Latin America Supply Chain Case Study
How to Reduce Cost, Increase Revenue, Reduce Lead Times and Improve Customer Service through a Supply Chain Strategy, Assessment and Optimization
October 2023
Case Study Overview
When Growth Plateaus
A global transportation and manufacturer of medium- and heavy-duty commercial vehicles was still achieving record revenues but started to see growth plateau in their key North American markets.
To offset this plateau, Senior Management identified a high-level goal of increasing presence, revenue/sales and profits in Latin America. For purposes of this case study, Latin America included South and Central American markets.
In order to achieve these goals, this global transportation company engaged T Exponents to perform a Latin America Supply Chain Strategy, Assessment and Optimization project. The goals were the following:
Assess the as-is (current) state of the Latin America supply chain in terms of lead times, customer service, system bottlenecks and customs challenges. Document the current state via process flow diagrams.
Define the to-be (future) state in terms of process improvements, automation, system enhancements, customs improvements and customer service improvements in order to achieve the desired state.
Identify a series of 10-12 high-value gap closure projects and initiatives that would help bridge the gap between the current and desired future state. Some of these projects were incremental in nature (e.g., to help reduce dealer order lead times or reduce customs delays by a few days). Other projects were transformational in nature (e.g., create new business entities to bypass the existing Panama distribution center).
Provide a detailed project plan and roadmap, including proposed phasing, cost-benefit analysis and prioritization for each of the projects.
Produce High-Level Design, Approach, Epics/ Features/User Stories, and Dev Estimates to move each project to the next phase (Execute).
Latin America Background
Why Latin America
Strong Emerging Growth Market: Many companies consider Latin America to be an important part of their emerging-market growth strategy as the region had a total gross domestic product (GDP) of US $5.5 trillion in recent years. Moreover, Latin America's GDP is projected to grow 4 percent annually, twice as fast as GDP in the major developed economies.
Prosperous Relative to Other Developing Markets: Latin American people are relatively well-off compared to other developing markets. For example, GDP in Brazil, is 45 percent higher than that of China and three times that of India. In addition, the proximity to the U.S. makes Latin America a desirable emerging market growth market versus China and India.