Vendor Managed Inventory

How to monitor cement inventory in construction material productions

“By partnering with Endress+Hauser, Lafarge’s customized ERP solution creates win-win-win scenarios for customers, carriers and Lafarge – a logistics currency for Sales & Marketing.”

Brent Smith, Marketing Director, Lafarge North America Inc.

Company details

Lafarge is the largest diversified supplier of construction materials in North America. They produce cement, ready-mixed concrete and asphalt in the United States and Canada. Headquartered outside of Washington D.C., Lafarge employs approximately 16,600 people, who work at more than 1,000 Lafarge Locations.

“We manage all new VMI sites as a new project.”

Customer Challenge 

One of the major unknown factors that can impact this business is weather. The weather could be bright and sunny at the terminal, but at the construction site, heavy rain may be halting construction.

This has a major impact on replenishment logistics and while orders may be coming in, material may be at a standstill because of harsh weather. By implemeting Vendor Managed Inventory (VMI) our customer now has a way to increase his role in customer cement shipments (i.e. they can be proactive based on customer demand and inventory in the future). Having the ability to commission level gauges and troubleshoot measurement issues remotely, played a significant role in choosing Endress+Hauser as a supplier. They manage all new VMI sites as a new project and coordinate site installations where required by hiring local electrical and mechanical contractors.

“Probably the most sophisticated on-demand intelligence.”

Our Solution

Data is received securely over the Internet (CIDX Format) and collected by the software SupplyCare. This information is used to transfer inventory data into a customized ERP based solution. The system combines inventory data from SupplyCare plus current GPS location data from trucks delivering material. As a next step they add data from the customer order management system, which updates the customer’s production forecasts every 30 minutes. With this they power an order generation engine which is supplying sales and logistics with probably the most sophisticated on-demand intelligence.

Solution Components

  • Fieldgate collects the inventory information and is a web-based telemetry product
  • All panels  are built with HART communications (Highway Addressable Remote Transducer) to the sensors and work with local displays and surge arrestors on all inputs and the mains
  • Sensors FMP40 or FMP250 based on radar technology
  • SupplyCare monitoring software hosted by Endress+Hauser
  • Integration of online inventory information in the ERP system
  • 2016 – The canada division purchased Supplycare Enterprise and moved all their tanks onto this software while the US division kept their tanks on the cloud based SupplyCare Hosting

Customer Benefits

  • Improved visibility on overall inventory management supply
  • Reduced freight and demurrage costs
  • Secured market share, price and contract sales
  • Improved order accuracy
  • Effective OTIFIC metrics (On Time, In Full, Invoiced Correctly)
  • Strengthened loyalty of their customers