A responsible supply chain, with AG’s star of excellence
Upon challenges displayed by macroeconomic contexts and the region, Corporación AG has strengthened its supply chain and logistics area by creating strategies in different fronts, optimizing its offer and service
Produced
by
Jassen Pintado
Creative Direction Omar Rodriguez
Juan Jacobo Alvarado, Chief Supply Chain Officer for Corporación AG
Interviewee
Corporación AG has been a loyal ally along Guatemala’s development within the construction sector. Its 70th anniversary is an ideal time to emphasize the company’s accomplishments resulting from expanding its operations, contributing to growth in all of Central America and the Caribbean, supporting the livelihoods of more than 1,800 collaborators.
Its management’s endeavors and vision have, throughout the years, kept Corporación AG experiencing constant growth and expansion, from construction materials distribution to becoming a full-fledged leading producer and marketer of steel products in the territory through a wide network, with both own and outsourced outlets, besides relying on SIDEGUA, one of Latin America’s cutting-edge steel plants.
In order to sustain this leadership, during recent years AG acquired
companies such as Tubac, Typsa and Megaproductos, which have contributed to increase efficiency and, as a result, deliver a wholesome offer contributing to the company’s positioning as a leading supplier for a complete line of solutions for construction.
It must be noted that the corporation is certified under international standards guaranteeing every product’s quality. And, to reaffirm a commitment to transparency all along its business model, the company has reinforced its zero tolerance policy toward bribery, by re-certifying under the ISO 37001:2016 standard, ensuring compliance and maintenance of the Anti-bribe Management System up until 2026.
Juan Jacobo Alvarado, Chief Supply Chain Officer, who has worked for Corporación for more than 20 years, commented that the fore-mentioned attributes have resulted in boasting
THROUGH RODRIGO GABRIEL’S -OUR CEOVISION, THE SUPPLY CHAIN DEPARTMENT WAS CREATED WITH THE PURPOSE OF ACCOMPLISHING A COMPETITIVE ADVANTAGE AND FOCUS
- Juan Jacobo Alvarado, CSCO for Corporación AG
Estrategia de Sostenibilidad
one of the broadest, top-quality portfolios in the steel industry in Central America.
THE IMPACT OF THE SUPPLY CHAIN
During seven decades, Corporación AG has evolved its organizational structure and upgraded its management systems, thus providing support to the enterprise’s growth.
In 2016, this evolution carried into the deployment of a structure from which new c-level positions arised to bring prominence to the business core, along with other positions contributing to its development. From then on, Corporación AG completed the following achievements, resulting in a positive impact on its supply chain and reaching stocking and sales records:
• Increase in global suppliers network
• Accomplishing balance between long and
nearshoring suppliers
• Increase in Order fulfillment
• Growth in distribution network
• Increase in production output
• Optimization of sales and operations planning
• Deployment and improvement of Net Promoter Score
• Increase in product portfolio
• Centralization of production operations
“Through Rodrigo Gabriel’s -our CEOvision, the Supply Chain Department was created with the purpose of accomplishing a competitive advantage and focus,” Alvarado added, since this department leads in a transparent and close way most of internal stocking, production, demand and logistics, with the purpose of
delivering better results in costs, working capital and service.
Being an important part of its endeavors and sustainability plan, AG deems its relationships with suppliers and clientele as very important, going beyond a simple commerce transaction, since working hand in hand with them results in offering better products and services. Resources such as satisfaction surveys and loyalty programs like “Recycling Agents” and “Transportation Agents” have contributed to upgrade different aspects of the stocking cycle.
TRANSFORMATIVE VISION
To balance its value chain and take on challenges such as the setbacks in stocking and logistics as a result of COVID-19, AG has taken different measures, such as an increase in its shipping capability by incorporating new distribution centers in Guatemala
and Honduras, operating with new technologies for inventory management, as well as integrating forecasting and other processes. New management methodology such as Lean Manufacturing and Scaling Up, among others, have contributed to improve operations and create management manuals. Also, the optimization of processes such as Sales and Operations Planning, Strategic Procurement, Order to Delivery, Lead to Cash, Go to Market and Route to Market have been reviewed along with some of the top consulting firms, worldwide.
