Supply of raw materials value chain
The supplier of raw materials is not always the source of the raw materials and there might be a supplier and logistics network before them. One example is the mining industry, some miners only mine, then they sell to or via traders, and the traders sell to the ultimate supplier of raw materials who in turn does some processing (value addition).
Let’s zoom in on the supply of Chromadek a sheet metal made by Mittal which is both a roof sheet used in the construction industry and a metal board in the signage industry. The iron ore was mined by a mining company, from which the iron was extracted by Mittal using a furnace and then rolled to create the flat sheet also by Mittal.
In this case, the raw material (iron ore) was supplied by a mine or a trader on behalf of a mine. Mittal then did the processing (manufacturing) to create this product.
| Mined | > | Processed | that was the value chain.
Raw material | Manufacture
Mittal does not sell directly…