The Boral Group's Integrated Supply Chain Management - Case Study Example

Integrated Supply Chain Introduction The Boral group deals with building and construction materials. It has its headquarters in Sydney, Australia. As of 30 June 2013, this group boasted of sales of the order of $5.2 billion, and it had 12,600 full time employees in 550 operating sites. The Boral group manufactures and distributes a wide range of construction materials, such as quarry products, cement, fly ash, pre-mix concrete, and asphalt. In addition, it manufactures and distributes numerous building products, including pavers and clay bricks, roof tiles made of concrete or clay, concrete masonry products, timber, and plasterboard [Sup15]. The primary regions of operation of this group are concentrated in the markets of Australia, Asia, and the US. Supply Chain Management It is the avowed objective of the Boral group to manage its supply chain in a sustainable manner. This would entail due weightage towards compliance, environment, health and safety, labour rights, innovation and cost. In addition, there is a genuine desire to provide its customers with improved service and value that surpasses the value and service provided by its competitors. Furthermore, the Boral group strives hard to consult and collaborate with its customers, during the development of sustainable products[Bor10]. Logistics Networks The efforts of all the parties involved in addressing the requirements of customers, including suppliers, manufacturers, distributors, dealers and customers, are synchronised by supply chain management. It is commonplace to utilise technology to ensure uninterrupted exchange of information, goods and services across the organisational boundaries. This is an approach that produces much closer association between the various components of the value chain, so as to deliver the right product at the correct place and time, for the right cost. The aim is to generate communication relationships and trust among the parties, thereby enabling them to function as a single entity that is totally aligned, in order to streamline business processes and realise total customer satisfaction[Bai151]. Boral’s transformation into a giant building products manufacturer has been facilitated by the following. First, with the wresting of control, by Australian shareholders, from Caltex and thereafter impelling Boral to undertake crude oil refining as an independent company. Second, Boral’s decision to discard oil refining activities and foray into the building products industry. This company achieved a tremendous growth, within a short span of three decades[Hut00]. Furthermore, Boral embarked upon an ambitious project of widening the range of products manufactured at its steel reinforcing plant in Sydney. A new variety of fencing was developed by this company, by the year 1975, and it was proposed to sell this material across the nation. The regions targeted for this proposed sales were those of South Australia and Victoria, where this company did not have steel reinforcing plants. Subsequently, Boral acquired Cyclone, which was a manufacturer and distributor of aluminium and steel products. Despite several adverse developments, Boral was successful in acquiring Cyclone[Hut00]. The construction materials and cement segment constitutes the supplier of products for the commercial construction, dwelling, and roads and engineering markets. As such, Boral Limited, with its 240 premix concrete plants, provides a vast array of exclusive concrete mixes for use throughout the nation. In addition, this company has 110 operating quarries, and sand pits and gravel operations[Mar151]. It produces concrete aggregates, crushed rock, asphalt and sealing aggregates, road base materials, sand and gravels for the construction industry. Boral Limited supplies asphalt and technical materials that are employed in the maintenance and surfacing of roads. The cement manufacturing units of this company are located in New South Wales and Victoria, and it sells fly ash that it obtains from power stations in New South Wales[Mar151]. The fleets of vehicles operated by Boral Limited furnish bulk transport and logistics solutions to its other divisions and to the construction materials sector. Moreover, this company provides recycling activities and property activities. Its operating sites across the nation are around 420. As such, Boral Limited supplies bricks, roofing, hardwood and softwood timber products, and aluminium windows. Its Boral Gypsum Joint Venture segment manufactures and supplies wall and ceiling lining accessories and systems that are plasterboard based[Mar151]. Transport The core business of Boral Logistics is bulk transport and logistics solutions. In Australia, it operates one of the largest truck fleets and caters to a wide range of requirements for the construction industry. Boral Logistics was the changed name of the erstwhile Boral Transport. This new entity had made a minor change to its colour scheme, by replacing the green colour of its trucks’ chassis with grey. In addition, it had adopted an entirely novel visual presentation that hopes to promote the company via new artwork and signage on its vehicles[Pri111]. As such, Boral has emerged an adept with regard to the development and adoption of the maximum safety gains feasible, across all business activities. This company has been recognised as being proficient at ensuring safety. In the area of transport and logistics operations, Boral has been acknowledged as one of the best companies in Australia to implement very high standards. With regard to transporting goods, Boral constitutes a