Gati Limited At the Threshold

of a Big Leap
BBA- Semester V
Gr1-B

Kanishq Baweja
Sushant Ohri
Fayza Akbar Khan
Avantika Makker
Utkarsh Aggarwal
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Gati Limited At the Threshold of

a
Big
Leap
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

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.

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-towhead which provided the cutting edge to the business.

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.

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 cos operational dynamics
& enable high performers to get on fast track growth
route

For training: co-opted consultants from NIIT, FCCI, AIMA,

ICFAI, XLRI etc.

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 timesensitive 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.

MARKETING

Gatis simple approach was to attract new customers & retain old ones.

Foundation of any successful business is only as strong as degree of customers

satisfaction,

Business is about people.

Stakeholders are financial mechanism that makes a companys Business happen.
Customers, as a user of companys services, are its paymasters.
Competitors need to be respected, as they spur a company to excel & work on
innovative & creative ideas.
A companys vendors are its supporters, & should, therefore, be made to belong to
the organization.
The companys 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.

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 (1-600-4254284)

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 companys

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 companys 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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INDUSTRY SCENARIO

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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 The express market is estimated at a total revenue of Rs. 2493 crore.

The share of Domestic market is 59% & International Market is 41%

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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ORGANIZED SECTOR

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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OTHER MAJOR PLAYERS

BLUE DART

South 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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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.

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Products and Services of the Express Industry

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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S.W.O.T. ANALYSIS
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

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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

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Emerging Challenges
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.

Porters Five Forces

Threat of new entrants: MediumHigh
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

Rivalry among competitors: High

Highly 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.

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.

Balanced Scorecard
Internal Processes
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 restructured 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

Financi
al
Initiative

Strategy
Grow 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.

Employee/ Learning and Development

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 shiftinggeographical 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.

Customer
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.

Conclusion
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

THANKYOU
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