize the management of the warehouse and the supply of components through a consignment stock regime and a procedure of preferential delivery,” Giovannini explains. “A second goal was decreasing the percentages of faults and increasing the quality of the components with the aim of improving the competitiveness of the company and its image.”
The appliance maker also wanted to obtain financial advantages and, of course, was looking for a partner to supply personalized solutions that would add value and differentiate its products from competitors.
The final agreement met all of Tecnogas’ conditions. “Sabaf was ready to activate a consignment stock delivery regime, including the implementation of the necessary software and procedures,” Giovannini says.
The arrangement also guarantees Tecnogas absolute priority in deliveries. “With partners like Tecnogas that agree to buy 100 percent of the components from the same source, we give priority in deliveries, best prices and also planned discounts, thanks to productivity gains,” Salvi explains. “We believe this is the right way to move in these difficult competitive environments.”
In regards to quality, the gas technology supplier promised high performance from all of its components, as well as comprehensive product warranties. “Sabaf also gave Tecnogas priority in the development of special and personalized products, to be promoted by common marketing activities,” Giovannini says.
One of the more unique aspects of the cooperation is the joint marketing agreement, which will include co-branding and integrated communication activities. “When a new cooking appliance launched by a partner that includes our burners and the claim of the advertising campaign relates to efficiency, cooking time improvements, lower gas consumption, and environmentally-friendly products, Sabaf is ready to participate with direct investments,” says Salvi.
Cost savings is another major benefit. By having one source for both standard and custom components, Sabaf says Tecnogas can take advantage of production efficiencies. “An example of this is the Series II burners with colored skirts in enameled steel that can match the color of pan supports and knobs or other visible appliance parts by changing only the flame spreader, but maintaining the same base fixed to the appliance,” Salvi explains. “In this way, it is possible to differentiate models with the same investment in tools for the production of the upper metal sheet, where burner bases are fixed.”
In the end, Giovannini believes that the common values, interests and goals of these two companies are what make this partnership a true competitive advantage. “It is the community of interests and values that brought Tecnogas and Sabaf, after decades of cooperation, to sign this strategic agreement,” he says, “with the aim of growing together.”

Suppliers mentioned in this article:
Sabaf S.p.A.

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