By Fábio Cerquinho
Everyone knows that Brazil is a country of huge dimensions, which makes logistics management a challenge for companies. Brazil covers a total of over 8 million square kilometers (almost 50% of South America), and we have borders with 10 countries. The Brazilian coast alone is 7,500 km long…
In deciding where to locate, companies take into account factors such as transportation, available labor and taxes. For example, Honda started in Brazil in 1971 as an importer. When they decided to manufacture the motorcycles in Brazil, they chose Manaus due to tax advantages offered there. The bikes are transported from Manaus to Belem along the Amazon River (1,600 km), and from there they are distributed to 800 exclusive outlets across the country. In order to get to Sao Paulo, their main market, they travel a further 2,900 km by road. Has choosing this site been worth it? Apparently so, being located in a city that is within the Amazon rainforest, companies can take advantage of a tax free zone for imports and Manaus already has about 2 million inhabitants.
Companies working with consumer products also face considerable and complex logistic challenges. For example a tobacco company needs to supply over 800,000 points of sale throughout Brazil, with a frequency that can vary from almost daily to twice a month. Companies working in the field of e-commerce often use third-party delivery services, but many still use the postal service (a public company). For an express delivery leaving Sao Paulo, delivery times can vary from 8 hours if nearby to up to 2 weeks for more remote locations.Fábio Cerquinho, Professor of Operations Management, ISE