GATI LTD.

Evolution of a Third Party

Logistics Organization

PGDIM 22, Sec B

Group 16
Jitendra Kastore

1502083

Kishan Kalaria 1502093

Krishnadas Dhake 1502095
Paras Mehta

1502125

Praharsh Shrivastava
1502130

Overview
Incorporated on 25-Apr-1989 with registered
office in Scunderabad
Aim is to redefine logistics industry
Gati is a leading domestic express cargo delivery
service with pan-India distribution network
Primary focus areas: integrated logistics solutions
through infra., IT Systems, tech solutions and
customization to meet customer needs
Offers multiple delivery options without
compromising on quality, reliability or speed

Features provided by Gati

Contract Logistics
Value added distribution
SME Logistics support
Business process outsourcing
Large fleet of trucks and ships
Strategic tie ups with railways and airlines
Temperature controlled vehicles with -20 deg C
to + 20 deg C capabilities
ISO 9001:2008 certified

Pillars of GATI Delivery Strategy

Customized solutions and nurturing
talent
Customer centric, simple and highly
reliable
Market leadership
Valuable organization
Encouraging innovation and
entrepreneurship

Gati Distribution Overview

Express Service

Premium Service

Special Services

Delivery in approx. 99.4%

districs in India

Handling 1200 MT Cargo

per month

For delivery of objects like

artworks

4.5 lk shipments booked

per month

24 x 7 operations and
customer service

Special offers for students

Assured space of shipments

in 28 sectors

GATI Supply Chain Flow Diagram

GATI Distribution Network

GATI - SWOT Analysis

Strengths

Weakness

Dominant player in surface cargo in

India
Re-engineered warehouses and
latest IT support

Multimodal connectivity

Opportunities

Expanding economy
Improvement in infrastructure
(roads and waterways)
Entry of multiple global retailers
Increasing investment (eg: VRL
Logistics IPO)

Insufficient global and regional

presence compared with
competitors
Courier segment is getting
neglected

Threats

Global logistics competitors

Space limitations
Competition from unorganized
sector

International Operation Countering

Global Threats
Expansion of operations in Asia Pacific Region and
SAARC Countries to strategically focus on India-centric
business
Tie-ups with Global Players leading to coverage in more
than 200 countries
Expediting customs clearance services for faster
overseas deliveries
Providing international delivery options in more than
500 pickup options in India

Conclusions
GATI must focus on developing relationship retailing
for retail business which will:
To maintain long tern bonds with customers
Improve retail experience
Will help in promoting the brand

Try to form a JV for tech transfer with a global supply

chain leader like Blue Dart or DHL
Using 3PL or 4PL for reducing management costs
GATI must try to reduce employee attrition by more
promotional strategies through HR support

Q1) The logistics business in India is expected to grow

steadily as an offshoot of 7 per cent projected GDP
growth. Gati has competition in every product/market
segment but none as a whole. How should Gati protect
itself from possible encroachment by competition?
Tie up with e-commerce companies such as Flipkart,
Amazon, Snapdeal, etc.
Introduce Express delivery and Overnight delivery
schemes
Emphasize on the extensive outreach of Gati and
publicize it
Cater to remote areas in the country such as the north
eastern states and Himalayan region
Develop warehousing capabilities especially in tier 2,3
and remote regions
Introduce transportation through waterways

Q2) Zipp is not moving. What can be done to revive

this? Employees are waiting to see some improvement
in Zipp, but when? To succeed, Zipp, needs
transformation to a process orientation. What would
take it to become a process based organization?
Create a separate team which would be responsible for delivery from
end to end. This meant a separate marketing team, focused operational
team, and dedicated customer care and monitoring team.
Some of the activities related to Zipp such as pick up, sorting, and
delivery can be outsourced.
Zipp was to use the Gati network wherever it was appropriate and
operate on its own network whenever necessary for purposes of speed.
For example, Zipp product would be in a separate bag. They would be
handled separately at the airport itself to reduce transit time.
Extensive market research to understand what new features may add
value to the product from the consumer point of view.
To add volume, Gati was planning to target a range of new customers
and hoped, based on the positive market feedback and image, to get
back the traditional Gati customers.
The product extensions of Zipp specifically targeted three major
segments: education(students), pharma companies, and e-commerce
business community.

