7/31/2019 gati-110122030724-phpapp02 (1)

1/32

Gati Limited At the Threshold ofGati Limited At the Threshold of

a Big Leapa Big Leap

Gati Limited;- Incorporated on 25th April, 1995 registered office at Secunderabad

Provided services ranging from traditional point to point transportationto complex end-to end integrated logistics and supply chainmanagement solutions.

Was Leader in Express Cargo movement and

Pioneer in Distribution and Supply Chain Management solutions in India.

They offered a spectrum of services that were cost efficient and flexible

Operates in three types of business segment viz.

Logistics

Shipping

Fuel Stations 1

7/31/2019 gati-110122030724-phpapp02 (1)

2/32

7/31/2019 gati-110122030724-phpapp02 (1)

3/32

Types of businessTypes of business

LogisticLog

istic

Logistics division primarily engaged in providing:- integrated logistics solutionsthrough state-of-the-art infrastructure, IT led initiatives, Modern equipment,efficient and mechanized system of working, multi-modal transport servicesthrough vast network of own offices and franchisees in India, own andoutsource fleet of trucks and through an alliance with Indian Airlines.

Express Distribution and Supply Chain is the core business segment of Gati,offering a complete range of value added services like warehousing, trucking,express and time bound cargo.

International business wing provides courier/freight services to over 200countries, offering customers the convenience of sending their consignments

on `consolidated weight basis.

The trucking solutions wing offered customized container services, with onlinecargo tracking and one-time locks for extra security.

The segment grown by 22.47% with a turnover of Rs259.14 crore3

7/31/2019 gati-110122030724-phpapp02 (1)

4/32

4

ShippingShip

ping The shipping division GATI Coast-to-Coast engaged in coastal shipping as

well as to Yangon (Myanmar) and Andaman & Nicobar Islands.

This segment grew by 11%.

Fuel StationsFuel Stations Operates 5 fuel stations at Bangalore, Belgaum, Indore, Shadnagar (near

Hyderabad) & Chhatra (Karnataka)

Trades in Petroleum and Lubricants. Supplies to several Pumps in Karnataka, Andhra Pradesh and Madhya

Pradesh, on behalf of oil majors.

Rising prices affected growth by 4% and profitability of this segment

TurnoverTurnover 70% from Logistics Division (Out of which 98% from Cargo 2% from Courier).

7% from Shipping Division.

23% from Fuel Stations.

7/31/2019 gati-110122030724-phpapp02 (1)

5/32

5

InfrastructureInfrastructure

Vast network of office and franchisees in India, own & outsourced fleet of

vehicles and own ships.

5 Zonal Offices, 61 Express Centers, 109 Depots, 160 Franchisees, 54 CustomerConvenience Centers, 20 Surface Transit Centers, 19 Air Transit Centers, 5 RailTransit Centres, 3827 extra service stations and 27 modern warehouses, spreadacross 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.

GATI handles 24,000 dockets daily.

Covers over 3.2 lacs kms. every day with its fleet of 2000 surface vehicles,1350aerodynamics LCV for in city pick-up & delivery.

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

7/31/2019 gati-110122030724-phpapp02 (1)

6/32

6

GATI aims to be a one-stop service provider in logistics solutions,

focusing on warehousing and infrastructure, Express DistributionsCenters, Central Distribution Centre, Information technology and humanresources.

2004-05 saw the emergence of India as worlds 10th largest economy, Byleveraging its country-wide network of branches, Express distribution

system and Centralized distribution system, Gatti was at the rightplace to take the advantage of the dynamic market that was activelysourcing its express distribution and supply chain management.

7/31/2019 gati-110122030724-phpapp02 (1)

7/32

7

TechnologyTechnology

Gatti website was inaugurated in 2002.It aimed at rendering better services tocustomers. Customer could track docket number,download information, lodgecomplaints online and track its status, check prices and transit time for shipment ofany of Gatis services, with the option to compare difference services on both front.

This helped GATI work pro-actively and provide high level of customer satisfactionthrough reverse flow of information through the Website, e-mail, SMS and toll freenumber.

Gati.Net, a corporate intranet application, to enable employees to share informationand communicate over an interactive online platform.

GATI implemented web based ERP called gati@web, comprising GEMS (GatiEnterprise Management System), a custom-developed application, Oracle CRMand Oracle Financial. This is completely a centralized and on-line application. In

order to connect to this application, 120 plus locations have been networkedthrough lease lines and VSAT

Implemented Lotus Notes suite of products, the company moved to `collaborativeworking through instant messing, sharing, presentations online, whiteboard andconferences on the web.

Set up an alternative disaster recovery site, to supplement the companys centralserver at its Head Office, GATI.

