An Optimal Redesign Approach for Optimal Global Supply Chain Redesign: Brazilian Soybean Grain Study

Abstract

Brazil and the United States are the leading soybean grain producing and exporting countries in the world. Although crop production cost is significantly lower in Brazil than in the United States due to more advanced crop production technology, this competitive advantage vanishes in view of the higher logistics costs in Brazil than in the United States, in view of the dominance of road transportation in Brazil, whilst river and rail transportation are prevalent in the United States. In order to regain its competitive advantage, there is a clear need for a redesign of the inland supply chain in Brazil through the use and expansion of existent inland waterways and rail networks. In this paper, an optimal supply chain redesign methodology is presented to achieve the aforesaid objective, with a focus on Mato Grosso which is the largest producer and exporting state in Brazil. This methodology is in fact applicable to multiply echelon global supply chains in general.