Might you give an summary of the logistical operation which helps Havaianas?
We have now totally different fashions in several areas, so in Brazil, we function our warehouses however we have now third events that do the transportation for us. Within the US, Europe and Asia, we have now third events that function our warehouses in addition to the freight transportation.
In Brazil, all of our ten crops are within the north-east and all the warehouses are within the main crops. We’ve crops and satellites; satellites are very small crops for particular features. Then we now have only one distribution centre, a quite simple one, that’s close to São Paulo as a result of the demand is there for the merchandise that we make ourselves.
We make the flip-flops however we purchase equipment and attire as completed items, which we obtain from our suppliers in Brazil or globally; we’ve got suppliers in Latin America in addition to Asia, even in Europe. We obtain them within the port of Santos after which we distribute them from the centre in São Paulo. We promote the flip-flops immediately from our crops, though we switch a small a part of the demand to São Paulo to provide our personal shops; we’ve got to be very fast to the market.
That are your largest markets?
Brazil, in fact, then after that Europe. There we now have some essential nations: Italy, Portugal and the UK. But when we glance 5 years from now, our bets are in Asia. We have now a great presence there however not a robust one, so we’re shifting to Asia and in addition to the US, which is a really robust marketplace for us. We’re working lots to overcome the US and South-East Asia.
Which ports do you employ to distribute to the worldwide markets?
We distribute from two ports in Brazil. Suape within the north-east is an important for our personal operations, for worldwide markets. For our distributors, an important is Santos within the south-east, close to São Paulo.
In Europe, we obtain the merchandise in Marseilles-Fos [France] and Antwerp [Belgium]. Then we now have two distribution centres in Europe: one in Marseilles and the opposite in Liège, in Belgium.
In Argentina [where Havaianas has seven plants]Buenos Aires is the port and in addition the distribution centre.
We simply launched a brand new operation in Colombia so we’re there in Barranquilla and in Cartagena.
And within the US we obtain the merchandise within the port in New York then we ship all of the merchandise to Columbus in Ohio; from there we ship throughout the nation.
Do you discover there’s a number of congestion within the ports in Brazil? For the automotive business this tends to be a problem.
Not congestion – our drawback is area. Once we export quite a bit from Brazil in serving these worldwide markets, there’s a scarcity of containers and area in vessels. We aren’t these huge automotive OEMs with a variety of quantity. We’re small and it’s very troublesome to barter with the massive delivery strains. They’re making alliances, turning into stronger, and we’re weak through the negotiations. Truly, we’re beginning to use cabotage. We don’t use railroads in Brazil however we’re utilizing extra home delivery alongside the coast to ship merchandise from the north-east to the south-east of the nation.
Initially the marketplace for Havaianas was simply Brazil and South America however the model is now well-known internationally. How did the availability chain and logistics operation change to help the emergence of that international id?
There are various points associated to this international progress. To start with, once we are managing the availability chain within the brief time period, typically in Brazil there’s a large quantity in comparison with the opposite areas. Typically it’s troublesome for us to recollect we can’t overlook these markets as a result of within the mid-term they’re essential for us. So we’re analyzing our processes as a way to attend to the demand of all markets, regardless of the strain of the brief time period to maximise the outcomes on this or in that market. In these nations we’re being challenged by calls for corresponding to: how can we provide a greater OTIF [on time in full]how can we velocity up the availability chain?
There’s one other facet. Outdoors Brazil, in Europe for instance, our enterprise could be very seasonal. We begin distributing throughout spring for our shoppers there, then comes summer time, after which all of the sudden we don’t have enterprise any extra. It’s very troublesome to place in an infrastructure; it’s costly for us. What we try to do is negotiate variable area, variable capability, variable all the things – as a result of we can’t afford to have an infrastructure on the peak of the enterprise in these nations after which pay for idle capability all yr.
We’ll develop extra, comparatively, outdoors Brazil, so how can we put in place a provide chain that may serve this very complicated state of affairs? Once we began our operations in Europe, we simply had one distribution centre in Marseilles-Fos, however the transit time from the south of France to the south of Italy to the UK was turning into a problem, so this is the reason we opened a second warehouse with a view to dramatically scale back the transit occasions; however then we had extra idle area. It’s very troublesome to unravel this type of trade-off: to spend money on infrastructure in addition to sustaining profitability.
