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TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE 41, 121-146 (1992).
Scenario Building: A Critical Study of
Energy Conservation in the Indian Cement
Industry
J. P. SAXENA, SUSHIL, and PREM VRAT
ABSTRACT
This paper discusses scenario building-searching for key variables, identifying the actors, their activities,
roles, alliances, and conflicts, and analyzing seeds of change. A case study for energy conservation in the
Indian cement industry is used to explain the approach of scenario building.
Indirect relationships having a greater influence than direct relationships are used to identify the key actors,
objectives, and activities. For this purpose, interpretive structural modeling has been used to develop direct
relationship matrices. Fuzzy considerations are superimposed to prepare fuzzy direct relationship matrices,
which are then used to develop stabilized fuzzy indirect relationship matrices. The driver power determined
from the fuzzy indirect relationship matrices is used to determine the hierarchy of variables and identify the
key variable of the system.
Actor’s strategy tables are used to study the alliances and conflicts among the actors. The extent of alliance
and conflict is also examined. Factors influencing changes in the role of various actors are identified.
Introduction
A scenario is the description of a future situation together with the sequence of
events leading from the base situation to the future situation. Increasing uncertainty,
growing interdependence, the quickening pace of change in industrial activities, and the
continued shortage of energy, especially in the Indian cement industry, which is the focus
of this paper, are factors that call for a futuristic approach when considering present
actions. Scenario analysis assists in strategic planning [I]. In fact, scenario building
triggers strategic thinking [2] and helps in the evaluation of alternative strategies [3].
Scenario building tries to determine possible futures and explore the ways and means
to achieve them, clarifying present actions and their potential consequences.
Scenario Building Methodology
Scenario building starts with the identification of the program plan elements and the
determination of the key variables by systems analysis. It then identifies the actors
J. P. SAXENA, a Joint Director in National Council for Cement and Building Materials (NCB), is Director
in Charge of Centre for Productivity Enhancement of NCB, New Delhi, India. SUSHIL is Associate Professor
with the Centre of Management Studies, Indian Institute of Technology, Hauz Khas, New Delhi, India. He is
lifetime member of Systems Society of India, Indian Institution of Industrial Engineering, Computer Society
of India, and Indian Society for Technical Education. PREM VRAT is Professor of Industrial Engineering,
Indian Institute of Technology, Hauz Khas, New Delhi, India.
Address reprint requests to Dr. J. P. Saxena, National Council for Cement and Building Materials, M 10
South Extension II Ring Road, New Delhi, 110 049, India.
0 1992 by Elsevier Science Publishing Co., Inc. 0040-1625l92t55.00
122 J. P. SAXENA, SUSHIL, AND PREM VRAT
involved, their activities and strategies, namely, the alliances and conflicts among them,
and the changes in their roles over time. The methodology for scenario building is
presented in Figure 1.
SEARCHING FOR KEY VARIABLES
The scenario is examined to determine the elements and subelements of the program
plan, that is, the actors, objectives, and activities, which are the variables of the sys-
tem/program. Key variables are identified in order to focus attention on the important
issues. The methodology for identification of the key variables is an integration of various
qualitative techniques of systems analysis such as interpretive structural modeling (EM)
[4], fuzzy set theory (FST) [5], and indirect relationship analysis (MICMAC) [6].
The methodology of searching for key variables starts with an examination of the
contextual relationships among the various subelements, also known as the variables of
the system. Based on the contextual relationship under consideration, structural self-
interaction matrices (SSIM), reachability matrices, the lower triangular format of reach-
ability matrices, minimum edge adjacency matrices, and digraphs for interpretive struc-
tural models [7-91 are developed following the methodology shown in Figure 1.
SSIM Keeping in mind the contextual relationships for each element, the existence of a
relation between any two subelements (i and j) and the associated direction of the relation
is questioned. Four symbols are used for the type of the relation that exists between the
two subelements under consideration:
V for the relation from i to j but not in both directions;
A for the relation from j to i but not in both directions;
X for both direction relations from i to j and j to i; and
0 if the relation between the elements does not appear valid.
An SSIM for the element under consideration is then prepared; that for the actors
is given in Figure 2.
Reachability Matrix
The SSIM format is transformed into the reachability matrix format by transforming
the information in each entry of the SSIM into Is and OS in the reachability matrix.
The situations are as follows:
1. If the (i, j) entry in the SSIM is V, then the (i, j) entry in the reachability matrix
becomes 1 and the (j, i) entry becomes 0.
2. If the (i, j) entry in the SSIM is A, then the (i, j) entry in the reachability matrix
becomes 0 and the (j, i) entry becomes 1.
3. If the (i, j) entry in the SSIM is X, then both the (i, j) and (j, i) entries of the
reachability matrix become 1.
4. If the (i, j) entry of the SSIM is 0, then both the (i, j) and (j, i) entries of the
reachability matrix become 0.
