Gefco innovating during a recession
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Gefco Brazil: Driving innovation in an economic downturn

Angelica Mari — October 2016
Alexandro Strack, CIO at global logistics company Gefco in Brazil, outlines the key role IT is playing in generating new business and sharpening operational efficiency — even as the country’s recession continues to bite.

A major crisis can be the catalyst for innovation. And at logistics multinational Gefco, the IT management has looked to an ambitious data analytics and mobile-led strategy to help its business in Brazil weather the country’s worst recession in 25 years.

A 20% slump in demand across the country’s automotive industry — one of the core sectors serviced by Gefco Brazil’s fleet of vehicle transporters — has had a direct impact on its fortunes. In response, CIO Alexandro Strack and his team have been focusing on innovation that stimulates new business and enhances operational efficiency at the company, whose Paris-headquartered parent is co-owned by Russian Railways (RZD) and French carmaker PSA Group.

Alexandro Strack, CIO of Gefco Brazil
A comprehensive review of Gefco Brazil’s IT strategy has prompted the alignment of resources much more tightly on the business’s immediate needs, Strack points out. In particular, it is combatting the impact of the recession by enhancing the value it derives from the vast amount of data it collects and stores.

“As a result of our new analytics approach we have been able to understand the business a lot better and make more assertive decisions,” says Strack, who has also used the slowdown to rationalize the company’s IT software portfolio.

Key to the analytics push is Gefco’s use of the QlikView data analysis and visualization tool, which is supported by local consulting firm Mindtek. It draws data from core business activities underpinned by an ERP suite from TOTVS, the Brazilian enterprise software market leader. Historically, front-office software used by its various business units has been a mix of proprietary and off-the-shelf systems; that is now being consolidated and replaced by modules also provided by TOTVS and integrate closely with its ERP platform.

According to Strack, the optimized use of analytics has also enabled Gefco to deliver critical information services to its logistics customers — from key performance indicators to the surfacing of patterns in their individual operations. The delivery of that intelligence through web dashboards is provided as a consultancy service matched to each client’s needs. Strack highlights how that has helped it retain clients’ loyalty, as information arms them with valuable insight into processes and areas where their operations can be made more efficient.   

“What we’ve seen is that a time of economic crisis is also one where clients are more open to doing something new. So we have been able to reach out to organizations — many of whom we hadn’t worked closely with until now — and help them navigate through this downturn more positively,” he says.
Mobilizing tax processing

That is not the only area where Gefco Brazil is helping customers streamline the movement of goods — and cut costs. It has sought to ease the burden of the paper-based tax forms associated with the logistics chain by introducing a suite of mobile applications.

Brazilian commercial law requires companies to maintain a comprehensive trail of taxable transactions. Each month, for example, Gefco Brazil issues 55,000 to 60,000 tax documents related to the delivery of its services. To put that in context, that is roughly the same volume of supply chain tax documentation that Gefco’s whole European operations generates in a year.  

Strack outlines the challenge: “Unlike with other countries, in Brazil a lot of the tax-related processes occur during the operation itself. You can’t just perform the service and then process the paperwork afterwards. And as the Brazilian government is increasingly expanding its governance, this directly influences our ability to operate.”

The company has tried to simplify and speed the task of navigating through such complexity by providing its teams with a sophisticated mobile application that leverages technology from cloud platform The mobile app is used by truck drivers and support staff as manufactured goods are picked up to capture information that is critical for creating tax paperwork. This is then automatically uploaded to Gefco’s central systems, which issue the mandatory transportation documents for drivers to hand over at delivery points.

“This flexibility of printing the mandatory documentation for transportation reduces unnecessary travel [by drivers] to a support center and therefore means lower logistics costs and shorter transit time to the final destination of the cargo,” explains Strack.

“The economic crisis has meant a difficult adaptation. But IT is core to dealing with that reality in a very productive manner.”

The mobile solution is not without its challenges — from the training of drivers to dealing with the sometimes patchy communications coverage in a country as vast as Brazil. But the advantages are compelling: not only does the mobile solution automate much of that tax processing for Gefco, it cuts transit times and improves logistics performance for clients, he says.

As with all such innovation, says Strack, “the goal is to use technology to streamline and accelerate supply chain processes and enable the industries we work with to make faster decisions, and have information on all the points involved in the supply chain in a more accurate and agile way. The economic crisis has meant a difficult adaptation, but I feel we are dealing with the reality in a very productive manner. And IT is core to a lot of that.”
First published October 2016
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