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From ERP to Cloud ERP

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While companies are investing in R&D and advanced tools to digitalise cement manufacturing processes, there is yet a lot to be achieved in terms of IT progression in the industry. ICR looks closely at the latest innovations that are underway to digitally transform the industry.

Our first brush with IT was with the implementation of ERP more than two decades ago, which brought in the proverbial single moment of truth among a range of internal stakeholders – from sales to production and materials management, including finance and accounting. This single view of things led to better decision making for accounting and reporting. This became the only way to enable businesses to create sale orders on the one hand and purchase orders on the other while planning and coordination became rule-based engagements. For those businesses that needed the Bill of Materials (BOM) to connect suppliers with the nuances of production planning and control, it was a great step-jump to align Master Production Schedules with Material Requirement Planning (MRP) and then Manufacturing Resource Planning (MRP-2). Later on, several modules of ERP created a much-needed interface between customer facing metrics and operationally directed goals that augured well to plan and monitor activities to the achievement of several objective functions.
IT is too general a term to be used any more although it still persists, in fact the three-decade old word was coined to include everything under one reference. The use of technology to enhance our ability to use information for delivering business results is no longer subsumed in the rhetoric of everything digital. That was in the realm of small data, when small was beautiful. Our ability to deal with small data hinged on data analytics that could solve problems through descriptive statistics only. At best, we did regressions to connect variables to make meaningful diagnostics and to create a forward view as in forecasts of all kinds.

The science of data
The world has changed to the new realities of Big Data, where the more the data is, the better our ability to find patterns in it, to be able to diagnose better and in doing so enhance our ability to predict things better. The real step change happened when data could be used to prescribe what needs to be done. IT of yester-years needed to be hardwired into this reality. Some industries have done better than the others. Let us examine what happened in the cement industry.
The cement industry progressed in the conventional lines to connect customer fulfillment processes to the delivery systems and then in turn to the production systems from the quarry to the grinding of cement. Every process got linked and aligned and the critical activities and their output could be better planned and monitored. From declaration of inputs into a programme to the declaration of outputs, from the thousands of SKUs that maintenance teams needed their spares to be managed, to the connecting links of equipment and their maintenance programs, the operating environment from production to maintenance leaped to include data acquisition systems that sometimes sat on top of the database that the ERP system created. Apart from the usual modules of sale order management, planning for production, material management to procurement, almost all modules were implemented to tie the process together in one edifice of ‘truth’. Thus, the costing system could be developed and curated to create several modules of control and monitoring and reporting for management review.
Thereafter the ERP systems progressed with several add-on features that connected control systems (electrical and mechanical) that could interface with the existing database, extract data and do several value-added analytics to better control and administer processes from mining, clinker processing to cement grinding. Sales and Operations Planning processes could use Decision Support Systems (DSS) to enable better fulfillment processes. However, it remained to be seen how much and to what extent this served the need of management to deliver results. Cement companies have largely used manual overrides at will, as it helped them to solve complex puzzles without going through the ordeal of rule-based capture where constraint-based systems work on principles rather than manual dictates and overrides.
The real test of fulfillment was in connecting logistics systems to work to the demand of the customer. This is where it has taken a considerable amount of time to make a clean head-way. On the other hand, logistics was the key cost driver and the enabler of results combined into one.

Digital connections
Two things started to create additional requirements from the customer-end of the process – the ability to do business online and doing it with thousands of digitally connected entities. This meant creation of on-demand systems that must go beyond the manual processes of taking snap-shots of order fulfillment processes and then doing a scenario planning based on our understanding of the physical systems at play, so that certain objective functions could be maximised or minimised. This took us to the realm of algorithms that helped to connect inputs and outputs in planning systems from order booking to fulfillment to the next level of ‘servitisation,’ the cloud-enabled services included.
For Ready Mix Concrete systems, this meant connecting not one but many objective functions where digitally connected delivery systems had to be aligned as well to the discrete nature of planned receipts of a large number of inputs. Logistics being the biggest cost driver in cement, the IT systems had to move to the next level of being cloud-enabled, where the first step was GPRS conversion of all mobile delivery systems.
The progress to digitisation with the existing IT infrastructure and the added demands of mobile interfaces required the much-needed conversion of all trucking and delivery systems to be GPRS enabled; this was no simple task, as it meant putting the entire system to a far more algorithm-enabled instead of manually orchestrated. It was a clarion call to be taken whether or not all movements of goods and services were to be GPRS-enabled with cloud-enabled IT systems. To this effect, much of the cement industry is far less initiated even today, although the benefits of which can be easily calculated and the return on this investment easily shown.
If the cement industry has to move to the next level of digitisation and aspire to be in the same league with the rest of the manufacturing industries, the first step has to be to ‘enable digital tracking devices’ to be connected to ‘Control Towers’ such that the network could be configured on a real time basis. This would solve not only the problem of customers being connected on line with their status of orders on a real time basis but also for the cement company to actually track the real logistics cost of the goods shipped, which under the current status of implementation leaves a lot to be desired. If prices must reflect the logistics cost, this seems like the basic need of the hour.
Digital progression to cloud-enabled ERP is the most logical step, but the cement industry has a lot to do in putting the act together with many stakeholders at play. Only a very few have taken the bold step to move in that direction and globally, too, only a few examples exist.