Following these rules, the reachability matrix for the element is prepared. The matrix
for actors is shown in Figure 3. The reachability matrix as obtained from the SSIM is
checked for the transitivity rule, that is, for any elements A, B, and C in the set S, given
that ARB and BRC, it necessary follows that ARC. If the transitivity rule is not satisfied,
the SSIM is reviewed and modified by giving specific feedback about the transitive
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 123
The Program
f
Identify Program Plan Elements viz Actors, Objectives, Activities
+
1 Determine Contextual Relationship for Program Plan Elements 1
Develop Structural Self Interaction Matrices (SSIM)
for Program Plan Elements I
t
Develop Reachability Matrices for Program Plan Elements
I
Satisfied
+
Determine Levels
by Level
Partitioning
Transform Reachability Matrices Into
AQaceney Matrices/Lower Trianmlar +
Reachability Matrices Format
t t
Prepare Digraphs from Reachability Matrices/
Lower Triangular Reachability Matrices
) Prepare Direct Relationship Matrices 1
1 Prepare Fuzzy Direct Relationship Matrices )
I Determine Fuzzy MICMAC Matrices (Stabilized) I
+
I Determine Ranks and Identify Key Actor, Objective and Activity I
t
1 Prepare Actor's Strategy Tables for Key Objective and Activity 1
t
J
Prepare Integrated Matrix for Alliances and Conflicts
Prepare Matrices Indicating Extent of Alliances and Conflicts
4
Examine Seeds of Changes in the Role of Actors
Fig. 1. Methodology for scenario building of a program.
relationship to the program expert. The revised SSIM for actors is shown in Figure 4.
From the revised SSIM, the reachability matrix is again worked out and tested for the
transitivity rule. The process is repeated until the reachability matrix meets the require-
ments of the transitivity rule (Figure 1). The revised reachability matrix for actors is
presented in Figure 5.
Lower Triangular Format Reachability Matrix
The reachability matrix as developed is transformed into a lower triangular format
by identifying the highest-level subelements and inserting them as the first subelements
124 J. P. SAXENA, SUSHIL, AND PREM VRAT
ACTORS -
f
CEMENT PLANTS
ELECTRICITY BOARDS
COAL COMPANIES
GOVERNMENT
CMM
NCB
BIS
IDBI
RAILWAYS
CONSULIANIS
I
II
111
IV
V
VI
VII
VIII
IX
X
Fig. 2. Structural self-interaction matrices (SSIM) for actors. CMM, Cement Machinery Manufac-
turers. NCB, National Council for Cement and Building Materials; BIS, Bureau of Indian Standards;
and IDBI, Industrial Development Bank of India.
in the new reachability matrix. Iteratively, the next highest-level subelements are identified
and transformed until the subelements are arranged into a lower triangular format. The
rows having the maximum number of OS are the rows relating to the highest-level su-
belements, and the rows having the maximum number of 1s relate to the lowest-level
subelements.
Minimum Edge Adjacency Matrix
The lower triangular reachability matrix is transformed into a minimum edge ad-
jacency matrix representing the first approximation of the structure under development.
This is achieved by transforming the diagonal entries in the lower triangular reachability
ACTORS -
c I II III IV v VI VII VIII IX x
I
II
III
IV
V
VI
VII
VIII
I x-
X
Fig. 3. Reachability matrix for actors. Contextual relationship: one actor assisting another actor in
energy conservation. V, eij = 1, eji = 0; A, eij = 0, eji = 1; X, eij = 1, eji = 1; and 0, eij = 0, eji
= 0.
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 125
ACTORS
i
- x IX VIII VII VI v IV III 11 I
1
II
111
IV
V
VI
VII
Fig. 4. Self-structural interaction matrix
(revised) for actors.
matrix from 1s to OS. As each eij entry of 1 is identified, the corresponding ith column
is searched for entries of 1. For all entries eki equal to 1 where k is greater than i, the
corresponding entries eki are constrained to be 0. Thus, the matrix A is identified as:
A (i,j) = (1 if (ij) ER
0 otherwise or if i = j} (1)
The lower triangular reachability matrix and the minimum edge adjacency matrix
are easily prepared with the help of computers. However, when the number of subelements
is small and the intention is to develop an interpretive structural model through manual
operations, the preparation of the lower triangular reachability matrix and the minimum
edge adjacency matrix is optional and the digraph can be developed directly from the
reachability matrix.
ACTORS -
II III IV v VI VII VIII IX x
Fig. 5. Reachability matrix (revised) for
actors.
126 1. P. SAXENA, SUSHIL, AND PREM VRAT
LEVELS
Ll
Fig. 6. Digraph for actors.
Digraph for the Interpretive Structural Model
Having identified the levels of the subelements using partitions [4, lo] the relation-
ships between subelements are drawn, indicating the serial number of the subelements
and the direction of relation with the help of an arrow. Digraphs thus drawn are quite
complex and are examined iteratively to eliminate transitivity relationships. The digraph
is then finalized for the interpretive structural model. Digraphs give information about
the hierarchy of subelements in an element. The digraph for actors is shown in Figure
6. A digraph developed in this way may have cycles at a particular level and feedbacks
across the levels between subelements. In normal circumstances, the feedbacks and cycles
should be eliminated to arrive at a digraph with minimum edges, but they should be
retained in the matrix if the intention is to further study the influence of indirect rela-
tionships between subelements. Therefore, the methodology is adopted deliberately with
the intention to study indirect relationships [ 111. The purpose of this exercise is to obtain
the most representative problem structure in view of the participants’ understanding of
actual subelements rather than including dummy subelements to generate a skeleton
hierarchical digraph.
Direct Relationship Matrix
A direct relationship matrix M is obtained by examining the direct relations between
the variable in the digraph, ignoring the transitivity and making the diagonal entries 0.
