Henrique Albernaz
CEFET/RJ, Brazil
E-mail: henriquealbernazfreitas@gmail.com
Ursula Gomes Rosa Maruyama
CEFET/RJ, Brazil
E-mail: maruyama.academic@hotmail.com
Marcelo Sampaio Dias Maciel
CEFET/RJ, Brazil
E-mail: msdmaciel@gmail.com
Fernando Ramos Correa
CEFET/RJ, Brazil
E-mail: frcorrea@gmail.com
Submission: 12/06/2014
Revision: 25/06/2014
Accept: 01/07/2014
ABSTRACT
This study aims to
present how distribution centers implementation in organization is able to
provide a competitive advantage. The qualitative research was based on multiple
case studies. Thus, the cases were focused on lubricants segment national
distribution company. It was intended to introduce improvements recognizing
distribution centers (DCs) importance as competitive advantage. DC Macaé-RJ and
DC Piracicaba-SP were chosen to represent this scenario. Therefore, as results
it was found increased sales and operating leverage within the market in which
it operates.
1.
INTRODUCTION
In
order to present a study on the benefits a company can achieve through the
deployment of distribution centers in its logistics network, this study aimed
to list improvements and differentiation opportunities which generated
competitive advantage for a Brazilian organization.
The
research question deals with the following issue: how companies acquire their advantage
over its competitors, and how could it use as a basis for structuring logistics
through distribution centers? The purpose was to analyze them as a way to
acquire a competitive advantage in sales, reducing costs and increasing its
market share.
Therefore
this paper presents how is possible to achieve this enhancement through
Distribution Centers (DCs), making an organization able to optimize their
processes and becoming a stronger company in its segment.
This
study was delimited in geographical point of view analyzing the Brazilian
scenario and based on the lubricant segment, focused on a branch company
headquartered in Rio de Janeiro and two distribution centers implemented in
Macaé-RJ and Piracicaba-SP. In the present study this organization was defined
as Company X.
After
a theoretical framework and lubricants market national scenario, the work
focused on presenting the benefits brought by logistics operation. Thus,
through fractional distribution from DCs there is a reduction of delivery time
(lead time), freight costs, as well as levels of damage in transport reduction.
Subsequently
multiple case study developed based on two warehouses that have been
implemented as distribution. Thus, it will be possible to identify a number of opportunities
which enabled Company X to achieve the objectives mentioned above.
Yet,
specialist filled a survey with the addressed issues in order to strengthen the
understanding of the benefits exposed. At the end, the research results have
proven that DCs structure can boost sales, generating competitive advantage and
cost savings.
2. LOGISTICS AND ITS CONCEPTS
In
general, logistics can be defined as the administration area responsible for
managing the transport and storage of raw materials and goods. Based on this
definition, we can understand logistics as an area accountable for managing the
entire process of product transport management from raw materials supplier up
to its production towards end consumer.
Associated
to supplier feasible lowest cost and meeting customer expectations, logistics compliance
is met on the deadline and without affecting product quality. Similarly, Novaes
(2001) identifies the logistics as:
[...] the process of planning, implementing and controlling efficiently
the flow and storage of goods and services and associated information, covering
from point of origin to the consumer, in order to meet the requirements of
consumer (NOVAES, 2001, p. 30).
Considering
how logistics is associated to the materials management throughout supply chain
another definition arises "is the management of the flow of materials and
information of a business, through the distribution channel to the end
consumer" (SLACK, 2002, p. 416). Another
point to present around the definition of logistics is that it is fully linked
to business strategy, how a company believes that should manage its inventory
levels and its distribution.
Fleury
(2000) acknowledges two basic lines of transformations from most modern
logistics management concepts: economics and technology. The economic
transformations create a distinctive environment and new demands in the market.
In addition, technological changes allow logistics to be increasingly seen with
a quite significant strategic role for organization success and not only been
as its operational function.
For
these reasons companies come to appreciate logistics, because they understand
the sector performance in its organization may be able to create a competitive
advantage over competitors. According to Ballou (2006), in recent years
business administration has been concerned with this coordination of logistics
activities. It is also possible to understand the potential savings arising
from logistics management review which are transforming the discipline.
It is
worth remembering the definition of logistics provided by Bowersox & Closs
(2001) as a process of information management, transportation, inventory
management and storage, information transfer, material handling and packaging
of a cohesive manner to generate all the capacity required to meet the logistical
requirements. Finally it is important to
mention logistics definition made by the Council of Logistics Management as:
[...]Supply Chain Management part which plans, implements and controls
the flow and storage efficiently and cost of raw materials, semi-finished
materials and finished products, as well as the related information from the
point of origin to point of consumption in order to meet customer requirements (CARVALHO,
2002, p. 31).
