How Sofcon Systems can help Cement Producers to migrate to Greener and more connected 21st Century Cement Plant?

Introduction

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We have been going through Covid-19 era since last two years in India.

Demand of cement has become volatile.

Every cement producer is seeking migration path to go for Greener and more connected 21st Century Cement Plant to earn a competitive advantage and build resilience.

This can happen when the Cement plant of the future will embrace digitization and Industry 4.0 to gain sustainability trends.

The global cement industry is hit hard by Covid-19 pandemic and cement demand globally declined by 8 percent in 2021.

In fact this is the right time to build resilience into the core of the cement value chain: the cement plant.

The cement industry company has to catch up with other heavy industries by embracing digitization and sustainability in order to achieve considerable productivity gains.

It is very important to sail through impact of Covid-19 and make cement companies more resilient to future disruptions.

It is quite evident that cement plant of the future will operate in drastically different way than today’s plants.

The vision of future cement plant is very clear.

We see our future cement plant as a resilient, green, agile and efficient plant.

The vision of cement plant of 2030

The cement plant of future will achieve

·??????Lower operating costs and

·??????Higher asset value through higher energy efficiency, yield and throughput.

Predictive maintenance will improve lifetime of equipment.

Environmental foot print of each plant will be minimized so that its license to operate across locations and jurisdictions will get secured.

The plant will meet customer demand by adjusting dynamically production and logistics based on real-time customer data.

All non- value- added tasks will be automated.

Employees will remain engaged in value added activities and will feel always excited.

Real time information will be available for all managers remotely to enable them to take better decisions.

Exhibit 1 shows that pursuing digitization and sustainability levers are key to boosting productivity and efficiency of a typical cement plant.

The result is a margin gain of $4 to $9 per ton of cement, which could shift a traditional plant to the top quartile of the cost curve for plants with similar technologies.

How much capital expenditure is required for this transition will depend on lever applied.

For example, implementing an advanced analytics pilot for the burning process would require two to three months of expert work to gather and analyse historical data as well as model to train the system.

?Enabling digital and advanced analytics

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At present, cement industry has not yet started its digital transformation journey.

However, it is now evident that declining demand, stricter government regulations and changes in the broader construction ecosystem will create urgency for this industry to pursue adoption of Industry 4.0 technologies to stay competitive.

Cement plant of the future will embrace value and not volume as key focus.

Real time, fact based decision making will be the norm, and continuous adjustments will account for ecosystem variability.

The product portfolio will increase 5 to 10 times.

Operations will be managed with dynamic constraints and opportunities, with production parameters adapted in real –time.

Digital twins will simulate and optimize the overall impact of external variability in operations.

It will include complex processes such as burning to more structured activities such as maintenance.

Few workers will be able to manage plant on site.

Interactive online dashboards will allow managers to collaborate remotely, solve problems and make quickly informed decisions with the rest of the team.

Maintenance engineers will get alerts of faults in equipment immediately and will also receive step by step instructions on how to repair with the aid of augmented reality.

Sofcon Systems team is equipped with strong technological base which can facilitate a fully integrated cement value chain.

Advanced analytics algorithms can improve yield, throughput, quality, energy efficiency and cement to clinker ratios.

Automated tracking of overall equipment effectiveness (OEE) loss and Advanced Analytics enabled software will tailor asset strategies to improve equipment reliability and lifetime as depicted in Exhibit 2.

A carbon-neutral cement industry: the response to climate change

Cement industry was responsible to create 7% of global CO2 emissions in 2017.

There is an increased global pressure for more stringent emissions standards and decarbonisation from society and alike governments and it will have major impact on the cement industry.

Entire cement value chain will get disrupted.

It will create pressure on cement producers to rethink on their product portfolios and also to go for newer partnerships to achieve carbon neutrality.

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As per analysis done by McKinsey and Companies, the cement plant of future will be able to reduce emissions by up to 75 % by 2050 in comparison to 2017.

Around 20% will come from operational advances, such as energy-efficiency measures and clinker substitution.

An additional 10% will come from alternative fuels.

The remaining 45% will come from adoption of Digitization & Industry 4.0 technologies.

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How to make it happen?

At present most of the cement plants are being operated in a traditional non-agile way with manual or outdated technology infrastructure.

They are also struggling to acquire and retain skilled workers in important roles.

Due to mergers and capacity expansion, legacy investments do not allow drastic changes in management.

Moreover cement industry has seen major advancements in IT infrastructure and operational technology over the past 20 years but ROI has been below expectations.

It happened because new ERP systems, process optimization tools and even predictive maintenance have lagged behind due to change management challenges and cultural differences between sites.

Cement companies can understand the gaps and opportunities in each market sub-segment by conducting an initial assessment of their plants and their entire value chain.

This exercise will not only define realistic digitization and sustainability aspirations but also facilitate discussions of a comprehensive strategy that is codified into a detailed road map for each plant.

Cement companies can either define top down targets for each plant or bottom up targets depending on specific use cases for each plant.

Sofcon Systems team can help them to build their digital capabilities.

They should then focus on their core activities to generate the largest margin gain for their business and customers.

Each plant will need to establish an agile operating model that will include adjustments to the organizational structure, capabilities, infrastructure, processes, and partnerships.

Local leaders need to be empowered to guide the way to achieve those goals, instilling transparency, customer orientation, and a sense of ownership within local teams.

The plants also need to move away from being pure cost centres and focus on initiatives that generate high value while running day to day operations in a lean way.

A stable organizational backbone ensures an organization has a common purpose, standards, platforms, culture, and set of values-allowing for open and simple knowledge sharing.

There is no single approach for success, and each plant should choose its own path depending on context, goals, desire for centralization, existing in house capabilities and so forth.

The most important questions for cement companies to answer before starting this journey are around value generation.

More specifically:

Is it better to have peak efficiency or to maximize throughput?

Can a fully integrated manufacturing process that has a raw material based production generate higher margins?

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Conclusion

The Covid-19 pandemic crisis has forced cement companies to go for digital transformation journeys through Industry 4.0 sooner rather than later.

Plants that realize a more digitized, sustainable vision of the future are more likely to ensure a long term competitive advantage in productivity, operational efficiency, and resilience that far outweighs any investments at the outset.

Greater efficiency and sustainability is just one aspect of this vision for the future.

In the coming decade, companies must take action across the entire value chain to produce cement in a manner that is both economically and ecologically feasible.

Sofcon Systems team can help Cement companies in their journey towards digitization process to embrace Industry 4.0 so that they can migrate to greener and more connected 21st century cement plant.

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Reference: McKinsey & Company report