Based on the digraph for actors shown in Figure 6, the direct relationship matrix is
depicted in Figure 7. It should be noted that the direct relationship matrix differs from
the minimum edge adjacency matrix in that it takes feedbacks into account.
Fuzzy Direct Relationship Matrix
The analysis can be further improved by considering the possibility of reachability
in addition to the mere consideration of reachability used so far. The possibility of
interaction can be defined by qualitative considerations on a O-l scale:
Possibility
of
reachability
Reachability
Value on the
scale
NO Very low Low Medium High Very high Full
N VL L M H VH F
0 0. I 0.3 0.5 0.7 0.9 I .o
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 127
ACTORS -
1 I II III IV v VI VI1 VIII IX x
I
Fig. 7. Direct relationship matrix for ac-
tors.
X
The possibility of reachability is superimposed on the direct relationship matrix to
obtain a fuzzy direct relationship matrix. Figure 8 shows the fuzzy direct relationship
matrix for the program plan element “actors.”
Fuzzy Indirect Relationship Matrix
INDIRECT RELATIONSHIPS The search for the principal determinants of the system and
their parameters can best be carried out by examination of the direct and indirect effects
of the variables, characterizing the phenomenon under study. Use of indirect relationship
analysis, also known as the MICMAC method [6], developed in the early 197Os, has been
of great help; the importance of a variable is measured less by its direct interrelationships
and more by many indirect interrelationships. The indirect relationships between the
variables have an impact on the system through influence chains and reaction loops, also
known as feedbacks. The number of these chains and loops could be so large that it may
be difficult to interpret the relationships without the help of computers.
ACTORS - II III IV v VI VII VIII IX x
Fig. 8. Fuzzy direct relationship matrix for
actors.
128
ACTORS-
J. P. SAXENA, SUSHIL, AND PREM VRAT
II
111
IV
MS, v
VI
v II
VIII
IX
X
0 0 0 0 0 0 0 0 0 ojo 6
5 0 .7 0 .5 0 0 .5 .l 0 2.3 3
Fig. 9. M5 fuzzy multiplication ma-
cKEYACIOR trix.
FUZZY INDIRECT RELATIONSHIP ANALYSIS The fuzzy direct relationship matrix as de-
veloped is taken as the base to start the process of finding the fuzzy indirect relationship
(FMICMAC) of the variables. The matrix is multiplied up to a power until the hierarchies
of the driver power and dependence stabilize. The multiplication process follows the
principle of multiplications in EST [5], according to which the product of the fuzzy set
A and fuzzy set B is fuzzy set C.
k (xl = min b.4 (x), b-93 (xl> (6)
The driver power of the variables in FMICMAC is derived by summing the entries of
possibilities of interactions in the rows, and the dependence of the subelements is deter-
mined by summing the entries of possibilities of interactions in the columns.
The ranks of the driver power of the variables decide the hierarchy of subelements
in the system. The stabilized matrix in FMICMAC for “actors” is achieved in the fifth
stage, as seen from Figures 9 and 10, wherein the hierarchy of driver power and depen-
dence have stabilized in alternate stages of multiplication. The subelement with the highest
driver power and first rank is the key subelement of the program. Actor VI is the key
subelement in Figure 9.
CLASSIFICATION OF VARIABLES AND THE KEY VARIABLES
Classification of the variables of the system can be based on the natural division of
the variables into different categories, for example, the actors can be classified into the
public sector, private sector, government departments, and institutions. Similarly, the
activities of the program can be divided into technological, operational, managerial,
economical, and developmental categories. However, this classification does not give
any indication of the influence the variables have in a system. Influence could be easily
studied by classifying variables into four sectors: autonomous, dependent, independent,
and linkage. Based on the driver power and dependence determined from FMICMAC
analysis, the FMICMAC dependence-driver power matrices are prepared and the variables
are placed in the matrix according to their dependence and driver power. The classification
of actors in different sectors is presented in Figure 11.
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 129
ACTORS -
KEY ACTOR
Fig. 10. M’ fuzzy multiplication ma-
trix.
It can be seen that autonomous variables are those that have weak driver power and
weak dependence. These variables are factors that are relatively disconnected from the
system, with which they have only a few links, which may be very strong. The dependent
variables have weak driver power and strong dependence. The linkage variables have
strong driver power and strong dependence. These variables are unstable. Any action on
the variables will have an effect on others and a feedback effect on themselves. Because
of this characteristic, these variables should be studied carefully. Independent variables
DEPENDENCE
Fig. 11. Classilication of actors in different sectors. A, autonomous sector (railways and consultants);
B, dependent sector (cement plants and the Industrial Development Bank of India [IDBI]; C, linkage
sector (electricity boards, cial companies, government, cement machinery manufacturers, and Bureau
of Indian Standards [BIS]; and D, independent sector (National Council for Cement and Building Ma-
terials [NCBI). P, private; PS, public sector; G, government; and INS, institutions.
130 J. P. SAXENA, SUSHIL, AND PREM VRAT
have strong driver power and weak dependence. It is observed that the variable with the
highest driver power, called the key variable, falls into the category of independent or
linkage variables (Figure 11).
ACTOR’S STRATEGY: ALLIANCES AND CONFLICTS
An actor’s strategy is directed toward fulfilling certain objectives, and the actor’s
activities are directed to achieve those objectives. To determine an actor’s strategy, the
role of each actor is studied to examine alliances and conflicts. For this purpose, an
actor’s strategy table is constructed in the form of a square matrix for each key objective
and key activity such that each diagonal cell contains the objective or the activity of each
actor. The other cells contain the impact of the action of one actor on the other actors
and help to determine if the actors are likely to converge or conflict on a given issue.
