Simulation of A Sustainable Cement Supply Chain Proposal Model Review

World Academy of Science, Engineering and Technology
International Journal of Industrial and Manufacturing Engineering

Vol:7, No:3, 2013
Simulation of a Sustainable Cement Supply

Chain; Proposal Model Review
Tarek Elhasia, Bernd Noche, and Lima Zhao
management operations to control effectively information,

Abstract—In recent years, sustainable supply chain management material and cash flow``, as stated in [2] and confirmed by
(SSCM) has been widely researched in academic domain. However, [3]-[4].
due to the traditional operational role and the complexity of supply Cement, as the most important ingredient of concrete and
chain management in the cement industry, a relatively small amount
most mortars, is a fundamental building material for society’s
of research has been conducted on cement supply chain simulation
infrastructure construction around the world. Cement
International Science Index, Industrial and Manufacturing Engineering Vol:7, No:3, 2013 waset.org/Publication/6630
integrated with sustainability criteria. This paper analyses the cement

supply chain operations using the Push-Pull supply chain consumption rate is known as economic growth- and
frameworks, the Life Cycle Assessment (LCA) methodology; and development index of several countries. In reference to United
proposal integration approach, proposes three supply chain scenarios Nations report [5] “Basic construction materials serve an ever-
based on Make-To-Stock (MTS), Pack-To-Order (PTO) and Grind- increasing demand for the building sector; this leads to annual
To-Order (GTO) strategies. A Discrete-Event Simulation (DES)
growth rates of about 6% for cement and 3.8% for steel. In the
model of SSCM is constructed using Arena software to implement
the three-target scenarios. We conclude with the simulation results same time these industries caused about 6% of global
that (GTO) is the optimal supply chain strategy that demonstrates the anthropogenic greenhouse gas emissions”. Cement normally
best economic, ecological and social performance in the cement consists of finely ground clinker and 5% Gypsum. Clinker is
industry. made from a raw material mix mainly consisting of High
carbon- limestone and Clay or their natural blend like lime
Keywords—Cement industry, simulation, supply chain marl and Correction additives. Cement used in construction is
management (SCM), sustainability. characterized as hydraulic or non-hydraulic. As the most
common type of hydraulic cement, Normal-Portland cement
I. INTRODUCTION (Type I) is the most produced cement worldwide; which is
S UPPLY Chain Management (SCM) refers to a managerial

