Published Article:
Lana Pinheiro, Agencia AUTODATA Weekly (1st. edition no. 154 Year II)

An integrated logistics services provider to the automotive industry. Since April 2003, when it began a deep restructuring process, this has been the new TDS Logística do Brasil´s core business. At that specific moment in time, TDS Automotive, a Canadian company, purchased all stock in the hands of the company's minority shareholders and became responsible for running the company's local operations and standardizing processes according to its global principles.

The immediate consequences from such acquisition ranged from a broad divestment process involving operations linked to segments not linked to the automotive industry, shrinking of its structure through a 40% reduction in space and 50% reduction in the workforce, concurrent with the objective of achieving the same financial results.

In 2003, TDS registered revenues of R$ 59.3 million, employed 414, and occupied an area of 103,000 square meters. The company has bold objectives for the next two years, according to the company's president, Walter Serer: " We want to triple our size ", he stated.

In order to achieve this, the company invested U.S. $1 million in training last year, and should invest an additional U.S. $500,000 in a new software dedicated to material handling control. The company has two major types of logistics services in the country: inbound and outbound.

In the first area, TDS offers the concept that is already utilized at its American and European operations: the Tier Zero. " The objective is to fill an existing gap between the Tier 1 and the vehicle manufacturer, offering services that range from the management of the supply chain, sub-assembly of equipment through the setting up of modules that are composed of a high volume of components, until the line’s sequencing and supply ", he added.

A practical example of this can be found at Ford's engine plant located in the city of São Bernardo do Campo, in the state of São Paulo, where TDS Logística is responsible for assembling the truck engines and fronts. According to Andrés Rojas, director of new business development at the company, close to 50 employees are hard at work assembling the two components and sequencing them in a form such as to enable their immediate to utilization in the production line.

The company offers its outbound logistical services to the vehicle manufacturers, which involves the consolidation of packages for export operations under the CKD and SKD regimes.

For example, from the company's site in the city of Santo André, Volkswagen CKD vehicles are shipped to China and Africa. It also recently began operating exports of Volkswagen semi-finished trucks to Mexico.

Daily, close to 120 trucks arriving from Volkswagen and its parts suppliers deliver parts and components, which will be exported, to the company’s industrial building of 94,500 square meters. The items undergo a rigorous quality-control process, are repackaged, and put into containers that are shipped to the port of Santos, in the state of Sao Paulo. According to Rojas, the secret at this time is to find the best way of fitting the parts such as to maximize space utilization without damaging them. In order to assemble this jigsaw puzzle, TDS has a specific engineering department. A similar process also takes place at the VW/Audi plant in the city of Curitiba, in the state of Paraná, where the company is responsible for the parts logistics that are shipped to the German after-market, as well as the CKD Golf, which is shipped to China. The first major project obtained by the company after its administrative restructuring was the export contract shipment of Volkswagen trucks to Mexico. The total volume has not yet been announced because the operation is in its initial phase. However, TDS expects to achieve a 20% increase in revenues by 2006.

Currently, outbound operations account for 85% to of the company's revenues in the country, equivalent to 40 containers exported per day, representing approximately 429,000 cubic meters shipped per year. But the company, according to its president, is planning to reach a balance on the services it provides. " We seek a large space for growth in inbound services in Brazil, mainly due to the increased vehicle production. This is the right time to show the vehicle manufacturers that they can outsource the service of management of its supply chain and the assembly of some equipment, allowing them to dedicate more time to their core business ", he stated. Outbound services are benefiting from the country's good export performance. " Brazil has good competitive advantages in foreign markets such as good engineering and the favorable exchange rate. This is why we have to take advantage of the opportunity, but also pay attention to the domestic market ", he added.