Published on January 2, 2017
1. By: Duttagupta Abhishek A Presentation On :
2. ALL ABOUT GATI LTD. Started operations in 1989 by Mr. Mahendra Agarwal as a ‘door- to-door cargo’ company. Initially was a division of Transport Corporation of India (TCI) which was owned by the Agarwal family. Became successful due to its commitment on delivery and money - back guarantee
3. THE INITIAL YEARS OF GATI LTD. (CONTD..) Initially started its operations between Chennai and Madurai. Gati operated its business with a group of front-end entrepreneurial delivery set-up. Members of this set- up were known as Gati Associates (GAs)
4. After nearly 6 months of its initial run, Gati was relaunched in four cities : Hyderabad, Chennai, Bangalore and Hosur. Mr. Agarwal’s focus on ‘Time bound - Point to point’ delivery led to its success In 1994, Gati separated from Transport Corporation of India and became a separate entity. THE INITIAL YEARS OF GATI LTD. (CONTD..)
5. THE FOUNDER Born in the affluent and well-known Agarwal family that owned Transport Corporation of India Holds an engineering degree from Bangalore University and a Masters in Business Administration from Austin, USA Recognised as a pioneer in setting up Express Distribution in India Made Gati the most recognized brand and established a market leadership position
6. GATI GROUP Single-window offering, for complete Supply Chain requirements Pioneer in Express Distribution and Supply Chain Solutions Rapid growth with a CAGR of 25% in the last 8 years Annual turnover of 150,30,00,00,000 INR (150300 Lakhs) Strong presence in the Asia Pacific & SAARC countries Most coveted company, with 3500 employees Strong base of 5000+ customers
7. DISTINGUISHED BOARD MEMBERS
8. THE VISION To be the preferred provider for India-centric Supply Chain Services and Solutions, and a leader in the Asia Pacific region To appease customers with quality service and set new trends through innovation and technology To be the most preferred organisation for all stakeholders To be a responsible corporate citizen, with an unwavering commitment to environmental protection and conservation
9. THE MISSION “To be the most preferred & beneficial business in supply chain and logistics industry to our customers, stakeholders as well as the society at large.”
10. VALUES AT GATI
11. OBJECTIVES AT GATI 1. To meet customer requirements. I. Quality of services at competitive value II. Analyse customer needs and find solutions to satisfy them III. Provide timely and correct information and avoid surprises IV. Prompt resolution of compliances and create an environment of mutual respect 2. Achieve operational efficiency by correct operational balances with the help of uniform, accurate, and timely information. 3. Control revenue leakages and costs and improve profitability. 4. Centralized information, which is consistent throughout the organization.
12. BUSINESS SECTORS
13. GATI KWE – AHEAD IN REACH Divided into 2 parts: 1. Express Distribution 2. Supply Chain Solutions
14. Express Distribution : The network reaches 99.3% of India Optimized route planning system enables disciplined delivery 24/7, 365-day service level monitoring system, ensuring safety, security and on-time delivery Direct connectivity operations in 28 airline sectors, and a vehicle strength of 4000+ vehicles GATI KWE – AHEAD IN REACH
15. Supply Chain Solutions division, offers an integrated Supply Chain service, point-to-point & end-to-end. The Supply Chain Division offers solutions by: Addressing critical operational constraints Improving the flow of information Reforming business processes GATI KWE – AHEAD IN REACH
16. GATI E-CONECT Multi Modal Delivery Solutions covering air, road and rail Gati eFulfilment Centres that offer pick-up, packing, quality check and last mile delivery Gati eFulfilment Centres in New Delhi, Bangalore, Mumbai, Hyderabad, Kolkata and Chennai Delivery capacity of 18,000 shipments a day Pre-paid and COD across 6,700 pin codes Covers 14,000 pin codes across tier IV cities and remote locations
17. GATI INTERNATIONAL It comprises of Freight Forwarding & Logistics Services Strong market presence in the Asia Pacific & SAARC countries Offices in Singapore, Hong Kong, China, Nepal and Thailand Freight Management Solutions – services by Air, Sea, Land and Vessel chartering Customs clearance – inbound & outbound International courier (Worldwide)
