Mahendra Agarwal

Founder & CEO

GATI LIMITED
Evolution of a Third Party Logistics
Organization
 ISO 9001:2008 CERTIFIED
CUSTOMIZED SOLUTIONS
ABOUT THE COMPANY CUSTOMER CENTRIC
ENCOURAGING INNOVATION AND
ENTREPRENEURSHIP
 18 EXPRESS DISTRIBUTION CENTERS
PORTFOLIO 12 RAIL TRANSIT CENTERS
33 AIR TRANSIT CENTERS
99% REACH IN INDIA
GATI
DISTRIBUTION
NETWORK
CASE ANALYSIS
HOW SHOULD GATI PROTECT ITSELF FROM POSSIBLE ENCROACHMENT BY
COMPETITION?

Tie up with e-commerce companies such as Flipkart, Amazon, Snapdeal,

etc. (B2B services)
Domestic and global SAARC
Provision of overnight delivery scheme specially for the Zipp vertical of
the company
Customized as per customer segments
Develop warehousing capabilities especially in tier 2,3 and remote
regions
Simultaneously should also concentrate on the functional drivers apart
from the logistical drivers
Strengthens its stronghold by creating barrier so as no competitor shall
be able to enter. (Express distribution and cold chain solutions of Gati
have a relatively high market share in Asian markets)
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.
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 Gati’s 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 India’s 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
GATI’S EXPERIENCE IN INTERNATIONAL OPERATIONS IN 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 ISSU E IS
HOW FAST THIS GROWTH SHOULD BE? WHAT WOULD ACCELERATE THIS GROWTH?
The JV with Kintetsu World Express redefines our roadmap linking to
and from the international business
Rural Penetration – With the FDI in retail controversy resolved, more
and more foreign investors will ook into India as a potential market.
GATI can quickly leverage this opportunity as its competitive
advantage if it has rural infrastructure in place
Reverse Logistics – specially in the e-commerce market has a huge
untapped potential. Every year 4% to 6% of all retail purchases are
returned, costing the industry about $40 billion per year.
WHAT ARE THE INTERNAL (STRUCTURE, PEOPLE, SYSTEM PERFORMANCE
APPRAISAL) REQUIREMENTS TO MOVE FROM AN ACTIVITY-ORIENTED
ORGANIZATION 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
Sync.
WHEN AND HOW GATI SHOULD GRADUATE TO A LEADERSHIP
MANAGED ENTITY FROM ENTREPRENEUR-DRIVEN ORGANIZATION?
In the ever competitive market scenario it is good to continue as an
entrepreneur driven organization as this creates new innovations and ideas (e-
commerce, Zipp)
Leadership managed can be also part which essentially concentrates on
optimization of existing businesses (speed delivery, warehousing), efficient and
effective functioning of the organization
 asd
GATI’S 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 doesn’t have to lock up its resources, only money needs to be
allocated
Gati now can more autonomous in taking decisions
 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?
• Employees should be given freedom and responsibility to
Ownership act on behalf of the entire company, beyond just
themselves or their team

Insist on the Highest • Leaders should have relentlessly high standards. It would
Standards motivate the employees to give their best.

Having great • Middle managers matter. These are the individuals who
will be having daily contact with your employees and will
managers at the Helm directly influence how they work day in, day out

Create an Enviable • Start by looking at what it is you bring to the table in

terms of potential to innovate and how you company can
Culture drive change

Focus on career • Invest in the employees through training sessions,

knowledge sharing sessions thereby giving them the feel
Development of career growth thro’ opportunities within the company
CONCLUSION
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
https://www.gati.com/wp-content/uploads/2017/12/Gati-Gati-KWE-Corporate-Presentation-2017.pdf

http://www.gatikwe.com/our-services/express-distribution/

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