The World S Cement Industry Commerce Essay

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Lafarge is the world leader in building materials; Lafarge extracts resources from the heart of the earth to make materials to bring to the heart of life. At present Lafarge is in 76 countries, the Group responds to the world's demand for housing and infrastructure. Lafarge is driven by the needs of its customers, shareholders, local communities and architects. The Group creates specialist solutions which encourage creativity whilst leaving a lighter trace on the world.

Lafarge is committed to:

offering our customers the best in innovative materials and reliable products and services,

Reinforcing our position as the world leader for our suppliers, employees, customers and shareholders.

Lafarge was responsible for two important discoveries that marked the early 20th century:

The advent of white cement, which uses kaolin instead of clay. This cement offers the same resistance as a comparable grey cement but better aesthetic qualities,

The discovery of Ciment Fondu® in 1908 by Jules Bied, director of the Lafarge research laboratory. This cement, made from limestone and bauxite, resists aggressive environments and high temperatures. It is very versatile and can be used as a high-performance binder or a chemical reactant in a diverse range of applications.

Today, Lafarge research and development continues to focus on innovation and works to continually improve the properties of cement.

Lafarge has been a major player in the UK construction sector since entering the British market in 1987 - acquiring Redland in 1997 and Blue Circle in 2001. Today, Lafarge is the market-leader in cement and holds top-ranking positions in aggregates, concrete and plasterboard. Lafarge has three sister companies in Britain - Lafarge Cement UK, Lafarge Aggregates & Concrete UK and Lafarge Plasterboard UK. Lafarge is passionate about customer care and proud of its active approach to sustainability and safety.

Manufacturing process of Lafarge

Step 1: extraction of raw materials

The raw materials needed to produce cement (calcium carbonate, silica, alumina and iron ore) are generally extracted from limestone rock, chalk, shale or clay. These raw materials are won from the quarry either by extraction or through blasting. These naturally occurring minerals are then crushed through a milling process.  At this stage, additional minerals are added to ensure the correct chemical composition to make cement is in place.  These minerals can be obtained from waste or by-products of other industries, such as paper ash.  After milling, the raw meal (as it is known) is transported to the plant where it is stored.   

 Step 2: raw grinding and burning

Grinding produces a fine powder, known as raw meal, which is preheated and then sent to the kiln. The kiln is at the heart of the manufacturing process.  Once inside the kiln, the raw meal is heated to around 1,500°C - it is of a similar temperature to molten lava.  At this temperature, chemical reactions take place to form cement clinker, containing hydraulic calcium silicates.

In order to heat the materials to this very high temperature, a 2,000°C flame is required, which can be produced through the use of fossil and waste-derived fuels.  The kiln itself is angled by 3° to the horizontal to allow the material to pass through it, over a period of between 20-30 minutes.

Upon exiting, the clinker is cooled and stored ready for grinding to produce cement.

Step 3: cement grinding and shipping

A small amount of gypsum (3-5%) is added to the clinker to regulate how the cement will set. The mixture is then very finely ground to obtain 'pure cement'. During this phase, different mineral materials, called 'additions' may be added alongside the gypsum. Used in varying proportions, these additions, which are of natural or industrial origin, give the cement specific properties such as reduced permeability, greater resistance to sulfates and aggressive environments, improved workability, or higher-quality finishes. Finally, the cement is stored in silos before being shipped in bulk or in bags to the sites where it will be used.

PERFORMANCE CULTURE

Performance culture requires a systematic approach to managing the performance of organizations, teams and individuals. While leadership and discipline are the defining elements of that approach, they are not the only elements. These authors outline a road map for changing organizational behaviour and, ultimately, for implementing, promoting and sustaining a high-performance culture. (Joanne Reid and Victoria Hubbell, 2005)

The right organisational culture is critical to improving the effectiveness of performance management, but it is notoriously difficult to describe or plan to change.

Culture is about people. It can be thought of as the sum total of the beliefs, values and behaviours of individuals within a given group, and it is a means by which norms of acceptable behaviour are established. Because culture is about what people believe and do, it has a huge impact on:

what a council sets out to do, its vision and priorities

how people are managed, motivated and supported to do their jobs

how individuals or groups respond to demands for improved performance

how individuals and the council as a whole view and make use of performance

management systems

High performing company may usually focus on strategies and may be unconcerned about the market share positions. (Kohli and Jaworski 1993)

"Creating a High-Performance Culture" provides trainers and trainees with real-life examples of how high performance initiatives are put into practice. It includes eight interviews with leaders who have instituted high performance initiatives in their organizations. In their own words they describe what works, and what doesn't. You will learn what to avoid, what to emphasize, and where to start. (Dr. Marlene Caroselli, 2005)

A series of fully reproducible training activities and assessments follows each interview. These activities reinforce the lessons learned from each interview. With these new skills, participants will move forward with greater assurance, knowing the shortcuts to take and the road blocks to avoid as they confidently lead their organizations movement toward a high performance culture.

