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SUMMER PROJECT CERTIFICATE

This is to certify that Mr. Sayantan Das, Roll No. 16DM201, a student of
PGDM 2016-18 has worked on a summer project titled: Network
Restructuring Based on GST at Gati-KWE after Trimester-III in partial
fulfilment of the requirement for the Post Graduate Diploma in
Management Programme.

Date: Prof. Rajeev Sharma

BIMTECH Seal
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ACKNOWLEDGEMENT

The sense of contentment and elation that accompanies the successful


completion of any task would be incomplete without the mention of
people whose constant guidance and encouragement made the
endeavour possible.

First of all, I would like to express my gratitude and sincere thanks to


Gati-KWE for giving me the opportunity to do my summer internship in
their prestigious organization from 10th April, 2017 to 5th June, 2017.

I take this opportunity to thank Mr. Nikhilendu Sekhar (Head of Supply


Chain Operations - North) for extending his guidance and assistance
which enabled me to overcome the obstacles during the project.

I would also like to specially thank Mr. Sanil Kumar (Head EDC Sales),
Mr. Amarendra Singh (North Zonal Network Manager), Mr. Chitij
Mayank (North Zonal Network Cord), Mr. Frederick Lakra (HR) for their
guidance and valuable inputs throughout the course of the project.

I am also grateful to Prof. Rajeev Sharma (Academic Mentor) without


whose support and meticulous improvement, this project would not have
been possible.
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LETTER OF TRANSMITTAL
5th June, 2017

Mr. Nikhilendu Sekhar,

Head of Supply Chain Operations,

Gati-KWE

Dear Sir,

Re: Summer Project Report

Attached herewith is a copy of my summer project report titled Network


Restructuring Based on GST which I am submitting in order to mark the
completion of the summer project at your esteemed organization. This
report was prepared by me using the best of practices and summarizes
the work performed on the project and is being submitted in partial
fulfilment of the requirements for the award of Diploma.

I would like to mention that the overall experience with the organization
was very good and helped me to know how a work is carried out in a
Logistics Industry. I feel honoured that I got an opportunity to work with
Gati-KWE, a company of great repute.

I hope I did justice to the project and added some value to the
organization. Suggestions regarding the same would be truly appreciated.

Yours sincerely,

Sayantan Das
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Letter of Authorization

I, Sayantan Das, a student of Birla Institute of Management And


Technology (BIMTECH), hereby declare that I have worked on a project
titled Network Restructuring Based on GST during my summer
internship at Gati-KWE, in partial fulfilment of the requirement for the
Post Graduate Diploma in Management.

I guarantee/underwrite my research work to be authentic and original to


the best of my knowledge in all respects of the process carried out during
the project tenure.

My learning experience at Gati-KWE, under the guidance of Mr.


Nikhilendu Sekhar and Prof. Rajeev Sharma, has been truly enriching.

5th June, 2017 Sayantan Das


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CONTENTS
Executive Summary ....................................................................................... 6
Overview of India Logistic Industry & its GST Impact .................................... 7
How GST will benefit the India Logistic Industry? ....................................... 12
Representation of GST and Credit Flow ...................................................... 14
Local Supply of Services ........................................................................ 14
Interstate Supply of Services ................................................................. 14
Supply Chain considerations under the GST Regime ................................... 15
Overview of GATI ........................................................................................ 16
Company Profile.................................................................................... 16
Vision of the Company .......................................................................... 16
Process Flowchart ................................................................................. 17
OU List (Operating Unit) ........................................................................ 19
Network Operation Process .................................................................. 20
Shop Floor Automation (SFA) ................................................................ 20
Terminologies: ............................................................................................ 21
Recommendations ...................................................................................... 21
1. Route Related Issues ......................................................................... 21
2. Pincode Issues ................................................................................... 24
3. Difference in Distance as recorded by VTS (Vehicle Tracking System)
data and as recorded in GEMS (Gati Enterprise Management System) 25
4. Route Restructuring .......................................................................... 27
5. Need of a Proper Automated Framework ......................................... 28
6. Observations of DELH Hub Visit ........................................................ 30
7. Centralized Accounting ..................................................................... 31
8. Decrease Pricing Structure ................................................................ 32
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Executive Summary

Objective:

