World Cement asks Philipp Leutiger, Chief Digital Officer at LafargeHolcim, how digitalisation is changing the cement and construction industries.
World Cement (WC): Your current role is Chief Digital Officer at LafargeHolcim. Can you describe your journey to this role?
Philipp Leutiger (PL): I have always been fascinated with the change processes that industrial companies need to go through when they open up to new technologies. This is particularly the case in heavy industries, where high-CAPEX, long-term investments meet agile processes and easily programmed apps. As a consultant, I worked with many European market leaders and also some of the top global technology companies. Now I am excited to put many of the best practices I studied into action myself.
WC: Digitalisation and IIoT are buzzwords in industry at the moment. What is your ‘digital philosophy’?
PL: To me, digitalisation is all about the user – be it customers, business partners, or employees. Think about how our private life has changed in the last ten years: interacting with our friends on Facebook, planning the next vacation on Tripadvisor, booking a cab on Uber. Our life has changed because companies put us, the user, at the centre of the discussion. At LafargeHolcim we are working on three priorities: Industry 4.0, Logistics, and Services & Retail.
WC: How is LafargeHolcim implementing digital strategies within its businesses?
PL: Our digital strategy is driven locally. We put collaboration in and with our country-based operations at the forefront, involving all our business segments. So far, we have enabled more than 100 digital initiatives, which we will now leverage and replicate. But we believe there is more potential to use the data we have and collaborate with external innovators. It is not about launching a blueprint from our headquarters in Switzerland, which would then be implemented by our country-based operations. We want to go one step at a time to best connect our knowledge with creative ideas from outside, thereby leveraging our domain expertise and our deep connection to local communities. For us, digitalisation starts in the quarry and ends at the construction site where our products are used.
WC: Change management will be a key factor in the success of digital adoption in the cement industry. In your opinion, how do you best manage the digital transition?
PL: To me, change management is the key factor in the success of digital adoption in our industry. We have a new digital team in place that will drive this ambition, together with our country-based operations. Our role is to advocate for change and collaborate both with country-based teams and external technology providers and innovators. So on the one hand, we support country operations in executing their digital initiatives; on the other hand, we leverage open innovation. We have recently launched LafargeHolcim Maqer, a digital platform that supports our business and functional divisions to find, purchase, and adopt solutions from start-ups and other innovative digital leaders. It will help complement our solutions portfolio, optimise our processes, and open up our organisation to accelerate learning through interaction with partners.
WC: How do issues of cyber security impact the adoption of digital technologies? How do you address these concerns?
PL: When you think about cybersecurity, data breaches and financial risks come into your mind. In our industry, if cybersecurity is not guaranteed, it can even be a risk for the safety of our plant and operations people. This is why we take cybersecurity very seriously. We carry out extensive security checks and align our high security standards with our partners before adopting new technology.
WC: How does digitalisation interact with other current industry trends, such as sustainability, plant optimisation, and the skills shortage that is particularly evident in Western countries?
PL: We are very ambitious and clearly want to change our industry from the ground up: from the service level we provide to our clients to the safety records in our plants, our commitment to sustainability, and our growth targets in the strongly growing building materials and solutions market. We are working on many fronts on achieving this ambition. But we know that, if we want to be a step ahead of the game, we need to put digital at the core of our business, from the quarry to construction site. We want to integrate digital opportunities across the entire value chain – in production, sales, logistics, energy, and circular economy – which has direct positive effects on other industry trends, such as sustainability and plant optimisation. Our fully integrated set-up, from the gravel pit and the retail business through to the construction site, offers a lot of interesting ecosystems where digital solutions facilitate collaboration, optimise processes, and make them more sustainable and efficient.
Let’s take logistics as an example. We produce over 200 million t of cement and over 50 million t of ready-mixed concrete every year. And considering that, for ready-mixed concrete from production until the processing, we only have around 90 min., it is critical to optimise our supply chain in a way that allows our drivers and clients at the construction site to work together as efficiently as possible. And this is where digital solutions, such as logistics platforms, routing optimisation, or SLAs to ensure on-time delivery, come into play.
WC: How is digitalisation changing the way LafargeHolcim interacts with its customers?
PL: Digitalisation offers a lot of potential for the interaction with our customers, above all in our retail business and in logistics. Retail markets account for about 50% of our sales and we want to support our sales teams and distributors with digital solutions. In collaboration with start-ups, we seek the right technology, such as sales apps or solutions, which help our clients calculate the optimal ready-mixed concrete formulas for their projects. As for logistics, we aim to partner with start-ups to get the right digital solutions to optimise routes and provide more precise delivery details.
WC: What might the digital cement and digital construction Industries look like in the future?
PL: It is important to remember that many of the big questions around construction and building materials have not been solved yet, despite the fact that our industry is a very established one with longstanding market leaders. Given this track record, companies like us should be humble and thankful for being educated by our customers, business associates, and technology partners on what the future could look like.
Read the article online at: https://www.worldcement.com/special-reports/04042019/the-revolution-is-now/