massive heavy vehicle operator. As such, this company has in excess of 700 company agitators for use in its concrete operations[Pri111]. Every new truck, in this organisation, is provided with the latest safety devices and systems. Several of these have been developed by Boral. In addition, the majority of the older vehicles of this company have been subjected to upgrades, thereby enhancing their safety to a significant extent. An instance is provided by the recent tipper and dog combinations that have been incorporated into the Boral Logistics operation[Pri111]. These vehicles, with their cutting edge technology, facilitate safety during work cycles. Product Performance and Safety In order to ensure a very high level of safety, Boral implements processes that promote product performance and significantly reduce health and safety risks. For instance, it enjoins appropriate product labelling, training, and publishes Material Safety Data Sheets. The latter provide information to customers regarding the safe use and handling, and optimal application procedures, with respect to its various products[Bor15]. Industry Sustainability Initiatives Boral has achieved the distinction of being a National Leader of the Housing Industry of Australia (HIA), since the year 2005. In addition, this company sponsors the HIA Boral GreenSmart Awards. These awards identify and extol excellence in environmentally sustainable housing construction. GreenSmart, per se, is a pragmatic approach towards building. It concentrates upon educating builders, designers, product manufacturers and consumers about the advantages inherent in undertaking environmentally responsible housing[Bor15]. Procurement Boral instructs its contractors, in no uncertain terms that they have to ensure that the equipment provided by them is suitable for the purpose, compliant with Australian Standards, and employed in the manner specified for its intended use by personnel who have been trained in the use of such equipment and who have gained proficiency in such use[Bor152]. In addition, such equipment has to be tested, maintained and tagged in accordance with the guidelines provided by the manufacturer, Australian Standards, and the approved Codes of Practice. Specifically, appliances of the domestic or household variety are not to be utilised. Moreover, a list of plant and equipment that are not to be used on its site are provided by Boral to the contractors[Bor152]. With regard to the identification and selection of contractors, Boral resorts to several methods. The aim is to have contractors who represent best value for money to this company. It is the usual practice with Boral to require the contractors to submit a proposal. Thereafter, Boral undertakes an assessment of such proposals, in order to determine their suitability for its operations. Furthermore, Boral encourages contractors to submit alternate proposals that could lead to better outcomes for it[Bor152]. Customers Boral believes in working closely with its customers. This enables it to comprehend their requirements and the issues that they envisage, thereby making it possible for it to deliver optimal solutions. In order to discern what is critical, this company conducts quantitative studies, holds focus group discussions, and conducts customer surveys[Bor10]. In addition, Boral conducts perception studies with a view to gaining a better understanding regarding the manner in which its brand is regarded in the market, and to determine whether it is achieving success in realising its objectives. These studies furnished significant information regarding its performance from the perceptive of a range of critical benchmarks for its brand. These include, innovativeness, and being up-to-date and environmentally responsible. Such information is utilised for developing future improvement strategies[Bor10]. As such, Boral has attained substantial improvement in the sustainability aspects of several of its products. Warehousing With respect to the Hardwood business, certain measures had been adopted, with a view to improving the operational efficiency. Specifically, a structural improvement programme had been implemented for this purpose. This programme was, in addition, expected to facilitate the restructuring of its warehousing and distribution network. The outcome was an asset impairment of $8.9 million and expenditure of $2.5 million towards the restructuring[Bor151]. Packaging for Cement Products Boral has always been seized with improving its paper sack packaging for its cement and concrete products. This quest resulted in improved sustainability standards for the entire cement industry. Thus, the cement and concrete bags have been upgraded to three-ply from two-ply paper sack, which served to reduce the annual paper consumption by 860 tonnes. In addition, an international norm has been created, with respect to grams per square meter (GSM), strength, customer satisfaction and least environmental impact[Bor10]. Thus, a 39% reduction of paper per sack had been achieved by this company, thereby reducing emissions, water use, waste and other associated environmental impacts. Moreover, a 20% reduction in price; perforation free packaging, which eliminated dust leakages and the resultant safety hazards; a 50% reduction in the plastic film weight per sack; and a 90% reduction in leakage during transport have been realised by Boral. These pioneering efforts were acknowledged with the bestowal of the 2010 Award for Excellence in Green Purchasing (Business) at the Australian ECO-Buy Awards[Bor10]. Contractor Related Services Boral has always been aware of the fact that its success is