Restructuring of Gati Network based on the implementation of GST

Project Approach:

Study the pros and cons of GST and how will it affect the Indian
Logistics Industry

Solve the important issues in Route Restructuring like Capacity


Utilization, On-time Arrival, On-time Departure and Market Vehicle
Hiring

Modifications reqd. in maintaining proper Hub and Spoke Model

Impact on the central warehouses

Impact on Accounting (CGST, SGST and IGST Model)

Pincode Issues
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Overview of India Logistic Industry & its GST Impact

The logistics industry in India was estimated to be worth USD 130 billion
in 2013 and has been growing rapidly ever since. While the logistics
sector could be among the primary bottlenecks in driving economic
growth, it will also act as a catalyst to realising India's 'manufacturing
dream over the next decade.
Owing to poor road conditions and check-post delays, trucks in India
travel for 20 days a month on an average compared to 25 days in
developing countries. Also, avg. speed of a truck on Indian roads is 30
km/hr. This is according to a joint study by Transport Corporation of India
(TCI) and IIM-Calcutta.
So, a truck in India can cover only 250-300 km a day compared to 700-800
km in developed countries such as the US and Europe.
Survey data show that on-road stoppage expenses (such as
toll/RTO/ST/octroi) including unofficial payments made to Government
officials and traffic police, amount to, on an average, 15 per cent of total
trip expenses.
According to a Ministry of Road Transport and Highways (MORTH) study,
an average truck spends nearly 16 per cent of the time at interstate
checkpoints and city entry points, as state authorities track and inspect
goods, and apply inter-state sales taxes. As 65 per cent of the freight
moves by road, this delays the movement of goods resulting in delayed
deliveries and increased product cost to the end customer.
India s tax will comprise four basic rates: 5 percent, 12 percent, 18
percent and 28 percent. While officials are yet to reveal final details of
what will fall into each bracket, Finance Minister Arun Jaitley has said 50
percent of items in the retail inflation basket won t be taxed to protect
consumers.
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Other mass consumption items like spices are likely to attract a 5 percent
rate while processed foods will be charged 12 percent. Household goods
like soaps, toothpaste, and smartphones are likely to be in the 18 percent
bracket while other durable goods such as air conditioners will attract 28
percent duties. Luxury goods such as tobacco will be taxed at a higher
rate.

The Indian logistic industry is expected to grow steadily, led by e-


commerce penetration, economy revival, proposed GST implementation
and government initiatives like Make in India , National Integrated
Logistic Policy, 100% FDI in warehouses, food storage facilities, etc.
Transportation alone holds 60% share of the logistic industry and rest
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40% is contributed by warehousing, freight forwarding, value-added


logistics, etc.

The transportation which contributes maximum to the whole pie of


logistic sector comprises various means such as road, rail, air and water.
India being emerging country with prime dependency upon
transportation through land, i.e. through road and rail together which
contributes about 60% followed by Warehousing 24.5% compromising
industrial and agricultural storage.

Distribution of Logistic Network

Furthermore, with respect to India s GDP growth the logistics industry is


expected to grow at 1-1.5x as logistics business is directly correlated with
economic activity. Considering the aforementioned aspect, the Indian
logistic industry is projected to grow at CAGR of 15-20% during
FY16~FY20. Despite these reasons, the logistic sector in India remains
entangled in several complexities which primarily includes higher logistic
costs and complex tax structure. The implementation of Goods and
Service Tax (GST) bill is expected to trim the logistic costs up to 20% from
the current levels; however, the persisting high logistic costs could only
be resolved by development of logistics infrastructure. According to a
recent survey, if the waiting time of trucks is reduced by 50%, it would
add 8% additional trucks on the highway.
P a g e | 10

The biggest driver of inefficiency is the complex tax structure, as given


below:
P a g e | 11

How GST will benefit the India Logistic Industry?


Goods and service tax is a colligation of multiple taxes levied by both
Central (i.e, excise duty, countervailing duty and service tax) and state
(Value-added tax, Octroi and entry tax, luxury tax, etc) governments
when an end-user purchases goods or services. It means same level of
taxation would be charged on a specific product or service across the
entire country irrespective of being manufactured and sold in different
states. The planned dual GST model (central GST and state GST) proposes
to replace around 29 state and federal taxes and tariffs for a single tax at
the point of sale. The current combined Centre and State statutory rate
for most goods works out to be 26.5% (Cenvat of 14%, and VAT of 12.5%),
whereas post GST implementation the same is expected to reduce to
standard rate of about 18-21% which will be levied on most goods and all
services.