Thus
it is possible to understand how logistics is important within companies, and
through good management decision making is possible the organization achieve its
goals, new customers and new markets, as well as strengthening partnership with
existing ones.
3. ORGANIZATIONAL LOGISTICS
It is
due to logistics the responsibility for controlling throughout materials or
products transportation within internal and external organizational environment
(inbound logistics and outbound logistics): from the arrival of raw materials
to final consumer product delivery. One can define some logistics primary activities
as:
•
Transportation: It is on the way to carry the load of
the company, the use of modal choice efficiently and effectively.
•
Inventory management: It is on the defining level of
inventory to meet demand without increasing costs.
•
Order processing: It is connected to the definition of
lead-time and order of service charges for customers.
Primary
activities described above according to Ballou (2006, p.41), has great
influence on the efficiency and effectiveness of both production and marketing
of company goods. In addition, there are other logistics secondary activities
such as:
•
Storage: It is related space issues and shaping the
way of storage.
•
Material Handling: It is on the internal movement of
products.
•
Packing: It is related to the definition of packaging
used with "only" purpose product protection.
•
Programming: Responsible for defining the routes for products
distribution to customers.
•
Control: Provides systems and database for location definition,
tracking within enterprise warehouses, besides providing an accounting control over
these materials.
Besides
these activities, for an organization, logistics have great connection on
company strategy and the level of customer service, once delivery is often the
final link between supplier and customer. Thus, good logistics service is
accountable for customer retention and,
[...] logistics not only involves management and different activities coordination, but also has an operational function which could be unfolded:
cut costs, speed up implementation of activities and improve customer service (MORENO,
2001, p. 4).
This
work intends to present logistics chain assembled efficiently, so the company
can influence and achieve customer loyalty, cost savings and other benefits focusing
on distribution centers.
4. DISTRIBUTION CENTER (DC)
The
distribution center (DC) cannot be considered a mere deposit, because their
function is greater than just a warehouse. The DC has importance within a
logistics system theme which this project aims to explain in more detail
further.
The DC
is a kind of warehouse positioned in a strategic location with a logistic
function defined by the company, where loads are received in bulk from one or
more suppliers. Upon load reception they are fractionated to group of items in
smaller quantities so they can later be dispatched to closer dealers and
customers.
In
order to point out a difference between a warehouse and a DC, Alves (2000)
shows that public deposits work in push system, because they are "plants whose
main purpose is to store products to offer customers" While DCs, work on
the pull system, they are "facilities whose purpose is to receive products
just in time so as to meet customers’ needs."
The
basic DC functions according to Calazans (2001) are: receipt, handling,
storage, order picking and shipping. Moreover, Garnier ranked physical
distribution centers as "sequential, direct or mixed" (GARNIER apud CALAZANS, 2001).
Relating
what was reported by these authors, it can be said that when a commodity
arrives at a DC, it can be stored or shipped immediately, the latter operation
is called cross docking. When a load is stored for later dispatch it should be
placed in position and properly inserted in the control system.
When
Garnier (CALAZANS, 2001) says that DCs can be considered sequential or direct, means
that a company which uses DCs sequentially passes to load multiple DCs until it
reaches final destination. On the other hand, company that makes the option for
direct shipping model is the load matrix to the nearest DC of final consumer.
Figure 1: DC basic functions.
Source: Adapted from Calazans (2001)
Another
concept related to DC is the concept of Advanced Distribution Center (ADC),
which functions the same as the DC, but it is located in a strategic point. For
instance, a set point that will bring many benefits to the company is to meet
certain range of clients, tax benefits, creating a competitive advantage over
its competitors.
To
Pizzolato & Pinho (2003), companies should consider according to their
market segment and according to their interests be resolved to act with few or
many DCs, i.e. whether to centralize or decentralize its distribution, taking
into account the costs and customer service.
Regarding
the Brazilian scenario, because it is a country with continental dimensions it
is necessary to have large portfolio of clients throughout the country in order
to make strategic decisions about where to deploy their footholds, as well as to
be able to serve all locations with greater efficiency.
Thus,
deployment of an ADC (Advanced Distribution Center) may bring advantage to the
organization and this work as previously stated aims to show in more detail how
to use these sites adequately bringing benefit to the company, choosing to
study a branch company of lubricants on the national scene.
