Final

1

Made By: Abhishek Kapoor(2)Aakanksha Zariwala(04)Dimple Bhagat()Karan Dhawan()Lakshmi()Nikita Garg(36)Nitesh Sharma(37)

Gati Limited – At the Threshold of Gati 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 transportation to complex end-to end integrated logistics and supply chain management 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

2

3

VisionVision • Be the leader in Asia-Pacific and a globally provider of India-centric supply

chain services and solutions.• Delight the customers with quality services by setting new trends through

innovation and technology.• Be the most preferred organization for all its stakeholders.• Be a responsible corporate citizen with unwavering commitment to

environmental protection and conservation.

Core ValuesCore 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.

Types of businessTypes of businessLogisticLogistic• Logistics division primarily engaged in providing:- integrated logistics solutions

through state-of-the-art infrastructure, IT led initiatives, Modern equipment, efficient and mechanized system of working, multi-modal transport services through vast network of own offices and franchisees in India, own and outsource 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 200 countries, offering customers the convenience of sending their consignments on `consolidated weight basis.

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

• The segment grown by 22.47% with a turnover of Rs259.14 crore 4

5

ShippingShipping 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.

6

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 Customer Convenience Centers, 20 Surface Transit Centers, 19 Air Transit Centers, 5 Rail Transit Centres, 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.

GATI handles 24,000 dockets daily.

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

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

7

• GATI aims to be a one-stop service provider in logistics solutions, focusing on warehousing and infrastructure, Express Distributions Centers, Central Distribution Centre, Information technology and human resources.

• 2004-05 saw the emergence of India as world’s 10th largest economy, By leveraging its country-wide network of branches, ”Express distribution system” and “Centralized distribution system”, Gatti was at the right place to take the advantage of the dynamic market that was actively sourcing its express distribution and supply chain management.

8

TechnologyTechnology

• Gatti website was inaugurated in 2002.It aimed at rendering better services to customers. Customer could track docket number,download information, lodge complaints online and track its status, check prices and transit time for shipment of any of Gati’s services, with the option to compare difference services on both front.

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

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

• GATI implemented web based ERP called gati@web, comprising GEMS (Gati Enterprise Management System), a custom-developed application, Oracle CRM and Oracle Financial. This is completely a centralized and on-line application. In order to connect to this application, 120 plus locations have been networked through lease lines and VSAT

• Implemented Lotus Notes suite of products, the company moved to `collaborative working’ through instant messing, sharing, presentations online, whiteboard and conferences on the web.

• Set up an alternative disaster recovery site, to supplement the company’s central server at its Head Office, GATI.

9

Human ResourcesHuman Resources: :

The Company has launched a series of innovative HR- development initiatives including e-HR, which gives complete emoluments and related information of every Gati’ite.

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

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…

10

OperationsOperations

GATI is an ISO 9001:2000 company, certified for design, marketing and providing 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 GATI Silver 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 up and 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, in association with local logistics agents.

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

11

It planned to acquire modernized, customized range of fleet of unique containers suited for Indian terrain 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.

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

The clientele of GATI included Hitachi, Pantaloons, Ford & Ranbaxy to name a few.

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

‘Foundation of any successful business is only as strong as degree of customer’s satisfaction’, therefore the main task was to understand customers 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 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.”

12

The series of innovative initiatives established GATI as the Logistic Leader in the 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 aided by 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 of the airline.

Tied up with Bhutan post & Maldives post to gain access to several destinations in these two countries. 13

ALPHONSO MANGO – was one of the customer delight initiative which had the fruit delivered at the customer’s doorstep by 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 by the consignors 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 Frost & Sullivan.

It setup a regional Office in Singapore in November 2004 to tap India centric business 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 direct service between Chennai & Yangon (Myanmar). This condensed the transit time & the company moved 55 countries from Yangon to Nagpur via Chennai in 14 days as against 35-45 days (via Singapore with Trans-shipment at Mumbai.)

14

March2005- a new office at Port Blair was setup to heighten operations in Chennai-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 well as niche value additions such 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.

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 the media, exhibitions & other promotional activities on the warehousing front.

15

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 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 1980’s 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) had enormous prospects for growth in local well as international markets.

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

16

Sector Revenue(Rs. In crore)

Market share (%)

Organized 1628 65

Semi Organized & Unorganized

618 25

EMS Speed post 247 10

Total 2493 100

17

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

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

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

ORGANIZED SECTOR ORGANIZED 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 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.

18

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 needed strong distribution network, latest technology, well trained staff, strong brand image & economies of scale. (given the operating leverage of industry was very high)

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

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.

19

OTHER MAJOR PLAYERSOTHER MAJOR PLAYERS

BLUE DARTBLUE DART:- :- is South Asia's premier courier, and integrated express package 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 warehouses at the 6 major metros of Bangalore,Chennai,Delhi,Mumbai, Kolkata and Hyderabad.

DHL offered customized solutions including express document shipping and supply 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.

20

21

DTDC COURIERS & CARGO LTD. (DTDCDTDC 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 and had four zonal offices at Delhi, Kolkata , Chennai and Mumbai. It had presence in over 80 locations across the country with strategically positioned regional and branch offices.

DTDC was the pioneer of franchisee system in the courier industry in India with over 3700 franchisees, delivering 321000 consignments across the nation every day.

With its widespread success in domestic domain, DTDC extended its service network internationally to over 240 worldwide destinations using international associates at prime gateways like USA, UK, Singapore, UAE, Nepal,Bhutan, Bangladesh, Sri Lanka and Hong Kong and hence also named as DTDC Worldwide Express Ltd .

As a part of business innovations, DTDC was venturing into the digital domain of internet shopping, the DTDC SHOPPING NET. With this concept anyone located at any corner of the country, could visit the DTDC site and log on to shopping link to choose from a wide choice of gift articles to be hand- delivered in India.

22

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

The objective of the company was of developing multi-modal logistics support for India's international and domestic containerized cargo and trade, by providing customers direct interaction and door- to –door services while capitalizing on the robust and more economical option of rail movement on the 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 to capture traffic at the production/consumption centres.

EMS Speed PostEMS Speed Post: EMS was the express arm of Post and Telegraph department in India which operated in association with other member countries of Universal Postal Union

EMS generated revenue of Rs 2.43 crores.

23

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

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

Semi Organized SectorSemi 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.

24

Un-Organized SectorUn-Organized Sector: of the express industry 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.

Products and Services of the Products and Services of the Express IndustryExpress 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:-

ProductsProducts:- :-

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.

25

26

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.

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 Gatti Income Statement of Gatti Ltd.Ltd.

27

Year

1996 Gati entered into strategic alliance with Indian airlines, on Jan 1st 1996. This association helped Gati take advantage of IA’s air network and deliver the shipments on time and intact and offer the customers a twin advantage of efficiency and cost effectiveness

1997 Gati introduced an innovative concept, 3rd Party Logistics solutions. The customer could outsource a readymade distribution channel. Keeping track of the changing needs of the customer and demands of the industry, Gati made the transition from 3PL to complete Logistics and Supply Chain Management. Gati believed in tailor making supply chain solutions that added value to customers business and enhanced profitability.

1999 Gati developed the infrastructure to enter the international Cargo Segment

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

2003 Gati took up a pioneering initiative in further strengthening its internal communication process with the latest ORACLE based software, in 2003.gati@web was designed to simplify the internal processes and communication 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

History of GrowthHistory of Growth

28

Strengths: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 nd warehousing solutions….

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

29

30

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

31

5 FORCES5 FORCES

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

33