Supply chain operations in Brazil, which have felt the impact of the major political and economic turmoil in the country, could start to see significant improvements over the next few years, largely due to the relatively recent arrivals of major retailers, such as Amazon.
This is according to management and supply chain consultancy Crimson & Co, which states that the aggressive expansion strategies of global retailers are forcing local firms to think smarter. In practice, this accounts for not only how products and materials are moved throughout their business, but also helping firms to understand how an effective supply chain can contribute towards shaping the long-term focus and direction of the business.
Richard Gurney, Crimson & Co’s General Manager for Latin America commented: “Increasingly, we are seeing more and more multi-national retailers, such as Amazon, investing heavily into the region, driven by expectations to replicate the same successes as seen in the likes of North America and Europe. In turn this has acted as a massive wake-up call for how businesses locally manage their supply chain and logistics.
“Traditionally, the supply chain function within local businesses in Latin America are often treated as a cost analysis exercise. In crude terms, it is often looking at how to get products or materials from point A to point B, in the cheapest way possible. Typically, the persons involved in overseeing this process will likely be a graduate from the production-line with strong ties to manufacturing processes. Critically, they often lack the collaboration skills needed to link in other facets of the business such as commercial & skills departments, marketing and R&D, in order to truly maximise supply chain operations within the organisation. Amazon’s arrival has forced a change in this mind-set.”
Richard continued: “What makes Amazon stand apart from all its competitors is its ability to innovate. Critically, it grasped the importance of speedy shipping earlier than many rivals and invested accordingly within its infrastructure and technology to make this happen. If you consider Brazil, the sheer size and its far-flung population means its ability to transport products across the country has always meant challenges, but Amazon has not been deterred, and critically, it has installed the necessary infrastructure by working with partners locally to improve distribution channels and better the speed of service for customers.
“Because of this, other retailers have been forced to sit up and take action. Notably, we are starting to see organisation’s employ designated supply chain and operations teams to improve how products reach customers quicker and more efficiently. Additionally, we are also seeing greater investment into training and learning mechanisms to improve the quality of supply chain personnel. This has massively improved the competitive retail landscape within the region. Firms are now much leaner and agile to market changes and as more and more retailers come into the region we only expect this to improve further, as firms start to recognise the significant benefits which can be gleamed from a fully optimised supply chain.”
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