Ash Grove’s Shift: From Traditional Network Design to Value Chain Optimization

Author: Carlos Centurion

The complexities of modern supply chains demand more than traditional network design approaches. That’s why I had the privilege of sitting down with Jose “Pepe” de la Garza, Vice President of Supply Chain North America at Ash Grove Cement, a CRH company, to discuss how they are navigating these challenges. In our recent webinar, Pepe shared Ash Grove’s transition from traditional network design to a comprehensive value chain optimization approach.

If you missed the live session, don’t worry. Here are the highlights—and I encourage you to watch the full webinar for deeper insights.

1. An Industry Undergoing Change

Pepe described the cement industry as one steeped in tradition, with manufacturing processes that have remained largely unchanged for decades. However, new pressures—particularly sustainability—are reshaping this landscape. With cement production contributing up to 8–10% of global CO2 emissions, the industry faces growing demands to innovate and align with sustainability goals.

Ash Grove is meeting this moment by:

• Diversifying product portfolios to meet evolving market needs.
• Exploring alternative raw materials and energy sources.
• Identifying sustainability improvement opportunities across the value chain

2. Moving Beyond Traditional Network Design

Traditional network design focuses on optimizing production costs, transportation modes, and facility footprints. While still essential, Ash Grove recognized that this approach wasn’t enough to address today’s complexities. Pepe emphasized the shift toward Value Chain Optimization, which integrates upstream suppliers, downstream customers, the product portfolio and financial constraints and objectives into the decision-making process.

Key improvements include:

• Integration of Unique Constraints Across the Network: Previously, constraints were analyzed in isolation or on a regional basis, limiting visibility. Now all constraints are incorporated into a comprehensive end-to-end value chain model, accurately representing the network that no longer relies on averages or benchmarks. This holistic approach captures the complexities and nuances of the entire network.
• Modeling Customer and Supplier SLAs: The network is now closely linked to customers and suppliers, allowing Ash Grove to proactively identify opportunities and risks throughout the value chain.
• Optimization Towards a Corporate Goal: With Value Chain Optimization (VCO), Ash Grove aligned their entire end-to-end model toward a primary corporate objective: maximizing Net Income. This focus ensures that every decision across the value chain supports overall profitability and strategic growth.

3. Realizing Tangible Value

Ash Grove partnered with River Logic to implement a Value Chain Optimization (VCO) solution, allowing entire end-to-end visibility across the supply chain. Leveraging its robust S&OP process as a backbone, Ash Grove integrated the VCO solution to model production and distribution, CO2 emissions, capital allocation, and supplier/customer constraints, cost-to-serve and profitability.

With River Logic’s solution, Ash Grove has achieved:

• End-to-End Optimization: Expanding optimizations to span multiple levels of the supplier and customer base, gaining deeper insights into customer needs and improving service, as well as the evolution of the product portfolio.
• Sustainability Target Integration and Optimization: Modeling CO2 emissions and their costs to refine the network design and align with the company’s decarbonization roadmap.
• Flow Path Optimization: Following each product throughout the value chain, supporting precise and agile planning.
• Capacity Planning: Optimizing which components to produce, where and when. This includes optimizing the overall footprint to align capacity and maximize margins.
• Supply Chain Risk Mitigation: Anticipating and addressing potential disruptions to optimize network performance, benefiting Ash Grove and its extended value chain.

Pepe shared how this approach has enabled Ash Grove to anticipate challenges earlier, connect decisions across regions, and make data-backed investments with clarity.

4. Advice for Other Leaders

Pepe closed the session with actionable advice for supply chain leaders embarking on similar transformations:

• Start Small but Think Big: Start with core areas like manufacturing and distribution, aiming to expand toward a holistic value chain view that integrates financial and sustainability strategy.
• Engage Stakeholders: Collaboration across internal departments, external partners, and different customer layers is critical for success.
• Invest in the Right Tools: Adopt solutions that offer flexibility, scalability, and the ability to model complex scenarios.

Experience the Full Story:

Ash Grove’s journey exemplifies how businesses can thrive by rethinking their supply chain strategies. Watch the full webinar to learn more about their transformation and discover actionable insights for your organization.

Watch the Full Webinar:

This partnership with River Logic exemplifies how technology and innovation can enable companies to thrive amid industry-wide change. For Ash Grove, the journey from traditional network design to value chain optimization highlights the importance of flexibility, financial and sustainability integration, and strategic alignment in today’s complex supply chains.

Ready to learn how Value Chain Optimization can support your modern business? Meet an expert to explore how River Logic’s solutions can help you achieve your sustainability and profitability goals.