India accounts for over 8 per cent of global cement capacity and the cement industry remains a crucial building block in the infrastructure development of the country. With 210 large plants, the installed capacity in the country is likely to reach 715-725 million tonne (mn t) annually by FY2028. The industry is primed for sustained growth, however, it is getting pushed into a tight corner due to increasing financial constraints. Despite the commodity nature of cement and intense market competition, manufacturers continue to find innovative ways to enhance operational efficiency and deliver value. This makes cost control a key driver for the industry's sustained growth and long-term success. The control of cost in the cement industry focuses basically on three key areas: power and fuel, freight, and raw material. Each of these components forms the basic foundation of the cost structure of cement and is viewed as a key strength in ensuring profitability through fluctuations in the market. Power and fuel costs In cement manufacturing, power, and fuel constitute the largest share of production costs. The entire process of cement manufacturing, starting from raw material preparation to clinker production and grinding of cement, is an energy-intensive procedure. Hence, energy efficiency has to be given the highest priority. Companies that have been able to reduce these costs considerably have been able to do so by the introduction of advanced technologies. The Variable Frequency Drives (VFDs) and Distributed Control Systems (DCS) allow very precise control of the equipment, yielding tremendous energy savings. Some companies have taken this a step further by installing Waste Heat Recovery (WHR) systems that capture and utilise waste heat emanating from production processes into a usable form of electricity. These help reduce the dependence on external power sources. According to ratings agency ICRA, India's cement industry is expected to rely on renewable energy for 40 per cent of its operations by 2025. Besides, Indian cement manufacturers have an added strength of being among the most eco-friendly in the world for the sustainability of the sector, keeping in view the vital role which it plays in the overall economic development of the country. Managing logistical challenges Among the major headaches the cement industry has been going through are freight costs, especially after the recent increase in fuel prices. Transportation is a substantial component of the overall cost of cement, and any inefficiency in this area can severely impact profitability. Overcoming the challenge will require reinventing logistics strategies and embracing digital transformation. While the onboarding of new transporters and the expansion of the vendor pool have enabled companies to create a competitive environment in freight services, driving prices further down, increasing the adoption of digital systems in logistics management has provided deeper visibility into supply chain operations. This, in turn, allows for more efficient route planning and real-time tracking of shipments. The use of automated freight management systems has been particularly impactful, reducing order-dispatch time by 15 per cent and improving the overall productivity of work. Raw material costs are another significant factor in the overall cost structure of cement manufacturing. The financial management of these resources determines, to a great extent, the profitability of the product. Some of the strategies that could be employed are optimisation of the grinding process. Intergrinding or grinding of cement components separately to alter the composition of the final product can be carried out by manufacturers so that the desired quality is attained at a minimal cost. The role of predictive maintenance in cost control The role of predictive maintenance in cost control cannot be overstated. By applying Artificial Intelligence (AI) and Machine Learning (ML), the cement plants would also be able to anticipate the failure of these pieces of equipment in time for timely maintenance. AI-powered solutions in procurement and raw material formulation help achieve ideal composition, resulting in improved product consistency. Advanced sensors and data analytics tools monitor and provide on-site adjustments to critical parameters in real-time. The implementation of the SAP Plant Maintenance (PM) modules has been quite instrumental in this regard, thus providing the companies with the tools required to improve the accuracy and timing of their activities. Equally important to good operational efficiency and maximisation of uptimes is spare parts management. The balancing act between critical spare parts availability and minimum inventory cost is always a challenge. A strategic spare parts management system helps in ensuring that the required components are available when needed without tying up excessive capital in inventories. Driving the future of cement manufacturing In modern times, the wave of technological changes came to hit the cement industry and brought radical changes in the ways and modes of production and interaction with customers. Digitalisation nowadays has become the cornerstone for this transformation, whereby companies are allowed to enhance operational efficiency and improve the customer experience. Automation of packing plants and smart dispatch systems resulted in operational efficiency in the delivery of cement at an optimum quality level to customers on time. Further, the use of Customer Relationship Management (CRM) systems has improved customer satisfaction by simplifying processes such as invoice downloading and quality certificate management. Of course, the integration of AI and ML-based optimisation software has allowed manufacturers to fine-tune production parameters with increased precision. These are applied to drive greater consistency for key production metrics, contributing to the enhancement of product quality and operational stability, among other things. The way forward Cost control and operational efficiency will drive long-term success in the fiercely competitive industry. The Indian cement industry, if it is to meet the challenges of tomorrow, needs continuous innovation in newer technologies and their adoption. For this, companies have to make investments in key areas such as energy efficiency, logistics management, predictive maintenance, and digitalisation in order to thrive in this environment, not just survive. Looking forward, it is seemingly clear that the influx of new technologies will be needed to achieve the forthcoming stride in growth and sustainability for the sector. About the author Vinita Singhania, Chairperson and Managing Director, JK Lakshmi Cement, has nearly three decades of experience in the cement industry. She was the first woman President of Cement Manufactures Association (CMA) as well as National Council for Cement and Building Materials (NCCBM).