The Cement Industry in Nepal: Embracing Digital Transformation

It is obvious to understand the supply chain of the industry beforehand when talking about the possibilities of digital transformations. The figure below shows the simple supply chain of the cement industry in Nepal. It starts with the supply of raw materials like limestone, iron ore, and other mineral reserves from quarries to the factory. Other suppliers, like fuel, supplementary cement materials, and services, are supplied to the factory. At factories, different technologies, including vertical shaft kilns and grinding, are used to produce the clinker and cement as a final product, which is then stored and packaged to be sent to small or individual customers through wholesalers or retailers or directly transported using trucks to large construction companies. The process of ordering and billing between customer and industry, and industry and its suppliers, is confirmed. This type of traditional supply chain generates push products where the customer cannot provide feedback in real time about demand and product quality. It is desired to be more customer-centric, which is achieved by digital transformation.

Figure: Traditional Supply Chain of the Cement Manufacturing Industry

Digital Transformation Idea: 

The main idea behind the digital transformation in any industry is data. Real-time accumulation of data like the amount and condition of mineral reserves or inventories, product quality or characteristics, market demand and consumption, equipment health, and account information like ordering, buying, and paying helps make the industry smart, highly effective, and more productive. In the case of the cement industry, as shown above, we can implement digital transformation technologies like Artificial Intelligence (AI), the Internet of Things (IoT), cloud services, automation by robots, autonomous vehicles, drones, and digital apps to get the digital supply chain as shown in the figure below. The industry ecosystem can only be incorporated by these mentioned technologies.

Figure: Digital Supply Chain of the Cement Manufacturing Industry

Digital Transformation Process:

IoT is the base technology that can be used in the cement industry. The different sensors used in the factory supply chain, from raw materials, production, and inventory management, can be interconnected, and the data obtained must be stored in the cloud and shared with suppliers, factory management, technical teams, and end customers through user interfaces like applications.
The devices used in mineral reserves and by other suppliers can emit signals notifying the condition of the materials availability, supply amount, and time required to extract them. On the factory side, the drone can be used to identify the inventory and supplies condition. The camera used in drones sends information to the central system based on cloud services. The information thus obtained is analyzed to find the number of supplies or materials required in a factory, which ultimately signals the suppliers to extract and transport the raw materials to the factory.
The cement manufacturing industry has many big pieces of equipment like grinding machines, clinker and cement production equipment, and other interconnected devices. These all devices cannot be run by human manually. To increase efficiency, robots can be used to run that equipment automatically. Along with the sensors, each piece of equipment is used to collect health information about the equipment, like battery life, errors, damages, and others. The health information identifies any kind of repair and maintenance necessary for full utilization of that equipment. This information is transformed by the sensors into the main central cloud-based system. All the systems must be highly interconnected through a stable network. The engineers can use these health reports sent by devices to do remote maintenance.
After the production of cement, it needs to be sent to either wholesalers for individual customers or directly to the large construction company. The trucks are used for logistics purposes. The use of autonomous vehicles helps with faster delivery to customers. The vehicles are also connected through IoT so that they can give feedback about the delivery condition to both the customer and the factory in real time. Finally, when the product reaches the customer, they can send feedback about the demand for the cement and about its quality as well. This collected information helps improve delivery and inventory in the factory. Similarly, by applying AI to the data collected from customers, the quality of the product can be improved. New methods or technologies, like carbon nanotubes in concrete, can be used to innovate the product. This shows the customer-centric approach. In the traditional system, there was a flow from raw material suppliers to factories and then to end customers. However, after digital transformation, customers can provide feedback in real time, and supply is driven by the customer rather than the industry.
Overall, the order and billing of the product, raw materials, and other suppliers can be done using apps linked with the central database in the cloud service. This will decrease the administrative cost, provide transparency, and improve efficiency.

Anticipated risk

The main risks associated are cybercrime, data piracy, and employee or customer unpreparedness to embrace the new technology. There is an accumulation of huge databases due to the digital transformation. There is a risk of loss and misuse of those data by partnering companies. To solve this, the industry should make sure to have a good information security system. Similarly, employees working in the industry may not be ready to adapt to the technology, and customers may not desire to learn new technology. They should provide on-the-job training to employees and an awareness program to customers to ensure their readiness to embrace emerging technologies.