Q3) Gati online ERP (called GEMS) is working well and

has stabilized. What should Gati do with this software?
Should it be sold to an IT firm or should Gati start a
consulting agency to implement this ERP in other
courier companies?
Gati is well known for its advanced IT infrastructure
GEMS is Gatis strength which differentiates it from its
competitors
In the west, many companies are known for their
proprietary IT capabilities especially in the logistics
domain such as UPS
These capabilities give an upper hand to such
companies over their competitors
So, Gati should not sell GEMS to direct competitors
operating in the same domain
They should rather make use of Indias high skill and
low cost IT capabilities to develop itself as a solution
provider
They may consider selling this service to large firms in
other domain that have logistics as their enabler

Singapore is quite encouraging. There is a similar

opportunity for small cargo business in the Middle East
and Europe. The fact that Gati has multimodal
transport operations is an advantage. All these would
ensure a solid
basis to grow both nationally and internationally. The
key issue is how fast this growth should be? What
would
this
growth?
Threat ofaccelerate
New Entrant [ LOW
] - high
entry barrier is the high fixed cost associated
with establishing the international transportation network. This includes hubs,
ground transportation vehicles, air fleet, etc.
Bargaining power of buyers [ HIGH] - buyers can turn to a shipping provider that
offer faster service, lower price, or service innovation with ease. This is especially
true for large corporations, like IBM, which ships in large volumes and can bargain
quantity discounts.
Bargaining power of suppliers [LOW] - Large shipping service provider can affect
prices of supplies, like packaging materials. This is because they buy in large
quantities and can turn to different suppliers easily.
Threat of substitute products [LOW] - There are not many substitutes to shipping.
In this day and age where many businesses have strong online presence and a
small physical presence, it would be difficult to find a substitute in delivering their
product
Rivalry Amongst Existing Firms[HIGH] - Established players in shipping service
industry complete rigorously for a market share, the company who responses first
to the constantly changing environment wins. Established companies have to
strive for continuous improvement in quality, lowering price, and innovation.
There is very low switching cost for consumers in this industry making rivalry
even more intense.

Q5) What are the internal (structure, people, system,

performance appraisal) requirements to move from an
activity-oriented organization to a solution provider
(logistics, 3PL, etc.)?
Structure
New composite teams should be formed that have representatives
from all the specializations
Should strengthen the marketing team to attract new projects

People
Should develop additional soft skills and management skills to serve
clients better
Team working capabilities need to be developed

System
IT systems should be further strengthened
Project management capabilities should be inculcated in the new
system

Performance appraisal
Additional compensation should be given to teams who receive
excellent feedback from the clients on their projects
Middle management should be appraised on the basis of client loyalty

Q6) The greatest strength of Gati is its ability to

experiment, willingness to face failures, and resilience
to overcome them. These are typically the
characteristics of an entrepreneur driven organization.
When and how Gati should graduate to a leadership
managed entity?
Gatis leadership should focus on enhancing the
companys strengths
In volatile markets it is good to have such
entrepreneurial capabilities to adapt to change
They should continue with such strategy in places
where they have less than desired market share
In the domains where they have decent market share,
they should operate as a leadership managed entity

Q7) Gatis business model has changed from

partnership to investment oriented. What are the risks
in the new model? What are the advantages?
Risks
Investments give future returns which are
unpredictable
Investments are guided by investees knowledge and
outlook
Advantages
Gati doesnt have to lock up its resources, only money
needs to be allocated
Gati now can more autonomous in taking decisions

Q8) Gati cares for its employees. It emotionally

supports them. What should it do to attract talent and
retain them? What kind of compensation would be
desirable? How to make Gati a most enjoyable
workplace?
Ownership
Insist on the
Highest
Standards
Having great
managers at the
Helm

Employees should be given freedom and responsibility to act

on behalf of the entire company, beyond just themselves or
their team
Leaders should have relentlessly high standards, which many
people may think are unreasonably high. It would motivate
the employees to give their best.
Middle managers matter. These are the individuals who will
be having daily contact with your employees and will directly
influence how they work day in, day out

Create an
Enviable Culture

Start by looking at what it is you bring to the table in terms of

potential to innovate and how you company can drive change

Focus on career
Development

The employees of today want to start with one company and

continue to grow with them. In order for them to advance,
they need to know that the company will invest in them and
continually up-train them,

THANK YOU