Supply Chain: The Advance of Espírito Santo

Have you ever considered the impact on a company of being featured in numerous headlines across various media and having its reputation damaged by allegations of involvement in labor practices akin to slavery? Or the consequences of being suspended from international trade fairs, commercial missions, and promotional events that significantly boost its market due to actions that violate laws and environmental regulations? 

This serves as a clear warning about how the supply chain is a relevant issue for corporations, regardless of their size and the sector in which they operate. Therefore, independent of the good practices that an organization develops directly, its relationship with its supply chain makes it jointly responsible.

Many companies have been prominently featured in the media due to inhumane situations, undue failures, and sometimes even illegal activities, exposing one of the most difficult risks to manage: reputation. However, it is redundant to highlight the difficulties, misconduct, and shared responsibility of the issue.

What is important to emphasize is that solutions, although complex, depend on breaking paradigms, uniting various forces, and engaging committed actors. Based on the concepts of supply chain development, Espírito Santo has distinguished itself on the national and global stage for nearly three decades.

Before the turn of the millennium, there was an almost insurmountable gap for small local industries to be part of the supply chain of the large industrial plants that were established and operated in this small Brazilian state, which had enormous potential for generating good business. There was a lack of quality, knowledge, and even necessary inputs, such as suitable parts and equipment.

However, the concerns from both ends of this chain—the representative entities and society—facilitated the “understanding that the growth of local industries meant a contribution to citizenship and opportunities for social development for thousands of residents,” according to Renato Guerón, who was then the head of Aracruz Celulose.

The turning point came with actions that promoted interconnection between technology companies and local institutions, the strengthening of consortia among suppliers, implementation of quality programs, cost management, and business management. The structuring of development and qualification programs brought certifications, training, and knowledge that are now internationally recognized.

The key mentor of this initiative, consultant Durval Vieira de Freitas from DVF Educação Empresarial, identifies three major benefits for companies: “Promoting the opening of new markets, improving competitiveness, and strengthening associativism.” In Espírito Santo, local participation in supplies for large companies increased from 8% to 60% this century, and currently, Espírito Santo companies operate throughout the national territory and are recognized as leaders in their fields.

Among a range of necessary qualifications that transform the business environment by providing security, innovation, and quality are topics related to compliance, finance, environment, taxes, and labor laws, which need to be widely disseminated to all institutions, regardless of their size.

The business, economic, and social benefits of this successful trajectory are reaped by society in Espírito Santo in various forms and are now exporting this methodology to other states and abroad as a new way to expand businesses while generating value for all stakeholders.

However, the business environment remains complex and demanding, and it is crucial not to forget that much still needs to be done to leverage and showcase the full potential that Espírito Santo and Brazil possess in the face of challenging scenarios.

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Luana Romero serves as the Executive Director at IDEIAS. She is an administrator with an MBA in Project Management and is a Project Management Professional (PMP) certified by the Project Management Institute (PMI). She is a specialist, professor, and consultant in ESG. Luana has worked on various projects to redefine adverse socio-environmental impacts of large enterprises, including programs in mobility, sanitation, infrastructure, and industrial plants, as well as in steel, pulp, thermoelectric plants, transmission lines, and gas pipelines, among others. She has been coordinating consulting projects for enterprises financed by institutions that are part of the World Bank Group.

IDEIAS

IDEIAS is a private entity founded on May 29, 2001. Based in Espírito Santo, it operates throughout the country in the social, economic, and environmental areas, seeking sustainable development and assisting companies in elevating their Environmental, Social, and Governance standards, thus promoting their ESG journeys.