5. LUBRIFICANTS
MARKET ON THE NATIONAL SCENARIO ANALYZED
Lubricating
oils are divided into two categories which are: mineral and synthetic. Mineral
oil is extracted by burning oil as is done in the generation of fuels such as gasoline
and kerosene. On the other hand, synthetic oil is laboratory made from the
polymerization of ethylene which forms the basis of synthetic oil.
Lubricants
are used to reduce friction between two surfaces, lower temperature and
increase the lifetime of a particular device. In Brazil, there are 13 kinds of
base oils. The present work aims to treat mainly logistics and not the
technical part on lubricating oils per se,
just explaining the main types such as: turbine, neutral, drum and naphthenic.
The
finished lubricant is a combination of one or more base oils and additives combined
to create a particular applicability to oil. Also in this family have
lubricating greases which are of high viscosity or pastes by mixing lubricating
oil and thickening agents. Greases are generally used in bearings from a
smaller scale as wheel hubs of vehicles by automotive bearings such as ball
bearings high impacts of hydroelectric plants and sugar cane plants. And thus
giving continuity to the issues explored in this work will be shown a set of
information about lubricants market on the national scene.
In
this section data on the domestic market will be presented to explain the
competition in the industry so that later can be shown the implementation of ADCs
used to gain competitive advantage over its competitors.
Sales of industrial lubricants in m³
(1m ³ = 1000liters):
Graph 1: Sales Volume of Industrial Lubricants.
Source: Adapted from Sindicom (2014)
Considering
all forms of sales, approximately 1.044m³ lubricating oils sold per month since
2003. Another important aspect to be highlighted in this work is related to the
composition of the market share in the segment analyzed.
The
lubricants market in Brazil is currently a very competitive and very hot niche.
As shown previously, companies in recent years changed their positions in the
market share, except of the first place all other institutions had changed its
position.
The
company was analyzed during the crop year 2008 a fifth place with 11.2% of
market share and a second place at the end of year 2012 with 14.6% market
share. Thus in a very competitive market is of paramount importance that
companies seek alternatives and measures that make a difference to build a
competitive advantage over their competitors so they can raise their sales
ability and thus acquire a larger market share.
The
segment has been getting in recent years a steady growth. According to ANP considering
only the finished product, 2011 sales volume was 1.369 million m³ and 2012, 1.383
million m³ which shows an increase of only 1% in the period. And as the same
agency expected a small increase in the coming years due to this strong
environmental laws that cause many companies to stop marketing the lubricant
per year and others end up increasing the values of its products to meet all
standards related to product.
In
recent years the National Petroleum Agency (ANP in Portuguese) engages with
maximum focus on lubricants quality marketed in Brazil. There is currently a
program of monitoring the quality of lubricants which has helped reduce the
rate of nonconformities relating to product quality, in 2011 were about 20.7%,
then it was reduced to 16.3% in 2012.
6. MULTIPLE
CASE STUDIES: SCENARIO ANALYSIS
Company
X is one of the largest producers of oil and grease lubricants in Brazil,
operates throughout the country and exports to the following countries:
Argentina, Bolivia, Uruguay and Paraguay. Its pillars are based on meeting
total customer satisfaction, innovation and safety in all operations.
The
headquarters and production plant are located in Rio de Janeiro and currently
has four distribution centers in Brazil: DC- Piracicaba, DC- Manaus, DC Suape and
DC Macae, besides having 24 distributors throughout Brazil. The company is
currently in second place in market share and growing through its bold growth
plan and implementation of distribution centers.
In
2008 a large Brazilian business group acquired control of the company, as well
as the right to produce and market one of the most recognized brands of
lubricating oils in the world. From this time the big company managers have
become concerned and move to the company had the necessary conditions to be
able to acquire more market share and competitive advantage over its
competitors.
In
2008, when the company became part of one big Brazilian conglomerate it was
developed a planning team to propose a series of transformations in the company
structure and processes. Thus, it would be possible to increase sales, reduce
costs and, therefore, increase their participation in market share.
By
that time, the company occupied the 5th place in sales in its segment. It was realized
that in order to achieve a larger share of this market it would be necessary
restructuring of logistic model adopted by the company. Up to that moment the direct
sales load distribution to distributors as well as to end customers was executed
by the factory. This behavior should be modified, though.
Associated
with this intention of gaining competitive advantage over its competitors, it
was applied survey and planning of the benefits achieved through DCs
implementation.