The analysis provides an opportunity to understand which actors are in conflict on a given
issue and which actors can be counted objectively as allies by others. It can be seen that
the actors can be opposed in their interests on some issues and yet be partners on others.
These potential contradictions contribute to the degree of uncertainty about the future.
To understand the strategy game fully, information about alliances and conflicts from the
matrix of the key objective and activity is integrated in one matrix of alliances and
conflicts. It is preferable to consider the alliances and conflicts on a number of objectives
and activities, the selection of which could be based on the importance attached to the
objectives and activities considered. Each cell of this matrix represents the number of
alliances and conflicts between the two actors. Some of the cells may represent all alliances
and some may represent all conflicts, while others may have both alliances and conflicts.
However, to have a clear visual picture, it is preferable to derive two separate matrices
for alliances and conflicts from the integrated matrix. The degree of alliance or conflict
between two actors is defined by an appropriate scale. Each degree of alliance or conflict,
such as nil, low, medium, high, and very high, is represented by a different indicator.
Further, separate figures are drawn for the low alliances and low conflicts, high alliances
and high conflicts, and so on, which helps in studying the scenario and the possible
solutions.
SEEDS OF CHANGE
The next important consideration in scenario building is to study the seeds of change.
The activities and roles of each actor are examined in detail, focusing on the changes
that are likely to occur and are likely to have an impact on the system under consideration.
A thorough understanding of these seeds of change will help in deciding the strategy to
be adopted in a given situation.
The Case of Energy Conservation in the Indian Cement Industry
Energy conservation in the Indian cement industry has been considered as a system
and is divided into 9 elements that are further subdivided into a number of subelements.
The present study considered 12 societal sectors, 9 needs, 12 constraints, 10 alterables,
12 objectives, 10 objective measurements, 22 activities, 15 activities measures, and 10
agencies, also called “actors,” thus totaling 112 subelements in the system [ 121. These
subelements represent the variables of the system.
ACTOR’S SCENARIO
The various actors associated with the energy conservation program belong to one
of a number of categories such as the private sector, public sector, government, and
institutions. The approach of the actors in each category toward energy conservation
differs. It is observed that cement plants are in both the private and public sectors. Other
private sector actors are cement machinery manufacturers and consultants. In addition to
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 131
some of the cement plants in the public sector, coal companies are also in the public
sector. Actors in the government categories comprise electricity boards, the Development
Commissioner for the Cement Industry, the Planning Commission, the Bureau of Industrial
Costs and Prices, the Ministry of Industry, and the Ministry of Energy, which is made
up of the Department of Power, the Department of Coal, and so forth. Institutions include
the National Council for Cement and Building Materials (NCB) and the Industrial De-
velopment Bank of India (IDBI).
The roles of the actors in the system are further examined by studying the dependence
and driver power matrix with the actors classified into autonomous, dependent, indepen-
dent, and linkage sectors. Based on the information derived from the FMICMAC stabilized
matrix (Figure lo), the actors were classified as shown in Figure 11. It is observed that
NCB (actor VI) and electricity boards (actor II) are found to be independent variables
and are expected to have considerable influence on the program. Coal companies (actor
III), government (actor IV), cement machinery manufacturers (actor V), and the Bureau
of Indian Standards (actor VII) are the linkage variables of the system. Any change in
their roles will have an impact on the program; hence these actors are also very important.
Railways (actor IX) and consultants (actor X) are autonomous variables and have only
a few but strong linkages with the program. Cement plants (actor I) and IDBI (actor VIII)
have emerged as the dependent variables of the program. Cement plants have to depend
strongly on other actors, such as NCB (actor VI) for technical advice, electricity boards
(actor II) for the power supply, and government (actor IV) for priority allocation of coal,
etc., whereas IDBI depends on institutions like NCB (actor VI) and consultants (actor
X) for technical support.
ACTIVITIES SCENARIO
Activities identified through program planning are divided on the basis of their nature
into technological (T), developmental (D), operational (0), economical (E), and mana-
gerial (M) aspects. Of 22 activities identified for the energy conservation program, three
are technological, six are developmental, five are operational, four are economical, and
four are managerial. Classification of the activities on an FMICMAC dependence-driver
power matrix is shown in Figure 12. Because the activities are clustered, those related
to each aspect are shown separately for clarity, indicating their domain.
Figure 12 shows that activity 19 “give publicity to success stories”, a managerial
activity, has the highest driver power. Activity 20, “motivate-institute awards,” is also
a managerial activity and ranks second in the hierarchy. Activity 18, “organize work-
shops/seminars, ” is a developmental activity. These three activities are independent vari-
ables and influence the program of energy conservation. They help create awareness and
motivation among the actors. Activity 13, “regular energy audit studies,” is another
management activity; although it appears in the dependent sector, it has sufficient driver
power. Similarly, activity 12, “introduce energy monitoring system,” is an operational
aspect which has sufficient driver power as compared to other activities. It is seen that
most of the other activities have very little dependence and low to medium driver power.
It is clear from the analysis that developmental and managerial activities are relatively
more important than other activities.
