Ken Loh, Pan-United Corporation, discusses an intelligent optimisation platform, which uses AI and analytics among other technologies, to overcome operational challenges commonly faced in the construction industry.
Traditional ’brick-and-mortar’ cement and concrete players tend to be labour- and resource-intensive, running decentralised concrete batching plants. Each batching plant runs like a mini business – ordering its own raw materials, getting orders directly from customers, and calling for trucks to deliver supplies. The largely manual model often results in a duplication of resources and manpower. Moving to Industry 4.0 allows companies to address these inefficiencies head-on and ultimately unlock value to improve the bottom line in a sustainable manner. By digitalising processes and connecting the physical plants to digital networks, companies can have an immediate bird’s-eye view of vertically integrated functions. The real-time data on hand enables centralisation and decisions to be made quickly and accurately. Labour can be fully optimised without duplicating efforts. Digitalisation of documentation also saves on paper-based administration. Companies that can drive Industry 4.0 become more cost-efficient and agile in meeting customer demands. Those that do not, risk falling behind the competition.
The resultant platform is shaped as a ready suite that covers end-to-end solutions, and takes a much shorter time to implement and produces significant savings.
Increased efficiencies and business opportunities
In general, most companies recognise the need for digitalisation. But the digital transformation and the adoption of smart technologies has often been a painful journey that companies cut short because it is a costly and time-consuming exercise. The issues are not straightforward. A major obstacle is to find the right IT experts to develop a suitable system, and then for management to set aside valuable time for integration with the business units. Operational ‘pain points’ and the pressure to serve customers’ changing needs are issues Pan-United Corporation (Pan-United) knows all too well. It took the company nearly a decade of amalgamating the solutions step by step to overcome many of the ‘pain points’ faced by the industry, which it faced itself as a leading industry player. The technology company used its capabilities in production and logistics to develop an intelligent optimisation platform called AiR, an acronym for Artificial Intelligence for Ready-mix concrete.
By bridging digital technology with in-depth domain knowledge, this digital platform employs artificial intelligence, data analytics, algorithms and sensor technologies to optimise every stage in a user company’s chain of operations. Every component or player in the AiR chain – the cement silos, concrete batching plants, trucking fleet, quality testers and customers – is connected to a single digital platform. This centralisation is the first step to streamlining end-to-end operations. The chain of optimisation starts from replenishing raw materials, managing the customer orders, deploying capacity at batching plants and facilitating quality control checks right up to electronic invoices (e-invoices).
The resultant AiR platform is shaped as a ready suite that covers end-to-end solutions, and takes a much shorter time to implement and produces significant savings. The AiR optimisation system has resulted in a greater competitive advantage and has improved Pan-United’s operational productivity. Incorporation of best-in-class practices into the technology platform and work processes has also elevated service standards and triggered gains of up to 45% in costs savings for the company since using the first basic AiR prototype in 2014.
By digitalising processes and connecting the physical plants to digital networks, companies can have an immediate bird’s-eye view of vertically integrated functions.
Offered as a software as a service (SaaS) scheme to the cement and concrete industry, the platform is modular and can be customised to suit the user company’s operations, logistics requirements and existing supply chain structure.
AiR is designed to be highly scalable to integrate new market-tested features. Upon implementation, the system is continuously upgraded as an ongoing value-add to the user. The upfront investment outlay is minimal in terms of capital expenditure; the user company has room for flexibility and agility to build a bespoke platform that addresses its own pain points.
For example, a fleet optimisation module incorporates dynamic scheduling of trucks for on-time delivery. The platform assigns the lowest-cost, nearest available tipper or concrete mixer trucks and directs them onto the best traffic route to the destination. The sustainable gains include more efficient road use and more economic fuel consumption.
Other features include electronic delivery orders (eDOs) and e-invoices. These eliminate the need for manual documentation, processing and handling by numerous parties – from production, despatch and delivery to keying in each delivery and filing. Importantly, these e-instruments reduce human error and make life easier for everyone.
Users can access real-time reports that can be shared with multiple parties simultaneously. Current and past transactions can be retrieved online. For Pan-United, the eDO route has proven its benefits by enabling administrative staff to be deployed to more productive work and by saving 13 t of paper annually.
The AiR platform has proven essential for facilitating safe construction work during the Covid-19 pandemic. With ‘lockdowns’ and the implementation of safe-distancing measures at public places, including construction sites, a technology-enabled solution is necessary to minimise or eliminate physical contact between employees, customers and workers.
AiR converts physical interactions into virtual or contactless touchpoints. Be it conducting trial mixes, processing orders, scheduling deliveries, cube sampling or signing off on deliveries – everything can be done remotely. The fully digitalised platform helps construction firms to not only carry out work efficiently, but also ensure workers’ safety and allow certain staff to work from home. For instance, in Singapore, the Covid-19 outbreak severely impacted the building industry, due to a country-wide suspension of construction work and sudden manpower shortage. With AiR, firms can quickly ramp up work after suspensions are lifted, improving operational efficiency with a limited workforce.
