How Sofcon Systems can help Cement Producers to adopt Industry 4.0?
Prabhat Kumar, Saxena
Chief Technology Officer at Sofcon Systems India Pvt. Ltd.
Introduction
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India is the second largest producer of cement in the world.
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It accounts for more than 7% of the global installed capacity.
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India has a lot of potential for development in the infrastructure and construction sector and the cement sector is expected to largely benefit from it.
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Some of the recent initiatives, such as development of 98 smart cities, is expected to provide a major boost to the sector.
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Aided by suitable Government foreign policies, several foreign players such as Lafarge-Holcim, Heidelberg Cement, and Vicat have invested in the country in the recent past.
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A significant factor which aids the growth of this sector is the ready availability of raw materials for making cement, such as limestone and coal.
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India’s overall cement production accounted for 294.4 million tonnes (MT) in FY21 and 329 million tonnes (MT) in FY20.
Cement production is projected to reach 381 MT by FY22.
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However, the consumption stood at 327 MT in FY20 and will reach 379 MT by FY22.
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As India has a high quantity and quality of limestone deposits through-out the country, the cement industry promises huge potential for growth.
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As per ICRA, in FY22, the cement production in India is expected to increase by ~12% YoY, driven by rural housing demand and government’s strong focus on infrastructure development.
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As per Crisil Ratings, the Indian cement industry is likely to add ~80 million tonnes (MT) capacity by FY24, the highest since the last 10 years, driven by increasing spending on housing and infrastructure activities.
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Higher allocation for infrastructure–34.9% in roads, 8.7% in metros and 33.6% in railways in budget estimates of FY22, over FY21, is likely to boost demand for cement.
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According to CLSA (institutional brokerage and investment group), the Indian cement sector is witnessing improved demand.
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Key players reported by the company are ACC, Dalmia and Ultratech Cement.
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In the second quarter of FY21, Indian cement companies reported a sharp rebound in earnings and demand for the industry increased, driven by rural recovery.
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With the rural markets normalising, the demand outlook remained strong.
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For FY21, CLSA expects a 14% YoY increase in EBITDA in the cement market for its coverage stocks.
Investments & Developments
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According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), cement and gypsum products attracted Foreign Direct Investment (FDI) worth US$ 5.28 billion between April 2000 and June 2021.
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In 2021, working remotely is being adopted at a fast pace and demand for affordable houses with ticket size below Rs. 40-50 lakh is expected to rise in Tier 2 and 3 cities, leading to an increase in demand of cement.
Private equity investments in real estate surged 24% YoY to US$ 477 million from July 2021 to September 2021.
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Some of the major investments and development in Indian cement industry are as follows:
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Government Initiatives
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In order to help private sector companies, thrive in the industry, the Government has been approving their investment schemes.
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Some of the initiatives taken by the Government off late are as below:
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Future aspect
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The eastern states of India are likely to be the newer and untapped markets for cement companies and could contribute to their bottom line in future.
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In the next 10 years, India could become the main exporter of clinker and gray cement to the Middle East, Africa, and other developing nations of the world.
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Cement plants near the ports, for instance the plants in Gujarat and Visakhapatnam, will have an added advantage for export and will logistically be well armed to face stiff competition from cement plants in the interior of the country.
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Due to the increasing demand in various sectors such as housing, commercial construction and industrial construction, cement industry is expected to reach 550-600 million tonnes per annum (MTPA) by the year 2025.
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A number of foreign players are also expected to enter the cement sector owing to the profit margins and steady demand.
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Adoption of new technology
In cement production, it pays off to be an early adopter of new technology.
Industry 4.0 will reduce costs, increase the bottom line, and even help attract and retain talent.
Boston Consulting Group recently published a report highlighting five areas where cement producers can benefit from Industry 4.0,?so we, at Sofcon Systems decided to help Cement producers in their journey towards Industry 4.0.
The lower the production cost, the better chance of survival.