ACTOR’S STRATEGY
The strategy of each actor focuses on the objectives and activities of the program.
The key objective and key activity using FMICMAC analysis are found to be “to develop
a sound energy policy” and “give publicity through the media for energy conservation
success stories,” respectively.
It is very useful to study the alliances and conflicts among the actors on the key
04
7.8 0 06 12 18 2& 3.0 36 42
DEPENDENCE ALL ACTIVITIES
4
3
3
2.
2
2.
1
1
0
0
2
4
3
3
2
2
2
1
1
0
0
TECHNOLOGICAL ACTIVITIES (Tl DEVELOPMENTAL ACTIVITIES (D,
4 4
3 3
3. 3
2 2
2 2
2 2
1 1
1. I
0 0
0 0
2 2
OPERATIONAL ACTIVITIES (0) ECONOMICAL ACTIVITIES (El MANAGERIAL ACTlVlTlES (Ml
Fig. 12. Classification of activities on a fuzzy indirect relationship (FMKMAC) analysis. I, autonomous variables; II, dependent variables; III,
linkage variables; and IV, independent variables. Acfiviries: 1, convert wet to dry (T); 2, install energy-efficient system (T); 3, instail inStruments
and computer (T); 4, find new coal/gas reserves (D); 5, monitor quantity and quality of coal (0); 6, create efficient transport (coal/natural gas)
(D); 7, encourage R&D to improve coal quality (D); 8, encourage R&D (develop energy-efficient system) CD); 9, monitor quantity and quality of
electricity (0); 10, install captive power plants (0); 11, introduce improved maintenance techniques (0); 12, introduce energy-monitoring system
(0); 13, regular energy-audit studies (M); 14, create soft-loan energy-efficient system (E); 15, review tax and duty (energy-efficient system) (I?);
16, liberalize imports (energy-efficient system) (E); 17, organize training program (energy-efficient system) CD); 18, organize workshops/seminars
(D); 19, publicize the success story (M); 20, motivate (institute awards) (M); 21, modify licensing policy (E); and 22, standardize equipment for
energy performance (M).
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 133
objective and key activity in order to decide the strategy of the actors and build the
scenario (see Tables 1, 2). However, to examine in detail the alliances and conflicts
among the actors, it is better to enlarge the number of objectives and activities. The
actors have identified the key objectives and key activities following fuzzy program
planning (FPP) [ 1 I] and fuzzy interpretive structural modeling (FISM) [ 131. The key
objectives and key activities as determined by FPP, FISM, and FMICMAC are as follows:
Key objectives:
0 To develop a sound energy policy.
0 To conserve energy by waste management.
Key activities:
0 Give publicity through the media for energy conservation success stories.
0 Organize workshops/seminars on energy conservation.
0 Install energy-efficient equipment/systems.
Table 1 shows that the actor’s strategy on the key objective produces 44 alliances
against 17 conflicting situations. Of these conflicting situations, five are likely to arise
from the decisions of the government, four from the actions of the Bureau of Indian
Standards, three from the actions of NCB, and two from the actions of cement machinery
manufacturers. Because this is the most important objective, there are many alliances,
indicating likely success on the issue of energy conservation. Strategies have also been
developed for the key activities “give publicity through the media for energy conservation
success stories,” “install energy-efficient equipment/systems,” and “organize work-
shops/seminars on energy conservation.” Table 2 shows that there are only six alliances
with no conflict on the key activity “give publicity through the media for energy con-
servation success stories.” Moreover, electricity boards, coal companies, cement ma-
chinery manufacturers, the Bureau of Indian Standards, IDBI, railways, and consultants
have no actions on this key activity, which may create action on other actors.
Considering the information on alliances and conflicts among the actors on the key
objectives and key activities, an integrated matrix for alliances and conflicts is presented
in Figure 13. Each cell in the matrix is divided into two parts; the number in the upper
half of the cell is the number of alliances and the number in the lower half is the number
of conflicts between the two actors. For example, cells (I,V), (I,VI), (I,VII), (IIJV),
(II,VI), and (11,VIII) indicate only alliances, whereas cells (II,V), (IVJII), and (IVJX)
indicate only conflicts. Other cells, such as (I,II), (IJII), and (IJV), show alliances on
some aspects and conflicts on others. At the same time, there are cells such as (IIJII),
(11,1X), (II,II), and (VII) indicating that there is no interaction among the actors on the
given issue. The numbers in both the upper half and lower half of the cell are an indication
of the degree of alliance or conflict between the actors, as the case may be. The degree
of alliances or conflicts is related to the scale below:
Number of alliances
or conflicts
Degree of alliances
and conflicts
0
Nil
1
Low
(L)
2 3
Medium High
(M) (HI
4
Very high
WH)
For clarity of understanding, two scenarios are developed from the integrated matrix
TABLE 1
Actor’s Strategy: Develop Sound Energy Policy (Key Objective)
Action on
Action of Cement plants I
involvement of
II Electricity
boards
III Coal
companies
IV Government
Reduced
demand for
captive power
(Ally)
Improvement in
thermal energy
performance;
less need for
beneficiation of
coal
(Ally)
Pressure for
following policy
guidelines
(Conflicting)
Electricity
boards 11 Coal companies
III
Cement machinery
Government manufacturers
IV V
Pressure on
electricity
boards reduced
(Ally)
Pressure on coal
companies
increased for