18. GATI KAUSAR LTD. (COLD CHAIN SOLUTIONS) Unmatched Cold Chain Distribution & Solutions One of the largest fleets of Cold Chain vehicles An FSSAI certified organisation HACCP procedures for preventing contamination Modern refrigerated units from France, USA and Korea Containers with insulation to counter different climates Cooling plants to switch to normal grid power Equipped service centers for consistent service
19. GATI TRADING SOLUTIONS Gati Trading Solutions offers business partnership in : Imports/Exports as importer/exporter (IOR) Billing & distribution to end customers High sea-sales management Supply chain solutions Gati Trading Solutions benefit customers with : Order management Demand collaboration Vendor management outsource Lean logistics department Reduced office and administrative expenses
20. GATI’S JOURNEY OF EXCELLENCE: INCEPTION TO EXPANSION 2006 - 08 Alliance with China Railway Express Introduced Vehicle Tracking System Centralised Call Centre at Nagpur 1989 - 01 Introduced door-to-door service with money-back guarantee Expansion to the SAARC countries 2001 - 06 Launched Gati Millennium Parcel Express Mechatronic warehouses with APL tracking 2008 - present Alliance with General Logistics Systems Introduced e-POD Joint Venture with KWE Japan Launched specialized verticals for e-Com deliveries
21. RECENT AWARDS AND ACCOLADES 5s Excellence Award by CII – Recognised their strict adherence to 5s methodology Certified Class B by TAPA for maintaining high operational standards Awarded Best Road Transportation by Indian Chamber of Commerce Excellence Award for ‘Achievement in Continuous Improvement by Asia Manufacturing Supply Chain Summit
22. GATI’S C.S.R. INITIATIVES Gati is a socially-responsible corporate, going beyond business by contributing towards the development of the community. Gati has set-up innumerous schools, has established ‘Gati Nagar’ in Bhuj District in the year 2001for Gujarat Earthquake victims Gati has also donated huge amounts of money for the rehabilitation of victims of calamities and natural disasters like Tsunami, Earthquake etc. Gati is also into ‘Adult Literacy Programmes’, ‘Green Initiatives’ and other vistas of C.S.R
23. GATI’S PREMIUM CLIENTS
24. GATI’S COMPETITORS Blue Dart DTDC Couriers & Cargo Ltd. CONCOR EMS Speed Post
25. INDUSTRY ANALYSIS
26. Logistics has huge impact on the domestic and global economy of any country Logistics is about moving materials, information and funds from one business to another business or from a business to the consumer. Logistics is an important part of the economic system and is a major global economic activity. It encompasses activities like freight transportation, warehousing, material handling, protective packaging, inventory control, order processing, marketing, forecasting and customer service.
27. Historically, the logistics sector was clearly separated and restricted mainly to transportation and warehousing. The logistics management in today’s world however, covers all the aspects of value chain including an efficient integration of transportation, distribution, warehousing, reverse logistics, value added services such as payment collection, packaging, documentation, customer brokerage facilities, kitting, repair management, reconfiguration etc. The developments of IT in recent years have further had remarkable implications for the logistics industry.
28. The Indian logistics industry has come a long way from being a labour intensive during 60’s to the present technology oriented system that provides wide range of logistics services. Traditionally, manufacturing companies in India managed their own logistics requirements in-house. The country then gradually evolved from the stage where basic services were outsourced to different service providers known as the (Second-Party Logistics) 2PL service providers. With the increasing demand, the service providers started providing integrated services together with other value added services, while the organizations focus on the core competencies and streamline their supply chain known as 3PL.