CGST: Central Goods & Service Tax


SGST: State Goods & Service Tax
CVD: Countervailing Duty
SAD: Special Additional Duty

GST will replace almost all indirect taxes, i.e. Excise Duty, Service Tax,
Value Added Taxes (VAT), Central Sales Tax (CST) and Entry Taxes;
however Basic Customs Duty (BCD), taxes on specified petroleum
products (for a specified period), alcohol for human consumption,
tobacco products, electricity and real estate will continue to apply. Local
P a g e | 12

supply of goods and services will be taxed by the Centre (CGST) and the
states (SGST). Interstate sales (including stock transfers) and imports will
attract an integrated GST (IGST) collected by the central government. This
tax will then be distributed between the central and the destination state
governments.
GST will also contribute to the Make in India and ease of doing
business initiatives of the government.

Source: Care Ratings


P a g e | 13

Deliberating on holistic view the implementation of GST would help the


logistic industry in improving the operational efficiency thus cutting the
logistic cost and expanding the business prospects through consolidation
of logistic players.

Representation of GST and Credit Flow

Local Supply of Services

Interstate Supply of Services

Source: pwc
P a g e | 14

Supply Chain considerations under the GST Regime


Supply chain design will be based on demand management and logistical
benefits rather than tax costs.

Source: pwc
P a g e | 15

Overview of GATI

Company Profile
Gati, founded in 1989, is India s pioneer in Express Distribution and
supply chain solutions, with a strong presence in Asia Pacific region and
SAARC countries, along with an extensive network across India providing
timely deliveries to 19000 pincodes, covering 672 out of 676 districts in
India.
Gati s integrated and IT backed multi modal network of air, road and rail
coupled with pan India warehousing facilities across India, allows us to
provide customized supply chain solutions to customers across
industries.
6000+ young workforce
3100+ Gati Business Associates
608+ Offices
4000+ Business Partners
5000+ Fleet Size
2400+ E-com delivery fleet
200+ Reefer Trucks
3 Mn+ warehousing capacity with e-fulfilment centres at strategic
locations

Vision of the Company


Be a globally preferred provider of India-centric Supply Chain
Services and Solutions and a leader in the Asia Pacific region.
Delight customers with quality service by setting new trends
through innovation and technology.
Be the most preferred organization for all stakeholders.
Be a responsible corporate citizen with unwavering commitment to
environmental protection and conservation.
P a g e | 16

Process Flowchart

Booking at Gati Customer pays online or


Website or at the offline depending on the
Customer End weight of the material

Booking received at
the nearest OU

Gati Associate picks In GKE (B2B), GA charges


the material & brings according to the basic
it to the nearest OU material amount
whereas in ECOM, GA
GEMS (Gati Enterprise
Management System) is
updated with the
required information

The material is
distinguished &
consolidated
according to the
destination OU

Enough material FALSE Consignments details


to be sent are checked & then
directly sent to the nearby HUB

TRUE
Material consolidated
Consignment details are in the HUB &sent to
checked, loaded in the the destination HUB
vehicle & then sent to the
destination HUB
P a g e | 17

Vehicle is decided
according to the Route

At the time of vehicle being


loaded, the consignments
If the vehicle is seen
and its details are uploaded stopped at a certain place
in between the journey,
then the OCC Team calls
The vehicle is then the driver of the vehicle, if
tracked by VTS (by not reachable, then the
Operational Control designated person calls the
Centre Team) vendor & the nearby OU,
&b asks the reason behind
the halt, & updates it in the
Material reaches the GEMS.
destination HUB

Material is sent to the OU nearest


to the exact destination

Then the material is delivered


by the Gati Concerned Person to
the Customer to whom it should
be delivered
P a g e | 18

OU List (Operating Unit)

Attached is the sheet containing all the OUs in North Zone.