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This could be the motto for most cement producers around the world, who have left no stone unturned in their quest to optimise production.
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The only hope for any real further gains is step change in the approach.
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In short, to optimise further, a revolution is needed.
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And now, the revolution is here.
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What is Industry 4.0?
Industry 4.0 is referred to as the 4th Industrial Revolution.
The term covers the current trend of digitalization and data exchange in automation and manufacturing technology.
Digital technologies are transforming Cement production processes from design and engineering to manufacturing.
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Some of the important elements of Industry 4.0 are
Internet of Things (IoT),
Cloud Computing,
Big Data and Analytics,
Virtual Twins,
Augmented Reality,
Autonomous Robots, and
Cyber-Physical Systems.
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In a Smart Cement Company based on Industry 4.0, all automation and manufacturing technology will be connected to a cloud solution with a connection to the internet.
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This will allow users to customize products online and manufacturers to produce batch size of one without additional costs compared to large batches.?
Industry 4.0 exploits new technologies like Internet of Things and Cloud Computing to create powerful connections between physical and digital systems.
This opens possibilities and new solutions for further optimisation.
With the enormous energy consumption, rising cost challenges, and the overall complexity, cement production will benefit from Industry 4.0.
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Are Cement producers already late for adoption of Industry 4.0?
Compared to other industries, cement producers are already late, and few players have implemented Industry 4.0 initiatives systematically.
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The good news is that this gives the first movers some advantages.
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“Typically, being first mover is associated with some level of risk. But, by now, most of these technologies have been used across several other industries. From a technological standpoint it has proven its worth. The first mover has some other advantages. One is the aspect of time, because whether you succeed or fail as first mover, you don’t have to play catch up with a competitor who already reduced their cost with X dollars per ton. The second thing is, as you embark on this journey, a lot of the technology partners will be very open to experimenting and customizing for individual plants upfront, before the solutions become industry wide standard solutions,” says Sumit Gupta, Managing Director, Boston Consulting Group.?
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Sofcon Systems can render help to Cement Producers in harnessing the full potential of Industry 4.0 such as:
Greater flexibility in processes,
Increased productivity and revenue, and
Higher-quality production.
Advantages of Industry 4.0
Industry 4.0 makes factories “smart.”
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Sofcon Systems team embraces a holistic approach to deploy Industry 4.0.
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This team works across all production sites to ensure that everything from technology infrastructure to governance and competencies are integrated and aligned.
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Main focus is to help clients build “factories of the future”—fully digital plants that deploy Industry 4.0 technologies?to achieve results that are sustainable, consistent, and scalable.
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These technologies such as the industrial Internet of Things, artificial intelligence, and cyber-physical systems interact seamlessly, communicating and adjusting continuously.
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Businesses that fully understand and capture the value of these advantages will be best positioned to take on the challenges that lie ahead.
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1.?Additive Manufacturing.?The classic example of additive manufacturing is 3D printing. Instead of prototyping individual components, companies can now produce small batches of customized products. The resulting advantages include the speedy manufacturing of complex, lightweight designs.
2.?Augmented Reality.?Augmented reality (AR) systems support a variety of services, such as selecting parts in a warehouse and sending repair instructions over mobile devices. With AR, companies can provide workers with real-time information that improves decision making and work procedures.
3.?Autonomous Robots.?Autonomous robots can interact with one another and work safely side by side with humans. These robots will cost less and have an increasing range of capabilities over time.
4.?Big Data and Analytics.?In an Industry 4.0 context, the collection and comprehensive evaluation of data from many different sources—production equipment and systems as well as enterprise- and customer-management systems—will become table stakes.
5.?The Cloud.?The more production-related initiatives a company undertakes, the more it needs to share data across sites. Meanwhile, cloud technologies continue to get faster and more powerful. Companies will increasingly deploy machine data and analytics to the cloud, thus enabling more data-driven services for production systems.