Logistics
planning identified benefits from distributions centers implementation.
Henceforth, it was established between years 2008 and 2012 it would be deployed
four distribution centers in Manaus-AM, Piracicaba-SP, Macaé-RJ and Suape-PE. A
number of benefits were identified through distribution centers based on
operational, tax, or the related to cost reduction issues.
The
first issue addressed was the lead time because its reduction directly impacts
the organization and customer service level. When a company starts allocating its
inventory closer to customer locations range, delivery time is reduced by
bringing competitive advantage, presenting this issue as strategic utmost
importance.
This
structure enables client maintaining lower level of stock. In addition it keeps
a lower safety stock leaving room to customer reducing costs and investing more
in its core needs. What generally brings the benefit of reducing delivery time
brings greater customer satisfaction. Henceforth this reduction also facilitates
reverse logistics.
Through
DCs it is possible to consolidate the load before sending to DC, the company is
able to send its products to transfer its subsidiaries into larger carts
so-stocking charge, which in general reduces the cost of shipping. In addition
it is also possible to improve modal consolidating shipping charge. As an
example we can consider cabotage which generally requires more travel time than
land transport, but it has reduced costs and risks of failure.
Another
important point is the possibility of reducing the shipping cost using the
railroad. Despite the insufficient Brazilian railroad mesh, it is still quite
satisfactory in certain regions. The product amount and path narrowing aim to
show that individual shipments should cover as much distance as possible, with
the largest volume cargo as possible, and this capability can be leveraged
through a network of warehouses (BOWERSOX; CLOSS; COOPER, 2002, p. 375).
The
warehouses and branches implementation can bring largest potential to reduce
insurance-related costs in freight transport. This question is based on the
ability to carry cargo transportation in a modal reduced insurance cost
compared to traditional road transport.
But
even when choosing to use the same modal - in this case the road transportation
- the company will be able to reduce their costs on cargo insurance, because it
is based on the product value carried. Usually cargo insurance is often called
ad-valorem rate: it is composed of risk management and insurance itself, both
based on the invoice value.
And
when a company is performing a transfer to an affiliate invoice value will be
based on their products standard price, which means a price without profit
(mark up), which is obviously much lower than invoice value transported
directly to customers.
From DCs
factory would reduce their storage spots and optimizing this area to
production and development, once its stock would be distributed over several DCs.
In this aspect the survey team identified benefits the company would gain
because it currently faces great difficulty in expanding its base oil tanks
volume.
The scenario
survey led them to choose such locations and subsequently two cases chosen to
be presented in this paper: Macaé-RJ and Piracicaba-SP, both in Brazilian
Southeast region. In the last section of this material the overall benefits
that were key factors in opening DCs will be shown.
DC
Macaé was on the need to improve service to clients: from diverse marine
region, several attendance bases to small vessels, large oil rigs and other
large companies that have facilities in the region, reasons that were leveraged
to select the region to deploy a warehouse.
As
described earlier in this paper, every lead time reduction is an interesting
competitive advantage for any company. Besides, associated with the company studied
was realized it should deploy a distribution center strategically located in a
region with a range of potential customers.
For
Macaé DC, it was obtained a saving in lead time of one day, whereas previously
all orders from Macaé city and region were carried out within two days. From this point, the new model delivered at the
same day as ordered.
This
reduction of 100% over the previously practiced costs, generating substantial profits
in terms of competitiveness and greater ability to service small boats that are
moored by often for just one day.
Macaé
region is a major oil producer and for this reason there are many clients as
potential oil platforms with different engines in their structures, beyond docked
boats and several bases motor oil dealers for small boats and motorboats.
In
this segment a deadline for delivery virtually unbeatable currently adopted is
12 hours. This change of time delivery generated a sales increase and a higher
profit margin due to the urgent needs of clients products.
Another
benefit gained from opening the DC is the possibility of Espírito Santo state attendance
via Macae city which would generate a 1 day saving on the lead-time, as well as
cost reduction in freight and warehouse operation fixed cost.
6.3.1. Obtained Results
in DC Macaé-RJ
This
distribution center had not a great reduction in freight cost, which in this
case was only circa 8% reduction.
Besides, such amount is related to the cargo insurance cost reduction due to
movement amongst branches using standard price as previously mentioned.
