JDA software cements advatage for Heidleberg


JDA Supply Chain Strategist software gives German-based manufacturer HeidlebergCement a better insight into its supply network

JDA software cements advatage for Heidleberg
JDA software cements advatage for Heidleberg

June 21, 2011

German-based company, HeidelbergCement AG needed to make more intelligent, decisions about its supply chain investments.

According to HeidelbergCement Logistics Strategy Analyst Henrik Lenart, the company
wanted
to understand where local demand exists and how to meet it in the most profitable manner.

A global market leader in aggregates and a prominent player in the fields of cement, ready-mixed concrete and other downstream activities, HeidlebergCement is of the world’s largest manufacturers of building materials.

By using JDA Supply Chain Strategist to model supply, demand and capacity across
its sophisticated network in more than 40 countries, Lenart says HeidelbergCement is able to make intelligent decisions that match shifting customer demand with available regional capacity.

As a result, the company has been able to analyse decisions such as the construction of new plants, acquisitions and other investments in a more strategic manner.

"With JDA Supply Chain Strategist, we can basically make much more informed decisions," Lenart says. "It enables us to allocate real values to different investment options."

"Without JDA, we would not be able to put all of our relevant data into one supply chain model. And we see now that it is absolutely necessary to make sound decisions."

Prior to implementing the JDA solution, HeidelbergCement was managing its global supply network with an in-house system.

The company realised that it needed a more sophisticated tool – one that could gather and analyse up-to-date information from its worldwide operations – to aid in making top-level strategic choices.

"We looked at several different solutions that promised intelligent decision support, and it became apparent early in the process that JDA Supply Chain Strategist was the best solution available," Lenart recalls.

Cement manufacturing is a complex process, and one of HeidlebergCement’s primary concerns was whether any supply chain solution could manage this complexity across a global network.

"We ran a pilot program to see if JDA Supply Chain Strategist could really model our business, and found that the tool had the capability to manage our production flows and optimise them. So it was an easy decision to choose JDA."

HeidelbergCement began by implementing JDA Supply Chain Strategist in parts of its German cement business, and sequentially implemented the tool at its cement manufacturing facilities in other countries.

The company is currently implementing JDA Supply Chain Strategist in its global aggregates business as well.

"A very good example of how we are using JDA Supply Chain Strategist occurred in 2007," says Lenart. "We did a study of whether we should build a new greenfield plant in order to serve growing customer demand.

"We modelled three of our existing plants in that region, then added the new plant to the model.

"The JDA model actually suggested that we sequentially upgrade the capacity of our existing plants, instead of investing in the new facility – a decision which saved us about $200 million Euros ($280 million US)."

In addition to short-term cash benefits, this decision also had a longer-term strategic impact. "When the credit crisis came and the markets were down, we were much more flexible in reacting," Lenart adds.

"We could just stop the capacity increase in the existing plants, whereas having a new plant would not be that easy to control."

JDA Supply Chain Strategist also helps HeidelbergCement to assess other potential investments such as strategic acquisitions.

"Recently JDA Supply Chain Strategist assisted us
in the realisation that a potential acquisition target would mean millions of Euros in cost-saving synergies," Lenart says. "With JDA, it basically all comes down to cost savings."

In addition, for the first time, HeidlebergCement has global visibility across its geographically distributed operations.

"We have facilities in more than 40 countries, with about 100 million tons of cement capacity," Lenart says.

"JDA Supply Chain Strategist is enabling us to bring our various facilities together and get a more global view of the whole network, instead of focusing on profit and loss for each country or region.

"It is helping us to make decisions based on the greater good of the company, not on the isolated profitability of one part of the business."

According to Lenart, JDA has helped to create a real competitive edge for HeidelbergCement in the global building materials industry.

"We have an advantage because we are able to allocate our capacity wherever it is needed to meet demand," he says.

"Having a better grip on demand, and where that demand is located, allows us to intelligently allocate capacity.

"We can avoid unnecessary capital investments, and we also have much lower transportation costs and distances, because we can strategically match available supply with demand. This provides a significant cost advantage over our competitors."

You can also follow our updates by joining our LinkedIn group or liking us on Facebook