Make vs buy vs partnership in distributing commodities: a case study and a methodology

This paper deals with the decision making about the strategic alternatives for distributing a commodity – the bulk cement – characterised by an extremely high incidence of the transportation costs. It is based on the case of Italcementi Group (ITC), the largest European producer of cement, leader in Italy with a share higher than 30 per cent and growing abroad through acquisitions and foreign direct investment in Europe, North America, Middle East and North Africa. This paper shows a methodology to select the most suitable alternative between own account, hire and reward and long‐term partnership to distribute basic commodities, given the existing manufacturing base (facility locations are given). The methodology takes into account the context of the local markets and supply of logistic services and considers multiple performance criteria.