AN ENTERPRISE READY FOR BIG-TIME CHALLENGES
As much as there is potential in a territory host to a market of approx. 50 million inhabitants, there are also historical challenges in Central American countries: lack of infrastructure in land roads, scarce
WHEN EXPERIENCING ACCELERATED GROWTH, ONE OF THE BIGGEST CHALLENGES IS FINDING WORK METHODS WHICH ALLOW THE INCORPORATION OF EFFECTIVE AND EFFICIENT CAPABILITIES
- Juan Jacobo Alvarado, CSCO for Corporación AG
Primetals Technologies Mexico with Workshops located on the Metropolitan area of Nuevo Leon since 1994, nearby the USA border, is a service and product company for the siderurgical industry value of chain, supported by centers of competence worldwide.
Our portfolio of solutions and services:
● Workshop inside customer facility dedicated to the off-line maintenance of a 2 Strand Thin Slab Caster that produces more than two million tons per year.
● Alignment and measurement specialized services for Casters and Mills.
● Fabrication and redesign of components and equipment for Steel Furnaces and Casters (EAF – QEAF – LF – RH – VD – CCM)
● Caster Monitoring and Assessment Process Services for operation parameters and better maintenance practices.
● Refurbishment for Mills equipment such as: Pinions, rolls, chocks, mandrils and similars.
● Innovative online platform created byPrimetals Technologies to bring together a wide rangeof E-Services in one place, where steel producers can order spare parts online andcentralize document management. primetals.com
Bid Project Manager miguel.escamilla@primetals.com
regulation and enforcement, low-quality custom processes and few professional transportation options. Such factors affect delivery times, besides increasing costs for every order.
Jacobo mentioned another factor recently affecting logistics: drivers migrating to the U.S., which adds up to costs, making them a hefty expense in Central America, as land freight between Guatemala and Costa
Rica ends up being almost 50% more expensive than sea freight between Guatemala and China, which makes it a very sensitive matter.
Corporación AG has overcome such obstacles through innovation in conveyance, recurring to closecoupled trailers, cross-docking and creating flexible fees that do not increase costs. Such strategies have been paired with training, partnerships with security companies, real-time
surveillance and contributing to the creation of a compliance and quality culture that has enabled the company to keep shipping in an uninterrupted manner, maintaining leadership within the business.
On a different matter, 2023 has seen the steel industry, globally, facing different challenges which came up in recent years: from production being affected by the conflict between Russia and Ukraine to changes in the global supply chain due to COVID-19 restrictions, which seems to lead into a search for closer, diversified sources.
Major challenges imply that Corporación AG should stabilize regularity in order delivery and service, avoid bureaucratic paperwork, simplify processes and increase agility.
The executive finalized by pointing out that, “when experiencing accelerated growth, one of the biggest challenges is finding new work methods which allow the incorporation
of effective and efficient capabilities and skills able to maintain excellence and quality in processes, products and individuals.”
THE LARGEST METAL RECYCLER
Highlighting the different areas of Corporación AG, it’s important to mention that the company is the largest metal recycling company in Guatemala and Central America, basing its production in a circular economy model, adding up to care for the environment and a responsible residue management.
More than 50% of the corporation’s production comes from recycled steel, and it should be noted that the company relies on a complete recyclers and supplies network in Central and South America and the U.S.
Grade 60 and Grade 80 rebar are produced from 100 percent recycled material, verified by the Guatemala Green Building Council (GGBC), which allowed the development of an eco-label boasting the Sustainable Commodity seal from the The Guatemalan Cleaner Production Center (CGP+L).
These badges enable clients to possibly obtain certifications such as EDGE, LEED and “Casa Guatemala”, accruing points due to the construction material, being steel in this case.