EDC: Express Distribution Centre


GDW: Gati Distribution Warehouse
CCCO: Depot
CCCF: Franchise
STC: Surface Transit Centre
ATC: Air Transit Centre
RTC: Rail Transit Centre
P a g e | 19

Network Operation Process

Load Analysis Analyse the amount of load


Plan a designated route for the trip
Route Planning
Plan a vehicle which can handle the amt
Vehicle Planning of load & can run in the specific route

Analyse the route, how much time it will


Route path & Schedule take to cover the distance, and what will
be the departure & arrival time
Survey Trial trip Do a trial trip & check the time which
was mentioned earlier is matched or
Start Operating the Route there is a considerable difference. If
there is, then try to find a reason &
Performance Monitoring minimize the issue
Analyse the performance of the route
Measure OTD/OTA, Analyse the OTD/OTA, CU% & Cost/Kg
Capacity Utilization & for the trip & try to minimize error, if any
Cost/Kg

Shop Floor Automation (SFA)


30C
First Scan
Load Scan
Unload Scan
Gate Out Scan
10C
Gate In Scan
P a g e | 20

Terminologies:
Curb Weight- Total wt. of the vehicle with standard equipment,
with all necessary operating consumables like oil, fuel, coolant while
not loaded with passengers or cargo
Unladen Weight- Curb Weight without fluid or any other additional
equipment
Dry Weight- It does not include diesel or any other fuel, coolant,
engine oil, brake fluid. It depends upon techniques how it is tested
by the manufacturer
Gross Vehicle Weight- The maximum the vehicle can weigh. It
includes curb weight, passengers and material weight
Payload- The maximum load the vehicle can carry, as specified by
the manufacturer. It includes passengers and material weight
Container Weight- Weight of an empty container

Recommendations

1. Route Related Issues

Lesser Capacity Utilization Higher Cost/Kg

Scenario: After GST is implemented, we need to have more full


truck loads. But as observed, there are number of routes, which are
having very less capacity utilization as less as around 40%.
Packaging is much more than the actual capacity of the material,
hence the 40% capacity amount to around 70% capacity utilization.
But still a lot can be done to increase the capacity.
P a g e | 21

Hiring a Market Vehicle

Scenario: In many of the routes, we sometimes see that vendor is


not able to provide a vehicle, and these creates a lot of hindrance,
resulting in hiring a market vehicle, having rate as high as 1.5 times
the rate of the vendor vehicle.
Also, we do not have any vendor providing vehicles for certain
routes, so we need market vehicle every time. And this is even true
for some express/service routes.
For the express/service route market vehicle, sometimes we have a
VTS (Vehicle Tracking System) installed, but that it isn t there in the
case of a feeder route. Hence it causes a delay in transportation.

On-Time Arrival/ On-Time Departure Issues

Scenario: Sometimes loading and unloading gets delayed because


some or the problem, and hence they are updated late. Sometimes,
there are less workers for unloading, as other workers are busy
elsewhere.
Sometimes trucks are late by 15-18 hours [as I had been informed
by the
OCC Team] and the truck drivers as well as the vendors give fake
excuses.
Recently, a material took 8 transit days to reach Guwahati from
Bombay, via Calcutta.
The reason behind the issue cannot be justified in front of the
customers, as they are paying for the material and they want their
shipments to be delivered on time.

In the Vendor Service Agreement, it is clearly mentioned that the


vendor would be penalized if the shipment is not delivered to the
customer on time. But generally it would be hard to find this
scenario.
I even found out that some vendors telling that if Gati would
penalize them, they would break the contract with Gati, and that is
why they are generally given only a warning.
P a g e | 22

Gati, being a premier logistics company, should not have such


discrepancies. Some of the data are as below:

Capacity Utilization
Route (in %) Payload
No. Route March April OTA OTD Cost/Kg (in Kg)
DELM-
N142 DELS 47.375 35.15 82 71 0.8125 6650
DELM-
N140 FBD 41.11 38.54 79 75 1.08 5500
DELM-
T108 NOI 39.1 32 69 85 0.83 7500
DELM-
T541 SPT 25.45 18.7 40 64 1.6 6860
DELN-
T331 DELH 53.75 39.3 90 84 0.84 8400
T343 FBD-DEL 16.01 11.13 94 62 4 2720
NDAO-
T067 DEL 36.11 28.13 43 55 1.5 2710
NDAO-
T527 FZB 53.08 46.13 50 70 1.8 7420
NDAO-
T490 AGR 66.95 75.11 64 64 1.1 8210
NDAO-
T074 AMC 66.49 68.55 95 100 1.15 7300
NDAO-
T078 SNP 42.32 41.56 20 32 1.32 7450
DELH-
T439 DELW 31.72 30.75 90 95 1.1 9010