The
major difference was the cost of stay reduction awaiting berthing of vessels,
due to the fact the goods out closest to ship you can get the load only when
there is a better confirmation of the ship's berthing that reduced spending
stays at the port awaiting berthing around 80%.Before using this distribution
center the company would spend around R$ 28.000,00/month in the locality with
costs of travel and these values are currently at average R$ 5.600,00/month,
generating estimated annualized cost reduction of R$ 268.800,00.
Related
to fault reduction were not achieved significant decreasing, according to data
previously collected for the DC implementation. The relative return and
delivery invoices issued revolved only 0.2% and this index yielded no
significant reduction after operation starting from the distribution center.
Considering
punctual delivery, the index was at 92% rate before DC operations, and six
months after its implementation analysis found this ratio reached 99%. There is
no doubt the great warehouse advantage was sales increase generated due to the
benefit of the lead time for Navy serving customers (ie. ships, oil platforms
and businesses in the region that serve smaller vessels). This increase in
sales in the last survey conducted by Company X based on the second half of
2013 shows that compared to the same period of six months prior to the project
being implemented reached a sales increase of 150% over the previous period,
which undoubtedly was the greatest warehouse advantage.
Piracicaba
supplies São Paulo state, where Company X has several industrial customers in
the region such as companies grinding sugar cane and ethanol production and
assembly plants tractors and vehicles of the locality.
The
entire São Paulo state would be supplied by this warehouse serving as support to
Vale do Paraíba region. Another important point that led the corporation to
build DC in this locality was a synergy created with one of its major customer
distributors for its products in Brazil: the distribution center Piracicaba was
a project developed with this partner.
Checking
the Piracicaba case was identified that benefits generated by reducing lead
time boosted sales in the region, and generate an improvement in company's customer
relationship. Thus, customers fulfill their orders closer to the actual date of
use due to reduced distance and greater assertiveness of on-time deliveries.
The two days reduction in each city route provided almost 100% decreasing in
lead time.
Tax
benefit generated a huge saving for organization in balancing ICMS (tax on sale
of goods and services). ICMS works as follows: the first concept is that this
tax is collected by each state apart; the second concept is that tax works
somewhat like a scale because, when a company sells a particular product within
a state tax is collected and when a particular company buys in the same state
tax is credited in the same account where later he was charged, i.e., is only
deducted from the balance sheet of this particular company tax and if this
balance is positive it is reset every year.
Whereas
the studied organization buy several products imported via the port of Santos,
which are products of high added value account ICMS always had a positive
balance in the state of São Paulo, then through sales in the state in question
the Company X has balanced best this tax.
Another
benefit generated in this location is bound to reduce storage costs. Before
structuring the company for this branch often low demands and lack of space in
the plant generated a cost of stay in port of Santos and someone higher towering
container rent. With the implementation of this distribution center is no
longer reality: load is allocated in the warehouse where the storage cost is
well below the port.
Still
analyzing this case, another important point is related to reverse logistics
container with waste oil from large factories in the region, previously the customers
claimed it was too expensive ship this product to be refined in Rio de Janeiro
plant. With DC implementation, the Company X agreed with these customers upon
delivery of these containers. So it would be collected for return and
subsequently consolidated to be refined again and sold as slop (refined oil mixed again).
This
change allowed an increase in waste return which makes Company X ensuring
larger parts of its products are not contaminating the environment besides
bringing a benefit with slop sales.
6.4.1. Obtained Results
in DC Piracicaba
Analyzing
the results this case can be seen a number of improvements: IPE Index (on-time
delivery) enhancement - before distribution center this index was 92%
deliveries and it rose to almost total efficiency (99.2%).
Relating
damage index, it also occurred an improvement reducing from 1% to 0.4% invoices
delivered devolution occurring due to product damage. This index remains
constant decreasing possibly associated with the use plant transfer to the DC
via enclosed trailer and whole load pallets.
Another
point diagnosed as positive outcome was the reduction in freight costs which
generated a 10% reduction per shipment, which in absolute values generated a
reduction in average freight cost per month of R$ 12.000,00, which revolves
annualized around R$ 140.000,00 reducing overall shipping cost (insurance cost
reduction is already within shipping costs).
Piracicaba
DC had its costs reduced associated with allocated containers at the port of
Santos, which generated a great result of retrenchment due to high costs for keeping
a container stored in the port area. Whereas the daily cost of staying with the
cargo at the port of Santos in the waiting room for unloading plant in Rio de
Janeiro revolved average four dollars per day (4USD/day) per container per
month. Therefore, Company X spent up to R$ 130.000,00 with containers at the
port, and this value was reduced to R $ 40.000,00 monthly, which means, cost reduction
of over a million dollars per year.