philosophy which seeks synchronization and convergence
of intra-firm and inter-firm operational and strategic
taken as a case study in this research.
As cement is usually delivered to local markets, the cement
industry spread their production facilities evenly all over the
capabilities into a unified, compelling marketplace force; as Federal Republic of Germany and locates near the respective
stated in [1]. As an integrative philosophy, SCM focuses on limestone deposits. Cement production is either (wet) or (dry),
developing innovative solutions to create unique, depending on the water content of the material feedstock.
individualized sources of customer value. Most of cement plants are operated by Dry-processing
Traditionally, SCM has played an operational role within worldwide.
the cement industry. Management of the cement supply chains Reference [6] gives a clear review about the nature of
will enable manufacturing operations and integrated logistics cement production. Fig. 1 described main manufacturing steps
into seamless pipelines to maintain the continual flow of and the most important sustainable aspects in cement industry,
cement from the raw materials source to the final customers. starting from the quarry works until the cement silos.
Furthermore, (SCM) is defined as ``the task of integrating Traditionally, these manufacturing steps are divided into five
organizational units along a supply chain and coordinating main production processes: Quarrying ’’Quarry works and
materials, information and financial flows in order to fulfill crushing’’, Raw materials grinding, Clinker production,
(ultimate) customer demands with the aim of improving Cement grinding and cement distracting ’’Storage & Shipping
competitiveness of a supply chain as a whole, Supply chain systems’’; as described in Fig. 1.
integration is considered as a systematic connection between Simulation has been defined as the imitation of the real-
the internal and external business processes through world process or system over time. Simulation tools are
specifically designed to limit transient effects on
Tarek Elhasia is with IPE Institute of Product Engineering , University of measurements, which can be used in estimating a set of
Duisburg-Essen, Keetmanstraße 3-9, 47058 Duisburg, Germany, (phone: +49 efficiency measures in production systems, inventory systems,
203 379-7057; fax: +49 203 379-3048; e-mail: [email protected]).
Bernd Noche is with Professorship for Logistic Engineering, Institute of
manufacturing processes, materials handling and logistics
Product Engineering, University of Duisburg-Essen, Keetmanstraße 3-9, operations. In order to recognize and implement strategies for
47058 Duisburg, Germany, (e-mail: [email protected]) developing and improving supply chain networks, various
Lima Zhao is with WHU-Otto Beisheim School of Management, Burgplatz
techniques have been used in the cement industry.
2, 56179, Vallendar, Germany, (e-mail: [email protected]).
International Scholarly and Scientific Research & Innovation 7(3) 2013 418 scholar.waset.org/1307-6892/6630
Vol:7, No:3, 2013
Environmental Aspects
Quarrying Raw Materials Clinker production Grinding cement Storage/ shipping
Dust grinding Dust Dust Dust
Noise Dust Noise Noise Noise
Vibration Noise Gases SO2, NOX,CO2, Electricity Fuels
Landscape impact Electricity micro-pollutants
Raw materials Heat
Limestone Fuels
Clay
Sand
Quarry & Dry-process Cement Plant
Social Aspects Economic Aspects
Stockholder returns
Employment
Local taxes &wages
Health & Safety
Supplier's business
Training
Widely used product
Local community impacts
Community investment
Fig. 1 Layout of cement production line and sustainable aspects
Computer simulation is one of the popular methodologies to traditional cement supply chain model by Arena (Version 10)
model cement supply chain systems. In order to identify, as an advanced step. Concerning sustainability in cement
implement and optimize strategies of cement supply chain industry, [7] reviewed the design and operation of the cement
framework and to demonstrate the value of sustainable supply value chain from sustainable point of view. Again based on
chain management in the cement industry, a simulation study Simulation approach [8] investigated SCM strategies to
of cement supply chain system is carried out. improve the manufacturing efficiency of cement industry in
Libya. In the past few years, the focus on critical issues in
II. RESEARCH BACKGROUND cement industry such as climate protection, responsible use of
fuels and raw materials, emissions monitoring and reduction
A. Scope of Research has resulted in the broader adoption of sustainability
The main scope of this research to create and simulate a principles into SCM practices. Sustainable supply chain
sustainable cement supply chain; as recommended in [4], by management is a vision of research that is gaining more
moving Push-Pull boundaries along the supply chain to attention in application. The cement industry has been recently
discuss the feasibility of (MTS, GTO and BTO) strategies; as developing strategies for implementing sustainable business
recommended in [3]. Furthermore proposing a chain of Mini– management along the value chain. The worldwide leading
cement grinding plants; as integration approach. international cement manufacturers [6] have set up a Cement
Sustainability Initiative CSI organized by the World Business
B. Literature Review
Council for Sustainable Development (WBCSD-CSI). In
Most research topics reflect the major concerns of the Germany, the social partners of the cement industry have
cement industry like cement production, material management formed the Initiative for sustainability in the German cement
and sustainability. Reference [3] proposed cement supply industry in 2002, which focuses on topics like Climate
chain frameworks from a business management perspective. protection, the use of alternative fuels and raw materials,
Reference [4] continued the strategic perspectives of [3], industrial safety and health of the employees, emission
analyzed the cement industry more in detail and simulated a abatement. The 1st Analysis [6] of the sustainable transport
Vol:7, No:3, 2013
and logistic chains of German cement industry; published a supply chains, two ATO strategies – Grind-To-Order (GTO)
once in 2004. and Back-To-Order (PTO) ; as reviewed more in detail in
[3],[4].
C. Research Objectives
Fig. 2 identified the main cement supply chain processes;
