Gati Limited – At the Threshold of a Big Leap

BBA- Semester VGr1-B

Kanishq BawejaSushant Ohri

Fayza Akbar KhanAvantika Makker

Utkarsh Aggarwal

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Gati Limited◦ Leaders in express cargo movement ◦ Pioneer in distribution and supply chain management

Services provided◦ Point – to – point transportation to complex end – to – end transportation.◦ Supply chain management

Services are◦ Cost –efficient ◦ flexible

Business Segment:◦ Logistics◦ Shipping◦ Fuel Stations

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Gati Limited – At the Threshold of a Big Leap

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Vision

Be the leader in Asia-Pacific and a global provider of India-centric supply chain services and solutions.

Delight the customers with quality services by setting new trends through innovation and technology.

Be a responsible corporate citizen with unwavering commitment to environmental protection and conservation.

Core Values

To be ethical, integrated and transparent in our leadership. To respect and treat with value the enquiries of others. To be caring and abundant in giving support and services to others. To balance the body and mind, and `people serve people’ in good spirit. To approach life holistically and elegantly with sympathy. In keeping with Indian culture and attitude, never say `no’ to service a customer. To be a responsible corporate citizen and remain committed to the cause of

environmental protection and conservation.

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Infrastructure

Vast network of office and franchisees

5 Zonal Offices, 61 Express Centers, 109 Depots, 160 Franchisees, 54 Customer Convenience Centers, 20 Surface Transit Centers, 19 Air Transit Centers, 5 Rail Transit Centers, 3827 extra service stations and 27 modern warehouses, spread across 580 out of 590 districts in the country.

GATI spread across 427 locations in India and overseas offices in Sri Lanka, Nepal, Hong Kong, Singapore and China.

The company also owns 30 containerized HCVs, refrigerated vehicles and tractor-tow-head which provided the cutting edge to the business.

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Technology Gati website was inaugurated in 2002.

Online tracking and lodging complaints .

This provide high level of customer satisfaction through reverse flow of information through the Website, e-mail, SMS and toll free number.

Gati.Net, to enable employees to share information and communicate

GATI implemented web based ERP called gati@web, comprising◦ GEMS (Gati Enterprise Management System), a custom-developed application,

This is completely a centralized and on-line application.

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Human Resources

The company has a strength of more than 2000 trained manpower that is committed to the growth of the organization. The training continues to be the thrust area of HR.

Promotion Policy was revised- branded Talent for Tomorrow”-which diagnose the co’s operational dynamics & enable high performers to get on fast track growth route

For training: co-opted consultants from NIIT, FCCI, AIMA, ICFAI, XLRI etc.

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Operations GATI is an ISO 9001:2000 company, certified for design, marketing

and providing cargo management services and logistic solutions

In collaboration with Indian Airlines, Gati launched GATI Gold and GATI Silver services, for speedy air-delivery of time-sensitive consignments at several major airports in India.

It offered value added services such as flexible delivery options, door pick up and delivery, online tracking, toll-free call number.

It planned to acquire modernized, customized to re-engineer and revamp its network to international standards.

GATI is certified by IATA (International Air Transport Association) to promote, service, market and handle international air cargo movement.

Gati’s simple approach was to attract new customers & retain old ones.

‘Foundation of any successful business is only as strong as degree of customer’s satisfaction’,

“Business is about people. Stakeholders are financial mechanism that makes a company’s Business happen.Customers, as a user of company’s services, are its paymasters.Competitors need to be respected, as they spur a company to excel & work on

innovative & creative ideas.A company’s vendors are its supporters, & should, therefore, be made to belong to

the organization.The company’s employees, being service providers, make its customers happy by

caring for them & Responding to their various needs.As it is people who drive all the operations of GATI, it is important for everyone to

work with the motto ‘people service people’ in mind.”

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MARKETING

GATI as the Logistic Leader in the market.

Transformed its warehouses to modern express distribution centers. Gati @ web was launched for faster & smoother communication.

They revolutionized cargo sector By On time intact, else money back. Custom designed product specific containers. Flexible pickup / delivery. Vehicle tracking system Customer complaint monitoring system Cash on delivery Track n Trace facility ( to keep a tab on consignments)

Gati was the first Indian Company to introduce toll free no (1-600-425-4284)

They tied up with Indian Airlines

Tied up with Bhutan post & Maldives post

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ALPHONSO MANGO –placing the order through phone or through company’s website

Gati was the first Indian logistics company to implement e-CRM (electronic Customer Relationship Management) by launching Customer call center that reduced complaints resolution time.

e-POD was another one of the firsts by GATI that facilitated scanned images of the consignment to be viewed on the company’s website.

