Economy & Market

How logistics value adds to the country’s GDP

Published

8 years ago

January 12, 2018

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Supply creates its own demand, at least that is entirely true for India, where we run a constrained system. Logistics could add a full percentage point to GDP.

If more rail-rakes are allocated to the coal sector, one would assume that more coal rakes would move. But not so; the logistics puzzle, especially when we deal with multi-commodity, multi-zonal rail movement under constraints ranging from line capacity and safety norms on one hand and zonal coordination on locomotives and crew, guard, on the other, is far more complex to comprehend.

So against the first quarter 2018, in the second quarter India moved less coal rakes although the clear allocation was to move more coal rakes. The overall movement of rakes across all commodities also came down in the second quarter over the first quarter of 2018. This clearly shifted many commodities from rail to road, thus raising the cost of the system and therefore impacted GDP.

Why is it so? Three factors came in the way:

Empty movement increased as out of turn rakes moved into coal which were earlier moving to other commodities, increased the empty rake run. Every rake moving an extra empty run reduced the overall rake movement with load.
Optimising rake movement with constraints need multi-commodity handshakes, a rake moving the first leg with iron ore could end up with coal in the second leg and slag i the third leg. When the allocation changes to coal in the first leg, the whole optimisation puzzle changes to new constraints and new solutions.
Inter-zonal and intra-zonal coordination for maximising rake movement precludes exchange of information so as to deliver one single objective function, which is maximising overall movement. When this objective function is changed to maximising coal rake movement, the coordination needs to move at two levels, which at times becomes impossible to handle as constraints increase.

India’s GDP is tied to higher production and output in the core sector, which can only happen if more commodities move; among all, coal, iron ore, steel, clinker, slag, cement and manufactured goods constitute the bulk. If one happens without the other, we create disparities of several kinds.
So the logistics spillover to road movement is a reality, but this surely comes at a cost. In the US, where 70 per cent of the movement is by road, no one moves bulk goods by road, other than the first or the last mile, this is sheer factor-advantage that cannot be relegated to wasteful economics.
Raising cost of movement due to a switch to road displaces factor advantages and raises the cost of the overall system. It impacts GDP as costs rise, it reduces consumption or when firm profits are impacted, the alternatives are not necessarily those that would add to the GDP.
Logistics is one of the most value adding components of GDP, this is better understood if we replace the country GDP with the firm GDP, which is net value added for the firm. When you raise cost of the system, the value added comes down whereas when you aid the flow, the value gets unlocked in higher EBIDTA.
Going back to our coal movement example, by attempting to increase the flow of coal, we ended up improving neither the coal movement nor the overall movement of all other commodities by rail and created the spillover effects in road, which added to overall cost of the system, thus impacting GDP negatively.
Spillover effects are generally negative to GDP, shifting from rail to road for bulk materials is one of them.
Is this a solvable puzzle? Of course it is, surely the puzzle would get sorted out but a lost GDP will remain a lost opportunity forever.
It is like the sale loss, could it be ever made up, I am not sure. To look at it differently if we would have added all the lost opportunities of moving stuff, the loss in value added would have knocked out a full percentage point from GDP.
Moving stuff efficiently is logistics, not just moving stuff any which way we can. The former adds to the net value added, whereas the latter destroys value.
By shifting rail to road for bulk goods, we could be doing the same for GDP.
The logic similarly could be extended to road as well, if we think by adding more vehicles we can move more stuff efficiently, we would be making the same mistake.
Optimisation is about solving these inter-connected puzzles, but the best we can do is demonstrating that we are keen to exchange more information and remove barriers that come in the way of transparent data.
Exchange of information in a constrained based system and along organisational interfaces where conflicting objective functions clash with each other, is one area of development in India. While digital information systems have improved and we have far higher transparency, we still lack the organisational reinforcements needed to deal with this.

