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SUPPLY CHAIN


Brazil: Improving Your External Relationship Management for More Effective Temperature- Controlled Logistics


Luiz Alberto Barberini, CQE, CPIM , MBA


External Relationship Operations Manager LatAm Bayer SA, Brazil


We’ve all heard that Brazil is a giant. And, as we know from fairy tales, a giant can have an own unpredictable nature that can make things difficult. This analogy can be used in our logistics and supply world. When in such a situation, what exactly happens and how do we manage the giant’s bad mood?


First of all, we should take a closer look at this giant. Brazil is 8,514 km2


in area, and is home to 204 million people. (2010 data). In 2014,


Brazil’s estimated nGDP was as high as US $3,072T. Just to compare, Canada has an are of 9,984 km2


and is home to 34 million people,


with an estimated GDP of US $1.793T. Brazil is a giant that offers a Human Development Index (HDI) of 0.755 and his bad mood becomes apparent when we notice Canada has an HDI rating of 0.913. To keep things working, Brazil's logistics issues result in costs that represents a GDP of 11.7%; a tad higher than the USA’s 8% 2013-based costs.


Government policies are an important part of this huge logisitics bill. One example of this issue is the tax dispute between states, which creates situations that result in pharmaceutical goods being manufactured in Northeast states but having them consumed in the Southeast region, creating a huge logistics problem. In other words, we send products 2,000 km for no good reason than politics, mainly using highways that are not in the best shape. Air transport in Brazil does not have the capacity that permits full service of drugs distribution, forcing us to use planes for major hub transfers but living with a potential last-mile syndrome. This is a real nightmare for cold- chain transport planners and an ever-present difficulty for distribution companies that must guarantee 2-8°C within 48 hours, most of the time with no insulated trucks. The use of subcontracted drivers just adds another level of unpredictability to this equation.


In such a complex scenario, our daily challenge is to avoid damages to perishable loads, mitigate situations that could ruin goods – thus impacting service level - and to continuously search for solutions to risky situations. In addition, some big companies must be humble enough to admit that logistics is not their core business and must rely on partners that do know what are the best alternatives or suggested actions for each distribution problem that appears. To find the correct, trusted and reliable partner is the “More-than-a-Million” worth


situation. The company in which we entrust our goods and our brand must surely deal with topics like proper training of their personnel and a correct use of devices such as thermal blankets/containers, and monitoring devices. In addition, they should have adequate delivery plans even for well known routes and established investigation and corrective action plans for when problems do occur.


Looking at the broader view, over the last twenty-or-so years many companies have increased the usage of 3PL (Third Party Logistics) companies along their supply chain process as most have identified the correct core-business and migrated to this solution. As pharmaceutical companies we are no different, but with one added roadblock for proper service providing, which is the need for robust Good Distribution Practices and Good Manufacturing Practices systems that guarantee that all offered services are in compliance with the strict requirements we face; even some pharma-based companies working with OTCs and cosmetics must follow good manufacturing requirements. In spite of having quality systems in place that have proven themselves as state-of-the-art service providers and verified through frequent audits, there is a natural tendency to control these activities from a vendee perspective and hence increase these controls over activities from time to time. When we have systems and processes with proven reliability and confidence, it’s time to move one step further towards other activities that once were kept in our hands. This kind of virtuous dynamic cycle system, although being a recognized value-added one, needs some intelligence to be supported as we frequently get ourselves in crossroads like:


Partnership X Relationship: How to take that step forward that moves us from a partnership to some kind of stable reliable relationship where both parts wants to achieve success?


Reliability X Commitment: Is our counterpart reliable or committed? What’s the difference between these two concepts and how do we enhance one over the other?


Productivity X Costs: Do we need to lower costs through lower prices? Or are we mismatching words, when what we do strive for is productivity and excellence?


Pharmaceutical Outsourcing | 36 | July/August 2016


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