The world’s largest producer of titanium dioxide and nanotechnologies pivots its supply chain strategy to secure raw materials into the next century.
The case for change
The competition for access to raw materials deflected attention away from core business functions. With a growing reduction in productivity and output due to a concentration on non-core activities, a pivot towards a vertical integration strategy and supply chain ownership was required.
By securing its pipeline of raw material for its global production plants the organisation aims to pursue a lean-focused continuous improvement approach to derive efficiencies with the aim of achieving competitive advantage over its powerful multinational competitors.
Our scope:
- To co-design a strategy for securing faster access to raw materials by purchasing the source of the raw material
- To negotiate the terms of the agreement between the organisation and the seller (Somaliland government)
- To design and implement the strategy
- To develop a new operating model to support changes to raw materials supply and transport
- To utilise lean methodology to define an ongoing continuous improvement approach to manufacturing
What we were up against
The business environment was complex and fast moving and the competition for access to raw materials was becoming an increasingly labor intensive and costly business function. Against the backdrop of an alarming and continuously increasing operating expenditure the organisation needed to make a change in order to refocus its attention and resources on its core production business.
There were two options:
- Significantly downscale its global operations; or
- Acquire the pipeline of raw material and therefore secure its availability into the future
The organisation opted to pursue the second strategy, marking a transformative shift in its supply chain cost model.
Outcome achieved
The organisation is poised to conclude the acquisition of 120 kms of mineral rich coastal land, assuring an independent supply of critical raw material for at least 100 years. Unfettered access to raw materials will guaranteed a continued supply of raw material to its global manufacturing plants for a fixed cost enabling the exercise of highly accurate forecasting. This bold move will place this global organisation at the forefront of titanium technologies with a far-reaching global footprint guaranteed to last into the next century.