In general, this research aims to analyze the essential based on the three-target supply chain strategies, which are
characteristics of sustainable SCM in the cement industry, to taken as simulation scenarios, later on.
model an integrated cement supply chain from the quarry to Make-To-Stock strategy/Scenario I provide the fastest
the end customers, and to optimize the cement SC through response time to customer, but the storage costs can be high
enhancing key success factors in environmental, economic, and product portfolio is usually limited; which is more
and social dimensions. suitable for bulk cement supply chain. In order to reduce the
The environmental dimension of sustainability constitutes storage costs and enrich customer product choices, Assemble-
to improve thermal and electrical energy efficiency, reduce to-order is implemented to handle bag and bulk cement order
emissions, and prevent environmental pollution along the configurations.
cement supply chain. From the economic perspective, the Pack-To-Order strategy/Scenario II helps to cope with the
sustainable development of cement companies is largely high demand uncertainty of bag cement. PTO can be an
influenced by the continuous profitability of the cement option for mass-customization of cement supply chain. With
supply chain network. Our proposed sustainable model aims increased variations in bag sizes and cement types in the
to increase cement production and distribution efficiency, future, the delay in the cement mixing and packaging process
reduce costs and generate revenue, streamline the cement is possible. Therefore, the implementation of PTO is
supply chain processes and enhance competitive advantages. reasonable with more flexibility in customer order fulfillment
The social dimension of sustainable SCM is frequently related and a trade-off analysis between the storage costs of cement in
with the concept of Corporate Social Responsibility (CSR), bulk and bag.
which tries to enhance the cement industry by investing in Grind-To-Order strategy/Scenario III sets the push-pull
employee safety and health, local impacts on land and boundary between clinker production and cement grinding
communities, as well as infrastructure and utilities process. GTO uses clinker as an intermediate product,
development. grinding cement as a final product according to customer
orders. GTO can integrate customer demand in the cement
III. SUSTAINABLE SUPPLY CHAIN MANAGEMENT IN CEMENT manufacturing process to reduce variability and improve
INDUSTRY flexibility in order fulfillment. The implementation of both
A. Cement Push-Pull Supply Chain Strategies GTO and PTO requires integrated information flow and
coordination along the cement supply chain.
Considering the response manner to demands, three
predominant supply chain systems are the push-model, pull- Market demand
Cement supply chain network and Scenarios
model and push/pull-model. Due to the high economies of Bulk
scale as well as the high (bag cement) and low (bulk cement) Fuel cement
sales
demand uncertainty in the cement industry, the push-pull Quarry Bulk
strategy is adopted to figure the right cement supply chain &
Supply
Cinker
production
Cement
grinding
cement
storage
Company’s Co.-
distribution cement
framework. Push-pull model takes advantage of risk pooling network sales
upstream to produce according to a forecast and keep Electricity
Cement Cement Cement
efficiencies high, while preserving responsiveness backing bags bags
downstream. Pull-push batches deliveries efficiently, while Push Pull
unit storage sales
Scenario 3
holds supply provisioning until demand uncertainty has been Grind To Order
revealed. In the supply chain framework, four strategies are Scenario 2
Push Pull
commonly used to address competitive priorities of response Pack To Order
Push
to market demand: Make-to-stock (MTS), Assemble-to-order Scenario 1 Pull
Make To Stock
(ATO), Build-to-order (BTO) and Engineer-to-order (ETO);
these strategies and their Advantages and Disadvantages are Fig. 2 Cement push-pull supply chain framework; based on
reviewed in [9]. Concerning cement industry, MTS and ATO (MTS, BTO and GTO) strategies
are the most accepted supply chain strategies. Traditionally, B. Cement Eco-Balance Analysis
the cement supply chain applies push-strategy with a MTS As a spreading evaluation method worldwide, Life cycle
mechanism which produces cement based on demand forecast assessment (LCA) is a technique for assessing the potential
and holds cement in inventory for immediate customer environmental impacts associated with a process or activity
delivery, so as to minimize lead time to customer. ATO from “cradle to grave”, which allows a measurement of
requires efficient and low cost production in the cement environmental performances of products, as identified in DIN
manufacturing process and flexibility in the assembly stage to EN ISO 14040 [10]. Two basic methods: process analysis and
satisfy individualized customer demands. In the cement input-output analysis have been combined into the LCA
Vol:7, No:3, 2013
method, which provides both completeness and accuracy of measures of environmental protection over the past decades.
the life-cycle inventory. This includes life phases along the Market and economic forces generally trigger the closure of
supply chain - the quarry, clinker manufacture, cement inefficient facilities as more advanced technologies are
grinding, and product distribution as in Fig. 3. commissioned. To become more energy- and Eco-efficient,
Eco-Balance summarizes all the environmentally relevant the use of alternative fuels besides fossil fuels in the clinker
input and output factors throughout the life cycle of cement. burning process is gaining in importance. By-products from
domestic, industrial, or agricultural sources can be used as
Fuel supply Power plant
alternative fuel, to replace partially the traditional fossil fuels.
In 2009, [12] found that the alternative fuels accounted
Thermal Electricity
energy more than 58% of the total fuel energy consumption of the
German cement industry. Meanwhile, this reduces the
Quarry Raw associated environmental impacts of finding, producing,
Clinker Clinker Cement Cement Distribution
works materials production grinding transporting and burning these fuels.
network
C. Integration Approach
Concerning Cement-Supply chains integration, as described
Emission Emission Sulfate agents & other Emission