Gati was the unanimous & the most obvious choice for the BEST DOMESTIC LOGISTIC COMPANY award that it won in 2004 .

by launch of direct service between Chennai & Yangon (Myanmar). 14 days as against 35-45 days.

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June2005- setup an office at Beijing.

During 2005- redefined logistics by setting up Express Distribution Centers (EDCs)

Gati was the only express distribution supply chain company that offered comprehensive multi modal (air, sea, land & rail) transportation services as well as third party logistics, trucking & warehousing solutions.

Adopting an “anticipate & prevent” approach the RMG (risk management group) at GATI proactively curtailed losses & maximized opportunities & covered areas of vigilance, internal audit, insurance / claim management & legal compliance.

The brand GATI was built over a period of years by vigorous involvement in the media, exhibitions & other promotional activities on the warehousing front.

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“Express Industry”. The consignments held by the express companies were broadly classified into : Documents Any material comprising paper such as

correspondence, bill / invoice, brochure, catalogue, books, files, account details etc.

Non Documents Items with or without commercial value like CKD units, small machineries, electronic parts, spare parts etc.

On overall basis, documents accounted 60% of total revenue & the rest 40% was non documents.

The express industry saw progressive growth in the last decade of 20th century due to trade & services. The elimination of trade barriers, globalization of markets & trade led to expansion in business

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INDUSTRY SCENARIO

Sector Revenue(Rs. In crore)

Market share (%)

Organized 1628 65

Semi Organized & Unorganized

618 25

EMS Speed post 247 10

Total 2493 100

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The express market is estimated at a total revenue of Rs. 2493 crore. The share of Domestic market is 59% & International Market is 41%

Solutions like Just in Time & e-Commerce enabled considerable business opportunity for web enabled services.

The organized sector which was principally in the package segment of Cargo management illustrated high growth.

Unorganized / semi organized sector faced pressure because of unfavorable pricing environment.

The organized sector was by and large into documents business. The margins were much lower than package segment & also barriers to entry were also very less.

Entry barriers in the Package segment were high because company needed strong distribution network, latest technology, well trained staff, strong brand image & economies of scale.

Logistics management emerged as a new growth opportunity for these companies because a lot of manufacturing companies were outsourcing their logistics requirements to third parties.

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ORGANIZED SECTOR

BLUE DARTSouth Asia's premier courier, and integrated express package Distribution Company.

The competitive advantage was that they had an air service, the only one of its kind in the country, which was focused on carriage of packages as its prime business, rather than as a by-product of a passenger airline.

DTDC COURIERS & CARGO LTD. (DTDC) DTDC was one of the leading Air Express & Cargo companies in India. It has expanded its delivery network to create the nations Largest Domestic Delivery

Network

CONCOR (Container Corporation of India Ltd.) The objective of the company was of developing multi-modal logistics

support for India's international and domestic containerized cargo and trade

It also had advantage of dedicated network of terminals across the country to capture traffic at the production/consumption centers.

EMS Speed Post Post and Telegraph department in India which operated in association with other

member countries of Universal Postal Union

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OTHER MAJOR PLAYERS

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Semi Organized Sector

Operating within a limited geographical area ( between states or between specific sectors like Ahmedabad-Mumbai, Delhi-Jaipur etc) .

There were few local companies who book consignments bound for any domestic locations. Such companies did not have their own distribution network and relied on the network of other similar companies in various locations or acted as wholesalers to organized sector companies. The semi-organized sectors matched the reach of organized sector service providers.

The semi-organized and unorganized players operated on price advantages. Unorganized and semi-organized players were mainly characterized by high volume business.

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Un-Organized Sector

Comprised companies, which had restricted operations within the boundaries of a particular city (intra-city couriers).

Almost the entire market for intra-city business was accounted for by documents.

The unorganized sector thrived on price and was unable to keep pace with the market in terms of reliability and timeliness.

A scenario wherein unorganized sector would not exit at national level due to its inability to keep pace with the technology and customer demand was anticipated.

In addition to the distribution of the consignments, express service providers offered customer specific products. Products and services offered by the express industry were:

Products: Express (Document and non-document) :- this was the basic product of all

express service providers. The delivery time was time bounded and was assured depending upon the distance between pick up and delivery locations.

Door to Door (by air and surface) :- under this product, companies offered an option selection of mode of transport (if the customer did not specify the mode of transport, the consignment were transported by air. In case of heavy consignments or destinations on the trunk route surface mode was used.).

Door to airport and airport to door :- Under these products the express companies took the total responsibility of preparation of legal documentation and procedures.

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Products and Services of the Express Industry

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Strengths: Dominant player in the surface cargo segment in India, which

accounts for more than 55% of the total. Niche value additions such as third-party logistics, trucking and

warehousing solutions. Re-engineered hi-tech warehouses and distributing infrastructure… Advanced IT solutions to back up its services. It provides multi modal connectivity.