29. India has become the prime destination for logistics service providers all over the world. The demand for logistics services in India has been largely driven by the remarkable growth of the economy. The growth is being projected at 9-10 per cent in next few years, with the CAGR (compounded annual growth rate) expected to grow at a rate of 7-8 per cent. This growth is expected to gain greater momentum due to the exponential growth of the Indian economy.
30. In terms of infrastructure, road is the dominant mode of transport which accounts for 68% of freight movement in India. Railways are considered a relatively cheaper mode of transport and are used mainly for transporting bulk materials over long distances. About 89% of its freight traffic is contributed by major commodities such as coal, fertilizers, cement, petroleum products, food grain, finished steel, iron ore and raw material to steel plants. The balance 11% is other commodities moving in bulk and containers.
31. TOP 3 COMPANIES IN LOGISTICS (SECTOR WISE) Transporter : 1. GATI 2. DTDC 3. DYNAMIC LOGISTICS Express Cargo & Couriers : 1. DHL 2. BLUE DART 3. GATI Freight Forwarders : 1. Gati 2. Container Carriers International Pvt Ltd 3. Express Freight Forwarders Container companies : 1. CONCOR 2. MAERSK 3. Indian Container Leasing Ltd Shipping Agents : 1. MAERSK 2. P&O Nedlloyd 3. GATI Warehouse Providers : 1. Central Warehousing Corporation 2. Associated container terminals Ltd (ACTL) 3. Dynamic Logistics
32. PORTER’S FIVE FORCE MODEL
33. THREAT OF SUBSTITUTES : MEDIUM Highly customer oriented company with multiple vendor options.
34. BARGAINING POWER OF BUYERS : MEDIUM Only a few large sectors and companies like the automobile sector are able to get significant discounts.
35. BARGAINING POWER OF SUPPLIERS: MEDIUM Government control of fuel prices makes it difficult to control, predict and pass on the fuel costs to customers
36. 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.
37. 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.
38. ENVIRONMENTAL THREATS & OPPORTUNITIES PROFILE
39. MARKET ENVIRONMENT India currently spends 13% of its GDP on logistics, which is expected to come down to 8.10% due to logistics systems and acceptance of service providers. Indian logistics industry characterized by dominance of the unorganized market. Players can be broadly categorized as local transporters, transporters providing some kind of value added services such as warehousing services, and completely integrated players providing 3PL services. The transportation service provider segment is completely dominated by small local trucking companies and individual truckers.
40. TECHNOLOGICAL ENVIRONMENT Currently, the logistics industry has low rates of technology adoption. The industry has now started investing and developing its IT infrastructure (RIFD, Vehicle tracking, warehouse management) and Gati Ltd has comparatively one of the best IT infrastructures in the industry. With the steady adaptation of high degree sophisticated technology by Gati, it sure will leave its competitors behind.
41. ECONOMIC ENVIRONMENT India has witnessed a sharp increase in trade over the past five years, led by strong economic growth and liberalization. With increasing exports and India's recognition as a manufacturing hub, international trade has also gone up considerably over the past five years. Consequently, the need for logistics has gone up sharply over the past few years across industries. Express delivery industry witnessed 15% CAGR over the last 3 years.
42. REGULATORY ENVIRONMENT The core issues for the firm include whether the highly competitive EDS/courier industry, with no entry or exit barriers and multiple operators (more than 2500 companies) actually need a regulator. Express' courier operators are still seeking an independent regulatory authority to regulate the written communications sector. The only law they are subjected to is the jurisdiction of the Consumer Protection Act, 1986.
43. POLITICAL ENVIRONMENT Declining foreign investment has stalled growth and transformation due to delays in passing / approving key policies like the implementation of GST.
44. SOCIO-CULTURAL ENVIRONMENT With the increase in spending power of an average citizen, the future looks bright. Gati has always been proud of its rich heritage of customer delight, its commitment to the society and being the best in what it does.
45. INTERNATIONAL ENVIRONMENT The competition in the package delivery service is very global due to the presence of FedEx Corporation, UPS, DHL, USPS as well as a host of other smaller companies at home and abroad. As well as competing against bigger players, GATI Ltd must also compete with regional delivery companies and international delivery companies that serve only their country.