One such neglected area is the inbound transportation versus the outbound transportation and the synergies mostly are never fully harnessed as the two are looked after by two different organisations. This is far more acute sometimes within the same supply chain where multiple commodities are moved using the same infrastructure and the missing synergies are not fully captured and acted on. Horizontal collaboration within supply chains where the same route is frequented by different commodities has a lot of scope to improve efficiency but the sharing of advantages is not fully garnered due to lack of organisational effort. This is not about technology, but the softer areas of barrier-less organisation must follow through with the efforts needed to transform.

Logistics, remains one of the most neglected functions in India, but things need to change fast as supply bottlenecks would continue to constrain the system.

Logistics alone could add a percentage point to GDP, such is the potential.

Infrastructure holds the center piece for logistics, but it is not the only piece of the puzzle. Factors that bring in efficiency and reduces wastes in the system is where the logisticians play the most important role. Simple things like empty haulage, return loads, less stops on the road, optimised loading programme, ease of movements at check points, multi-modal movements, last mile and the first mile connectivity are few of the areas where substantial gains could be achieved.

Logistics is no more the just the tail, it is time it starts to wag the dog.

ABOUT THE AUTHOR: Procyon Mukherjee, Chief Procurement Officer of Lafarge Holcim

Concrete

Our strategy is to establish reliable local partnerships

Published

6 hours ago

February 19, 2026

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Jean-Jacques Bois, President, Nanolike, discusses how real-time data is reshaping cement delivery planning and fleet performance.

As cement producers look to extract efficiency gains beyond the plant gate, real-time visibility and data-driven logistics are becoming critical levers of competitiveness. In this interview with Jean-Jacques Bois, President, Nanolike, we discover how the company is helping cement brands optimise delivery planning by digitally connecting RMC silos, improving fleet utilisation and reducing overall logistics costs.

How does SiloConnect enable cement plants to optimise delivery planning and logistics in real time?
In simple terms, SiloConnect is a solution developed to help cement suppliers optimise their logistics by connecting RMC silos in real time, ensuring that the right cement is delivered at the right time and to the right location. The core objective is to provide real-time visibility of silo levels at RMC plants, allowing cement producers to better plan deliveries.
SiloConnect connects all the silos of RMC plants in real time and transmits this data remotely to the logistics teams of cement suppliers. With this information, they can decide when to dispatch trucks, how to prioritise customers, and how to optimise fleet utilisation. The biggest savings we see today are in logistics efficiency. Our customers are able to sell and ship more cement using the same fleet. This is achieved by increasing truck rotation, optimising delivery routes, and ultimately delivering the same volumes at a lower overall logistics cost.
Additionally, SiloConnect is designed as an open platform. It offers multiple connectors that allow data to be transmitted directly to third-party ERP systems. For example, it can integrate seamlessly with SAP or other major ERP platforms, enabling automatic order creation whenever replenishment is required.

How does your non-exclusive sensor design perform in the dusty, high-temperature, and harsh operating conditions typical of cement plants?
Harsh operating conditions such as high temperatures, heavy dust, extreme cold in some regions, and even heavy rainfall are all factored into the product design. These environmental challenges are considered from the very beginning of the development process.
Today, we have thousands of sensors operating reliably across a wide range of geographies, from northern Canada to Latin America, as well as in regions with heavy rainfall and extremely high temperatures, such as southern Europe. This extensive field experience demonstrates that, by design, the SiloConnect solution is highly robust and well-suited for demanding cement plant environments.

Have you initiated any pilot projects in India, and what outcomes do you expect from them?
We are at the very early stages of introducing SiloConnect in India. Recently, we installed our
first sensor at an RMC plant in collaboration with FDC Concrete, marking our initial entry into the Indian market.
In parallel, we are in discussions with a leading cement producer in India to potentially launch a pilot project within the next three months. The goal of these pilots is to demonstrate real-time visibility, logistics optimisation and measurable efficiency gains, paving the way for broader adoption across the industry.