Recommendations:

a. Vehicles with lesser payload capacity can be used for certain


routes.

b. Related routes can be merged to increase capacity.

c. We can change the vendor for certain routes. Or else we can also
have new vendors. Firstly, we need to give them certain routes to
run, and then if we are happy with them, we can ask them for more
vehicles, and ask them to run for more routes.
P a g e | 23

d. We can increase our number of company vehicles for these types


of issues.

e. There are as many as 4 routes running per day between Delhi


HUB and Ambala HUB.
If I can assume 4 trucks (24 *8*8) of average 70% capacity is run
every day.
(Including both side routes).
Each truck having a payload of 8 tonnes.
Amount of material transferred everyday= (70/100)*8*4= 22.4
tonnes
which can be easily transferred in 3 trucks
There are many other routes too, which needs to be analysed like
this.

f. We can also have even lesser number of 32-feet trucks (having


payload capacity of 15 tonnes) or 40-feet trucks (having payload
capacity of 20 tonnes).

g. For routes having higher volumetric wt. than actual wt. or


materials having high packaging, I would suggest to use Single-Axle
High-Cube Trucks for Hub to Hub Transport.

h. Size of HUBs can be increased as customer base would be likely


to increase after the enablement of GST.
[According to a study by Care Ratings, GST will enable the logistics
sector to grow at a CAGR of 15-20% till 2020-21]

2. Pincode Issues
- Wrong pincode needs to be identified as early as possible and rectified
before the implementation of GST.
- I have worked with the Network Team and asked certain OU Managers
to share their WhatsApp location and using their latitude and longitude
to find their accurate pincode. I have identified certain wrong pin codes.
P a g e | 24

- Changes in pincode of some of the HUBs:


Major HUBs Pincode as provided Accurate Pincode
in GEMS
AMCO HUB (Ambala) 136135 133102
NDAO HUB (Noida) 201301 201307
DELH HUB (Delhi) 123503 122506

- Changing this pincodes accurately would save the company from


incurring extra costs. And many other pincodes also needs to be
rechecked.
- Another issue I have noticed is that some pincodes of OUs falls under
(or) covers area from two states together. They need to be remapped.
For ex. Bahadurgarh OU covers certain parts of Delhi as well as certain
parts of Haryana.

3. Difference in Distance as recorded by VTS (Vehicle


Tracking System) data and as recorded in GEMS (Gati
Enterprise Management System)
- I was provided the distance covered in each route according to the VTS
data (Vehicle Tracker). I noted several differences in distance from the
data which was recorded in GEMS Directory [in Route Master] in Gati
Portal.
- It means that vehicle has travelled less distance as to be covered
usually, and has reached the required distance.
But the vehicle vendors charge according to the GEMS distance.
It means that the vendors charge more money than what they are
supposed to charge. I have listed out all the routes, which have more
than 10% deviation:
P a g e | 25

