QUESTION 3 With reference to the above article, give a critical account of the measures that can be adopted by DHL in terms of inventory management and demand to maximise profitability. (25) ri CASE STUDY DHL ESTABLISHES A SUPPLY CHAIN DISTRIBUTION CENTRE IN BRAZIL DHL Supply Chain, the contract logistics specialist within Deutsche Post DHL Group, consolidated the logis operations of three Sanofi divisions in Brazil by establishing a new distribution centre in Guarulhos, near Paulo. The project, initiated by Sanofi in 2014, covers all portfolios of Sanofi, Sanofi Pasteur and Medley Bra In addition to the operation of the newly installed logistics centre, Sanofi redesigned its distribution netwo for the complete Brazilian market and the corresponding export processes. The development of the new site means investments of 200 million Euros between 2015 and 2020. Alre today, it is one of the largest distribution centres of Sanofi worldwide and the largest operated by DHL in Br for the healthcare sector. Guarulhos was chosen as the ideal location due to its proximity to Sanofi's indus plants, large consumer centres and main logistical hubs of the country such as the Port of Santos. With 36, square meters of fully air-conditioned storage area and almost 50,000 pallet positions, DHL's Distribution Ce has increased Sanofi's daily shipping capacity significantly, especially with regards to operations of cold cl processes. Thereby ensuring speed, quality and safety for all steps along the supply chain. "The objective of project was to simplify and enhance Sanofi's storage operations and distribution network in Brazil. Consolida these operations into a single distribution centre has enabled us to foster synergies and streamline the er process," says Javier Bilbao, CEO DHL Supply Chain Brazil. Rodrigo Alponti, Supply Chain Director at Sanofi Br points out that the consolidation allowed greater efficiency in the delivery of products to distributors consequently, to the points of sale and patients. "Previously, Sanofi and Medley had independent logi operations even though they shared about 70 percent of their customers," he says. The project is in line with Sanofi's global strategy to strengthen its presence in emerging markets. Health products are often very delicate and their intactness must be ensured without jeopardizing the costs of opera the new site. At the Guarulhos's distribution centre, the latest technologies and best practices in the distribu and storage of pharmaceuticals are applied and already decrease operating costs by 30 percent. Sanofi's e software, which adjusts and distributes the orders in closed boxes to their end customers, reduced the am of packaging damage incidents by 35 percent. DHL's extended experience was crucial for re-designing the distribution centre and streamlining processes. Additionally, DHL was responsible for choosing the most sui equipment for the project and establishing security and stability. For this operational testing and assessments are performed prior to every execution. SOURCE: Adapted from Supply Chain Digital, 2016