correct quantity
and quality of
coal
(Conflicting)
Implementation
of government
policy become
easy
(Ally)
Close interaction on
conservation
aspects; suggestions
for improvement in
design for better
energy performance
(Ally)
Quality of
power
improved
Pressure on
electricity
boards for
consistent
power supply
(Conflicting)
Establishing
policy for coal
beneficiation and
better schedule
for delivery of
coal
Pressure on coal
companies for
good-quality coal
in required
quantity
(Conflicting)
Less
interference of
government
needed
(Ally)
Less
interference of
government
needed
(Ally)
To decide on
energy policy
Design of machines
may be simplified
(Ally)
1
Pressure for
manufacturing
energy efficient
equipmentisystem
(Conflicting)
E
V Cement Reduced
machinery problems
manufacturers (Ally)
VI NCB Increased
demand for
data, reporting
(Conflicting)
VII BIS Pressure to buy Demand for
standard stabilized
equipment power
(Conflicting) (Conflicting)
VIII IDBI Easy finances
(Ally)
IX Railways Easy operations
(Ally)
X Consultants Increased use of
services
-
-
Reduced pressure
in view of new
developments for
use of low-grade
coals
(Ally)
Demand for coals
of given quality
(Conflicting)
Less problem for
transportation
-
Demand for
concessions on
energy-efficient equipment/system
equipment
(Conflicting)
Smooth
functioning,
monitoring
(Ally)
Demand for
energy-efficient
equipment
increased
Wly)
Demand for
larger
resources
(Conflicting)
Greater
involvement
and less
demand on
finances
(Ally)
Demand for
financial
resources
(Conflicting)
Demand for better
designs of standard
specifications
(Ally)
Increased demand
for equipment
(Ally)
Increased business
(Ally)
BIS, Bureau of Indian Standards; IDBI, Industrial Development Bank of India; and NCB, National Council for Cement and
Building Materials. E
$$b;PG-PAGINATE $$i(Jl) 92TFS-T19 Batch 11: ELSEVIER: TFS;Ol-22-92 10-43-31 Galley
TABLE 1
Kontinued~
NCB BIS
VI VII IDBI
VIII Railways IX Consultants
X
Better analysis of
data and issues to
improve energy
performance
(Ally)
Avoidable work of
analysis reduced;
can use resources
optimally
(Ally)
Reduced demand
on research
activity
(Ally)
Better standards
formulation
(Ally)
Reduced need
for
standardization
(Ally)
-Do-
(Ally)
Effective
implementation
of energy
incentive
schemes
(Ally)
Demand for
railway cars
regulated due to
better planning
(Ally)
More effective
cooperation for
new schemes
(Ally)
Reduced pressure
for finances
(Ally)
-Do-
(Ally)
Less demand on
consultants
(Ally)
Reduced load on
transportation due
to improvement
in coal quality
(Ally)
-DC+
(Ally)
Better research
projects
undertaken
(Ally)
Standardization
possible
without
difficulty
(Ally)
Risks of finances
reduced
(Ally)
Demand for
regulated
transport system
(Conflicting)
Increased project
studies
(Ally)
To prepare policy
for R&D and
training of
personnel for
energy
conservation
- Increased
demand for
finances
(Conflicting)
Easy
standardization
(Ally)
More requests
for financial
assistance
(Conflicting)
Close interaction
(A”y)
Increased number
of studies
(Ally)
-
- New schemes to - To assist in
finance development of
- Reduced demand
for services
(Conflicting)
Close interaction
(Ally)
Increased
consultancy jobs
(Ally)
To provide an -
efficient transport
system
I
(Conflicting) 1 energy policy I
,.
138 I. P. SAXENA, SUSHIL, AND PREM VRAT
TABLE 2
Actor’s Strategy: Publicize Energy Conservation Success Stories Through Media (Key Activity)
Action on
Action of
I Cement
plants
Cement
Coal machinery
Electricity companies manufacturers
Cement plants I boards II III Government IV V
I I
Publicize energy
conservation
success stories
through media
Provide
incentive for
success in
energy
conservation
-
II Electricity
boards
III Coal
companies
IV Government
V Cement
machinery
manufacturers
Increased efforts
in energy
conservation
(Ally)
- Direct media to
publicize
energy
conservation
success stories
VI NCB Increased efforts
in energy
conservation
(Ally)
- Financial
support for
workshops/
seminars for
greater thrust in
publicity
(Ally)
VII BIS
VIII IDBI
IX Railways
X Consultants
-
BIS, Bureau of Indian Standards; IDBI, Industrial Development Bank of India; and NCB, National Council
for Cement and Building Materials.
(Figure 13): one for alliances (Figure 14) and the other for conflicts (Figure 15). The
degree of alliance and conflict is also indicated by different notations as shown in the
figures. This type of presentation provides information at a glance about the alliances
between the actors and the degree of alliance for energy conservation. It is seen from
the figures that there are more alliances as compared to conflicts on the subject. Further
analyses can be carried out to highlight a particular degree of alliance or conflict. For
example, Figure 16 shows only the low degree of alliances between the actors, and Figure
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 139
TABLE 2
(Continued)
NCB
VI
Assist in publicity
efforts for energy
conservation
success stories
(Ally)
BIS
VII IDBI
VIII
Give liberal
financial
assistance
(Ally)
Railways Consultants
IX X
-
- -
-
-
-
-
-
Provide publicity
through
workshops/
seminars
- -
- I%, -
- I - I
17 shows only the low degree of conflicts. Similarly, alliances and conflicts of medium
degree, high degree, and very high degree are presented in Figures 18-23. From these
figures, it is seen that alliances of low, medium, and high degrees are in good number,
whereas very high degree alliances are relatively few. In the case of conflicts, most are
of low degree. Only six conflicts are of medium degree and two are of high degree, while
there is none in the very high degree category.
