Gati Limited: Evolution of a

Third Party Logistics Organization

Submitted by: Group 17

Abhiron Bhattacharya(1402001)
Amrik Chatterjee(1402011)
Anshul Chaudhary(1402021)
Aruj Kapoor(1402026)

About GATI
Gati started its operations as a door-to-door cargo company, a
division of Transport Corporation of India (TCI) in 1989.
It was established with an aim to redefine the logistics industry
with time bound, point to point delivery, premium priced
cargo management service.
More priority was given to timely delivery (to ensure customer
satisfaction) than the cost of delivery reflected by vehicle
underutilization with the vision Service first, cost

next.

It is a leading domestic express cargo company with a panIndia distribution network offering multi-modal connectivity
(road, rail, air and sea) and end-to-end logistics solutions.

About GATI (Contd..)

The focus is on integrated logistics solutions. Gati's transport
infrastructure, IT systems, cutting - edge technology solutions
and an intensive knowledge of India allows it to tailor its
products to meet every customers' unique needs.

The greatest strength of Gati is its ability to

experiment, willingness to face failures and
resilience to overcome them.

Business Strategy
Front-end entrepreneurial delivery set-up business with
members of this set-up known as Gati Associates (GAs).
Door to door facilities
Use promotional activities
Time bound delivery
Using a third party 3PL and 4PL for reducing a cost
Strategic relationships with airlines and railways to use
their cargo capacity to deliver products and services.
HR policies to cultivate long term employee relationship,
organizational commitment, win-win situation,
multiskilling of employees

After Restructuring
Every division and region was expected to set its targets
(in consultation with the corporate office)
Region should manage their funds (making each region
as a cost center)
Each Region can resolve structural issues; modify
procedures, refund customer (claim) settlement, and
damages. Virtually they are independent subject to
broad policy issues.
Regions are now divided based on intensity of activity.
The new system is driven by performance measures and
empowerment. Responsibilities have been redefined and
refocused, and reporting relationships have changed.

Protection from possible encroachment by

competition
Provide consulting service and end-to-end solution to
customer
Partnership with other brokers to ensure reverse
materials flow which will consolidate financial position
by increasing revenue
Presence in SAARC countries will help it leverage the
opportunity with availability of free trade zone
Long term contracts with customers to ensure financial
stability in case of economic slowdown
Partnership with automobile companies and leverage
their empty truck load on their reverse movement
Venture into packers and movers market for intra/inter
city transportation

Zipp revival plan

Partner with MNCs and leverage the existing
GATI infrastructure for inter-office movement
Integrate existing IT infrastructure Gati@Web
with GATI Zipp to improve the accuracy of the
delivery and match it with the world standard
Partner with e-commerce groceries such as
bigbasket.com and utilize existing cold chain of
GATI
Open service outlets/customer relation centers
in major universities and colleges

GEMS future strategy

GATI should start a consulting agency to
implement this ERP in other courier companies
Continuous source of income for GATI
Grow and sell the solution to the market internationally, not
just India
GATI can gain knowledge from other competitors issues
and gain advantage in their future course of action

Growth in International Operation

The growth might not be as fast due to the following
reasons:

Flat growth for forwarders

Pessimism about growth opportunities in air freight
Ongoing overcapacity in ocean freight
Risk of cheap capacity

But, the factors for acceleration are

Flexible business model
Deep expertise in key customer industries
Using IT to maintain 360-degree control

Transformation from activity-oriented org.

to a solution provider (logistics, 3PL, etc.)
Rather than just communicating, manufacturing
and distribution functions need to be plugged
into what's going on with sales and marketing
Performance Appraisal System should be linked
it to Business performance.
Promotion policy should be transparent and
sustainable to career development plan.
Cross-functional teams should function with a
holistic view, work in tandom

Transformation to a leadership
managed entity
Hire more management graduates in middle
level management
Standardize the processes to minimize the risks
involved in decision making
Developing a Center of Excellence which will
take care of innovation and mitigate the risk
based on proper analysis and planning

Investment Oriented Business Model

Risks
Investors typically expect to receive some control over the business in
exchange for their investment, based on the agreement
Attracting mere investment cannot bring business functions in-house
and add capabilities and skills to the business team
Advantages
The interest on an investor loan is deductible as a standard business
expense. It comes right off the top line of your business return.
Investors don't receive managerial control.
Investor money (equity capital) is not a loan and isn't paid back if the
business fails. Professional investors weigh risk versus reward carefully.

Employee Retention

Work life balance

Compensation at par with industry leaders
Flexi timing
Balance of male female ratio
Social gathering/festival celebrations
Stock options
Job rotation