Weakness: Insufficient regional and global presence as compared with its

competitors. It has been neglecting courier segment

S.W.O.T. ANALYSIS

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Opportunity:

Expanding economy, WTO agreements Improvement in the logistics infrastructure in the country-better

roads, improved ports etc. Entry of a large no. of global retailers Increasing investments, booming manufacturing and development

of organized retail sectors-provides business potentials to express industries

Threats: Global competitors Direct competition from unorganized sectors. Space limitations

Space is a perishable item, availability of space is the foremost challenge faced by industry.

Direct competition from unorganized sector player fight for lower profit margin

Express industry depend upon domestic and international trade

Sustained growth with the help of Liberalization of Indian economy and integration of international trade.

Emerging Challenges

Threat of new entrants: Medium-High

On one hand barriers to entry is low in terms of ease of getting a license; industry is vulnerable to

intense competition and easy scale-up; Can be provided without

assets. However the cost of capital is high with complex

taxation laws, congestion of key rail, road and port networks.

Bargaining power of Suppliers: Medium

Government control of fuel prices makes it difficult to

control, predict and pass on the fuel costs to customers

Threat of Substitutes: Medium

Highly customer oriented company with multiple

vendor options

Bargaining power of buyers: Medium

A few large sectors and companies like the

automobile sector are able to get significant discounts.

Rivalry among competitors: HighHighly fragmented- large number of local, regional and

national players. Commoditization of products due to lack of differentiation leading to further price erosion. Gati's

competitors have business models which allow them to offer services at pricings to cost sensitive customers which Gati

cannot.

Porter’s Five Forces

Balanced Scorecard

Strategic Objective Initiative

Global provider of India- centric supply chain services  

Establishment of Gati-Kintetsu Express, a joint venture with Kintetsu World Express (KWE) which has in 200 cities across 30 countries. Gain from KWE's operational expertise in warehousing services and 3PL.

Services leader in the rapidly growing online retail sector 

Dedicated e-commerce logistics services covering warehouse, online and home delivery requirements has been planned and is on track

Leader in Asia pacific region of global SCM solutions

Expansion with a number of locations across India and Asia Pacific. Company has consolidated position in China, Hong Kong, Thailand & Singapore and re-structured investment in international subsidiaries. Control will be through the Singapore subsidiary company i.e. Gati Asia Pacific Pvt Ltd., (GAP) and it has closed Gati Holdings Ltd.,(GHL) Mauritius, the erstwhile direct subsidiary.

Responsible corporate citizen - "Green Gati". 

The main focus areas are Education, Community & Environment. Initiatives: Gati MC High School, Nagore, Tamil Nadu Relief Initiative to the Assam Flood victims Health checkup camp for drivers & handlers Gati Government High School, Hyderabad, Andhra Pradesh Green Belt Plantation Blood Donation Camp

Internal Processes

Strategy InitiativeGrow shipping business profitably During FY2012 the shipping division recorded a revenue of Rs. 180 MN and

loss from operations of Rs. 288 MN against Rs. 923 MN and Rs. 162 MN respectively in the previous year. Gati has restructured the shipping business into a wholly owned subsidiary -Gati Ship Private Limited and inducted a strategic partner to raise required capital.

profitable growth of-Commerce, Cold Chain and International Freight Forwarding businesses 

Investment in increasing capacity to cater to this industry.

Strategy Initiative

Best employer with latest HR practices Series of innovative HR-practices including e-HR containing information of every employee. Talent for tomorrow- promotion policy allowing high performers to achieve fast track growth. Opportunities for lateral shifting- geographical and functional

Manpower Skill enhancement Training is a thrust area for Gati Ltd. Had it had co-opted consultants from AIMA, XLRI, NIIT, FCCI etc.

Financial

Employee/ Learning and Development

Strategy Initiative

High quality valued service ISO 9001:2000 company- certified for marketing and providing logistics and cargo management services; valued added service like door to door delivery, online tracking etc., e-Pod.

Attract new customers and retain old ones

Leveraging service advantage through technological capabilities and supporting customers Operations. Build forge long-term relationships with customer; almost 75% of top customers have been with the company for more than three years. 

Customer

GATI must develop Relationship Retailing for development of Retail Business

Which will help the company… To establish and maintain long-term bonds with customers,

rather than act as if each sales transaction is a completely new encounter.

Though Gati is a dominant player in the surface cargo segment in India, it still needs radical rethinking because-

Its now facing global competition Needs to improve its networking as its competitors are much ahead of

it More international tie ups to become global

THANKYOU26

Conclusion