For an industry segment like cement where high product volume is intrinsic to the business, logistics and supply chain play a critical role in ensuring service differentiation in the face of increasing competition. Transporting material is an essential requirement for industrialisation and urbanisation alike. Further, with rural consumption being one of the main drivers for growth in India, it is important to build an effective and scalable supply chain network to reach the last mile.
Supply chain in India faces a number of challenges including lack of well-developed logistics infrastructure, unavailability of skilled manpower, inability to cater to increasing rural consumption, stringent statutory regulations, policies and low level of maturity in industry as compared to other developed countries.
Most cement plants are located in remote clusters depending on the availability of limestone, which is the raw material for manufacturing cement. Supply chain in cement industry is critical to ensure the delivery of cement from these manufacturing locations to the markets. Due to the low value of single consignments, the logistics cost/tonne is much higher compared to other products like fruits, vegetables, consumer appliances, and FMCG etc. Hence, optimising logistics costs has an immediate and visible business impact for cement companies. Finally, the nature of cement consumption in urban locations is quite different from the nature of cement consumption in rural locations. This implies differentiated supply chain strategies to serve urban and rural customers.
An agile and responsive supply chain is critical to sustaining industry leadership. This has been the driving factor and key differentiator for supply chain excellence at UltraTech who focus on each step from planning to delivery.
With differentiated supply chain systems in rural and urban areas, it becomes very critical to plan and chart out system for different areas according to the location. Post COVID lockdown this sector will have challenges meeting demand surge with a lot of limitations to overcome. We will have to wait and watch on the measures taken by the cement giants, on their take on supply chain management system to keep their businesses on the race.
