AI-powered Demand Planning for Building Materials and Cement Industry: How To Balance Supply & Demand

January 13, 2024 · 4 minutes
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Dating back to 5600 BC, cement has become an indispensable building material, with its consumption only second to that of water.

While the construction industry itself poses some unique challenges in supply chains across the world, cement manufacturing comes with its own diverse set of differentiators like the ones mentioned below:

What are the Top Challenges of the Cement Industry?

1. Green Building Mandates

IPCC’s 2021 report is a commentary on the aggressive state of carbon emissions, of which the building industry is a major contributor.

As much as 40% of global carbon emissions are linked to the construction industry in the forms of manufacturing waste, high embodied energies, and global supply mechanisms.

The report has led to large-scale changes in the construction industry sector, and green building regulations are at the helm of these amendments.

As environmental concerns escalate, a high percentage of cement manufacturers are choosing to evaluate their processes and proposals and optimize them for enhanced eco-consciousness. 

2. Rapid Global Urbanization 

It is predicted that by the year 2050, 7 billion people will live in urban areas across the world. This shift to an urbanized lifestyle comes with a lofty demand for increased housing and the urban infrastructure to support the growing urban sprawl.

3. Infrastructural Upgradation

The US Senate, in August 2021, passed a $1 trillion proposal for Infrastructural Upgradation to upgrade America’s roads, bridges, and tunnels. Since cement is a key construction material, this proposal is going to create widespread demand for cement.

Unless building material supply chains enhances agility while catering to this cement demand, it is going to create a disbalance between demand and supply. 

A key enabler that has made the cement industry even more prone to demand fluctuations is the shift from infrastructure development initiatives in first-world countries to those in second-world countries. The Indian construction industry is set to achieve a Compound Annual Growth Rate (CAGR) of $738.5 billion by 2022.

Statistics around other developing economies in Southeast Asia and Latin America show similar trends on the verge of wide-scale growth. 

Cementing Supply Chain Operations: Key Drivers for Optimized Cement Supply Chains

The cement industry is a core industry due to its influence on urban-level infrastructure as well as private settlements. It influences demand across sectors like housing, transport and logistics management, and even consumer goods. 

Accurately anticipating this demand to enhance efficiency across the supply chain can lead to breakthroughs in construction supply chain management and the elimination of bottlenecks in manufacturing

Learn how cement manufacturers can leverage AI-driven capabilities to maximize working capital savings across their supply chain. Download free case study now.

Strategic demand planning to future-proof building materials and cement industry for uncertainties

Strategic demand planning for the building materials and cement industry ensures stakeholders a higher degree of stability in an otherwise volatile market. A few key strategies that enable efficient demand planning include using Artificial Intelligence (AI) for testing, risk mitigation, and demand forecasting. 

1. AI-Powered Forecasting 

Machine learning models can make sense of a range of (seemingly) unconnected data to drive usable insights. These models then generate specific reports on key trends, demand projections, and geographies of escalated demand.

Employing AI-powered tools has become necessary to differentiate the information generating forums from legacy frameworks adopted by businesses.

2. Widening Vendor Network

As global disruptions due to geopolitical unsettlement become common, cement businesses need to develop far-reaching vendor networks. A wide network of vendors can buffer against elevated demand, create a consistent flow of material across the supply chain, and enhance deliverability.

3. Increasing Workforce Numbers

The cement industry needs an army of workers at its base operations to keep up even with everyday demand levels. However, escalated demands necessitate workforce evaluation and exaggeration.

As the world runs into global workforce shortages, cement manufacturers need to scale their workforce to remain viable. 

4. Increasing Supply Chain Visibility

Increasing supply chain visibility can ensure demand deliverability in two ways-

  • At the Demand Fulfilment Stage
    A transparent supply chain establishes opportunities for added inventory in the cement industry early on. This transparency ensures shorter lead times and faster demand fulfillment for both B2B as well as B2C enterprises. 
  • At the Replenishment stage
    When escalated demand calls for efficient order placement and inventory restocking, transparency in supply chains can highlight excess inventory in nearby locations. This can enable cement manufacturers to cut costs on transport and delivery and expedite building operations.

An Intelligent Demand-Planning Solution for Cement Manufacturers

Catering to global infrastructural operations, the cement industry is a high-value component of the building sector. As deliverability and efficient transportation systems gain prominence across supply chains, it becomes even more important for the cement industry to proactively factor them in. 

ThroughPut’s AI Suite offers intelligent solutions to enhance visibility across the supply chain to expedite procurement and delivery for cement manufacturers.

ThroughPut’s AI-powered engines drive insights from multi-faceted data to give direction and agility to global cement chains. Real-time reports on shortages, demand escalation, and inventory data allow cement manufacturers to take important calls early in the supply stages. 

Book a demo with ThroughPut’s Demand Planning and Sensing Module to achieve transparency, agility, and visibility in your building materials and cement supply chain. 

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Anita Raj
Product Marketing Specialist