6.?Cybersecurity.?It’s no surprise that Industry 4.0 boosts increased connectivity and the use of standard communications protocols. As a result, the need to protect critical industrial systems and manufacturing lines from cybersecurity threats rises dramatically. For this reason, secure, reliable communications, together with sophisticated access management for machines and identity verification of users, are essential.
7.?Horizontal and Vertical System Integration.?Industry 4.0 allows companies, departments, functions, and capabilities to become much more cohesive. Cross-company, universal data-integration networks evolve and enable truly automated value chains.
8.?The Industrial Internet of Things.?Industry 4.0 means that more devices are enriched with embedded computing. This process allows devices to communicate and interact both with one another and with more centralized controllers. It also decentralizes analytics and decision making, thus enabling responses in real time.
9.?Simulation.?Simulations are a cornerstone of the industrial revolution 4.0. They’re used extensively in plant operations to leverage real-time data and to mirror the physical world. Done right, these models allow operators to test and optimize settings in numerous variations, thereby driving down machine setup times and increasing quality.
Industry 4.0 in Cement Industry
The report of Boston Consulting Group (BCG) lists five areas of Industry 4.0 of particular interest to the cement industry.
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1.??Reduce costs and attract talent
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Sumit Gupta from BCG shares the two main reasons why cement producers need to embrace this digital future.
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“One is cost, the other is talent. Industry 4.0 is a lever to introduce the right technology to reduce costs and apply more to the bottom line across the entire cement value chain. It also gives the option of running more plants remotely, and this will help attract talent in a time where we have a skill gap.”
SUMIT GUPTA, Managing Director, Boston Consulting Group
The set of recommendations includes analytics-driven predictive maintenance.
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Predictive maintenance addresses issues before the equipment breaks down, and this requires sensors attached to all critical machines to monitor conditions such as vibration, temperature and pressure.
These sensors must be connected to a network and send data for analysis.
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Through machine-learning, cement producers will be able to uncover root causes of past failures and predict the risk of failure for each machine.
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Predictive maintenance has been one of the main topic within the discipline of automation for years, and this is a good place to start the digitalization journey because a number of solutions are already available.
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“For equipment unique to the cement industry, such as the kiln and grinding media, you need a customised solution. In this area, equipment suppliers have the potential to develop industry specific solutions that will generate max value. In contrast, a stacker reclaimer is common in many industries and there are already many solutions available. In general, there are enough frameworks available to start a solution that will point you in the right direction,” Sumit Gupta says.
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2.??????????????Simulate production process
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Digital twins is the second area Boston Consulting Group points to.
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Digital twins allow cement companies to mirror the entire production process through a digital model.
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The model allows you to simulate how adjusting one setting impacts all other settings.
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As the computers can comprehend far more data than the human brain, this allows for optimisation that is not possible with traditional tools through testing various scenarios in a safe and costless environment.
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With Artificial Intelligence and machine learning, the software will even improve itself along the way in a spiral for continuous optimisation.
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As good as this sounds, it still requires a good deal of work to programme accurate digital twins.
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Here, Mr. Gupta underlines that you don’t need a full-scale self-improving model to start reaping the benefits.
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“Here you can apply the concept of the minimum viable product. People have played between two fences where either they don’t want to do it, or they want a full-scale solution from day one. But it is a step-by-step process where your first model is not the end-state but good enough to start using. Don’t expect everything to be simulated perfect from day one, but pick an area and replicate it. Then, as the model keeps learning, you will see much better results in six months or one year’s time, and then the ROI step-by-step becomes lucrative,” SUMIT GUPTA says.
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3.??????????????Technology creates more jobs
Building accurate digital twins requires cooperation between experienced employees from the cement plants and data scientists.
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Here lies a challenge, as some employees are reluctant to share information.
