BERT’S BRICKS ~ SUPPLY CHAIN

GRINDING &
EXCAVATE
CRUSH & BLEND SOURING BLENDING
Excavated raw
material Crushed material Soured material Ground & blend
material

SHAPE & PRESS

CUTTING MIX & BATCH SCREENING
Extrusions / pressed
Cut raw bricks bricks Brick mortar Sieved material

SORTING TRANSPORT TO YARD PILE & SOLAR DRY FIRING

Sorted raw bricks Bricks ready to be Low moisture raw Fired bricks, not
Reject raw bricks dried bricks sorted

STOCK PILE SORTING/QC

DELIVERIES SALES Sorted bricks: face
Bricks for stockpiling
Delivered goods Sold stock bricks, general
building Reject bricks
 OPERATIONS MANAGEMENT

PBSB 813

The Value Chain of Bert’s

Bricks

Submitted by: Submission date: 12 February 2011

 Chicken Run Group Members
“There is nothing more determined than poultry with a plan…”

Bezuidenhout, P.J. 1224 6093

Botha, Desere 2250 2556

Buys, Johan 2049 8705

Kleynhans, Wessel 1251 7755

Schoeman, Willie 1032 6065

Van Wieringen, Anton 12318388

Wohlfahrt, Andre 2255 3533

Group Leader: Willie Schoeman

willie@vtrade.co.za
 Graphic illustration of clay brick manufacturing process:

Digging raw
clay materials
Transport and Stock up

Crush Raw
Materials through
Crusher Add Water

Clay water
mass is pressured
and cut Stock piling and sun dried

Coal-fired
kilns
1. Introduction

Baltzan & Philips (2010:26) describes the supply chain as a dynamic process which involves the constant
flow of information between different parties.

The website supplychaindefinitions.com (Anon, 2011:1) in turn defines the supply chain as the movement
of materials as they flow from their source to the end customer. Supply chain includes purchasing,
manufacturing, warehousing, transportation, customer service, demand planning, supply planning and
supply chain management. It is made up of the people, activities, information and resources involved in
moving a product from its supplier to customer.

2. The brick industry in perspective

According to (WOW, 2010:3), the brick industry in South Africa is in its worst slump in 15 years. The
economic downturn and slowdown in the industry has crushed many players, left dry hundreds of
retrenchments and put surviving players with production shutdowns and cut-throat competition with
“excessive price cuts” and excess stock.

A slight recovery in 2010 went slower than expected. This left many brick factories operating at well below
capacity. Consumer spending on building material has dropped tremendously in since 2007 mainly due to:

• Residential property owners opting to pay of access debt levels, halt spending on renovations
and expansions on private properties,
• Financial institutions rethinking their market share strategy, conservatively adding lower risk
exposure to their portfolios,
• The non-residential market has pulled back on larger projects of expansion as overall demand
for newly build apartments, townhouse complexes, estates and office blocks where offset by
short term renting option.

3. Key Success Factors

The following Key Success Factors (KSF’s) within the industry were identified:

• The industry requires high capital investment as larger number of units makes up the profits,
• The factory’s geographical region should be balanced between future market demand and raw
material supply requirements
• Brick makers are skilled individuals, many operating as a 2nd, 3rd and even a 4th generation
business man, keeping to a long term focus of the business,
 • Operations are labour intensive, training in manufacturing, logistics, safety and ownership are
key aspects within the business.

4. Analysis of Value Addition

Miller (2011:1) states that the first thing to be done when dealing with a supply chain is to ensure its
efficiency. To be able to effectively measure a supply chain, certain metrics must be identified, defined, and
analyzed, leading to an enhancement in the overall efficiency of the business. These metrics must be
related to the nature of the business or organization. The results of the measures are what matters most.

Miller continues by saying that the measurements obtained will reflect the efficiency of the supply chain,
doing the things right. It is best if the measurements show a consistent level of performance in the chain.
High consistency is usually indicative of good performance while low consistency shows problems or lags
somewhere within the network. However, as with the example of high inventory turnovers, measurements
are useless if they cannot be translated into suggested improvements.

In the case of Bert’s Bricks it is therefore also important to isolate and identify all the different processes
involved in the manufacturing of bricks, as well as the value added by each process. This can be tabulated
as follow:

Process Value added Ability to Unit of Analysis of performance consistence

and output to measure? measurement
next process

Excavations Raw material Yes Cubic metres Excavations able to keep up with demand,
huge stock pile available for future
production

Crushing & blending Crushed & Yes Cubic metres Crushing and blending process according
blended raw to quality standards
material

Souring Soured material Yes Cubic metres Souring process in line with acceptable
standards.