46. ENVIRONMENTAL SECTOR NATURE OF IMPACT IMPACT Market Is dominated by the unorganized sector and Gati Ltd in the unorganized sector. Technological Advent and adaptation sophisticated technology. Economic The Industry’s growth rate is favorable. Regulatory Lack of proper regulatory body results in inefficient of industry. Political Inefficiency and hurdles in policy making hurts. Socio-cultural Service is customized to delight the customer. International Intense rivalry and competition prevails in the International Competition.
47. KEY SUCCESS FACTORS Gati is always focussed on the following Key Success Factors: 1. Customer / Partner / Gati’ite satisfaction. 2. Organization effectiveness and flexibility 3. Quality and value-added services. 4. Dependability and trust. 5. The Gati’ites’ culture of services.
48. OPPORTUNITIES Introduction of GST Expected growth in GDP Increasing industry preference towards time sensitive delivery and Just-In-Time delivery Phenomenal growth of e-Retail segment Increasing disposable income levels and favorable demographic profile Increased internet penetration and usage of smart phones Very few specialized players to cater to e-Logistics Lack of cold storage infrastructure in India
49. THREATS Increased competition from other players Shift towards In- House delivery model by E-Commerce players Fast changing industry dynamics and ever-changing requirements of customers Squeezing margins of e-tailers Erratic power supply & Shortage of electricity Capital intensive business Highly competitive Industry
50. STRATEGIC ADVANTAGE PROFILE (SAP)
51. MARKETING CAPABILITY FACTORS Gati prides itself for its high level of customer service. Gati provides highly customized services for its customers. Gati has an effective promotional program Gati Ltd has build its own brand image that stands for Time bound – Point to Point delivery model that aims for customer delight
52. FINANCIAL CAPABILITY FACTORS Raising Funds Gati plans its processes effectively to raise funds & make available for business needs Follow domino discipline in fund management & ensure that fund availability doesn’t affect customer value delivery Controlling Expenditure Has built a disciplinary system that ensure that the methods of monitoring expenditure are reliable. Guidelines to the team members to how they can control expenditure.
53. OPERATIONAL CAPABILITY FACTORS Gati established modern state-of-art warehouses at numerous places. Gati has entered into special tie-ups with India airlines, Indian Railways etc. It offers value-added services such as flexible delivery options, online tracking etc. Besides this, it is more cost-effective in comparison to other services.
54. PERSONNEL CAPABILITY FACTORS The Company has launched a series of innovative HR - development initiatives including e-HR, which gives complete emoluments and related information of every personnel. The company has a strength of more than 2300 trained manpower that is committed to the growth of the organization. Training is in consultation with consultants of AIMA, XLRI, NIIT, FCCI etc. They are provided opportunity for lateral shift - geographical or functional and have their talent potentially rewarded.
55. INFORMATIONAL CAPABILITY FACTORS Gati website was inaugurated in 2002. It is aimed at rendering better services to customers. GATI implemented web based ERP called gati@web comprising : 1. GEMS (Gati Enterprise Management System), a custom- developed application, 2. Oracle CRM and 3. Oracle Financial. Set up an alternative disaster recovery site, to supplement the company’s central server at its Head Office, GATI.