Start AS Per VTS AS Per Difference in %


LANE End Location
Location (AVG.) GEMS KM Change
DELM-DELH,DELH-
DELM DELH 38 65 28 43%
DELM
DELP-DELH,DELH-
DELH DELP 42 73 31 42%
DELP
RKT-LKOD,LKOD-RKT RKT LKOD 277 477 200 42%
DELH-BDG,DELH-BDG DELH BDG 50 86 36 42%
DELH-PLW DELH PLW 68 110 42 38%
DELN-DELH,DELH-
DELN DELH 56 85 30 35%
DELN
LKO-LKOD,LKOD-LKO LKO LKOD 16 24 8 32%
GZB-NDAO,NDAO-GZB GZB NDAO 15 19 7 32%
FBD-DELH,DELH-FBD FBD DELH 59 88 24 28%
DELC-DELH,DELH-
DELC DELH 56 75 20 27%
DELC
DELH-NDAO,NDAO-
DELH NDAO 156 171 45 26%
DELH
BWL-DELH,DELH-BWL BWL DELH 43 57 14 25%
DELG-DELH,DELH-
DELG DELH 68 89 21 24%
DELG
DELX-DELH,DELH-
DELX DELH 69 86 19 23%
DELX
DHR-DELH,DELH-DHR DHR DELH 26 35 7 21%
JAIO-DELH,DELH-JAIO JAIO DELH 225 220 62 21%
LKOD-KNP,KNP-LKOD LKOD KNP 74 83 16 19%
AMCO-LKOD AMCO LKOD 667 813 144 18%
DELS-DELH,DELH-
DELS DELH 58 70 12 17%
DELS
AGR-NDAO,NDAO-AGR AGR NDAO 187 225 38 17%
ALD-LKOD,LKOD-ALD ALD LKOD 196 235 39 17%
DELH-GGN,GGN-DELH DELH GGN 29 35 6 16%
DELH-NJF,NJF-DELH DELH NJF 50 80 12 16%
SLQ-AMCO SLQ AMCO 131 158 22 14%
DED-AMCO DED AMCO 156 180 24 14%
AMCO-DEL AMCO DEL 204 236 32 13%
NDAO-MAAO NDAO MAAO 2367 2722 355 13%
AMC-DED AMC DED 159 181 22 12%
NDAO-LKOD NDAO LKOD 462 525 63 12%
DELH-SPT,SPT-DELH DELH SPT 109 121 14 12%
JAIO-UDR,UDR-JAIO JAIO UDR 413 432 50 11%
RTK-DELH,RTK-DELH RTK DELH 75 85 10 11%
ALW-JAIO ALW JAIO 170 190 20 11%
DELH-SGN DELH SGN 398 445 48 11%

Reason: There might have new roads built, and the distance given was
pretty long ago.
Vendors charge according to the distance mentioned in GEMS directory.
So, we can save huge cost if vendors follow the actual distance as
covered. And vendors cannot deny the excel file (Tracked distance).So, it
is important to hereby solve this major issue.
This is one of the major changes that need to be implemented before
GST.
P a g e | 26

4. Route Restructuring
- As it is being said that a Logistics Company needs to have proper HUB
and SPOKE Model, where the spokes nearest to the HUB needs to be
connected.
But this was not possible as certain OUs (Operating Unit) were in
different states than their nearest HUBs.
So, there is an inappropriate alignment in Hub and Spoke Connect.
Because of GST, we can have a proper HUB and SPOKE Model once again.
- In the table listed below, I have mentioned the OU to HUB distance
[from where it was connected earlier, and from where it should be
connected].
- Here is a list of OUs which are closer from one HUB but routing is done
through another HUB, but after implementation of GST, we can do
proper routing by connecting the OUs form the most nearby HUB before
sending for express/service routes.
[GDW refers to major warehouse, CCCO refers to Depot, and CCCF refers
to Franchise]
DELS (GDW),
DELN (GDW),
DELC, DELG, DELU, DELX, SPT (CCCO)
FBD (GDW),
PLW, BBG (CCCF)
WZP (CCCF of GGN GDW)

These OUs are connected with DELH HUB, but are nearer to NDAO
HUB.

NMR, PLN, JJN (CCCF for JAIC)

These OUs are connected with JAIO HUB, but are nearer to DELH
HUB.
P a g e | 27

DELH NDAO AMCO LKOD JAIO


STC Pin Distance saved (in KMs)
122506 201307 133102 226401 302026
Codes
GDW DELN 110015 50 34.5 15.50
DELC 110002 61.7 20.5 41.20
DELG 110042 60 39.3 20.70
CCCO DELU 110059 43 40.8 2.20
DELX 110092 66.2 16.7 49.50
SPT 131028 78.3 54.1 24.20
GDW DELS 110020 63.3 16 47.30
GDW FBD 121001 64 20 44.00
PLW 121102 91.1 70.6 20.50
CCCF
BBG 121004 73.2 19.5 53.70
CCCF WZP 123505 65.6 282 65.60
NMR 301705 88.7 183 94.3
CCCF PLN 333031 155 222 67
JJN 331025 193 213 20
565.70

[We can save as much as 566 km according to this re-routing]

