C o n f i d e n t i a l

“Caring for our customers’ precious objects with “Domino Discipline”,

we promise to stay “Ahead in reach” in service quality, wide network,
technology, automation and in being high calibre Gati’ites and
responsible business partners.”

VALUE ENGINEERING IN LOGISTICS

K. Ramachandran
12 October, 2006

C o n f i d e n t i a l

October 31, 2
2006
 Value Engineering In Logistics

Value engineering is a
systematic method to improve
the "value" of goods and services

C o n f i d e n t i a l
by using an examination of
function.
Value, as defined, is the ratio of
function to cost. Value can
therefore be increased by either
improving the function or
reducing the cost.
October 31, 3
2006

It is a primary tenet of value

engineering that basic functions
be preserved and not be reduced
C o n f i d e n t i a l

as a consequence of pursuing
value improvements.
Value Engineering techniques
can be applied to any product
process procedure system or
service in any kind of business
or economic activity.
October 31, 4
2006
 Value Engineering focuses on
those value characteristics which
are deemed most important from

C o n f i d e n t i a l
the customer point of view.
Value Engineering is a powerful
methodology for solving
problems and/or reducing costs
while maintaining or improving
performance and quality
requirements.
October 31, 5
2006

Value Engineering can achieve

impressive savings, much
greater than what is possible
C o n f i d e n t i a l

through conventional cost

reduction exercise even when
cost reduction is the objective of
the task.

October 31, 6
2006
 Benefits of Value Engineering

Improving quality management

C o n f i d e n t i a l
Improving resource efficiency
Simplifying procedures
Minimising paperwork
Lowering staff costs
Increasing procedural efficiency
October 31, 7
2006

Benefits of Value Engineering

Developing value attitudes in

staff
C o n f i d e n t i a l

Competing more successfully in

marketplace

October 31, 8
2006
 In Logistics You Can Term

C o n f i d e n t i a l
Value Engineering as

VALUE MANAGEMENT/VALUE
ADDITION

October 31, 9
2006

GATI Commitment

Single Window Solution

In-Country International
C o n f i d e n t i a l

Logistics Logistics
Future GATI Assured
DELIVERS
Growth Delivery
Technology All India
Support Reach
Inventory Management
October 31, 10
2006
 Value Addition By GATI

Why Gati?

C o n f i d e n t i a l
• Project Management approach
for all warehousing project.
• Team of Engineers to design &
build warehouse as per your
requirement.

October 31, 11
2006

• Creating State of Art Warehouse

with APL Racking & MHE at all
C o n f i d e n t i a l

location across the country.

• Availability of additional
warehouse space on shared
basis as per need basis in all
India location.
• Strong Financial strength to
invest in capital infrastructure.
October 31, 12
2006
 CASE STUDY
Customer : IFTEX
PETROCHEMICALS LTD.

C o n f i d e n t i a l
Product : FUEL ADDITIVES
Requirements :
Instant warehousing distribution
system
Pan India warehousing and
distribution
October 31, 13
2006

•Sales tax registration in 21 states

•Delivery to BPCL petrol stations
C o n f i d e n t i a l

•Delivery against cheque / draft

•Banking at local branches
•Monthly sales tax return
submission
•On-line inventory visibility
•Single window solution
•Optimum cost
October 31, 14
2006
 Solution Given

100 sft warehousing space (21 cities )

Dedicated manpower
Shared system support

C o n f i d e n t i a l
Communication support
Storage racks
Web based WMS system
Order processing
Returns management
All India co-ordinator at Mumbai
Daily MIS reporting
October 31, 15
2006

Primary and secondary distribution

Centralised billing facility
Track and trace of all
C o n f i d e n t i a l

consignments
Facility for sales staff seating at
locations
JIT delivery to OEM two wheeler
factory

October 31, 16
2006
 21

STATE
B
WAREHOUSE
P C
S
C
U
IFTEX
S

C o n f i d e n t i a l
FACTORY VAS L
ROHA T
(MAHARASTRA) Storage
O
O
M
Distribution Centre U
E
T
Cross Dock R
L
Receivi Put store pick VAS Consolid Ship
S
ng away ate E
Inventory Pick-pack
Mngment Kitting
Kiting
Break-bulk T
Packaging
S
Product flow

Information flow

October 31, 17
2006

Our Approach : Four Stages

Diagnostic
C o n f i d e n t i a l

• Carry out Supply Chain SWOT

• Identify areas that will provide
customers with maximum
value
• Through Questionnaire,
Interviews and site visits

October 31, 18
2006
 Proposed Supply Chain Model
• Process Mapping/ Detailed

C o n f i d e n t i a l
Audit
• New Model, Strategies and
Technologies evolved
• Process changes required
identified
• Logistics options explored
• Cost- benefit Analysis Done
October 31, 19
2006

Our Approach : Four Stages

(contd.)
Detailing
Teams formed to detail the
C o n f i d e n t i a l

approved model
Critical Process Mapping, Root-
causes and re-engineering of
processes
Comprehensive logistics and IT
Plan
October 31, 20
2006
 Our Approach : Four Stages
(contd.)
Implementation Plan, People
Issues, Cost-Benefit Analysis

C o n f i d e n t i a l
Implementation
Comprehensive Support
Steering Committee
Vendor Selection: Logistics and IT
Tracking of MOPs: Costs and
Benefits, Cycle Time
Control Systems
October 31, 21
2006

Unlike Other Logistics Service

Providers that simply focus on Cost
C o n f i d e n t i a l

Cutting and unwittingly end up in

Value Destruction
WE SHALL FIND WAYS TO TONE
UP YOUR SUPPLY CHAIN
Or If You have a Ready Solution, we
shall implement it straightaway.
The Next Step…..

October 31, 22
2006
 GATI Logistics Package

Provides you with a ready-to-

move distribution network;

C o n f i d e n t i a l
having storage locations and
distribution channels:

No big investment
Standardised execution at all
locations
Locate your inventory closer to
your customer
October 31, 23
2006

Expand into new markets

C o n f i d e n t i a l

without a large capital investment

Available shelf space at 200
locations
Seasonally in distribution
requirements met
October 31, 24
2006
 “MANTRA” For Survival/Growth
‘FUTURE INVENTION’
(a)Ongoing Practice of anticipating :
(i) Customer Needs &

C o n f i d e n t i a l
(ii) Competitor Moves

(b)Examine Traditional Business

Cycles & Supply Chains

(c)Eliminate Processes that do not add

value to products or market position
October 31, 25
2006

To conclude

SCM moves from Back room To

C o n f i d e n t i a l

Board room

Current Business Environment

necessitate streamlining of
processes, use of IT, ERP & SCM
tools/solutions

October 31, 26
2006
 India Inc can save upto $ 5 bn.
by 10% reduction in SC costs

C o n f i d e n t i a l
from the present $ 50 bn. (Rs.
2,35,000 crores)
(13% of GDP, highest in the
world)

Can we can help you to get

your share of this big cake ?

October 31, 27
2006

C o n f i d e n t i a l

Welcome to
Ahead In Reach

THANK YOU
October 31, 28
2006