ILOS consulting prevents misguided investment in Distribution Center: benefits that could be captured by the customer would not be worthwhile.
A large retailer specializing in nutrition, with operations throughout Brazil, was looking to assess whether it would be worthwhile to open a new Distribution Center in Minas Gerais. The company's objective was to capture additional tax benefits with the new investment.
To analyze the pros and cons of this alternative, ILOS reviewed all tax benefits, identified the areas to be served by the potential new distribution center, determined the necessary capacities, and calculated logistics costs in different scenarios and locations.
The result was a recommendation not to open the CD, as the expected gains in the realistic estimate carried out by ILOS were not very representative.
ILOS has extensive expertise in optimizing distribution networks, considering logistical and tax aspects. Contact us.
project type
- Optimization of the logistics network
Segment
- Retail
Financial analysis of opening a Distribution Center in Minas Gerais, aiming to capture tax benefits.
Challenge
A nutrition company operating throughout Brazil was seeking to capture tax benefits and believed that opening a Distribution Center in Minas Gerais would be a good investment. They sought ILOS's help to analyze the financial viability of opening this DC, quantifying the gains.
ILOS solution
- Analysis of the estimated tax benefits with the new CD
- Definition of areas to be served by the eventual distribution center in Minas Gerais.
- Sizing the necessary capacities in each scenario.
- Calculation of logistics costs by scenario and location.
Results
- ILOS conducted realistic estimates of the tax benefits that could be captured, identifying that these gains were below the client's expectations.
- Recommendation not to open a new distribution center in Minas Gerais.