What are your long-term plans and strategic approach for working with Indian cement manufacturers?
For India, our strategy is to establish strong and reliable local partnerships, which will allow us to scale the technology effectively. We believe that on-site service, local presence, and customer support are critical to delivering long-term value to cement producers.
Ideally, our plan is to establish an Indian entity within the next 24 months. This will enable us to serve customers more closely, provide faster support and contribute meaningfully to the digital transformation of logistics and supply chain management in the Indian cement industry.

Economy & Market

Power Build’s Core Gear Series

Published

6 hours ago

February 19, 2026

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A deep dive into Core Gear Series of products M, C, F and K, by Power Build, and how they represent precision in motion.

At the heart of every high-performance industrial system lies the need for robust, reliable, and efficient power transmission. Power Build answers this need with its flagship geared motor series: M, C, F and K. Each series is meticulously engineered to serve specific operational demands while maintaining the universal promise of durability, efficiency, and performance.

Series M – Helical Inline Geared Motors
Compact and powerful, the Series M delivers exceptional drive solutions for a broad range of applications. With power handling up to 160kW and torque capacity reaching 20,000 Nm, it is the trusted solution for industries requiring quiet operation, high efficiency, and space-saving design. Series M is available with multiple mounting and motor options, making it a versatile choice for manufacturers and OEMs globally.

Series C – Right Angled Heli-Worm Geared Motors
Combining the benefits of helical and worm gearing, the Series C is designed for right-angled power transmission. With gear ratios of up to 16,000:1 and torque capacities of up to 10,000 Nm, this series is optimal for applications demanding precision in compact spaces. Industries looking for a smooth, low-noise operation with maximum torque efficiency rely on Series C for dependable performance.

Series F – Parallel Shaft Mounted Geared Motors
Built for endurance in the most demanding environments, Series F is widely adopted in steel plants, hoists, cranes and heavy-duty conveyors. Offering torque up to 10,000 Nm and high gear ratios up to 20,000:1, this product features an integral torque arm and diverse output configurations to meet industry-specific challenges head-on.

Series K – Right Angle Helical Bevel Geared Motors
For industries seeking high efficiency and torque-heavy performance, Series K is the answer. This right-angled geared motor series delivers torque up to 50,000 Nm, making it a preferred choice in core infrastructure sectors such as cement, power, mining and material handling. Its flexibility in mounting and broad motor options offer engineers the freedom in design and reliability in execution.
Together, these four series reflect Power Build’s commitment to excellence in mechanical power transmission. From compact inline designs to robust right-angle drives, each geared motor is a result of decades of engineering innovation, customer-focused design and field-tested reliability. Whether the requirement is speed control, torque multiplication or space efficiency, Radicon’s Series M, C, F and K stand as trusted powerhouses for global industries.

http://www.powerbuild.in
Call: +919727719344

Concrete

Compliance and growth go hand in h and

Published

6 hours ago

February 19, 2026

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Pankaj Kejriwal, Whole Time Director and COO, Star Cement, on driving efficiency today and designing sustainability for tomorrow.

In an era where the cement industry is under growing pressure to decarbonise while scaling capacity, Star Cement is charting a pragmatic yet forward-looking path. In this conversation, Pankaj Kejriwal, Whole Time Director and COO, Star Cement, shares how the company is leveraging waste heat recovery, alternative fuels, low-carbon products and clean energy innovations to balance operational efficiency with long-term sustainability.

How has your Lumshnong plant implemented the 24.8 MW Waste Heat Recovery System (WHRS), and what impact has it had on thermal substitution and energy costs?
Earlier, the cost of coal in the Northeast was quite reasonable, but over the past few years, global price increases have also impacted the region. We implemented the WHRS project about five years ago, and it has resulted in significant savings by reducing our overall power costs.
That is why we first installed WHRS in our older kilns, and now it has also been incorporated into our new projects. Going forward, WHRS will be essential for any cement plant. We are also working on utilising the waste gases exiting the WHRS, which are still at around 100 degrees Celsius. To harness this residual heat, we are exploring systems based on the Organic Rankine Cycle, which will allow us to extract additional power from the same process.

