Abstract
ABSTRACT This case study aims to develop in each student analytical competencies by evaluating current logistics processes and, from this understanding, to use the knowledge gained on tools and theories of continuous improvement to propose solutions and discuss strategic alternatives for the company to improve its processes. Efficiency in logistics operations plays a key role in the results of direct sales companies because there are thousands of customers and daily deliveries that bring complexity to the process. The new Supply Chain Director took over the position in a difficult period of falling market in the country. Thereby he implemented internal discussions to evaluate the status of various processes and to engage leadership. He intends to find ways to improve logistics processes through capital investments or by using continuous improvement tools that could provide cost reductions and increase service levels. The case can be used in undergraduate courses, graduate courses, and also in professional education in themes related to business management, supply chain, logistics, and industrial operations.
Highlights
On that Thursday in January 2017, as Pedro headed to his first day of work at Avon Cosméticos Brasil’s main office, he was reflecting on the paths that had brought him to that moment in time
The positive assessment of the service jumped from 72% to more than 90%, and reached 99% in one-off campaigns; (c) Vehicle availability and occupation: there was a 7 percentage points improvement in a delivery methodology called ‘milk run’ that, according to the Lean Institute Brasil, “is a method for accelerating the flow of materials between plants, in which vehicles follow a route to make multiple loads and deliveries at many plants” (Lean Institute Brasil, 2020, online); (d) Risk management in transportation: there was a gain because of a reduction in losses, and an increase in the retailers’ satisfaction rate
Applying TPM concepts meant that 86% of returned products were reused and reverse logistics costs reduced by 21% (Figure 12)
Summary
On that Thursday in January 2017, as Pedro headed to his first day of work at Avon Cosméticos Brasil’s main office, he was reflecting on the paths that had brought him to that moment in time. Based on internal discussions and diagnosis of the status of Avon Cosméticos’ logistics operations, Pedro could proceed with the approval of the Avon+ Project: improving the efficiency of logistics processes by acquiring new equipment and physical expansion was the path that was known and historically used by the company in Brazil. Pedro foresaw a series of benefits for the company that would result from engaging the leaders of the areas and using the well-known tools of continuous improvement He could revolutionize the way the affiliate acted with regard to increasing its productivity and improving service levels, by initiating a transformation in the company’s innovation culture in Brazil. Pedro needed to make a decision quickly and it had to be shared with Avon Brasil’s board of directors — May was less than 30 days away and the affiliate needed to present its numbers and projects at the company’s global meeting
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