It’s fascinating that IT is a part of your job title – it suggests IT goes to play an more and more necessary half in fixing these challenges. Is Havaianas implementing new techniques?
As provide chain individuals, we’re arduous customers of IT; we don’t promote, we don’t produce, we simply handle. So info is vital for this perform, first. Second, we was an industrial firm, however our enterprise mannequin is altering lots as we have gotten this model with retail operations. Immediately we’re a mixture of industrial and retail; we’ve e-commerce, market, direct channels, house shops, all of this stuff occurring right here in Brazil and in all of our markets. IT performs a strategic position on this setting.
We’re pursuing a worldwide IT structure, which suggests the cloud, cellular [solutions]and a gross sales system as a worldwide device in all our areas. In our shops we’re additionally pursuing a worldwide retail system. We try to have an built-in order administration system as a way to accomplish service ranges which are tougher, and we’re integrating the totally different ERPs that we’ve got in all of our areas. So we try to face this digitalisation strain and these new methods of promoting.
Are you able to talk about Havaianas’ current machine studying venture?
As we grew from the 1980s to at this time, the variety of SKUs [stock keeping units] elevated so much so forecast errors additionally grew, given the complexity of the demand. It is extremely troublesome to forecast what we’re going to promote. In an effort to keep this complicated trade-off – the lack of gross sales, capital invested in inventories, the utilisation of our crops – in a managed method, we constructed two provide chains, one targeted on value, the opposite on flexibility. However it’s not sufficient, as a result of after every assortment or season we now have a variety of uncooked supplies that we have now to put in writing off, at a price. So we launched a machine studying [ML] initiative.
Are you able to clarify a bit extra concerning the two provide chains first?
For base merchandise within the Havaianas portfolio, value is an important variable in managing the availability chain. They’re very predictable, non-perishable carry-overs. We don’t change the manufacturing planning given the truth that the calls for change, as a result of we’ve got excessive utilisation of our belongings. So this can be a cost-driven provide chain. Then for almost all of our merchandise, the forecast error is large; these merchandise are perishable, as a result of after the season is over we launch a brand new assortment. On this different provide chain, flexibility is an important variable; we watch for the demand and we make a fast response.
However two provide chains is just not sufficient any extra, so we launched this machine studying initiative to assist our business workforce. It’s not straightforward to know which type, which color, we’re going to promote extra of so this [ML initiative] is permitting us to realize effectivity as a result of we’re decreasing the forecast error. We’re decreasing the write-off of uncooked supplies and we’re decreasing reductions [in outlets] on the finish of the gathering. We went to the restrict with these provide chain instruments, segmenting the availability chain by product behaviour, and now on prime of that we’re utilizing machine studying.
When did the undertaking begin and is it lively now?
We did the pilot from the start to the center of final yr, so a six-month venture. We took one a part of the portfolio and we needed to show the idea. We additionally wanted to study which have been an important variables and algorithms to unravel our issues. Now we have now rolled out the ML after the pilot and this has develop into a month-to-month course of. We nonetheless have a requirement sensing course of that’s led from the business group, however with this software now we give them analytical help for his or her forecasts. It’s carried out and it’s serving to us rather a lot.
What do you assume Havaianas can study from the automotive business and what do you assume the automotive business can study from Havaianas?
I feel there are various features the place there’s plenty of room for us to study, for instance buying; we don’t have this type of tight relationship with our suppliers [that the automotive industry does]. For us, there’s lots of collaboration to evolve when it comes to provide chain administration. I see the automotive business as leading edge in its provide chain methods and instruments, so I feel we nonetheless have so much to study from this business, for instance when it comes to logistics and warehousing.
From the other viewpoint, I consider it’s a development within the automotive business to customize extra and that is the sort of factor we do quite a bit. We customise, we’ve colors, we have now style, we now have totally different sizes, alternative ways of promoting, totally different channels. I consider that the automotive business, when it comes to promoting channels, has advanced little or no – the vendor mannequin appears to be one thing that has stayed the identical for a very long time. The business will probably be challenged to have e-commerce and mass customisation. How you can predict and plan for that? That’s one thing vehicle-makers can study from the style business.
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