Developing a sustainable supply chain to add value
A Lafarge case study

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Page 2: Sectors of industry and sustainable supply chains

Business activities may be classified by the type of production that takes place. All activities fall into one of the following three sectors of industry:

  • Primary – involving the extraction of raw materials or the growing of crops
  • Secondary – involving a transformation of raw materials into finished goods
  • Tertiary – covering the provision of services.

Lafarge 17 Diagram 2Since the C19th, the balance of UK activity overall has been changing, moving to an increasingly service-orientated economy. Industries such as mining (primary) and manufacturing (secondary) have reduced due to cheaper goods from overseas competitors. In 2011, the primary sector accounted for 1.4% of UK GDP, the secondary sector for around 22% of GDP, with the tertiary sector dominating with just over 76% of GDP. However, certain key industries in the UK, such as steel and cement, have experienced growth, with new technologies and innovation driving demand. Lafarge therefore needs more people with both specialist and generalist skills to meet that growth.

The interdependence between the sectors is known as the ‘chain of production’. This Lafarge 17 Diagram 3identifies the interlinked stages that a product goes through from raw materials to arriving at the final customer. Each stage adds value to the previous one. A sustainable supply chain aims to ensure that the business is conducted in a manner which can be maintained in the future and which does not impact adversely on future generations. The key challenge is to deliver products and services that give value to the business and the customer, whilst maintaining a positive environmental impact.

Lafarge 17 Diagram 4Lafarge operates in all three sectors of its industry, extracting raw materials, manufacturing finished goods and providing sales and after-sales service for customers. In this way, Lafarge is able to take control of and manage not just operational efficiencies but also quality, health and safety and its impact on the environment.

Lafarge | Developing a sustainable supply chain to add value