7/31/2019 gati-110122030724-phpapp02 (1)

8/32

8

Human ResourcesHuman Resources::

The Company has launched a series of innovative HR- development

initiatives including e-HR, which gives complete emoluments and relatedinformation of every Gatiite.

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

They were provided oppurtunity for lateral shift-geographical or functional

and have their talent potentially rewarded.

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

7/31/2019 gati-110122030724-phpapp02 (1)

9/32

9

OperationsOperations

GATI is an ISO 9001:2000 company, certified for design, marketing andproviding cargo management services and logistic solutions

Modern State-of-the-Art warehouses at Gurgaon, Ludhina, Jaipur, Indore,Kolkata and Pondicherry.

In collaboration with Indian Airlines, Gati launched GATI Gold and GATISilver services, for speedy air-delivery of time-sensitive consignments at

several major airports in India. This was a door pick-up and delivery service

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

International business operations kept pace with the changing market trends.GATI International handled international business with a new focus, inassociation with local logistics agents.

Company have branches in Singapore & Nepal and liasion office in SriLanka, Hong Kong and China and is in a process of opening branches/liaisonoffices in Thailand, Malaysia, UAE and Taiwan.

7/31/2019 gati-110122030724-phpapp02 (1)

10/32

10

It planned to acquire modernized, customized range of fleet of unique

containers suited for Indian terrain to re-engineer and revamp itsnetwork to international standards.

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

7/31/2019 gati-110122030724-phpapp02 (1)

11/32

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

clientele of GATI included Hitachi, Pantaloons, Ford & Ranbaxy to name afew.

The precedence was to provide personalized & innovative services therebybuilding an everlasting relationship with its customers.

Foundation of any successful business is only as strong as degree ofcustomers satisfaction, therefore the main task was to understandcustomers thoroughly & delight them in the best possible manner.

Arthur Simon Bertie , chief business chain officer rightly said :

Business is about people. Stakeholders are financial mechanism that makesa companys Business happen. Customers, as a user of companysservices, are its paymasters.

Competitors need to be respected, as they spur a company to excel & workon 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 customershappy by caring for them & Responding to their various needs.

As it ispeople who drive all the operations of GATI, it is important foreveryone to work with the motto people service people in mind.

11

7/31/2019 gati-110122030724-phpapp02 (1)

12/32

The series of innovative initiatives established GATI as the Logistic Leader inthe market.

Gati, transformed its warehouses to modern express distribution centers, Gati

@ web was launched for faster & smoother communication.

They revolutionized cargo sector with its pioneering offers & solutions aidedby fleets like: 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 to assure itself of cargo space in 34 sectors ofthe airline.

Tied up with Bhutan post & Maldives post to gain access to several

destinations in these two countries. 12

7/31/2019 gati-110122030724-phpapp02 (1)

13/32

ALPHONSO MANGO was one of the customer delight initiative which had the

fruit delivered at the customers doorstep by 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 by the consignors 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 Frost & Sullivan.

It setup a regional Office in Singapore in November 2004 to tap India centricbusiness in the Asia-Pacific region. In the same month launched Gati Saver, in

small package segment.

February 2005- Coast to Coast achieved a new landmark by launch of directservice between Chennai & Yangon (Myanmar). This condensed the transit time

& the company moved 55 countries from Yangon to Nagpur via Chennai in 14days as against 35-45 days (via Singapore with Trans-shipment at Mumbai.) 13

7/31/2019 gati-110122030724-phpapp02 (1)

14/32

March2005- a new office at Port Blair was setup to heighten operations inChennai-Port Blair sector.

June2005- setup an office at Beijing. As an attempt to extend further in the Asia-Pacific regions the company intended to set up offices in Hong Kong, Thailand,

Malaysia & Indonesia

During 2005- redefined logistics by setting up Express Distribution Centers(EDCs) at Kolkatta, Jaipur, Pondicherry, Gurgaon, Ludhiana & Indore.

Gati was the only express distribution supply chain company that offered

comprehensive multi modal (air, sea, land & rail) transportation services as wellas niche value additions such as third party logistics, trucking & warehousingsolutions.

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.

Gati was in the process to implement a software to provide Single invoice,

Multiple docket tracking facility to its regular clients.

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

14

7/31/2019 gati-110122030724-phpapp02 (1)

15/32

INDUSTRY SCENARIOINDUSTRY SCENARIO Express Industry comprised courier companies which offered domestic &

international services. 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 CKDunits, small machineries, electronic parts, spare parts etc.

On overall basis, documents accounted 60% of total revenue & the rest40% was non documents.

The 1980s saw the entry of professional players into the express industry &since then the industry grew at a steady rate.