crucially dependent upon the use and development of contractors. Thus, it undertakes contractor related services, of the order of $800 million, every year. Armed with this redoubtable initiative, Boral has ensured continuing development and implementation of sustainable contractor management processes in its entire organisation. Some of the consequences of these programmes are; risk reduction, cost management, and alignment of contractors’ sustainability capacity with its specific requirements[Bor10]. The Boral Gypsum division undertakes manufacturing, distribution and installation of plasterboard based walls, ceiling lining systems and accessories. This company is one of the primary producers of plasterboard and internal lining solutions in the Asia Pacific region. The manufacturing units of this company, in Australia, are located in Victoria, Queensland, and New South Wales. This division has a 50% stake in Gypsum Resources Australia. The latter owns and operates one of the largest natural gypsum resource in the nation[Pro15]. Furthermore, Boral Gypsum has a 50% stake in Rondo Building Systems, which supplies metal ceiling and wall framing. As of the financial year 2014, this division had contributed 13.1% of the total revenues of the company. In addition, it had generated $57.5 million from discounted operations, and this amount was 1.1% of the total revenues of the company. This company categorises its operations into the regions of Australia, Asia, US, and others. As of the financial year 2014, these regions contributed 77.1%, 8.7%, 13.1% and 1.1% towards the total revenues of the company, respectively[Pro15]. The business risk emerging from over dependence upon a specific product line and segment for revenue generation is reduced by the company’s broad range of operations and a diversified product portfolio. This company, as of June 2014, has been conducting its operations via the Boral Construction Materials and Cement, Boral Building Products, Boral USA and Boral Gypsum. The Boral Construction Material and Cement division undertakes the distribution of the company’s vast range of construction materials, such as, fly ash, cement, quarry products, asphalt, and pre-mix concrete[Pro15]. On the other hand, the Boral Building Products division provides clay bricks and pavers, concrete masonry products, timber, windows, plasterboard, and clay and concrete roof tiles. Moreover, the Boral USA business division provides fly ash, masonry, quarries, pre-mix concrete, bricks, and roof tiles. Furthermore, the Boral Gypsum division provides plasterboard products. In addition, it provides bulk transport and logistics. It has 162 operating and distribution sites in the US, in addition to 24 plants at 15 locations in eight states.[Pro15]. Moreover, Boral has demonstrated strong levels of non-dwelling and infrastructure activity in Australia. This has been based upon the heavy demand for concrete. Approximately, 20% to 30% of Boral’s income is derived from operations conducted outside Australia[Joh07]. Conclusion Boral constitutes a primary building and construction materials company of Australia. It has several subsidiaries and has made its mark upon the markets of Asia and the US. This company undertakes contracting, transportation, and land development activities. Within Australia, Boral has 240 pre-mix concrete plants. With regard to quarries, Boral is one of the leading quarry operator of the nation. Nevertheless, value tends to dissipate from the supply chain. In order to address this very serious issue, managers frequently resort to supply chain management to enable them to deliver services and products swifter, better and in a less expensive manner. As such, supply chain management incorporates the trends that have transformed business practices, across the world, such as, just-in-time inventories, electronic data interchange, outsourcing of activities, globalisation and supplier consolidation. Boral has become a giant company that provides building and construction materials. However, the supply chain management procedures will become complex with the expansion of the company. Hence, it should consider the following aspects of management for better performance in the future with minimum risks. These are planning, evaluation and continuous monitoring of all processes, at every stage, until the final product reaches the customer. As such, it can be surmised that the supply chain enables Boral to predict, prevent and manage risks, whilst maximising profits. References Bain & Company, 2015. Supply Chain Management. [online] Available at: [Accessed 16 December 2015]. Boral Limited, 2010. Boral Limited Sustainability Report 2010. [online] Available at: [Accessed 15 December 2015]. Boral, 2009. Boral Limited Sustainability Report 2009. [online] Available at: [Accessed 16 December 2015]. Boral, 2015. Boral Annual Report, Chatswood, NSW, Australia. Boral, 2015. Contractor Information Pack. [online] Available at: [Accessed 17 December 2015]. Hutchinson, D., 2000. The Transformation of Boral: From Dependent, Specialist Bitumen Refiner to Major Building Products Manufacturer. Business History, 42(3), pp. 109-132. Johnson, A., 2007. Tough Year ahead for many. Manufacturers' Monthly, December. MarketLine, 2015. Company Profile: Boral Limited, London, UK: Progressive Digital Media Ltd. Prime Mover, 2011. Boral boosts safety. [online] Available at: [Accessed 15 December 2015]. Progressive Media Group, 2015. Boral Limited (BLD) : Company Profile and SWOT Analysis. World Market Intelligence, 17 January, pp. 1-35. Supply Chain Informer, 2015. Boral. [online] Available at: [Accessed 15 December 2015]. Read More