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How to build the business case for AI-powered demand planning in the cement industry

Cement demand is a moving target. The best way to master it is to get ahead of it.

How to build the business case for AI-powered demand planning in the cement industry
[ipopba , rh2010 /AdobeStock]

Cement demand is a moving target. The best way to master it is to get ahead of it.

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Market conditions are more volatile than ever before. The key competitive differentiator under such circumstances is market responsiveness—the agility with which cement manufacturers adapt to the many curveballs that are the trademark of the construction industry. This, in turn, can only be achieved via a proactive approach to demand planning.

But given the complex nature of demand and the wide variety of factors that influence it, demand planning is no simple matter. The easiest way is to segment the entire ecosystem that caters to it. This enables dynamic, accurate decision-making—key to market survival and growth. But dynamic segmentation that can help you master transient market conditions on the fly is only possible with an autonomous, agile system based on machine learning (ML) and artificial intelligence (AI).

AI-led dynamic segmentation enables you to leverage fast-moving market conditions—at scale and along the entire length of your value chain—thus helping you achieve market differentiation and maximizing your top- and bottom-line profitability.

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AI-DRIVEN DYNAMIC SEGMENTATION ENABLES MULTIPLE BUSINESS AND MARKET VIEWS AT SCALE

To remain competitive in a rapidly evolving market, cement manufacturers must dynamically segment their demand and supply strategies—as well as their operations—to optimize cost at every step toward delivering value to their customers. This, in turn, helps maximize the performance of their supply chains, leading to continued improvement of relevant KPIs.

With AI, cement manufacturers can overcome the significant challenge of consistently implementing new business rules in response to supply chain complexities and uncertainties while at the same time keeping an eye on acceptable limits of variation and ensuring seamless, integrated operations. Today, the most innovative companies are turning to data as they try to synchronize and optimize their operations as they work toward incremental improvements in efficiency, quality, and profitability.

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MONITOR, PREDICT, AND FULFILL DEMAND

Fluctuations in demand are frequent in the volatile cement industry and inevitably lead to supply chain complexity and chaos. With AI, you can track demand at all times and use that data to precisely predict it for the near-term, ensuring accurate business decisions aligned with demand across all segments of your execution model—all while building an agile and resilient supply chain.

DYNAMICALLY ADJUST PRODUCT MIX AND SEGMENT CUSTOMERS

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With the rate at which the construction industry is subject to shifts in business, customer, and environmental requirements, a “hot” product today may outlive its popularity within months. Likewise, material sourcing or pricing issues may radically affect the feasibility of an otherwise perfectly viable product. This means that customer preferences can no longer be analyzed at periodic intervals. They need to be continuously tracked and monitored so that business goals and operations can be adapted on the shop floor to ensure continued profitability.

Similarly, customer needs vary significantly across industries. While well-established customers may have large budgets and high order volumes, smaller customers may or may not have comparable spending power. Even then, sudden changes in business priorities, government policy, or trends may further oscillate demand. Given today’s accelerated product lifecycles and equally sporadic market dynamics, only AI can keep pace with the scale of change across hundreds of parameters and segments, self-adjusting where required, and all the while maintaining an integrated view for streamlined operations.

ADAPT TO MARKET VOLATILITY

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From climate changes and natural disasters to global pandemics and political uncertainties, the cement industry has witnessed all-encompassing changes affecting every sphere of operations. In times of unprecedented uncertainty, AI-enabled dynamic segmentation helps cement businesses shift from a reactive approach to a proactive one that supports rapid adaptation to constant market shifts.

OPTIMIZE SALES & OPERATIONS PLANNING

Traditionally, S&OP in the cement industry has been driven by business goals. However, this model no longer works as it is static, while market conditions are dynamic. The modern cement business thus needs to adapt and optimize S&OP based on changes in demand, as and when they happen. With demand indicators numbering in the hundreds or more, the only way to monitor them is through AI, which also helps predict near-term changes—thus enabling process optimization in real time to ensure long-term profitability in compliance with business goal-based rules.

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PRIORITIZE ORDER PROMISING

In the cement industry, orders are often promised with little to no visibility into the feasibility of fulfillment; schedules are rearranged based on fast-approaching delivery deadlines rather than profit margins and operational efficiency. The trick is to engineer robust, repeatable supply chains led by rules rather than exceptions. Daily operations cannot afford to be disrupted by random order promising. Orders should instead be promised taking into account already existing orders and the most optimal way to fulfill each of them on time without incurring exceptional costs for expedited delivery. AI affords much-needed visibility into available-to-promise lead times that help protect supply for important orders while maintaining the agility to cater to other orders as well.

MANAGE MARGIN PRESSURES 

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With constantly escalating market competition, cement businesses are under extreme pressure to do more with less across their supply chains. Dynamic segmentation is key to enabling accurate business decisions at every stage of these highly unpredictable journeys. In the long-term, this helps ensure higher revenue and profit margins in alignment with business goals.

CUSTOMIZABLE, PROFITABLE CEMENT MANUFACTURING

More and more leading cement businesses are choosing to leverage the power of AI to achieve seamless, demand-driven supply chains end to end. With responsive, synchronized supply chains, manufacturers gain the ability to predict and plan for demand in advance, allowing them to fulfill orders on time and in full, every time.

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Disruption being the norm rather than the exception in today’s market, cement manufacturers need every tool at their disposal to automate and optimize business decisions and operations, while delivering increasing profits and unbeatable customer experiences.


Anita Raj is the VP of Product Marketing for ThroughPut Inc., an AI-Powered Supply Chain Software Company based in the U.S. & Germany.

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