-Procyon Mukherjee

Concrete

Jefferies’ Optimism Fuels Cement Stock Rally

The industry is aiming price hikes of Rs 10-15 per bag in December.

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Cement stocks surged over 5% on Monday, driven by Jefferies’ positive outlook on demand recovery, supported by increased government capital expenditure and favourable price trends.

JK Cement led the rally with a 5.3% jump, while UltraTech Cement rose 3.82%, making it the top performer on the Nifty 50. Dalmia Bharat and Grasim Industries gained over 3% each, with Shree Cement and Ambuja Cement adding 2.77% and 1.32%, respectively.

“Cement stocks have been consolidating without significant upward movement for over a year,” noted Vikas Jain, head of research at Reliance Securities. “The Jefferies report with positive price feedback prompted a revaluation of these stocks today.”

According to Jefferies, cement prices were stable in November, with earlier declines bottoming out. The industry is now targeting price hikes of Rs 10-15 per bag in December.

The brokerage highlighted moderate demand growth in October and November, with recovery expected to strengthen in the fourth quarter, supported by a revival in government infrastructure spending.
Analysts are optimistic about a stronger recovery in the latter half of FY25, driven by anticipated increases in government investments in infrastructure projects.
(ET)

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Concrete

Steel Ministry Proposes 25% Safeguard Duty on Steel Imports

The duty aims to counter the impact of rising low-cost steel imports.

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The Ministry of Steel has proposed a 25% safeguard duty on certain steel imports to address concerns raised by domestic producers. The proposal emerged during a meeting between Union Steel Minister H.D. Kumaraswamy and Commerce and Industry Minister Piyush Goyal in New Delhi, attended by senior officials and executives from leading steel companies like SAIL, Tata Steel, JSW Steel, and AMNS India.

Following the meeting, Goyal highlighted on X the importance of steel and metallurgical coke industries in India’s development, emphasising discussions on boosting production, improving quality, and enhancing global competitiveness. Kumaraswamy echoed the sentiment, pledging collaboration between ministries to create a business-friendly environment for domestic steelmakers.

The safeguard duty proposal aims to counter the impact of rising low-cost steel imports, particularly from free trade agreement (FTA) nations. Steel Secretary Sandeep Poundrik noted that 62% of steel imports currently enter at zero duty under FTAs, with imports rising to 5.51 million tonnes (MT) during April-September 2024-25, compared to 3.66 MT in the same period last year. Imports from China surged significantly, reaching 1.85 MT, up from 1.02 MT a year ago.

Industry experts, including think tank GTRI, have raised concerns about FTAs, highlighting cases where foreign producers partner with Indian firms to re-import steel at concessional rates. GTRI founder Ajay Srivastava also pointed to challenges like port delays and regulatory hurdles, which strain over 10,000 steel user units in India.

The government’s proposal reflects its commitment to supporting the domestic steel industry while addressing trade imbalances and promoting a self-reliant manufacturing sector.

(ET)

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Concrete

India Imposes Anti-Dumping Duty on Solar Panel Aluminium Frames

Move boosts domestic aluminium industry, curbs low-cost imports

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The Indian government has introduced anti-dumping duties on anodized aluminium frames for solar panels and modules imported from China, a move hailed by the Aluminium Association of India (AAI) as a significant step toward fostering a self-reliant aluminium sector.

The duties, effective for five years, aim to counter the influx of low-cost imports that have hindered domestic manufacturing. According to the Ministry of Finance, Chinese dumping has limited India’s ability to develop local production capabilities.

Ahead of Budget 2025, the aluminium industry has urged the government to introduce stronger trade protections. Key demands include raising import duties on primary and downstream aluminium products from 7.5% to 10% and imposing a uniform 7.5% duty on aluminium scrap to curb the influx of low-quality imports.

India’s heavy reliance on aluminium imports, which now account for 54% of the country’s demand, has resulted in an annual foreign exchange outflow of Rupees 562.91 billion. Scrap imports, doubling over the last decade, have surged to 1,825 KT in FY25, primarily sourced from China, the Middle East, the US, and the UK.

The AAI noted that while advanced economies like the US and China impose strict tariffs and restrictions to protect their aluminium industries, India has become the largest importer of aluminium scrap globally. This trend undermines local producers, who are urging robust measures to enhance the domestic aluminium ecosystem.

With India’s aluminium demand projected to reach 10 million tonnes by 2030, industry leaders emphasize the need for stronger policies to support local production and drive investments in capacity expansion. The anti-dumping duties on solar panel components, they say, are a vital first step in building a sustainable and competitive aluminium sector.

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