main Constituents in [4], both of the ’’vertical- and horizontal’’ integration in
cement industry. Fig. 4 shows the physical layout including
the interconnections of the integrated supply chain modules.
Fig. 3 Cement Eco-Balance Structure – Input Output Analysis
IV. CEMENT SUSTAINABLE SUPPLY CHAIN MANAGEMENT
The evaluation and the comparison of such inventories
MODELING
make it possible to regard the extent of their environmental
impact. In the Eco-Balance structure of cement, three issues In order to optimize the cement sustainable SCM, a
are discussed in the Life Cycle Assessment LCA: (Emissions simulation approach is adopted in this research to model the
reduction, Thermal energy efficiency and Electricity cement supply chain framework. In many cases, simulation
efficiency). studies have been used to gain insight into the behavior of
Nowadays, about 60% of all CO2 emission from cement real-world systems under different types of control strategies
production originate from the basic calcination process the or to determine the accuracy of analytical models. Nowadays,
heating of limestone to form lime. Ca. 30% comes from usage most of the situations in the domain of simulation modeling
of fuel, and the remaining 10% from electricity usage and can be represented by discrete -dynamic-stochastic models.
transportation. Reducing CO2 emission from cement The discrete-event simulation (DES) contains stochastic
production is a key focus of the cement producers and components, and the state variables change only at discrete
governments. Improvements of Greenhouse gases emission time moments. In order to model cement supply chains by
can be made by enhancing technology and design, striving for DES, we use Rockwell Arena-V.10 to build the model,
continuous measurements and full monitoring coverage, conduct experiments and collect system performance data of
building cleaner plants within higher degree of automation, Cement SCM.
optimizing de-dusting systems and self-cleaning systems, A. Data Assumption
environmental policies and protocols, as well as the
In the proposal SCM model, an integrated- sustainable
optimization of cement distribution network.
cement supply chain is designed with a maximal capacity of
Roadmap1 of (WBCSD-CSI) gives us the future vision of
one million ton clinker annually. Given the normal plant
the sustainability of cement industry.
efficiency of ca. 80%, with 800,000 tpa ’’ton per annum’’
In reference [11] the German cement industry has set itself
actual production capacity. The operation period of the plants
the target of reducing specific CO2 emissions from energy
is assumed to be 300 days annually, based on 45 days required
consumption by 28% between 1990 and 2008/2012. Thermal
for Refractory and Routine maintenance works. Further
energy supplied by fuel is primarily required for the clinker
emergency plant-shutdowns are assumed to be 20 days. The
burning process, while electrical energy is mainly consumed
proposal model is described in details in Fig. 4 and (Table I).
in raw material pretreatment, clinker burning, cooling and
cement grinding. The process-technology optimization of B. Physical Model
rotary kiln plants in the past has resulted in a significant The quarry is the start point of the cement supply chain,
reduction in the fuel energy requirement for cement which supplies the raw materials such as limestone, clay, etc.
manufacture. Electricity efficiency has been improved by for clinker plant I. In the clinker plant I, the raw materials are
more industrial specifications for product quality and delivered to the crushers and then taken by the belt conveyors
into the Input inventory for clinker production ’’Clinker
1
yard’’. The mixture of limestone, clay and other additives is
Cement Roadmap of WBCSD-CSI targets 2010-2050 (press) URL:
http://www.wbcsdcement.org/pdf/technology/WBCSD- ground in the grinding section; and then conveyed into
IEA_Cement%20Roadmap_centre_spread_actual_size.pdf.
Vol:7, No:3, 2013
Homogenizing- and Storage silos. Raw-mix feeding into the cement is conveyed to Silos and stored in bulk. Further
Preheater is started by withdrawing material from the masonry cement types are produced in the Mixing-silo, on
Homogenizing silos into the proportioning section ’’clinker customers’ demands. Backing unit consists of more than a
production process’’; including Preheater with bypass and Cement-backer followed by truck-loading facilities in the
fans, Rotary kiln, Grate-cooler. truck yard via the belt conveyors. The cement in bulk or bag is
delivered according the customer orders in 25 ton Bulk-tank-
TABLE I trucks.
DATA ASSUMPTIONS OF THE CEMENT SUPPLY CHAIN MODULES
Fig. 4 and (Table I) review the proposal model.
Connected Capacity
Modules Location Products
Modules (tpa)
Quarry Close to Clinker 1.6 Limeston TABLE II
clinker plant I million e, clay, CEMENT MONTHLY DEMAND STATISTICS (SOURCE: BDZ)
plant I etc. Mon- Cement Cement Cement Av Cement Arr
ths Sales 2007 Sales 2008 Sales 2009 sales per
Clinker Close to Indoor One Clinker (ton) (ton) (ton) % (tpm) hr.
plant I quarry terminals, million Jan. 1208617 1308828 698298 4.3 34130 0.6
Port terminal Feb. 1451120 1722112 1158810 5.8 46160 0.8
Clinker Clinker Seaport, 200,000 Clinker
Mar. 2132910 1779963 1997258 7.9 63396 1.1
distribution storage to Barge

