With changing times and demands, cement companies may create a system to sell to their end consumers directly using the Internet thereby relying more on technology than traditional formats.

Logistics for cement begins from the source where limestone, the raw material is procured from mining sites and brought to the plant. Logistics ends with the finished product leaving the manufacturing facility and ultimately reaching the consumer. For this, it travels across the lengths and breadths of the country. The demand for cement by every organisation must be met on time, or they lose the opportunity to their market competitors. The mode of transport for cement decides its cost and generally holds up to 20 per cent of its retail price. The cement industry today uses multiple modes of transports to fulfil its logistical needs. 

Largely there are three key elements of distribution channels – wholesalers, retailers and end consumers. Cement organisations sell their end product to the consumers through wholesalers or retailers. 

Factors affecting cement distribution

Logistics cost is one of the key differentiators amongst the prices that any cement manufacturing company quotes. Intense competition drives them to find innovative methods to lower these costs and thus, stay market leaders. 

The process of bagging & de-bagging of cement for movement between the manufacturing unit to distributors is one of the contributors to the logistics cost. This can be reduced by carrying cement in bulk, rather than in bags. However, sometimes when adequate storage facilities are not arranged for, this bagging and de-bagging process becomes necessary which results in increased logistics cost. Other factors that influence cement distribution would be market demand, seasonal surges, government policies, political lobbies, connectivity, infrastructure, technology, country geography, history and culture.  

Cement distribution solutions

Many cement manufacturers have created applications that can be downloaded to place order for cement or get to know the availability of their preferred brand at the nearest distributor or retailer. A new concept of cement marketplace has also been in the being for some years now. It is online shopping of cement where small and large quantities of cement can be purchased online. These eCommerce platforms are gaining popularity by the day.   

Selection of distribution channels

Any cement business must look at benchmarking against the best practices adopted by their competitors and adopt a similar model to achieve larger markets and cost efficient channels. Cost efficiency can be determined by analysing production and delivery cost of cement at all stages. The best cost-benefit ratio helps come to this decision. 

While selecting a distribution channel, an organisation must look into the demand, its projection and lead time to fulfil that demand. Along with this also comes the market potential which may differ through geographies and depend on the reputation of the brand in the marketplace.

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