Supply chain management in the cement industry

Abstract

Traditionally supply chain management has played an operational role within cement and mineral extraction commodity companies. Recently, cost reduction projects have brought supply chain management into the limelight. In order to clarify the reasons of the evolution of supply chain management and to demonstrate the value of efficient supply chain management within the cement industry, an analysis of the cement supply chain has been carried out using Michael Porter's five forces. In addition, a comparative analysis of the supply chain strategy of the four largest cement companies has been presented, according to Larry Lapide's excellent supply chain framework. Also, a characterization of the current cement supply chain has been done, using the Supply Chain Council's SCOR model processes; plan, source, make, deliver and return. Five authors' various frameworks of supply chain design have been used to gain insight into the general characteristics of the cement supply chain and propose a definitive supply chain strategy. Finally, three case studies from mineral extraction commodity companies have been presented to demonstrate the potential of supply chain management. The study concludes that supply chain management has tremendous potential to add value as a strategic function for companies in these industries.