03 - Procurement BC - ISC

Team:

• Nick ???
• Gabriel ??? - 🇧🇷
• Patrick ??? - 🇲🇽
• Julio ??? - 🇲🇽
• Unknown person

Maya Cosmetics

Cosmetic products company located in Barcelona

Rapid growth thanks to

• Innovation
• Strategic marketing
• Expansion to new markets

Recent expansion to Latin America (LATAM)

Places strong emphasis on innovation. It has its own laboratory and formula development team.

Current supply chain

• Raw material + packaging from EU
• Third party manufacturers in Europe
• Distributors
• Retailer throughout the world
• Consumer throughout the world

All manufacturing sites are currently in Spain.

Case presentation

Objective: address company growth with an additional manufacturing site to serve growing...?

Approaching capacity issues

Brazil: picked as one of the manufacturing sites.

• Consistent sales growth
• Short lead time to the market
• Avoid import taxes
• Better risk management
• Less transportation cost
• Less carbon footprint

Disadvantages:

• Lower manufacturing capacity
• Exchange rate

Producing in Brazil, halves the avg distance to LATAM countries.

Business case objectives

• Manufacturing options
  • Producing in Brazil only for brazil
  • Producing in Brazil for LATAM
  • Keep producing in Spain
• Main focus
  • 100% cost
  • 50% service - 50% service
  • 50% sustainability - 25% cost - 25% service

Supplying possibilities

Brazil has a lot of import taxes

There is going to be a big difference in transportation cost moving manufacturing to Brazil.

Manufacturing

2 models of manufacturing

• Full service
  • suppliers will charge a premium
• Maquila