Abstract
This paper adds new knowledge on how raw materials should be managed in iron and steelmaking firms. While previous research has contributed significantly to how firms should deal with functional challenges related to raw materials, the understanding of Raw Materials Management from a holistic perspective is largely lacking, and extant research does not provide qualified advice to firms on this matter. This study provides such knowledge by drawing on insights from Höganäs AB, a world leader in ferrous powder metallurgy, and their efforts to identify key aspects and principles of raw materials management. Our elaboration of a more holistic view on raw materials management builds on two elements. First, we depict five external uncertainties and three internal conditions that impact firm-level raw materials management. Second, we present six critical capabilities that underpin proficient firm-level raw materials management. The paper concludes with a discussion of implications for both firms aiming to increase their raw materials proficiency and to future investigations into this important area.
Highlights
This paper aims to add to the understanding of factors impacting how raw materials should be managed in iron and steelmaking firms, and explore capabilities underpinning proficient Raw Materials Management (RMM)
External uncertainties and internal conditions related to raw materials management Raw Materials Management that goes beyond a basic approach requires an in-depth understanding of impacting/ influencing factors
We have described external uncertainties and internal conditions related to raw materials management
Summary
This paper aims to add to the understanding of factors impacting how raw materials should be managed in iron and steelmaking firms, and explore capabilities underpinning proficient Raw Materials Management (RMM).Process firms manipulate material properties to develop and produce upgraded raw materials for subsequent use in Technology and Social Sciences, Luleå University of Technology, Luleå, Sweden upstream product and application areas (Barnett and Clark 1996). Firms in the iron and steelmaking industries are key examples of such raw material intensive firms, in which the firms’ capability to manage their raw materials constitute a critical dimension of their competitiveness. Effective raw materials management means performing all these activities better—i.e., faster, with higher quality, better price, and with fewer inputs and less hurdles—than competitors. All this needs to be done taking into consideration both the competitive environment of the firm as well as internal strengths and weaknesses of the firm, i.e., the cost of using any raw material is linked to the processes used within the company and cannot be understood unless a broad view is applied
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