E-Delivery orders (eDOs) eradicate the need for manual documentation, processing and handling by numerous parties. In effect, they reduce human error and make it hassle-free for all parties involved.
Empowered by technology
Such a major shift towards adopting Industry 4.0 in cement and concrete operations is only possible with a clear direction and management will from the very top. The change to a digital business model must come with the willingness and confidence to invest – both time and money – in technology and in upskilling employees.
People are at the heart of the concrete and cement business. The built environment is designed and constructed by people, for people. While technology must be welcomed to help drive productivity, human input is still essential. Senior management provides the strategic overview of business processes but the line employees’ operational experience is crucial. These employees are best placed to analyse data and implement actions based on the data collected. Hence, the business priority must be to develop a workforce with the necessary skillsets to take on new responsibilities and remain relevant. Perhaps the greatest challenge in executing digitalisation initiatives may be in getting the buy-in of employees, customers and partners. User companies may meet some change resistance from employees who view these disruptions as threats to their careers. When work automation frees employees from manual processes, some rank-and-file workers may have feelings of hostility towards the company and the technology, out of fear that these new automated workflows could displace them.
To obtain the full support of employees, it is imperative for user companies to incorporate an effective change management plan. The purpose is to ease them into these changes and demonstrate that technology can allow them to concentrate on more knowledge-based or fulfilling tasks. For any change management to succeed, the senior management needs to be fully transparent with their long-term goals for the company and how the company and its workforce will look in the years to come. They have to help employees connect with the company’s innovation mission – endorsement from every single employee is vital.
To help mature workers and partners cope with digitalisation changes in the landscape, Pan-United upskills them by conducting holistic training for its drivers, operations personnel and customers alike, preparing them for further digitalisation in the industry. With the AiR digitalisation system, user companies will be able to manage all project transactions conveniently online and access production and financial data easily, which will maximise business productivity and streamline their operations. Business decision-makers will have more time and resources to focus on solving strategic issues and driving business expansion.
Users can access real-time reports that can be shared with multiple parties simultaneously.
Building industry strength through knowledge-sharing
Collaborations with existing players can pave the way for new opportunities in the concrete and cement industry. By leveraging machine learning and algorithms, the AiR platform provides meaningful and data-driven insights that allow user companies to better understand and pinpoint bottlenecks and areas for improvement. The AiR platform assists and supports user companies to help them to learn from their past, identify existing gaps and switch to new, customised solutions.
Pan-United also actively conducts briefings and holistic training on the various AiR modules. This ensures that user companies in the region are able to visualise and identify areas where such ‘smart technology’ – in this case, the AiR platform – can make an impact on the market. Pan-United has already entered into a Memorandum of Understanding with South Korea’s largest ready-mix concrete company, Eugene Corporation, to explore opportunities for adopting AiR. The strategic agreement facilitates information-sharing between the two companies and accelerates the pace of digital transformation in the construction and logistics space.
By supporting fellow industry players with their digital transformation journey, it is hoped that the combined impact of these initiatives can reshape user experiences and improve standard business processes in the long run, and ultimately level up the cement and concrete industry.
Digitalisation: an ongoing process
If successfully executed, digital transformation can bring a breath of fresh air to the longstanding traditional workflows in the construction sector. Despite this, some players in the industry are still averse to digitalisation, either overlooking innovation and focusing on immediate external issues or stifling innovation with an unconducive organisational culture. The senior management of such companies may be compelled to stay with conventional workflows, which tend to be manual and time intensive, simply because they are familiar with these processes, even if they may not be the most effective. As the push towards digitalisation accelerates, players that are hesitant about these changes and resistant to adapt to these new technologies may find themselves losing their competitiveness and even facing the potential risk of getting phased out or becoming irrelevant. When used appropriately, digitalisation tools such as the AiR platform can help companies better understand data on costs, resources and waste, improve business performance, and potentially enable leaders to make more well-informed business decisions for strategic growth.
Companies cannot expect that the adoption of any technological tool will act like a silver bullet. Instead, they must be ready to embrace technology across all functions of the business. It may be by educating and equipping the workforce with the skillsets needed, making continuous refinements to their business processes and technological tools, or enlightening customers and partners on the changes to be made. Companies must not be complacent. They should continually seek to refine and enhance their technological tools – even looking to other industries for new lessons and insights.
About the author
Ken Loh is the Chief Operating Officer at Pan-United Corporation and Executive Director of Pan-United Industries. Ken joined the group in 1999 to spearhead the development and implementation of growth strategies in PanU’s Concrete & Cement business, which is now Singapore’s biggest producer of ready-mixed concrete and largest supplier of cement. He is also a member of the Institute of Engineers, Singapore, and the Singapore Institute of Directors.
Read the article online at: https://www.worldcement.com/special-reports/05102020/artificial-assistance/