20 Years of experience in Brazil

September 17, 2021 | General, Podcast

Our Brazilian subsidiary Staufen Taktica, nowadays Staufen Brazil, was founded 20 years ago. We spoke with Dario Spinola, Managing Director of Staufen Brazil about the Brazilian economy 20 years ago when he founded Staufen Taktica, how he sees the economy today and where the economy is heading.
Dario worked as a consultant and interim manager for more than 20 years, mainly in China and Brazil. He was Vice General Manager at Staufen China before he took over Staufen Brazil six years ago.

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Dario, how was the market in Brazil 20 years ago when Staufen Brazil or rather Staufen Taktica was found? Which potentials did you see back then in the market and what encouraged you to become a consultant?

20 years ago, Taktica began as a lean consulting company. At that time, the market was booming after a recession and many international companies were investing in Brazil. My partner Paulo Lima and I believed that many companies needed to establish the rightprocesses. Many investments were made, especially in terms of capacity and new technologies -mostly related to automation. The topic of lean was also new. At that time, we did not talk about comprehensive transformations as we do today. Lean was more related to applying Japanese principles and methods to production sites.

Looking back 20 years ago, which was quite long ago: How about today? What distinguishes Brazil’s economy now?

20 or 40 years ago or even today, the Brazilian economy still greatly depends on policies. How is the macro economy is defined by politicians? How do they regulate the economy especially in terms of tax on foreign exchange? With the introduction of the Brazilian Real, we now have our own currency which has been quite stable since 1994. However, we still depend on foreign exchange, U.S. dollars or euros.
Nowadays, Brazil is still recovering from the recession in 2014/2015, but there is a lot of remaining capacity. If you look at the automotive or machinery sector or other industries related to equipment, there is a high level of capacity which is promising for the years to come. We are prepared to grow again. But the main point will be: how will we grow? And can we efficiently grow?

Besides machinery, what are other common fields of expansion within the Brazilian industry?

Currently, the agro industry. This industry is very strong as Brazil is a large country. For the past decades, investment and exploration of the agro sector, agriculture especially, was quite large. Furthermore, the food industry is also a booming market, very much correlated with the agro business.
Consumer goods are growing more specifically to cope with the global demand. Brazil is a very rich country in terms of commodities. We have many mining reserves, especially for ores: steel and iron. Accordingly, the agro business, food, and a few commodities, such as steel, are the most expanding industries in Brazil.

Looking at Brazil from a consultant’s perspective, where do you see the greatest potential for optimization?

Brazil is a very large country in terms of territories. We have land equivalent to ten times or more than Germany. As a result, the greatest potential is related to transportation and logistics on how to move products around, such as raw materials, semi-finished products, and final products. If you are producing in the middle of the country, how do you bring your products to the coast? You go to a port, ship it and send it elsewhere.
According to lean philosophy, transportation is one of the seven forms of waste. The main means of transportation are trucks. Little exploration of trains for big loads has taken place. We use the railway, but mostly to move commodities, not for final products. Highways and trucks are the leading means to move parts around. In many companies, logistics account for around eight percent of the total cost of a product, sometimes only six percent, in other case up to 10 or 12 percent.

Looking at Germany, most production plants are largely organized according to lean principles. What is it like in Brazilian plants?

Brazil has a very broad mixture of companies. There are local Brazilian companies, which are mostly family owned. Then we have a few midsized companies and a few large ones. Furthermore, we have many international companies; European, American, and Asian companies. Especially Asian companies have greatly increased over the past 20 years.
Some of the advanced companies are more organized in terms of lean principles. They pursue continuous improvement, but there is still room for improvement. Other companies – many mid-sized, small sized and few large companies – are trying to catch up with regards to lean principles. Some leading companies, like Embraer are doing okay. They are leading transformation by being more optimized. They have implemented high product and process requirements to remain competitive. Some large companies took a step forward a few years ago, but in general, Brazil has a long way to go.

Looking to the future, what do you expect for Brazil in the coming years?

Nowadays all over the world, companies are pursuing digitalization (smart factories, smart companies, Internet of Things). This is also taking place in Brazil. I expect greater adoption of collaborative tools, how we use data science, process mining, automation, mobile devices, and everything related to mobile data.
As transformation consultants, we believe that it is important to first create stability, no matter what kind of process you are working with. First, you must create stability, remove waste, standardize the process and then digitalization goes on top of that.

Moderation

Thilo Greshake, Partner, STAUFEN.AG

Guest

RGB

Dario Spinola, Managing Director, STAUFEN.Táktica

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