Optimization of iron ore supply at Gerdau

Gerdau Mineração plays a strategic role within the Gerdau Group by ensuring a stable, efficient, and high-quality supply of iron ore to the company’s steelmaking units. 

Gerdau operates a complex supply chain involving the production and beneficiation of iron ore at both owned and partner plants, as well as the supply of steel mills located in four cities across Minas Gerais. This operation demands coordinated long-term decisions on inventory management, logistics, market sales, and external sourcing — all of which have a direct impact on the technical and financial performance of the company’s production chain. 

Our solution supports strategic and tactical decision-making across the entire raw material supply chain. It encompasses everything from mining and beneficiation — in both Gerdau’s own and partner plants — to the efficient distribution of fine and lump ores to steel mills located in four cities across Minas Gerais.  The model focuses on long-term inventory optimization, transportation cost minimization, evaluation of market sales opportunities, and procurement from external suppliers. We also implemented seamless integrations with Gerdau’s internal systems and other Cassotis optimization tools, ensuring consistency and alignment throughout the supply chain.   

By reshaping how raw materials are selected, sourced, and stocked, we unlocked tangible value across the chain:  Long-term inventory optimization with a 11.9% reduction in associated working capital;  Identification of opportunities to use more cost-effective materials, resulting in a 1.6% reduction in raw material costs;  1.3% reduction in raw material procurement costs.