center to Port yard Loading Apr. 2184391 2472403 2218754 9.2 73607 1.2
Seaport system May 2387877 2347777 2149788 9.2 73675 1.2
Jun. 2509361 2560271 2386513 10 79826 1.3
Clinker DC Linked 3 clinker 200,000 Clinker
Jul. 2502612 2633321 2527485 10 82105 1.4
to outdoor- clinker RM storage (3)
cement storage with facilities of Aug. 2517982 2273125 2199494 9.4 74830 1.2
grinding plants plants Sep. 2332999 2622317 2536074 10 80307 1.3
plants (III,IV,V) (III,IV,V) Oct. 2579330 2513438 2395443 10 80176 1.3
(III,IV,V)
Nov. 2241494 2079129 2067536 8.6 68427 1.1
Dec. 1350324 1451206 1252760 5.4 43360 0.7
Indoor Indoor, Indoor 200,000 Masonry- Sum. 25399017 25763890 23588213 800000
Portland close to terminals, / Portland
cement Clinker Truck yard bags or Av.= average %, Arr hr= arrivals/hour, (tpm)=ton per month
grinding Plant I bulk
plant (II) Cement
3 Outdoor Distances Truck yard 200,000 Masonry-
Portland from Port terminal (3) / Portland
grinding Clinker to Cement
plant with a Plants bulk / bag
Masonry III:200km
mixing silo IV:400km
IV:600km
Portland Cement Truck yard 200,000 Portland