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“Some of these resident experts don’t want to share information because they grew up in a system where information is power. They feel threatened by the new technology because they don’t know their role in the future. It is a big management task to make people understand that the technology does not threaten their jobs, but actually creates an opportunity for them to develop new expertise. Most of the applications we are talking about will aid the human effort and take productivity to the next level. Some low-end jobs might go across, but I see more jobs being created. The initial fear of losing one’s job will always be there, and this is where the role of management comes in – tell people what is coming, let them know that they are part of the solution, and share the benefits across the organisation,” SUMIT GUPTA says.
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4.??????????????Cut energy expenses in half
Simulating the process in a digital twin also has very beneficial impacts on the next two areas mentioned in the report: Predictive Quality Analysis and Alternative Fuel Optimization.
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The quality analysis can help reduce overspending where producers tend to use costly, high-quality limestone and additives to meet quality targets.
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A self-learning digital twin will, over-time, associate all the process input parameters and the raw material characteristics with the quality outcome and thus reduce the overspending.
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The same goes for the energy expenditures that today represent 45% or more of total cement production costs.
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According to Boston Consulting Group, this could be cut in half by using alternative fuels, which today accounts for only 17% of the industry’s overall fuel use globally.
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Sumit Gupta mentions three barriers that digital simulation can help overcome:
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Securing the source of alternative fuel;
Replace the right level of fuel with alternative fuel; and Use the right quantity in the right mix.
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“Digital solutions can create clear advantages across these three areas, even the supply. You can tap down on your sources of supply and get an overview of what is going to arrive when,” he says.
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When you use a digital twin to simulate the environment, you can really look at what the right range is for your plant, and instead of increasing by one percent, perhaps you can increase by five percent. It makes the journey faster.
SUMIT GUPTA, Managing Director, Boston Consulting Group
However, he once again states that a full functioning digital twin must never be considered necessary to begin this journey towards more sustainable production.?“I don’t want the digital twin to become a non-starter. If you continue to wait for the right moment, you lose the race,” he says.
5.??????????????Taking the final step
The last area of recommendation in the report is The Integrated Control Tower.
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A digitized cement plant can be run remotely.
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According to the report, the few plants that do this already are experiencing reduction of up to 15% in operating costs, significant workforce optimisation, lower maintenance costs, and improvements in safety and working conditions.
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Points that match very well with the early comment about using Industry 4.0 to compensate for the skill gap.
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Reading the report and talking to Sumit Gupta, Industry 4.0 sounds like the obvious next step for cement producers.
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But, how do you put it into practise, and where do you begin?
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To answer the first part of the questions, the report lists five general steps:
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·??????Grasp the current situation,
·??????Set the vision,
·??????Conduct pilots,
·??????Create a reference factory,
·??????Establish strong governance.
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But when facing everyday challenges at the plant, you might be more interested in the answer to the second part of the question on where in your flowsheet you should set in.
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“It really depends on the plant and the current situation of the plant. If all plants were equal, anything around the mill and the kiln would have maximum impact. But I have seen plants running really well, but the limestone mine needs improvement, and for some it’s logistics that need improvement. So, the question of whether cost, quality or capability improvements is the right first step is different for every plant. If everything is good, look at the kiln and the mill – this is where Industry 4.0 will take productivity to the next level,” Sumit Gupta says.
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Conclusion
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Sofcon Systems can form a team with your operations & maintenance engineers to isolate pain area and help in digitalization process for embracing all five advantages of Industry 4.0 in your cement plant.
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The five areas of Industry 4.0 which hold great potential for cement manufacturers today are:
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·??????Analytics-Driven Predictive Maintenance
·??????End-to-End Optimisation via Digital Twin
·??????Predictive Quality Analysis
·??????Alternative Fuel Optimisation
·??????Integrated Control Towers
??????????????????????????????????????????????????????????????????????????????????????????????By Digital Prabhat
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Note:?Conversion rate used for November 2021 is Rs. 1 = US$ 0.01336
References: Media Reports, Press releases, Union Budget 2019-20, Edelweiss Securities Ltd., Boston Consulting Group report on Industry 4.0