56. STRENGTHS Undisputed leader in express distribution with supreme industry knowledge PAN India Network with time sensitive delivery capability Already established infrastructure and brand name of Gati ltd Efficient Execution and IT Capabilities Delivery capability ranging from 50 gms to 50 kgs Capacity to deliver on same day Customization and Value added services Established client base
57. WEAKNESS Enormous shortage of skilled manpower Frequent fuel hikes Limited air freight network Poor courier experience Lack of integrated infrastructure Huge repairs and maintenance costs Use of outdated technology in refrigerants
58. BUSINESS DEFINITION
59. Customer Functions -what (Complete Logistic Solutions) Customer Groups - who Alternative Technologies – how (For Consumers as well as ( provides Express Deliver, E-commerce Companies ) as well as Cold Storage Solutions)
60. ORGANIZATION STRUCTURE
61. MAJOR STRATEGIES
62. EXPANSION STRATEGIES Expansion through concentration Expansion through integration Expansion through diversification Expansion through cooperation Expansion through internationalization
63. EXPANSION STRATEGIES Expansion through concentration Expansion through integration Expansion through diversification Expansion through cooperation Expansion through internationalization
64. EXPANSION THROUGH CONCENTRATION A keen focus on services it provides currently and their betterment through various methods is a hallmark of Gati Ltd. It also focuses on recent customers and new customer development by providing them customized services.
65. EXPANSION THROUGH INTEGRATION Gati Ltd integrated the existing network of Transport Corporation of India. It integrated a model of e-SCM into its day to day operations.
66. EXPANSION THROUGH INTERNATIONALIZATION They provide services to over 200 countries. The company has setup offices in China, UAE, Hong Kong, Thailand, Malaysia and Indonesia through wholly owned subsidiaries like : Gati Asia Pacific Pvt Ltd (Singapore), Gati Hong Kong Ltd, Gati Thailand Ltd, Gati Dubai Ltd, Gati Holdings Ltd (Mauritius) and Gati Cargo Express Shanghai Ltd (China).
67. JOINT VENTURES Gati Ltd entered into a Joint Venture with Kintetsu World Express Private Limited to form “Gati KWE”. It recorded a turnover of INR 7,823 Million in the period of nine months registering a growth of 20%.
68. STRATEGIC ALLIANCES Gati Ltd has entered into ‘Strategic Alliances’ with Indian Airlines as well as Indian Railways. They have an alliance with Jubilee Commercial, an IATA accredited freight forwarder that started operations in 1998 as Air Cargo Agent. Signed a Memorandum of Understanding (MoU) with China Railway Express International Logistics Company Ltd (CREIL), a market leader in China for rail and road cargo and package delivery. Gati has also signed a MoU with International Shipping Logistics FZE (ISL) which is a subsidiary of Tata Steel
69. DIVESTMENT STRATEGIES Gati has divested 40% stake in its Shipping business for Rs 8 crore to a HNI group in Hyderabad. As per reports in February 2015, Gati Ltd is looking for a financial investor for its cold chain business Gati Kausar.
70. BUSINESS MODEL AT GATI Gati's business model was vastly futuristic in comparison to its competitors. It chose to focus on the customer’s needs from the start. It developed the business partner concept of “Gati Associates” giving rise to a team of entrepreneurs who were independent business partners of Gati.
71. EVOLUTION OF BUSINESS MODEL OF GATI The Beginning Years (1989-1994) For the initial four years of its operation, delivery commitments took priority over complete utilization of capacity and Gati was focused on to its aim to provide time bound and point to point delivery. Innovation, Value-addition and growth (1994 – 2001) Gati added innovative strategies to capture the market and make the transition from a small cargo services company to cargo management.
72. CONTD.. Gati Process, Technology, Automation and Awards (2001-2006) To sharpen marketing focus, operational efficiency and improve service quality, Gati reorganized itself right from the zonal level and affected a separation of its verticals and corporate functions. Empowering the network (2007- 2009) Gati expanded its network in India, China and Europe following strategic tie-ups with logistic service partners. Transformation, Recognition & Growth (2010-Present) Gati grew by leaps and bounds. They started their own Supply Chain Division as well as ventured into E-Commerce business.
73. POLICIES AT GATI
74. MARKETING POLICY Gati’s simple approach is to attract new customers & retain old ones. The Motto of the Marketing team – Customer is the Owner !! Gati’s main policy is to provide personalized & innovative services thereby building an everlasting relationship with its customers. It is the First Indian Company- - to introduce toll free no (1-600- 425-4284) - to implement e-CRM - to introduce e-POD system.