The analysis of alliances and conflicts enables the analyst to foresee things likely
to happen and make strategic plans accordingly. Plans can also be made to achieve the
140 J. P. SAXENA, SUSHIL, AND PREM VRAT
ACTORS +
, I II 111 IV v VI VII VIII IX x
i I
11
111
IV
V
VI
VII
VIII
IX
X
ALLIANCE
@
CONFLICT
Fig. 13. Integrated matrix for alliances and con-
flicts. Number of interactions and degree of inter-
action: 0, nil, I, low; 2, medium; 3, high; and 4,
very high.
ACTORS -
I II III IV v VI VII VIII IX x
NO OF DEGREE OF INDICATOR FOR
INTERACTION INTERACTION DEGREE OF INTERACTION
0 NIL
1 L
2 M
3 H
I, VH
Fig. 14. Alliances among actors: I, cement plants, II, electricity hoards; III, coal companies: IV,
government; V, Cement Machinery Manufacturers (CMM); VI, National Council for Cement and Building
Materials (NCB); VIZ, Bureau of Indian Standards (BIS); VIII, Industrial Development Bank of India
(IDBI); IX, railways; and X, consultants.
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 141
ACTORS -
1 11 III IV v VI VII VIII IX x
Fig. 15. Conflicts among actors. See Fig. 14 for expla-
nation of symbols.
ACTORS -
I I 11 III IV v VI VII VIII IX x
t I
II
III
IV
V
VI
VII
VIII
IX
X
ACTORS -
I I II III IV v VI VII VlllIX x
41
II
111
IV
V
VI
VII
VIII
IX
X
Fig. 16. Low
of symbols. degree of alliances. See Fig. 14 for explanation
Fig. 17. Low degree of conflicts. See Fig. 14 for explanation
of symbols.
142 J. P. SAXENA, SUSHIL, AND PREM VRAT
ACTORS -
J II 111 IV V VI Vli VIIIIX x
I
If
III
IV
V
VI
VII
VIII
IX
X
Fig. 18. Medium degree of alliances. See Fig. 14 for expla-
nation of symbols.
objectives of the energy conservation program by improving on the alliances between
the actors and by resolving the conflicts on the issues. For example, an optimistic scenario
could be achieved by giving attention to resolving the medium and high degree con-
flicts.
ACTORS-
1 I II 111 IV v VI VII VIII IX x
Fig. 19. Medium degree of conflicts. See Fig. 14 for expla-
nation of symbols.
ACTORS -
Fig. 20. High degree of
of symbols. alliances. See Fig. 14 for explanation
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 143
ACTORS -
J
I II III IV v VI VII VIII IX x
I
II
111
IV
V Fig. 21. High degree of conflicts. See Fig. 14 for explanation
VI of symbols.
VII
VIII
IX
X IllIll
SEEDS OF CHANGE IN ACTORS’ ROLES
With increasing interaction and interdependence among the various actors, it is
interesting to study the seeds of change in actors’ roles (see Table 3).
Coal Companies
The coal companies supply coal of the quality they get from mother earth. Pressures
are building on them to supply coal of the quality acceptable to cement plants. The coal
ACTORS -
I
I II III IV v VI VII VIII IX x
I
II
III
IV
V Fig. 22. Very high degree of alliances. See Fig. 14 for expla-
VI nation of symbols.
VII
VIII
IX
X
ACTORS-
I I II III IV v VI VII VIII IX x
Fig. 23. Very high degree- of conflicts. See Fig. 14 for
nation of symbols. expla-
144 J. P. SAXENA, SUSHIL, AND PREM VRAT
TABLE 3
Seeds of Chanee
Serial no. Actors Likely changes
1
4 Electricity boards
5
6
7
Cement plants
Coal companies
Bureau of Indian
Standards
NCB
Government
Cement machinery
manufacturers
IDBI
Railways
Consultants
Have to use marginal-grade limestone but will exert pressure for
a consistent quality of coal with a given calorific value and an
upper bound to maximum ash contents. Also will pressure the
electricity boards for a consistent supply of power.
Will have to create an infrastructure of coal washeries at pit
heads or near clusters of cement plants to supply quality coal.
Modification of specifications for coal, plants, and machinery.
Will be involved in creating standards for equipment and
systems for efficient energy performance.
Monopolistic attitude in providing power has to change. May
have to compensate cement plants if the power provided is not
stable.
A greater role in creating energy consciousness, education,
energy audits, and monitoring in plants with an emphasis on
results rather than advice for improvements.
Shift from regulatory to developmental role. Need for greater
professionalism in approach. Use of gas in cement plants
partially or fully replacing use of coal.
Emergence of competitors and large number of consultants. Need
for new energy-efficient equipment, systems, instrumentation,
automation, and computers.
New financial strategies for energy conservation with greater risk
investments.
Strain on network for increased quantity of coal transportation,
yet a desire for less dependence on rail infrastructure if natural
gas is made available.