With the launch of Star Smart Building Solutions and AAC blocks, how are you positioning yourself in the low-carbon construction materials segment?
We are actively working on low-carbon cement products and are currently evaluating LC3 cement. The introduction of autoclaved aerated concrete (AAC) blocks provided us with an effective entry into the consumer-facing segment of the industry. Since we already share a strong dealer network across products, this segment fits well into our overall strategy.
This move is clearly supporting our transition towards products with lower carbon intensity and aligns with our broader sustainability roadmap.

With a diverse product portfolio, what are the key USPs that enable you to support India’s ongoing infrastructure projects across sectors?
Cement requirements vary depending on application. There is OPC, PPC and PSC cement, and each serves different infrastructure needs. We manufacture blended cements as well, which allows us to supply products according to specific project requirements.
For instance, hydroelectric projects, including those with NHPC, have their own technical norms, which we are able to meet. From individual home builders to road infrastructure, dam projects, and regions with heavy monsoon exposure, where weather-shield cement is required, we are equipped to serve all segments. Our ability to tailor cement solutions across diverse climatic and infrastructure conditions is a key strength.

How are you managing biomass usage, circularity, and waste reduction across
your operations?
The Northeast has been fortunate in terms of biomass availability, particularly bamboo. Earlier, much of this bamboo was supplied to paper plants, but many of those facilities have since shut down. As a result, large quantities of bamboo biomass are now available, which we utilise in our thermal power plants, achieving a Thermal Substitution Rate (TSR) of nearly 60 per cent.
We have also started using bamboo as a fuel in our cement kilns, where the TSR is currently around 10 per cent to 12 per cent and is expected to increase further. From a circularity perspective, we extensively use fly ash, which allows us to reuse a major industrial waste product. Additionally, waste generated from HDPE bags is now being processed through our alternative fuel and raw material (AFR) systems. These initiatives collectively support our circular economy objectives.

As Star Cement expands, what are the key logistical and raw material challenges you face in scaling operations?
Fly ash availability in the Northeast is a constraint, as there are no major thermal power plants in the region. We currently source fly ash from Bihar and West Bengal, which adds significant logistics costs. However, supportive railway policies have helped us manage this challenge effectively.
Beyond the Northeast, we are also expanding into other regions, including the western region, to cater to northern markets. We have secured limestone mines through auctions and are now in the process of identifying and securing other critical raw material resources to support this expansion.

With increasing carbon regulations alongside capacity expansion, how do you balance compliance while sustaining growth?
Compliance and growth go hand in hand for us. On the product side, we are working on LC3 cement and other low-carbon formulations. Within our existing product portfolio, we are optimising operations by increasing the use of green fuels and improving energy efficiency to reduce our carbon footprint.
We are also optimising thermal energy consumption and reducing electrical power usage. Notably, we are the first cement company in the Northeast to deploy EV tippers at scale for limestone transportation from mines to plants. Additionally, we have installed belt conveyors for limestone transfer, which further reduces emissions. All these initiatives together help us achieve regulatory compliance while supporting expansion.

Looking ahead to 2030 and 2050, what are the key innovation and sustainability priorities for Star Cement?
Across the cement industry, carbon capture is emerging as a major focus area, and we are also planning to work actively in this space. In parallel, we see strong potential in green hydrogen and are investing in solar power plants to support this transition.
With the rapid adoption of solar energy, power costs have reduced dramatically – from 10–12 per unit to around2.5 per unit. This reduction will enable the production of green hydrogen at scale. Once available, green hydrogen can be used for electricity generation, to power EV fleets, and even as a fuel in cement kilns.
Burning green hydrogen produces only water and oxygen, eliminating carbon emissions from that part of the process. While process-related CO2 emissions from limestone calcination remain a challenge, carbon capture technologies will help address this. Ultimately, while becoming a carbon-negative industry is challenging, it is a goal we must continue to work towards.