Bulk grinding Bulk-Loading (4) bulk
distribut-ion plants system cement
center
Portland Cement Truck yard 100,000 Portland

bags grinding Bags-Loading (4) bags or
distribution plants system Masonry
center bags
Demand Market Cement 800,000 All of

Managt. customer Storage cement Fig. 4 Physical model (proposed)
sites sales
C. Logical Flowchart
The demand management section organizes the marketing
Most bulk clinker is conveyed directly to the indoor cement and sales operations of the cement supply chains including the
grinding plant II or distributed to outdoor cement plants III, decision making in different types of product sales: bulk
IV, V by ’’River transport’’, a small portion of 10% of bulk clinker exports, bulk cement sales, distributing Bulk cement as
clinker is exported through the seaport, based on market company’s product and sales of cement bags on customer’s
demand. In the four cement grinding plants II, III, IV, V, the demand. These decision points are represented in the logical
transported clinker, gypsum and additives are stored in the flowchart in Fig. 5.
cement materials (intermediate) yards ’’RM II, RM III, RM
IV & RM V; these storage units are known as inventory
points’’. After the grinding process in the Cement mill, the
Vol:7, No:3, 2013
D.Model Structure
Arena cement supply chain model in Fig. 6 is arranged in 6
stages: quarry, clinker input, clinker output, cement raw
material (RM), distribution center (DC) inventory, and
customer demand management. In order to keep reasonable
inventory levels, the proposed cement supply chains applies
the well-known (Q, R) inventory control policy. The
inventory has an order quantity Q, and reorder point R. The
settings of order quantity and reorder point, as well as
production schedules can be used to implement different
cement supply chain strategies (MTS, PTO & GTO); as in
(Fig. 2).
V. MODEL SIMULATION
The demand management module generates the cement
demand stream based on statistics at the German cement

market, handles customer order fulfillment, and triggers
replenishment orders from the cement distribution centers.
The cement orders that arrive at demand management are
Fig. 5 Logical Flowchart of the Cement Supply Chain
assumed to be in 25 ton each based on the maximal loading
capacity of trucks in Germany. The demand stream at the
The first decision point DP1 occurs at the clinker output,
cement plants II, III, IV, and V consists of orders from the
maximally 10 % of clinker are exported through the seaport
demand management. The input data of cement supply chain
near the clinker plant I; the most portion is transported to the
model consists of three parts: the scheduled order arrival at
cement grinding plants II, III, IV, V by inland shipping.
demand management, the parameters of module entities, and
Decision points DP2, PD3 and DP4 happen at the cement
the variable settings based on supply chain scenarios. The
distribution centers. Normally, about 10% of bulk cement is
order arrival rate is scheduled based on the cement sales
exported, while 30% are sold in the domestic market. At DP3
statistics in Germany.
about three quarters are transported as company product to the
The monthly cement sales statistics on the German market
construction sites, as the rest flows to DP4.
in the recent three years – 2007, 2008 and 2009 are
The fourth decision concerns two types of the bag cement
summarized and the average percentages of monthly sales to
sales, where the masonry cement has to be produced 60%
schedule the order arrival of demand management (Table
according to customer orders. The rest bag cement is sold as
II). The highest monthly cement demand on the German
Portland cement. All percentages at decision points are
market occurs in July and the lowest in January.
assumed according to cement market statistics in Germany.
TABLE III
ENTITY PARAMETERS OF CEMENT SSCM MODEL
Parameter Unit Value Type Source
Total raw materials ton per ton clinker 1.6 quoted VDZ
Clinker consumption ton per ton cement 1 quoted VDZ
Fuel energy consumption G.joul/ton cement 2.842 calculated VDZ
Electrical power consumption kWh/ton cement 100.167 calculated VDZ
CO2 emissions ton per ton cement 0.587 calculated VDZ
Clinker production costs EUR/ton clinker 37 quoted Mc Kinsey, VDZ, BDZ
Transport costs -Inland shipping EUR/ton clinker per 100 km 3.5 quoted Mc Kinsey, VDZ, BDZ
Road transport costs EUR/ton clinker per 100 km 8.6 quoted Mc Kinsey,VDZ, BDZ
CO2 emissions costs EUR/ton cement 20.53 calculated Mc Kinsey VDZ, BDZ
Transport distances - Inland Shipping km to Plants (III:200, IV:400 IV:600 assumed Data Assumption
Transport speed - Inland Shipping km/day 575 quoted Rodrigue J.et al. 2009
Transport distances - 25 ton truck km TRIA (150, 80,10) assumed Data Assumption
Transport distances - Small trucks km UNIF (80,10) assumed Data Assumption
Transport speed -Truck transport km / day 600 quoted Pillay.S, 2010
Transport emissions – Inland Shipping gram/ton· km 31 quoted VDZ, BDZ
Transport emissions – Truck transport gram/ton·km 158 quoted VDZ, BDZ
Vol:7, No:3, 2013
Given the production capacity of 800,000 tpa, 25 operation of raw material, fuel and electrical power consumption, CO2
days per month (based on 300 operation days per year) and emission (Table III) during the production processes are
the customer order quantity of 25 ton each, the arrival rate per quoted from [13], [14], [15], and the fuel and electrical power
hour is calculated and generated at the demand management consumption, CO2 emission are the average values based on
module. the figures of recent three years in the German cement
In the cement sustainable supply chain model, parameters industry.
Cement RM (Clinker) Inventory