Demand in different areas of expertise to meet the needs for new
energy systems and gas with associated automation and
computerization.
companies have realized their responsibility and are in the process of creating an infra-
structure of washeries at the pit heads to improve the quality of raw coal to meet the
minimum specifications of the cement plants. In addition, to avoid transporting coal over
long distances, the coal companies are being pressured into examining the feasibility of
establishing coal washeries in areas having a cluster of cement plants. The conflicts
between cement plants and coal companies are likely to result in a better quality of coal
being supplied to cement plants.
Bureau of Indian Standards
The Bureau of Indian Standards has already laid down specifications for the coal
supplied to the cement industry. It has further realized the need for standardization and
variety reduction of equipment and accessories used in cement plants to achieve the
objective of energy conservation. A survey of electric motors used in the industry showed
that varying capacity motors were used for similar operations and suggested creating
standards for motor ratings for a given performance. Similarly, new equipment and
systems under development have to adhere to some minimum energy performance stan-
dards. The role of the bureau is therefore going to be an important one in years to come
regarding the activities of coal companies, machinery manufacturers, and consultants.
SCENARIO BUILDING IN THE INDIAN CEMENT INDUSTRY 145
Electricity Boards
Electricity boards, being under state control, have monopolistic attitudes, but they
are increasingly being pressured to provide a guaranteed quantity of power of a given
quality to cement plants or, if they fail to do so, suitably compensate the cement plants
for losses. This situation will make the electricity boards more conscious of their re-
sponsibility to take appropriate action to improve the power situation.
NCB NCB’s role in energy conservation is changing. It is no longer confined to merely
identifying the potential areas of energy conservation and training energy personnel; NCB
now plays a much more important role by demonstrating ways to reduce energy con-
sumption in cement plants. Energy audit studies are going to be a continuous process of
identifying areas for improvement and monitoring the targets achieved. NCB has the task
of strengthening the cement industry’s infrastructural facilities in response to the energy
audit. Along with this, NCB has to train personnel to carry out energy audit studies. The
development of trained personnel in the areas of energy conservation and energy man-
agement is going to be an important activity of NCB. Further, NCB is going to take an
active part in the development of energy-efficient systems on both the technological and
operational fronts.
Government
The government is going to have a greater role to play in energy conservation than
ever before, thus undergoing a shift from a regulatory role to a developmental role. The
Development Commissioner for the Cement Industry, in addition to recommending coal
distribution and obtaining railroad cars from the railways in required numbers for the
industry, has undertaken the additional task of continuous energy monitoring, including
planning new strategies for energy conservation.
The Department of Coal, which used to decide the coal allocation for cement plants,
may no longer be able to make unilateral decisions in such matters. This may be due to
the fact that cement plants would like to receive coal of a desired quality while paying
a price they can afford and later recover through the sale of cement in the open market.
The department has to change its approach and become more professional in the discharge
of its duties.
The use of natural gas as a fuel in place of coal has many advantages, such as
savings in power due to the elimination of coal crushing and grinding, a reduction in
thermal energy consumption, etc. A change to natural gas likely would reduce the burden
on the existing railway infrastructure, as gas would be available through a pipeline
network. The emergence of gas as a fuel would also bring changes in system arrangements
in cement plants, which would like to adopt more compact layouts.
Other Actors
Modifications of existing layouts in cement plants in order to accommodate new
energy-efficient machinery in place of the old energy-inefficient machinery would be an
important activity. Cement machinery manufacturers would be engaged in producing
equipment and systems that are energy efficient, compact, and have with automatic and
computerized control systems. This would necessitate suitable back-up support from
consultants, who would be increasingly involved in modifications in the existing systems
rather than developing new designs. With these expected developments, the role of IDBI
would become much more crucial to bring about these desired changes through pragmatic
investment strategies.
146 J. P. SAXENA, SUSHIL, AND PREM VRAT
Conclusions
1. Our study of energy conservation in the Indian cement industry shows that NCB
is the key actor. NCB and the electricity boards, being independent variables,
would exercise considerable influence on the program. Cement companies, the
government, cement machinery manufacturers, and the Bureau of Indian Stan-
dards are the linkage variables of the system. Any change in their role will have
an impact on the program; hence these actors are very important.
2. Managerial and developmental activities are very strong driver activities, whereas
operational activities have medium driver power. Technological and economical
activities have low driver power.
3. Our study shows that some of the actors in the private and public sectors, gov-
ernment, and institutions have strong driver power, whereas others in these
categories have weak driver power. It is therefore not possible to generalize the
leading or lagging actors in energy conservation based on this classification.
4. Our analysis shows that there are a large number of alliances as compared to
conflicts between actors. Further, alliances of low, medium, and high degrees
are in good number, whereas very high degree alliances are relatively few. It is
also observed that most of the conflicts are of low degree. Only a few conflicts
are of medium or high degree. Very high degree conflicts are not found at all.
5. Scenario building, having taken note of important considerations and being based
on a systematic methodology, acts as an essential and important management
tool for strategy planning and policy framework. It can help improve alliances
between the actors and resolve conflicts on the issues to achieve the objectives
of energy conservation.
This article is based on the research carried out by thejrst author under the guidance
of the second and third authors and is part of a dissertation for the degree of Doctor of
Philosophy. It is being published with the permission of the Director General of NCB.
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Received 26 June 1990; revised 16 May 1991