The Indian Express Cargo industry (organized & Un-organized both) hadenormous prospects for growth in local well as international markets.

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

15

7/31/2019 gati-110122030724-phpapp02 (1)

16/32

Sector Revenue(Rs. In

crore)

Market share (%)

Organized 1628 65

Semi Organized &Unorganized

618 25

EMS Speed post 247 10

Total 2493 100

16

The ingress of international players led to transition & growth as well asposed challenges by web based technology.

Express market Scenario Over 2000 express companies in India. 20 inorganized sector. 25 in semi-organized sector & others in unorganized sector.

The express market is estimated at a total revenue of Rs. 2493 crore. Theshare of Domestic market is 59% valued at RS. 1468 crore. & the share ofInternational Market is 41% valued at RS 1025 crore.

7/31/2019 gati-110122030724-phpapp02 (1)

17/32

ORGANIZED SECTORORGANIZED SECTOR Comprise of service providers with national & international reach fortified with

fully equipped infrastructure & other value added services.

The major consumer sectors are: Pharmaceuticals, IT, Readymade garments &FMCG products.

Domestic companies act in consolidation to international service providers &some of them even have tie-ups with them.

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

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

Unorganized / semi organized sector faced pressure because of unfavorablepricing environment.

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

17

7/31/2019 gati-110122030724-phpapp02 (1)

18/32

The industry was not regulated therefore licensing was not requisite to

setup a cargo management company.

Entry barriers in the Package segment were high because company neededstrong distribution network, latest technology, well trained staff, strongbrand image & economies of scale. (given the operating leverage ofindustry was very high)

Cargo management companies were leveraging on their strong distributionnetwork & were providing customers with value added services.

Logistics managementemerged as a new growth opportunity for thesecompanies because a lot of manufacturing companies were outsourcingtheir logistics requirements to third parties.

18

7/31/2019 gati-110122030724-phpapp02 (1)

19/32

OTHER MAJOR PLAYERSOTHER MAJOR PLAYERS

BLUE DARTBLUE DART:-:- is South Asia's premier courier, and integrated expresspackage Distribution Company. They have the most extensive domestic

network covering over 25,498 locations, and service more than 220

countries and territories worldwide through Sales alliance with DHL

Blue Dart had Warehouses at 14 locations as well as bonded warehousesat the 6 major metros of Bangalore,Chennai,Delhi,Mumbai, Kolkata andHyderabad.

DHL offered customized solutions including express document shipping andsupply chain management.

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.

19

http://www.bluedart.com/bd-dhl.htmlhttp://www.bluedart.com/bd-dhl.html

7/31/2019 gati-110122030724-phpapp02 (1)

20/32

7/31/2019 gati-110122030724-phpapp02 (1)

21/32

21

CONCOR (Container Corporation of India Ltd.):CONCOR (Container Corporation of India Ltd.): it wasincorporated in March 1988 taking over the existing network of 7 InlandContainer Depot (ICD) from the Indian railways.

The objective of the company was of developing multi-modal logistics supportfor India's international and domestic containerized cargo and trade, byproviding customers direct interaction and door- to door services whilecapitalizing on the robust and more economical option of rail movement onthe Indian Railways network.

It had the undisputed position as sole-provider of rail hauls for containers.

It also had advantage of dedicated network of terminals across the country tocapture traffic at the production/consumption centres.

EMS Speed PostEMS Speed Post:EMS was the express arm of Post and Telegraphdepartment in India which operated in association with other membercountries of Universal Postal Union

EMS generated revenue of Rs 2.43 crores.

7/31/2019 gati-110122030724-phpapp02 (1)

22/32

22

Electronic track and trace system were implemented for Speed Post andExpress Parcel.

In the Tenth Five Year Plan, it was proposed to link all the state Speed PostCentres with the web-server for providing on-line track and trace system

Semi Organized SectorSemi Organized Sector:Operating within a limited geographicalarea ( between states or between specific sectors like Ahmedabad-Mumbai,Delhi-Jaipur etc) .

There were few local companies who book consignments bound for anydomestic locations. Such companies did not have their own distributionnetwork and relied on the network of other similar companies in variouslocations 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 highvolume business.

7/31/2019 gati-110122030724-phpapp02 (1)

23/32

23

Un-Organized SectorUn-Organized Sector: of the express industry comprisedcompanies, 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 bydocuments.

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

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

7/31/2019 gati-110122030724-phpapp02 (1)

24/32

Products and Services of theProducts and Services of the

Express IndustryExpress Industry

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

ProductsProducts:-:-

Express (Document and non-document) :- this was the basic product ofall express service providers. The delivery time was time bounded and wasassured depending upon the distance between pick up and deliverylocations.

