Holcim is a manufacturer of sustainable building materials, operating in approximately 70 countries with more than 70,000 employees. Among its major products is ECOPact, a type of low-carbon “green” concrete that reportedly results in 90% fewer CO2 emissions than standard materials. The company incorporates large amounts of recycled construction and demolition waste in its concrete, and plans on operating at least one net-zero emissions plant by 2030.
The cement manufacturing industry enjoyed a relatively stable supply chain for many years. There were few hiccups along the way, with on-the-ground experience taking precedence over data-driven analytics. During that time, Holcim focused mostly on addressing basic use cases relating to processes such as trip tracking, cycle-time monitoring and the application of safety-focused key performance indicators (KPIs).
The global cement supply chain hit a wall in 2020. The result was far greater uncertainty around demand and supply, making key decisions more difficult. There was a clear need to digitize operations to improve the flow of data, but instead of outsourcing that task, Holcim turned to its own Transport Analytics Center (TAC) to carry out the necessary innovations and undertake change management.
At the outset, the team was relying on available data derived from basic use cases to generate analytic solutions to the crisis of the moment. Over the course of a year, however, Holcim restructured and pumped up the TAC from around 10 to more than 30 employees, tasking them with focusing on critical processes such as freight management, network optimization, KPIs, shipment diversion, operational efficiency and inventory management — all from the perspective of digital transformation.
A Mission Expanded
Formed in 2018, TAC’s initial charge was to monitor KPIs on road safety, such as braking and speed. The group drew on data from monitoring systems installed in vehicles, then correlated it with information from ordering and dispatch systems. The new structure was first rolled out in India, deploying TAC in 35 plants. It began tracking more than 20,000 trucks, using data derived from enterprise resource planning (ERP) applications, in-vehicle monitoring systems (IVMS), radio frequency identification and other sources.
With the arrival of the COVID-19 pandemic in 2020, Holcim asked TAC to step up its game. In all, the company undertook more than 1,000 initiatives across some 1,500 users and four business segments. The goal was to speed up logistics decisions, improve operational efficiency and realize significant cost savings. Adopting the mantra that “innovation is born out of crisis,” Holcim sought to simultaneously address all three of its critical “pillars” of operation: safety, efficiency and sustainability.
To ensure road safety, TAC provides daily data analytics to the company’s Driver Management Center (DMC), which uses the intelligence to train and coach drivers on safe driving practices.
On the efficiency side, TAC supplies analytics on freight, distance, turnaround time, route adherence, leads and direct dispatches. Drawing on its in-house team of data scientists, the group created an optimization algorithm that identifies the best plants for deliveries, minimizes distances traveled, and boosts overall service levels.
It’s not surprising that a company that fashions itself a “green” manufacturer would also place an emphasis on sustainability in its logistics operations. Holcim says it was the first in its industry segment to establish CO2 reduction targets for Scope 3 emissions — those generated by vendors and other supply chain partners over which it has no direct control. The group’s efforts spanned 57 countries, monitoring more than 60,000 trucks covering 1.4 billion kilometers per year.
Targeting Scope 3 Emissions
On the road to zero-emissions transportation, Holcim has set a target of 26% reduction in Scope 3 emissions by 2030. Again, TAC is aiding in that effort, by enabling the tracking of all transportation emissions via a digital platform.
Holcim cites several use cases to validate initial results from its three-pronged approach to supply chain optimization. For road safety, TAC’s safety KPIs helped it to reduce fatal incidents by 75%, while increasing by 75% the number of kilometers driven by trained drivers.
In the area of operational efficiency, TAC set out to reduce freight rates by cutting down on distances traveled and identifying those routes with the biggest freight increases. Through an end-to-end process of mapping and analysis, the company improved loading times and increased fleet rotation by 10%, measuring progress through an operational efficiency dashboard.
On the sustainability front, Holcim approached the challenge of measuring and reducing Scope 3 transportation emissions with the help of a CO2 Transport Dashboard. It allows users to monitor, analyze and manage their carbon footprint for both inbound and outbound logistics. And it helps transportation providers to employ “levers” that figure in such factors as modal mix, distance and payload to cut CO2 emissions.
In Germany alone, Holcim reduced CO2 intensity per load for the cement and clinker (a granular substance) segment by 10.1%, and overall distances traveled by 15.2%. At the same time, it boosted volumes moving on rails and waterways by 28.1%, and weight per shipment by 4.1%.
TAC’s transformation journey took place over several years: the global IVMS rollout and safety initiative in 2018 and 2019, further safety programs and freight optimization in 2020, and the additional deployment of analytics to address CO2 emissions and a data lake project in 2021.
The year 2020 brought significant challenges to Holcim. “The crisis has forced the organization to shift focus on innovation and restructuring the business using modern digital tools, with emphasis on advanced data analytics,” the company said. “Improved operational efficiency and substantial amounts of logistics cost-saving allowed Holcim to successfully navigate through the crisis.”
Holcim Group, https://www.holcim.com/
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