Cement Distribution Centre
Clinker output Inventory

Clinker RM input

Cement RM (Clinker) Inventory Cement Distribution Centre

Fig. 6 Arena Cement Sustainable SCM Model
These input parameters are set into the entities of the clinker Scenario 1 based on the Make-to-stock (MTS) strategy, the
manufacturing sub model and cement grinding process sub safety stock of the distribution centers at outdoor cement
model to simulate the material flow and energy consumption. plants III, IV, V should be about 20% of storage capacity,
whereas the reorder point of indoor cement distribution center
A. Simulation Scenarios
II is set as 10% of silo capacity (Table I), because the
The what-if-scenarios of are designed according to the distances from clinker plant I to outdoor cement plants can
cement push-pull strategies in (Fig. 2). Three scenarios are cause extra transport delays. The order quantity of demand
separately implemented based on the supply chain strategies management is set to be same as the safety stock of cement
of Make-to- stock (MTS), Pack-to-Order (PTO) and Grind-to- DC; the reorder points of cement RM are calculated according
order (GTO), which varies in the inventory levels along the to the clinker to cement ratio of 1 and the order quantity of
cement supply chain. Given the continuous-review inventory cement DC; the reorder points of clinker input are calculated
policy (Q,R) the three scenarios can be implemented by according to the raw material to clinker ratio of 1.6 and the
setting the R and Q for each module and the change of order quantity of clinker output.
ordering mechanism, as calculated in (Table IV). The reorder
points of cement distribution centres are set based on the TABLE IV
storage capacity of cement silo. According to the data SCENARIO DESIGN – PARAMETER SETTINGS OF INVENTORY LEVEL
assumption of the cement supply chain, the silo capacity is Inventory Scenario 1 Scenario 2 Scenario 3
42,000 m3 with a common Portland cement density of 1.51 points R Q R Q R Q
ton/m3, the safety stock of each scenario can be therefore
Clinker
calculated. inputs
92800 102000 26560 29800 5600 6300
Vol:7, No:3, 2013
Clinker
54000 58000 15000 16600 3150 3500
production volume caused by lower safety stocks. In the cost
outputs analysis, the highest total costs occur in scenario 2; whereas
Cement RM scenario 1 has the highest production costs.
8000 9000 1400 1500 400 450
II
The reason is that the small transport batches can cause
Cement DC II 6000 8000 1200 1400 300 400
transportation inefficiency (increased number of transports
Cement RM 14000 15000 4000 4500 800 900 with rarely fully loaded transport units) therefore increased
(III, IV, V) (3) (3) (3) (3) (3) (3) transport costs in scenario 2. The lowest costs are shown in
scenario 3 with the minimum inventory levels.
Cement DC 12000 14000 3000 4000 600 800 The inventory levels of outdoor cement grinding plants are
(III, IV, V) (3) (3) (3) (3) (3) (3)
calculated in average for output analysis. Both scenario 1 and
Cement 2 deliver zero order delays; while the third scenario shows a
38500 42000 8600 10200 1900 2100
demand slightly decreased level of service due to the dramatically
R: reorders, Q= quantity decreased inventory levels. The simulation output confirms
the result of the cement push-pull supply chain analysis.
Scenario 2 adopts the Pack-to-Order (PTO) strategy with
5% of storage capacity at outdoor cement plants III, IV, V and TABLE V
OUTPUT DATA - KEY PERFORMANCE INDICATORS

