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Blog May 2021 Updated March 2022

Meeting customer demands in cement distribution

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Jan Tønder Intelligent Optimization Solution Advisor

When Covid-19 significantly slowed down construction, the demand for cement dropped, leading to overcapacity. Up until then, we were consuming 4 billion tons of cement worldwide each year. Now we’re emerging from the impact of the pandemic, and construction companies are rearranging operations that had been suspended.

Growth of cement market

As a consequence, the global market for cement and concrete products is expected to grow by more than U.S. $32 billion this year over last year. Predictions see the market reaching $481.23 billion in 2025 at a CAGR of 7%.

All of which points to a growing demand for cement. Yet just because the demand is returning doesn’t mean every cement distributor will capitalise on the opportunities. The pandemic was a chance to reinforce your competitiveness, as many in the cement industry did – and as the International Finance Corporation advised in 2020.

It’s not too late to do just that.

Paper processes leak revenue

The supply-and-demand uncertainty inherent in cement distribution does not lend itself to paper processes. Nothing does, actually. If you’re still working with paper, you should know that it’s eating up to 3% of your revenue, according Gartner, Inc. Those costs include the paper, printing, filing, storing and maintaining files of information. It’s also an incredibly slow way to work and is prone to human error. It’s simply not sustainable in the long run.

Future proof your business

Without an accurate forecast of the stock you need, you can’t be certain of your ability to service your customers. That’s no way to live. You need technologies in order to replenish stock without sacrificing margins. Think about the possibilities if your IT systems were seamlessly integrated. No siloes of information, but a true workflow. The efficiencies you’d gain would be nothing like you’ve ever known. Let’s go one step further. What, for example, could you achieve if the warehouse management system could send data to your planning system about stock levels and automatically generate replenishment orders?  

It’s in the algorithms

These technologies are being used now. Data is exchanged in real time. Best-in-class technologies will be designed specifically for the cement and ready-mix concrete industries. They use powerful algorithms to streamline processes involving stock, which allows you to:

Lead times, transport costs – these and other relevant issues are factored in, so you work smarter, faster and more agile. You can meet customer demand without stress and with your margins intact.

Gaining an edge

A best-in-class planning system uses your historical data to forecast when you need to replenish or collect stock. It automatically generates orders for you, moving them into your planning system for route optimisation. An order cancellation can come through right before your truck is due to leave – or even while the truck is on route – and optimisation will immediately redirect the load in the way that makes the most sense. This is how you work efficiently to accelerate top-line growth.

Better customer service

If a customer is experiencing sudden dry running and needs your help, route optimisation will redirect your loads. Best-in-class technologies enable you to monitor customers’ stock levels so that you can more accurately plan their next delivery. You can include their own pick-ups to cater for silo capacity.

At the end of the day, it’s customer service that differentiates you from competitors in this industry. The better you can solve their problems, the less churn you’ll experience.

We’re talking about AMCS technologies

Our best-in-class solutions are everything we’ve just described. They can allow you to plan both bulk transport and bag distribution in the same system. Include multiple silo locations and loading heads per silo within your planning. Reduce your mileage by up to 20%. Ability to monitor execution. Re-optimisation of your plan in real time, as needed. Spend 75% less time on planning. There’s more, of course.

Get to know AMCS connected technologies, designed specifically for the cement and ready-mix concrete industries.

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