Grinding & blending Ground raw Yes Cubic metres Grinding and blending as per set standards
material

Screening Sieved material Yes Cubic metres Screening or sifting process as per set
standards

Final mixing or batching Batched (mixed) Yes Cubic metres Batching process as per set standards
clay

Shape and press Extruded/shaped Yes 1000’s of bricks Ability to manufacture 20,000 bricks/ or 6
bricks million bricks/month with wastage within
 acceptable standards

Cutting Cut bricks Yes 1000’s of bricks Ability to manufacture 20,000 bricks/ or 6
million bricks/month with minimal rejects

Sorting Sorted raw Yes 1000’s of bricks Ability to manufacture 20,000 bricks/ or 6
bricks (Rejects million bricks/month which is ahead of
returned to current customer demand
process)

Transport to yard Bricks moved to Yes 1000’s of bricks Ability to manufacture 20,000 bricks/ or 6
yard million bricks/month which is ahead of
current customer demand

Pile and solar drying Low moisture Yes 1000’s of bricks Ability to manufacture 20,000 bricks/ or 6
bricks million bricks/month to minimum of 8%
moisture content.

Firing Fired bricks Yes 1000’s of bricks Ability to manufacture 20,000 bricks/ or 6
million bricks/month which is ahead of
current customer demand

Sorting/Quality Control Sorted final Yes 1000’s of bricks Ability to manufacture 20,000 bricks/ or 6
product (Rejects million bricks/month which is ahead of
returned to current customer demand
process)

Stock piling Palletised bricks Yes 1000’s of bricks Current stock pile sufficient to satisfy 8
ready for sales months of supplier demand

Sales Sold stock Yes 1000’s of bricks Sales subject to market demand – far
below current production capability

Delivered goods Delivered goods Yes 1000’s of bricks Deliveries subject to sales which is
currently below production capability

It becomes evident that all processes are quite capable of handling current market demand and that market
demand will only outstrip supply once quantities go beyond the production capability of 70 million bricks per
annum.

Apart from this the current stockpile of approximately 48 million bricks has also to be taken into consideration
which has been manufactured to keep workers occupied. Excess stock costs money and is lost opportunity
cost.

Final remark on supply chain analysis is that performance consistence of all processes in general is fairly
constant and that adequate measures have been taken by management to ensure that production remains
under control. The only weak link in the whole supply chain is sales which came under pressure during the
world-wide recession. The big demand for housing and building materials came to an abrupt end and Bert’s
Bricks was also severely affected by this unfortunate chain of events.
5. Suggestions about optimising the process

Bert’s Bricks is a semi-automated plant in as far as certain processes are automated and further simplified by
use of conveyor belts to transport processed between certain processes. Once the raw bricks are
manufactured, manual labour is used rather extensively to pack and transport bricks to the yard and eventually
into stock piling:

 Raw bricks are hand-packed from conveyor belt onto trailer

 Raw bricks are transported to yard and hand-packed into piles for solar drying
 Hand-packed from solar dried piles onto trailers
 Hand-packed from trailers onto kilns
 Fired bricks are hand-sorted and packed onto transport pallets

The same brick is handled at least FIVE times by manual labour before it is stacked onto pallets where
machine labour can take over.

The solution will be to consider the elimination of one process or combining of two processes into one. Careful
consideration of processes reveals that none of the current handling processes can be eliminated unless some
sort of automation is considered. A series of complex conveyor belts between extruder and solar drying
process would have been ideal as this will eliminate two handling processes (loading and off-loading of
trailers), but only long term cost benefit analysis will show if this is viable or not.

The only other solution, unfortunately also with a high initial capital outlay, will be to manufacture a series of
trailers which can be packed and parked in the yard until bricks are ready to be fired. The trailers can then be
moved to the firing area and the bricks off-loaded for stacking into kilns. The success of this method relies on
high numbers of trailers to be built. Once a trailer is parked it will be out of the manufacturing cycle for at least
three to four weeks until moisture in raw bricks has reached desired levels before it can be brought back into
the manufacturing cycle. The number of trailers this system will require will be dependent on the quantity of
bricks a single trailer can handle in the drying cycle until it can be off-loaded.

Both suggestions will be rather complex to execute and implement even if financial constraints were not a
consideration. The other factor that must also be considered is that management has a very strong obligation
towards their labour force and the community in which they operate and will only consider any lay-offs if there
is absolutely no other way out.

One other constraint worth mentioning is rainy weather which can hamper production if no stock is available. At
current stock levels, however, this does not pose any real threats.

6. List of Sources

BALTZAN, P. & PHILLIPS, A. 2010. Business Driven Technology. 4th ed. New York: McGraw-Hill.
616 p.

ANONYMOUS. 2011. Website: http://www.supplychaindefinitions.com/ Date accessed: 6 February 2011

MILLER, SAM. 2011. The Importance of Taking Supply Chain Measures. Website:
http://ezinearticles.com/?The-Importance-of-Taking-Supply-Chain-Measures&id=1559979 Date accessed:
6 February 2011.

WOW, 2010. The Manufacturing of Clay and Concrete Bricks. www.whoownswhom.co.za Date of Access:
7 Feb. 2011.