The cement maker has embraced digitization and sustainability to earn a competitive advantage and build resilience.
Transporting cement is akin to walking a tight rope. Everything – every step in the process – must happen seamlessly. One can encounter several changes on an order right up until the last minute. It doesn’t matter. You are still expected to come through.
Cement maker JK Lakshmi Cement (JKLC) has been aware of the inherent challenges facing the industry. Right from gaining foothold in the new and emerging markets in the country to investing in the latest R&D, it has continued to be a resilient performer.
In this interaction Rajesh Kumar Singh, Head-IT at JKLC shares his views on how digitization and sustainability are helping gain competitive advantage and building business resilience. Excerpts:
Q. We have seen the cement industry embrace digital transformation in a big way with new investments in automation and technology. However, before we get to the technology piece, can you share some of the unique business challenges that you are facing?
Tackling logistics and distribution are the two major concerns. Cement is a product category that is generally not stored. Our customers want their order to be delivered just before consumption or what we call just?in?time (JIT). Sometimes the cement production to consumption happens in a few hours. This is beneficial to us and also to our customers that the cement is supplied JIT.
Another challenge is that we need to deliver cement consignments at a fresh location each time. The repeat order from the same location happens on rare occasions. When delivery doesn’t go according to plan and if we are not prepared, margins can erode. The costs of idling trucks, fuel, and of course the material that customers reject, add up. These are some challenges that are different than other sectors.
Q. All of this, of course, puts incredible pressure on your logistics to deliver just in time. As a result, your transportation must be minutely planned and organized for efficiency. From streamlining transportation networks to fine-tuning warehouse operations, companies rely on logistics solutions to manage their supply chains, accelerate fulfillment activities, and simplify a wide range of business processes. How have you geared up to plan for the unexpected?
Logistics is a huge challenge for the cement industry. We have been operating on a standard ERP for years now. However, it is not designed to handle the peculiarities of logistics.
After evaluation of various products, we decided to opt for Oracle Logistics Cloud management to handle this part smoothly.
We wanted to have a platform that could handle the specific requirements of our fleet operators, handling agents, and the driver community. We have around 300 transporters of varying sizes, around 500-600 handling agents and there are thousands of drivers. We wanted to make the lives of all these people easier.
There are many factors that one needs to consider. For example, when the consignment is allocated, when will a truck arrive at a given location, how much time will the truck stay at the customer location, etc. Proof of Delivery or POD is another pain area. It would take 4-5 days for a POD to enter the system and then the payments would be done. We wanted to have the POD in real-time along with the payment.
This is beneficial to the transporter as their payment is getting released immediately, and we are aware that the consignment has been delivered.
Q. What have been some of the tangible benefits post deployment of Oracle Logistics Cloud?
We have been able to achieve ease of operations with all the stakeholders viz. our operations team, fleet operators, Clearing and Forwarding Agents, and drivers. While Oracle’s solution will play a major role, there are other solutions like GPS and IVR in place. So, for example, if a driver calls a call center, we will be able to identify which consignment they are talking about. This enables seamless collaboration with the driver community and aids the business.
Secondly, there will be a reduction in the turn-around time. The solution will help to make payments faster to our fleet operators. This translates into a lesser waiting time for the fleet operator. For example, if a consignment took 18 hours to complete, now we will achieve it in 12 hours. This saving of six hours is beneficial to all stakeholders. And finally, payments that took at least a week to happen, can now be done instantly.
Q. Moving ahead, how are you aiming to embrace digital and fine-tune logistic processes to become more efficient and predictive?
Apart from the Oracle Logistics Cloud, we have other solutions where we are utilizing machine learning and analytics. We are using all these in combination to act in a faster manner and become more predictive.
For instance, if a truck is waiting more than its expected wait time, our system gets a notification. We then call the driver to find the issue. Secondly, we can now predict the time of consignment delivery based on the orders, the load factor, etc., which is then shared with the customer.
This is a continuous journey. To date, we have created around six to seven used cases and over time this will increase.
Q. Businesses are recognizing the need to have environmental sustainability. How are you gearing to step up towards this path of deriving sustainable business practices to succeed in the long run and make a difference to the environment?
The agenda of reducing carbon footprint is high on the agenda of all companies and the focus is on creating a sustainable future.
Our manufacturing team is working aggressively around this area. For example, energy is a big requirement for us. We have moved towards solar energy.
We are also using Alternative fuels otherwise known as AFR to generate energy. These are primarily waste from the industrial and household units. We are working with the manufacturing team to help them utilize the energy in an efficient manner. For example, in AFR various kinds of waste are coming from the industry and households. We are trying to design a system that can be used to segregate them and make them ready to consume.
We are also looking at thousands of old machines that need to be refreshed. We continuously monitor these machines. Whenever there is a lack of performance/efficiency in a machine, we immediately flag it to the business owners for necessary action.