75. OPERATIONS POLICY Believes in Asset Light Business Model and Just in Time. Modern State-of-the-Art warehouses at Gurgaon, Ludhina, Jaipur, Indore, Kolkata and Pondicherry. In collaboration with Indian Airlines, Gati launched GATI Gold and GATI Silver services, for speedy air-delivery. GATI International handles international business with a new focus, in association with local logistics agents. Company have branches in Singapore & Nepal and liaison office in Sri Lanka, Hong Kong, China, Thailand, Malaysia, UAE and Taiwan.
76. FINANCIAL POLICY Gati follows a system of Internal Control on Costs as well as efficient Working Capital management. On the other hand, they believe that employees are their greatest assets. They have increased employee benefit expenses by 13.8 %. Their Asset Light Business Model and Just in Time policy also helps them save costs
77. PERSONNEL POLICY Gati has launched a series of innovative development initiatives including e-HR, which gives complete emoluments and related information of every Gati’ite. Gati has a strength of more than 2364 trained manpower that is committed to the growth of the organization. Promotion Policy was revised – branded “Fast Track” & “Talent for Tomorrow”. Collaborated with consultants from IIM, NIIT, FCCI, AIMA, ICFAI, XLRI etc., for training and development.
78. VIGILANCE AND AUDIT POLICY The Vigilance team exercises due diligence to prevent and detect criminal conduct and promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law. The reviews are undertaken on a continuous basis covering various areas. The Audit Committee reviews all reports and suggestions for improvement are discussed and implemented appropriately.
79. RISK ASSESSMENT AND MITIGATION POLICIES Gati has a Corporate Risk Management Team consisting of professionally qualified accountants and functional specialists who are empowered to examine/audit the adequacy, relevance and effectiveness of the controls, compliance with policies, strategic plans and statutory requirements.
80. PRODUCT PORTFOLIO (BCG MATRIX)
81. BCG MATRIX OF GATI Star International Services E-commerce Question Mark Shipping Supply chain solutions Cash Cow Express Distribution Cold Chain Solutions Dog Courier Services MarketGrowthRate Relative Market Share
82. QUESTION MARK Shipping: Has a relatively low market share in the world with major players like UPS, Maersk, and FedEx to compete with. Supply chain solutions: It is a relatively new and a growing sector which has not reached its maturity in growth cycle.
83. STAR E-commerce and International Services: Both these services are on ever high currently because of increase in globalization and technology advancement.
84. DOG Courier Services : There has been a steady decline in courier and speed delivery services post the internet era where major transactions are done online. Internet usage boom has brought a downfall in this part.
85. CASH COW Express Distribution and Cold Chain Solutions : These have a relatively high market share in Asian markets and they generate major cash for Gati.
86. GATI’S FUTURE ..!
87. …. FOR GATI LTD. The economy is expected to gain momentum in FY 2014- 15. The Industry is expected to grow with the growth of economy. For the FY 2014-15, Gati is expected to post better growth at consolidated level which could be propelled with the expected introduction of GST nationwide.
88. …. FOR GATE KWE GATI-KWE expects strong growth through solution selling by integrating warehousing, distribution along with other value added services. Its focus would be to develop more capabilities in E-com logistics
89. … FOR GATI E-CONNECT Gati is uniquely placed to provide services in Metros, Capitals, Tier 2 and 3 cities, which is current need of E- Commerce industry due to surge in demand from smaller towns. The E-commerce vertical has potential to grow 100% per year.
90. … FOR GATI KAUSAR (COLD-CHAIN SOLUTIONS) The growth in organized cold chain industry is also expected to be driven by growth in Quick service restaurants, organized retail segment and food processing industry. Given these favorable industry dynamics, Gati Kausar's plan to set up 10 large cold chain warehouse is the another tipping point for expansion of Gati Group.
91. GATI’S DREAM Gati dreams to be a ‘Completely Integrated Logistics Service Provider’.
92. Thank You !!