In Lafarge the key players for the performance was basically its employees, the company took the efforts to ensure that every employee in the organisation makes connections between his everyday tasks and his contribution to the overall performance. Communication, training and as well development of performance culture which has enabled to understand the objectives and to be shared by all. This represents a major challenge in local business lines and within a highly decentralised organisation.

But there were other factors which were affecting the performance that was mainly due to the government control because the company was operating in the Western European Market which had come to a halt the government had put restriction as the government was focused mainly reducing the public deficits. This had brought down the performance but in other countries which it was operating quiet well but there was other factors that as well was affecting it the rising prices of cement in the global market.

In order to increase the performance of the organisation Balance scorecards

Balance Scorecard combines both qualitative and quantitative measures; it acknowledges the expectations of different stakeholders and relates an assessment of performance to choice of strategy. (Gerry Johnson, 2006)

The organisation could track on various grounds through the balance scorecard giving a broader aspect

BALANCE SCORECARD

FINANCIAL PERSPECTIVE

CUSTOMER PERSPECTIVE

INNOVATION AND LERNING PERSPECTIVE

INTERNAL PERSPECTIVE

The aspect of improvement in the performance would be Innovations and Research & Development these as well help in improving the performance.

The development of construction materials to bring greater safety, comfort and aesthetic appeal to everyday life. To broaden the range of products and services, meet the everyday challenges; constantly improve the performance of the production and technologies.

The distinction between services and products is both difficult to define and not particularly useful. Information and communication technologies are even overcoming some of the consequences of the intangibility of services. All operations are service providers who may produce products as means of serving their customers (Nigel, 2007).

For achieving its goals, Lafarge had carried out re-organisation of its research and development set-up, they had a team of top quality researcher with an international team. To keep the pace with demand from the market place and as well from its competitors, Lafarge made constant improvements to the technical performance of its products. Lafarge had acquired and mastered an expertise that ensured continuous progress in plant productivity, competitiveness, environmental protection and product quality.

OPERATIONAL CHALLENGES OF LAFARGE GIVEN THE MODERN CONCERNS OF SUCH INDUSTRY

PESTLE framework which can be identified how future trends in the Political, Economic, Social, Technology, Environmental and legal environments might impinge on organisations. If the future environment is likely to be very different from the past it is helpful to construct scenarios of possible futures. This helps the managers consider how strategies might need to change depending on the different ways in which the business environment might change. (Keven Scholes, 2006)

LAYERS OF THE BUSINESS ENVIRONMENT

THE MACRO ENVIRONMENT

INDUSTRY

COMPETITORS

MARKETS

THE ORGANISATION

These are the factors that can affect the organisation, while making decisions the organisation has carefully decide and keep their decisions flexible as its never known when the policies of the organisations have to be altered.

Collaboration between WWF and Lafarge started with the development of key performance indicators for CO2 emissions and with initiatives to enhance biodiversity and the restoration of forest eco-systems. Activities soon evolved to include the establishment of an agreement defining practical commitments in the areas of climate change, biodiversity, persistent pollutants, water consumption and sustainable construction for all companies within Lafarge group.

Lafarge's commitment is to reduce emissions in relation to 1990 levels by 10% in absolute terms in industrialized countries and by 20% net - per ton of cement produced - worldwide, by 2010, through a variety of strategies developed in conjunction with Climate Savers.

Mitigating CO2 Emissions

Lafarge and WWF jointly identified a list of areas where ambitious incremental improvements in cement production would substantially reduce CO2 emissions.

• Increased energy efficiency of production processes and reduction in overall energy consumption;

• Modernization of production plants and constant improvement of industrial processes;

• Use of alternative fuels and renewable energy sources;

• Use of industrial waste to manufacture cement.

To ensure internal support for CO2 reduction goals, Lafarge cascaded the mitigation execution mandate down to operations management at the production plant level. Business units and production plants have total autonomy in determining how to achieve plant-specific CO2 reduction goals. They are supported by technical centres, which drive internal know-how and best practices. CO2 reduction goals were further incorporated into each manager's personal objectives. Achievements in this area are part of the evaluation and reward processes through strategies like the awarding of bonuses. In addition, Lafarge committed to invest in research focused on:

• Accelerating carbon emission reduction through modification of the chemical composition of clinker so as to produce less CO2;

• Optimization of the composition of concrete;

• Improvement of recycling processes.

The life cycle of buildings - design, construction, operation and demolition - accounts for approximately 40% of energy consumption and 30% of CO2 emissions. Therefore, another important aspect of Lafarge's CO2 mitigation strategy is to help to reduce the overall carbon footprint of buildings by working with a variety of stakeholders to promote sustainable construction products and systems along the construction chain and to produce a roadmap towards zero net energy buildings.

