Operational Transformation in Brazil: Overcoming Supply Chain Challenges
The Challenge
A raw materials processor operating in Brazil’s industrial heartland struggled with operational inefficiencies that were eroding profitability. Despite Brazil’s decades of mining activity and developed supplier ecosystem, the client was confronted by significant challenges: geographical distance from mining operations, hierarchical governance structures imposed by lead firms, and difficulties accessing innovative technologies. Production costs were 22% above industry benchmarks, and equipment effectiveness had fallen to concerning levels.
Our Approach
We implemented a comprehensive operational assessment that went beyond surface-level issues to address fundamental challenges in the value chain:
- We introduced buffer management across the entire value chain, addressing the geographical distance challenges that had previously hindered responsiveness.
- We developed a production control system that synchronized processing operations with actual mining output, implementing pull principles rather than push-based production.
- We shifted the focus from equipment utilization to effectiveness, implementing Total Productive Maintenance (TPM) methodologies for the client’s processing equipment.
- We established Information Centers to drive shift, daily, and weekly interactions, breaking down communication barriers between operational teams.
The Outcome
The transformation yielded remarkable results: processing cycle times decreased by 19%, auxiliary equipment requirements were reduced across the value chain, and overall operational costs fell by 25%. More importantly, employee engagement in continuous improvement initiatives reached 89%, creating a sustainable foundation for ongoing optimization. The client leveraged these operational improvements to secure new contracts with mining companies that previously favored established foreign providers.