Door to Door (by air and surface) :- under this product, companiesoffered an option selection of mode of transport (if the customer did not

specify the mode of transport, the consignment were transported by air. Incase of heavy consignments or destinations on the trunk route surfacemode was used.).

Door to airport and airport to door :- Under these products the expresscompanies took the total responsibility of preparation of legaldocumentation and procedures.

24

7/31/2019 gati-110122030724-phpapp02 (1)

25/32

25

Services:-Services:-

The basic service of express service providers was time-bound delivery.In the competition, some companies offered value added services such

as pick up, proof of delivery, collection of cheque , payment after

delivery, monthly payments, tracking services etc.

7/31/2019 gati-110122030724-phpapp02 (1)

26/32

2005 2004 2003 2002 2001 2000 1999 1998

Income 365.39 309.19 276.34 253.05 250.23 204.65 162.9 154.43

Net Sales 359.19 306.15 275.14 252.55 249.52 204.17 162.45 153.9

Other Income 2.08 3.04 1.2 0.5 0.71 0.48 0.45 0.53

Non-recurring income 4.12

Expenditure 333.66 287.32 259.49 237.68 232.34 188.12 151.65 143.42

Consumption of raw materials 71.72 68.98 50.41 47.19 47.79 34.93

Personnel Cost 39.95 35 32.38 31.45 29.11 22.38

Other expenses 221.99 183.34 176.7 159.04 155.44 130.81 151.65

PBDIT 33.73 21.87 16.85 15.37 17389 16.53 11.25 11.01

Interest 4.72 5.68 5.03 3.78 2.71 2.42 4.19 5.04

Depreciation 27.01 16.19 11.82 11.59 15.18 14.11 7.06 5.97

PBDT 7.3 7.81 5.37 4.75 4.09 3.36 2.91 3.37

PBT 19.71 8.38 6.45 6.84 11.09 10.75 4.15 2.6

Tax 5.22 2.83 2.35 2.54 3 1.7 0.4 0.05

Deferred tax 0.42 1.9 0.84 1.15

PAT 14.49 5.55 4.1 4.3 8.09 9.05 3.75 2.55

Rs in Crores

Income Statement of GattiIncome Statement of Gatti

Ltd.Ltd.

26

7/31/2019 gati-110122030724-phpapp02 (1)

27/32

Year

1996 Gati entered into strategic alliance with Indian airlines, on Jan 1st 1996. Thisassociation helped Gati take advantage of IAs air network and deliver theshipments on time and intact and offer the customers a twin advantage ofefficiency and cost effectiveness

1997 Gati introduced an innovative concept, 3rd Party Logistics solutions. The customercould outsource a readymade distribution channel. Keeping track of the changingneeds of the customer and demands of the industry, Gati made the transition from3PL to complete Logistics and Supply Chain Management. Gati believed in tailormaking supply chain solutions that added value to customers business andenhanced profitability.

1999 Gati developed the infrastructure to enter the international Cargo Segment

1999 PD Agarwal Development Center in Pune was set up exclusively for employeestraining and development with the objective to instill in the employees, in depthknowledge of their work along with a sense of commitment and teamwork.

2003 Gati took up a pioneering initiative in further strengthening its internalcommunication process with the latest ORACLE based software, in2003.gati@web was designed to simplify the internal processes andcommunication with a view to offer faster and better service to the customers.

2004 Gati introduced Mechanized Racking System in its automated warehouse

(Express Distribution Center) at Panvel, near Mumbai in July 2004

Historyof GrowthHistory of Growth

27

mailto:2003.gati@webmailto:2003.gati@web

7/31/2019 gati-110122030724-phpapp02 (1)

28/32

Strengths:Strengths:

Dominant player in the surface cargo segment in India, which accounts for morethan 55% of the total.

Niche value additions such as third-party logistics,trucking nd warehousingsolutions.

Re-engineered hi-tech warehouses and distributing infrastrucure

Advanced IT solutions to back up its services.

It provides multi modal connectivity.

Weakness:Weakness:Insufficient regional and global presence as compared with its competitors.

It has been neglecting courier segment

S.W.O.T. ANALYSISS.W.O.T. ANALYSIS

28

7/31/2019 gati-110122030724-phpapp02 (1)

29/32

29

Opportunity: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:Threats: Global competitors

Direct competition from unorganized sectors..

Space limitations

7/31/2019 gati-110122030724-phpapp02 (1)

30/32

30

5 FORCES5 FORCES

7/31/2019 gati-110122030724-phpapp02 (1)

31/32

31

7/31/2019 gati-110122030724-phpapp02 (1)

32/32

ConclusionConclusion

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

32