We are importing Bitumen from other countries to counter the entry tax imposed in Rajasthan which would save approximately Rs 9,000 per MT.
The G R Infraprojects Ltd. (GRIL) is a national company specialising in the infrastructure sector. It extends its range from highways, flyovers, bridges, buildings, air field developments, irrigation, mega highways, road upgradations etc. Ratan Lal Kashyap explains the logistics chain and also advises to make deals to overcome some challenges the procurement sector is facing today. Current scenario Indian construction industry especially infrastructure projects lack very precise planning due to uncertainties prevailing from client site like delay in approval of drawings, delay in providing land, delay in environmental and forest clearance and also delay in utility shifting.
There is a big variation in planning and actual progress at site. Hence the related players end up with inventory carrying cost and at times loss due to drastic change in rates. Due to strong cartelisation of cement manufacturers and steel main producers, most of the time strategic procurement is not possible.  Challenges“Cartelisation of major raw material suppliers is creating a monopolistic scenario. Frequent change in government policy like ban on mining has increased the rates of aggregates and sand in the market,” points out Mr Kashyap. “Demand-supply gap in supply of Bitumen by PSU’s contractors are forced to opt for import route for availability and better pricing. Availability of quality products and timely supply of material is also a big challenge.”In addition, due to liquidity issue in the economy, vendors are sticking to much secured payment terms with no credits available. Tax structures of state governments are being raised imposing entry tax on almost every state which in turn is resulting into increase in landing cost of material.
Make dealsLots of infrastructure companies are not in good financial condition today and opting to sell the plant assets which can be an opportunity for companies having good liquidity and intent to do more projects. The deals can be good based on companies’ requirement of funds. In case of raw materials, aggregates industry can partner with mines owner with some business commitments. Mines owners can be convinced to invest on crushing and mining equipment with good business plant with commitment in quality. 
Talking about the issue of inadequate warehouses, Mr Kashyap says, “For the industry we belong shortage of warehouse is not a big issue due to availability of open land within ROW. Normally the raw materials are stocked in open and other items like cement are stored in godowns and bulkers at site. Bitumen are stored in tanks, else we hold the bitumen tankers till storage is created by consumption.”
Logistics supply chain“We are organised as we work on SAP platform for entire business operations. Our entire logistics plan and pro activeness and cordial relationship with vendors have always helped us delivery of projects ahead of time,” adds Mr Kashyap.The company owns its own fleet of almost 500 trucks out of which approximately 100 are engaged in transporting Bitumen from refinery for captive consumption and around 20 of them for transport of machines from site. These all are fitted with GPS system for online tracking of vehicles to ensure optimum utilisation and on time delivery of materials at site.
Software help“We are working on SAP platform with BI/BO module and we generate MIS every month and evaluate on performance of vendors on various parameters. We seek regular feedback from sites on performance parameters of vendors,” says Mr kashyap.
To get visibility and control over all the spend happens in the company, GR Infra uses SAP with Business Intelligence/Business Operations Module. 
Achievements“We have been able to maintain the average price of cement in spite of huge fluctuation in the market. We are importing Bitumen from other countries to counter the entry tax imposed in Rajasthan which would save approximately ` 9,000 per MT,” informs Mr Kashyap. “We have also entered into agreement with mines owners having their own crushing and mining equipment with business commitments which has helped us keep the price of aggregate firm for entire project.”
G R Infra’s own fleet of tankers with GPS facility has increased the turnaround time for tankers, on time delivery of materials, mitigates the quality issue of mixing enrooted by transports companies etc. It has backward integration of manufacturing facilities like emulsion, polymer modified bitumen (PMB), thermoplastic paint, metal beam crash barrier etc. which form a major ingredient for quality and on time construction of road is under control and owned by GRIL.
– Ratan Lal Kashyap, Vice President – Procurement, G R Infraprojects Ltd.