2%at indoor cement distribution center II as safety stock. The
other parameters are calculated in the same manner as in Index Parameters Units Scenario 1 Scenario 2 Scenario 3
scenario 1. In this scenario, the flexibility of the cement Electrical
kWh 78550961 78488858 65709552
Eco- consumption
supply chain increases as the inventory level decreases.
balan- Fuel Giga
In scenario 3 of the Grind-to-Order (GTO) strategy, the 2228696 2226934 1864352
ce consumption joule
safety stock of the distribution centers at outdoor cement Emissions ton 474608 474163 406976
plants III, IV, V should be about 1% of storage capacity, Production
EUR 29015400 28992460 24272000
whereas the reorder point of indoor cement distribution center costs
II is set as 0.5% of silo capacity. Other input parameters can Cost Transporta-
analy- EUR 10289700 10634403 8640426
be calculated accordingly in the same manner. Scenario 3 tion costs
sis
enables minimum inventory level along the cement supply Emissions
EUR 16214594 16175587 13888956
chain. costs
∑ Total Costs EUR 55519694 55802450 46801382
B. Output Analysis
Inventory
After the simulation runs of the cement sustainable SCM ton 5388.4 1635.7 345.6
clinker input
model based on the three proposed scenarios, the key Inven- Inventory
performance indicators (KPI) of output are categorized and tory clinker output
ton 948.6 537.8 237.4
analyzed in aspects of Eco-Balance, cost analysis, inventory levels
Inventory
and service level in order to optimize supply chain model in cement RM ton 372.00 69.4 19.1
the cement industry. To evaluate the Eco-Balance (indoor-plant)
performances of the cement supply chain, three parameters - Inventory
electrical and fuel energy consumption, CO2 emissions are cement DC ton 372.0 101.0 42.5
taken into consideration. The electrical and fuel energy (Indoor-plant)
consumption covers mainly the manufacturing processes of Inventory
clinker and cement, whereas the CO2 emissions cover the cement RM
ton 889.7 185.9 37.9
(outdoor-
carbon leakage of both production and transportation Inven- plants; avg. )
processes. The economical aspect of the cement supply chain tory
levels Inventory
is estimated in cost structure analysis, which covers the
cement DC
production, transport and possible emissions costs. The (outdoor-
ton 1278.4 329.2 25.6
efficiency of the SCM can be evaluated in both inventory plants; avg.)
levels along and the customer service level, which is
Inventory
calculated on the basis of delayed orders and total number of customer
ton 5939.9 1350.9 276.5
customer orders. The simulation results based on three
Delayed
scenarios are summarized in (Table V). nr. 0 0 189
Cust- orders
The simulation results of the sustainable cement SCM omer
Order fill
model based on the three scenarios of Make-to-stock (MTS), service % 100 100 99.4
rates
Pack-to-Order (PTO) and Grind-to-order (GTO) strategy kWh= kilowatt hour, nr.= numbers
(Table V) indicate that the ecological performance factors are
improved as the inventory levels of the supply chain decrease, VI. CONCLUSION
which result in enhanced supply chain flexibility and reduced
This paper aims to characterize SCM in the cement
Vol:7, No:3, 2013
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future, the social dimension as well as storage costs should be
quantified in subsequent researches.

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World Academy of Science, Engineering and Technology

International Journal of Industrial and Manufacturing Engineering

Simulation of a Sustainable Cement Supply

management operations to control effectively information,

integrated with sustainability criteria. This paper analyses the cement

S UPPLY Chain Management (SCM) refers to a managerial

Quarry & Dry-process Cement Plant

Social Aspects Economic Aspects

Fig. 1 Layout of cement production line and sustainable aspects

Emission Emission Sulfate agents & other Emission

distribution storage to Barge

Portland Cement Truck yard 200,000 Portland

Portland Cement Truck yard 100,000 Portland

Demand Market Cement 800,000 All of

demand stream based on statistics at the German cement

Cement RM (Clinker) Inventory

Clinker output Inventory

Cement Distribution Centre

Cement RM (Clinker) Inventory Cement Distribution Centre

Cement RM (Clinker) Inventory

Fig. 6 Arena Cement Sustainable SCM Model

OUTPUT DATA - KEY PERFORMANCE INDICATORS

and CO2 Performance “Getting the Numbers Right”, World Business

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