[One of the routing which had been done some time back was:
Dehradun (DED- GDW), and its CCCOs and CCCFs are under Noida
HUB as per the structure but these OUs are connected from Ambala
(AMCO) HUB]

5. Need of a Proper Automated Framework


- In GEMS, data is being entered or searched or updated manually.
- First of all, certain areas needs to be automated as it would save time
for employees.
- Secondly, a more user-friendly User Interface is needed.
- I have conducted a survey including some GDW Managers, Network
Managers, Quality Manager [a total of 10 persons in Gati]
Survey Result shows that 8 out of 10 persons asked have said that GEMS
needs to be updated.
P a g e | 28

These are the 3 issues identified:


A. Time Consuming
B. System gets hanged very often
C. Insertion/ Updating Issue
The survey result goes as follows:

Analysis
4

0
A B C

- Also there is a huge change in technology; companies are moving onto


BigData and Analytics, so Gati, being a premier logistics company, should
be technologically capable for controlling accounting for OUs.
- My recommendation would be to use:
Oracle Enterprise Architecture Framework.
It would improve the Operational Efficiency of the company.
- Benefits:
Increase overall safety & reliability
Understand potential issues
Risk Analysis
Route Optimization
Accurate Business Demand Planning
P a g e | 29

6. Observations of DELH Hub Visit

Recent Structure:

- According to the layout structure as mentioned above, cost is incurred


while transferring the material from the Sorting Centre to the
Inbound/Outbound Area.
As I have heard that there will be some more sorting centres opening in
other HUBs, which will be more prevalent after enablement of GST, so I
would suggest having the Sorting Centre in between the Inbound and the
Outbound Area.
- The outbound area is smaller than the outbound area. So, the space can
be increased.
- A much noticed problem was that the outbound area was an open area,
and it is not a closed structure like that of the inbound area. When it rains
or any such natural calamities, the materials get spoiled. It is also hectic
P a g e | 30

for the workers as they need to keep the material in another place for the
time-being.
Recommended Structure:

- The sorting machine, Armstrong Propix, which is used there have some
issues and also sometimes, small dockets get stuck in the belt. This
creates a problem for the workers. It sometimes takes 6-7 hours to get
serviced, and for that time, they need to work manually.
One more thing they mentioned is that it is still in warranty, that is why it
is getting free servicing but after 6 months, it would also incur cost.
So, for newer sorting centres, I would recommend using Falcon Sorting
Machine.
- Total Open Area (1,53,341 sq. ft.) is much bigger in size than the Total
Built-up Area (1,24,005 sq. ft.), but it is not used efficiently.

7. Centralized Accounting
- According to some of the articles by PwC, EY & KPMG, Logistics
Companies should be moving into Centralized Accounting after GST, and
they should also have the technical capability for controlling it.
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- First of all, we can start with a centralized accounting for a State, and
then merge to form Centralized Accounting for Zones.
- For this model, GDWs will behave as CCCO/CCCF or a warehouse.

- We can save manpower cost as well as office cost in this manner.

8. Decrease Pricing Structure


- According to a study by EY, it is said that Logistics Costs will go down by
20%.
- So, I would suggest that we should decrease our pricing structure to
increase our customer base.
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References

www.gatikwe.com

www.careratings.com

www.cleartax.in

http://www.hindustantimes.com/business-news/gst-set-to-
transform-face-of-indian-logistics-industry/story-
cTGOm98qzkjCzCpj44QWyL.html

https://www.gstindia.com/impact_of_gst_on_logistic_company/

http://www.financialexpress.com

www.ibef.org

www.crisil.com

www.pwc.in

http://www.livemint.com/
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Glossary of Abbreviations

GST: Goods & Service Tax


EDC: Express Distribution Centre
GDW: Gati Distribution Warehouse
CCCO: Depot
CCCF: Franchise
STC: Surface Transit Centre
ATC: Air Transit Centre
RTC: Rail Transit Centre
SFA: Shop Floor Automation
VTS: Vehicle Tracking System
GEMS: Gati Enterprise Management System
OTA: On-time Arrival
OTD: On-time Departure
CU: Capacity Utilization
DELH: Delhi Hub
AMCO: Ambala Hub
NDAO: Noida Hub
JAIO: Jaipur Hub
LKOD: Lucknow Hub