Question

A specialty chemical company is considering expanding its operations into Brazil, where five companies dominate the consumption of specialty chemicals. What sort of distribution network should this company utilize?

Answer 1

Answer:

Since the specialist chemical company should supply to only five companies, the supply chain should be short and should be with minimum or no intermediaries like distributors. The Business to Business (B2B) model works best for this company. This would not just...

Answer 2

We are provided information about where a chemical company is thinking of expanding its operations and we are asked what should be the distribution network. The sort of distribution network is as under:

• If the expansion into Brazil is merely a sales operation, then distributor storage with the delivery of the last mile is the best network design.
• If the expanded operations include manufacturing also then the manufacturing storage with direct shipping will be the better alternative.
• As the company deals in chemicals package carrier delivery is not possible.
• Even having a retail storage unit there will customer pick-up will also not be the correct method.
• This is because the setup is a B2B system of operation.
• Another option can be an in-transit merge but this is possible only if the manufacturer has a set of plants established in Brazil.
• A short supply chain will be the best option as it will be easier to coordinate due to the stable demand and sharing of information.

PROJECT CODE: #SPJ2

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