The Challenge of Monitoring and Analyzing CO2 Data With approximately 166 cement production sites in more than 79 countries, the capacity to effectively manage, consolidate and distribute data on CO2 emissions was paramount to the achievement of Lafarge's mitigation goals. Decision-makers at business units and at the corporate level required timely and relevant data at a variety of break-down levels.

Lafarge's main focus was to help operational people make CO2 mitigation decisions in a fast, informed and consistent manner. The climate change team carried out market research for an analytical CO2 tool that fit the needs of the company and concluded that the market was not mature enough to offer an efficient tailor-made solution. They opted for in-house development of a tool that suited their needs.

Lafarge's C-O-Tool was designed with three main functionalities

1. Monitoring: To provide a detailed breakdown of emissions, thus supporting a full overview of current emissions at different levels (plant, business unit, country, regional, global) and understand the levers that lead to CO2 reductions.

2. Benchmarking: To support easy and intuitive comparisons between the different Lafarge plants and business units. For example, a manager in Germany could compare the CO2 performance of his plant with other plants in Germany, China or France and with the European or worldwide average.

3. Forecasting/simulation: To allow for the simulation of the effects of alternative carbon reduction actions and identify the full potential for CO2 reduction in a given business unit. For example, a plant manager can simulate the effect of a production process optimization on CO2 emissions and the knock-on effect of selected key production levers on CO2 reduction. Or, plant managers can forecast the effect on CO2 emissions of, for example, specific increases on the C/K ratio levels, cement production growth or biomass rate increase in the fuel mix.

SYNERGY AND NEW PRODUCT DEVELOPMENT

Synergy refers to the benefits that might be gained where activities or processes complement each other such that their combined effect is greater that the sum of the parts. (Richard Whittington, 2006)

Synergy is often seen as the raison d'etre of the corporate parent. It is often given as a reason by corporate managers for product/service or international diversifications. (Gerry Johnson, 2006)

New product development often glow with such promises and their forecasts ring with such authentic precision, that entire business strategies defining an organisation's future are built upon them. (Robert J Thomas, 1993)

Ideas for new product arrive from any number of sources. Key managers think the idea looks good and with their best judgement and other data sources, generate forecasts for their planning documents that predict impressive market and financial performance for the new product opportunity. (Robert J Thomas, 1993)

New products can be used to reinforce a firm's strategic direction by enhancing its competitive advantage in the world. New products developed for this purpose are typically extensions or me-too versions of existing products that introduce additional features to accommodate changing buyer or market needs. Such product emerge from new product development processes that emphasizes incremental innovations and constant improvements. (Robert J Thomas, 1993)

New products can be used to change organisation's competitive advantage. Although this sometimes happens by chance, more often than not its result of a process of continually listening to the market and its major stakeholders. The resulting new products can lead to a fundamental change in the way the market is viewed subsequently change the organisation's entire basis for competitive advantage. (Robert J Thomas, 1993)

For Lafarge the NPD process was the take over of Redland which gave it a competitiveness over its competitors as Redland was into concrete tiles which gave an ad on for the company to be ahead of its competitors.

DICHOTOMY OF OPERATION RESOURCE AND MARKET REQUIREMENTS OF THE OPERATION STRATEGY

Porter (1996) describes activities as the basic units of competitive advantages. An organisation will adopt a distinct strategic positioning; it will compete on the basis of flexibility, cost, quality, speed, diversity, and variety. Strategic positioning means 'performing different activities from rivals or performing similar activities in different ways'

They will be based on combination the current dichotomy of strategic view points

Generic Strategy: based upon lower cost, premium price through differentiation, or combining the two either on a broad front or using a niche focus

Strategic positioning: positioning the firm to compete on the grounds of flexibility, cost, quality, speed, diversity, and variety

Operation strategy: a unique resource based fusion of core competencies, capabilities and processes; resources; technologies; and certain key tactical activities that are vital to support a particular strategy or positioning.

Operational Management: the organisation of operational management activities and management methods, both internally and externally, to provide a good or service in both profit and non-profit organisations.

The important role and contribution of an operation strategy as a vehicle for achieving competitive advantage seems apparent. What remains less clear are the types of operation strategy that might be employed and their exact composition.

ORDER PROCESSING SYSTEM

1. Procurement of raw materials

2. Raw Milling - preparation of raw materials for the pyroprocessing system

3. Pyroprocessing - pyroprocessing raw materials to form portland cement clinker

4. Cooling of portland cement clinker

5. Storage of portland cement clinker

6. Finish Milling

7. Packing and loading

Procurement of Raw Material

Raw Milling - Preparation of raw material for the pyroprocessing system

Cooling of Portland cement clinker

Storage of Portland cement clinker

Pyroprocessing - pyroprocessing raw material to form Portland cement clinker

Finish Milling

Packing and Loading

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