Checking
increased sales generated from logistics new structure and strategic operation
in sales to large grinding mills in the region reached an increase of 12%. This
volume has always been high increasing even larger revenues. The overall
increase in sales in the locality analyzed in six months historical data reached
11%.
Thus
we can see that this was more a place where he brought a number of benefits for
the organization becoming a pivotal support for the company was able to acquire
this growth period studied.
Another
research step taken in this study was an interview conducted with five
logistics professionals. A list of nine questions related to the topic was
presented and then answered by them. The specialist functions range from: warehouse
supervisor, performance analyst, logistics assistant, cargo assistant (scheduling)
and logistics coordinator.
Nine
questions were developed on the topic addressed in this work where it was
possible to identify professional pattern answers. As an initial example is a list of
answers were organized into a table addressing what were the three main
benefits that the opening of a distribution center brings.
Table 1: Standard of Survey Answers – Main benefits of
DCs implementation
Distribution Center Implementation Benefits |
Logistics planner |
Coordinator |
DC leader |
Performance assistant |
Performance analist |
Freight cost ↓ |
x |
x |
x |
x |
x |
Lead time↓ |
x |
x |
x |
x |
x |
Production Capability ↑ |
x |
|
|
|
|
Competitive Gain |
|
x |
|
|
|
Tax Benefits |
|
|
|
x |
x |
Customer service flexibility |
|
|
x |
|
|
As it
can be seen the majority of answers are related to factors reducing freight
cost and reducing delivery time, indicating that in the professional
understanding these are really the key benefits. Also identified in the pattern
of responses to the public questioned the main benefit to the client is to
reduce the delivery time, because it can decrease their safety stock
considering that one can order more compared to its real consumption need,
which undoubtedly reduces final cost to customer and generates a lower risk of
shortages.
Another
point highlighted in this research was related to working through the distribution
centers operation influencing product quality. What according to research
collaborators this form of logistics network reduces faults rates on product
packaging, because in long commutes products are consolidated and unitized. In addition,
even modal change also reduces the risk of failures, once the route from each
branch are shorter, which in turn reduces risks.
Most
respondents believe the greatest impediment to distribution centers is the
initial fixed cost of full operation of that facility. Finally the research
could fulfill its role within professionals addressing issues already listed in
this work, ratifying with linking information.
Currently
the company aims to consolidate prominently its second position in market share
and continuing distribution centers implementation throughout the country by
partnering with key distributors which will now become direct subsidiaries of
the Company X.
The
current scenario shows that the market is still growing, but at a decelerated
pace as practically the entire world economy. Another important topic discussed
by the company nationwide is the slowing production of vehicles which generates
a great impact on the analyzed company.
It is
being analyzed the possibility of many distributors become distribution centers
themselves. The DCs cases already deployed were considered satisfactory stimulating
the company to expansion of 16 and 22 DCs over the country, as well as
considering the possibility of opening a branch in Argentina.
The aforementioned
information shows that Company X continues to seek improvement in order to gain
advantage over its competitors. Besides, it looks forward to nurturing its
customers, increasing market share and using logistics enhancement through
implementing a strategic vision number of distribution centers.
7. FINAL CONSIDERATIONS
This
work aimed to show the benefits introducing distribution centers improving results,
considering the deployment of structured and strategic manner. Thus, it was
taken as the basis of study a national company of lubricants industry to assist
in the presentation of the idea, linking benefits and results to show these
positive transformations.
Both
studies were based on the Brazilian Southeast region. The overall benefits were
identified as reduction in lead time, cost reduction, obtaining production
space in the production plant between amongst other benefits. Through the
implementation of this project Company X could boost its sales, increased market
share arising from the fifth to second place in sales. The study also showed
business positive results such as delivery time reduction, ratings of on-time deliveries
improved, transportation costs reduction, waste mitigation and raised sales.
This
paper also presented a vision of how professionals see the benefits of
distribution centers, and finally scenario analysis before and after this
deployment. In so using a national company in the lubricants market as this
research object of study was possible to see the contribution this work brought
improving their customer service level, reducing their deadlines through a
structured plan based on company strategic logistics network.
This
work could be used as a basis for possible studies focused on other classes or
segments, as presented benefits of these stakeholders can be treated as a base
for any business purpose. Thus associated with the content presented in this
paper it could be realized the DC role within the strategy to be treated with
its due importance making difference in any organization.
8.
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