the beginning, as an answer to trading requirements, the Barter System came into being.

This
was the first Supply Chain known to man.

The word “logistics” was first claimed to have been associated with the military in 1905 – as a
branch of war that pertains to the movement and the supply for armies.

Giant First-Leaps

In the ancient Greek and Roman empires, ‘Logistikas’ were military officers assigned the duties
of providing services related to supply and distribution of resources and were deployed during
war. This is assumed as the birth of Logistics.

Various events set in motion the requirement for vast improvements

in Logistics. For example, the development of the chariot required
Egyptian forces to maintain repair depots and mobile repair
battalions to keep machines functional on the march. The need to
manufacture, issue, and repair new iron weapons in unprecedented
numbers required yet more innovations in logistics. Warehousing
was utilized in the Assyrian army, for whom the production and
storage of weapons became a central feature of the army’s logistical
structure. A single weapons room in Sargon-II’s palace at Dur-
Sharrukin contained 200 tons of iron weapons, and similar weapons
warehouses were scattered throughout the empire.

Marching armies, such as the army of Alexander, 65,000 strong,

required 195,000 pounds of grain and 325,000 pounds of water on a
daily basis besides 375,000 pounds of forage per day to sustain
cavalry, baggage, and transport animals. No less than a miracle, this
was a logistical feat achieved with meticulous planning and execution.

Evolving Modes of Transport

Since the Bronze Age, the donkey was the standard means of transport for the Egyptian army. At
the Battle of Kadesh, Ramses II revolutionized Egyptian logistics by introducing the ox-drawn
cart, which became the standard mode of military logistical transport for a thousand years. As
armies grew in size, the logistical burden threatened to reduce drastically their rate of movement
and operational flexibility. The introduction of the horse to military operations by the Assyrians
allowed increase in logistics capacity, as did their innovation of using the camel as a military
beast of burden. Five horses could carry the load of a single ox-cart but could move the load at
four miles an hour for 8 hours. Equally important, the horse could move easily over all types of
terrain, and five horses required only half the amount of forage required to feed a team of two
oxen.

On the Seas

The Persian army introduced a major innovation in logistics. A large-scale navy used primarily
in support of ground operations was a Persians introduction. They designed ships to transport
infantry, horses, and supplies, including shallow-draft vessels for use on rivers. Coupled with
their extensive use of the horse in the supply chain, the supply system of the Persian army was
more effective than anything the world had ever seen and allowed the world’s largest armies to
remain deployed far from home for months on end.

Agility

Alexander and the Romans made maximum

use of the carrying capacity of their soldiers
to increase logistics capability. The soldier’s
load has been increasing ever since. With
soldiers carrying one-third the load of
animals, an army of 50,000 men required
6,000 fewer pack animals than it would
have needed, along with 240 fewer animals
to haul the feed for the other animals, thus
making them lean and agile. By requiring
the soldier to carry his own equipment and
food, Alexander created the lightest, most
mobile, and fastest army the world had ever
seen.

Evolving Further

Over the ages, transportation by road, which was the dominant mode, found a contender in the
waterways. Canals and inland waterways served as an effective means for transport of goods and
materials across destinations. Although slower than movement by road, the cost advantage and
presence of waterways over the landscapes all over, made this means a preferred alternative.

The invention of the engine gave logistics a new lease of life in the form of mechanized vehicles
which could transport goods faster than was ever possible earlier, and across greater distances by
road, in the form of trucks and other mechanized carriers, and also by motor powered boats and
ships which now improved the time to deliver, owing to increased speeds.

The introduction of Railways was another significant step in the modernization and improvement
of cost-effective logistics and transportation methods. Railways evolved as a faster means of
transportation for specific distances compared to ships and waterways.

Aircrafts, as a means of transport is the pinnacle of advancement in transportation modes, a swift

means cutting down delivery time to hours from days, although they come at a premium price.
The first practical demonstration of air freight occurred in November 1910 when a department
store shipped a bolt of silk by air from Dayton to Columbus, Ohio in the US. There on, the use of
air cargo never looked back. Although more expensive than all the other modes of transportation,
air cargo has its own advantages, foremost being transport of perishables such as fruit, fish and
vegetables, around the world, especially stuff affected by the weather on a daily basis.
Changing Dynamics

Changes in the early 1900’s saw farm products

distributors realize the importance of providing
time and place utility. Until about mid 1950’s,
the field of supply chain management was in a
state of dormancy. Piecemeal and fragmented
set of activities was rampant. Production and
manufacturing were given uppermost
attention. In the early 1960’s logistics was
acknowledged as one of the frontiers of opportunity for enterprises to improve their corporate
efficiency. During the Ethiopian famine relief efforts of the 1980’s, the term logistics was
applied to the food-supply activities. The 1980’s stressed the need for quality, while 1990’s saw
the emergence of supply chain management and new trends of e-business or IT enabled supply
chains.

With India taking steps to emerge from the controlled regime to a more market-oriented
economy, aligning itself to go global, the opening up of the economy gave a fillip to the fast
paced growth, a direct resultant of which was the unprecedented growth of the logistics industry.

Increasingly being recognized as the ‘destination of the future’ in logistics, India’s logistics
industry finds itself at a strong growth curve, being pegged at INR432,000 crore (US$90 billion)
currently. It is estimated to increase to over INR600,000 crore (US$125 billion) by 2010, an
impressive 16 percent growth (Sources: www.northbridgeasia.com). This compares favorably
with the US$3.43 trillion (INR16,464,000 crore) global market growing at a 7.5 percent per
annum.

Logistics costs in India, compared to 9 percent for the US and 10percent for Japan, were
estimated to be about 13 percent of GDP or approximately INR451,200 crore (US$94 billion).
The industry is priming itself to offer a wider spectrum of services, deliver enhanced value and
accept greater responsibility to increase the rate of growth. Logistics providers have matured
with a better understanding of market and customer requirements. Today there is a shift from
mere movement of goods to service response logistics.

Third party logistics

With growth of companies and supply chain becoming increasingly complex, corporates have
started outsourcing their logistics requirements. This is where the Third party logistics (3PL)
providers came into the picture. Third party logistics providers typically specialize in integrated
operation, warehousing and transportation services that can be scaled and customized to the
customer’s needs based on demands and delivery service requirements for their products and
materials. This serves a few purposes, namely -

 Allowing businesses to focus on their core competency while their logistic requirements
are being catered to
  Providing cost-competitiveness

 Benefiting from the logistics know-how and international distribution knowledge-base of

specialized 3PL providers worldwide, resulting in superior levels of customer service.

Though some companies prefer to have their own logistics arm, increasingly, corporates are
opting to outsourcing their logistics to 3PL providers as a more cost effective and efficient
option.

Global third party logistics providers (3PLs), too, are growing their networks in India while
leading domestic 3PL providers are offering total supply chain solutions. The expanded set of
services includes delivery of components ‘just in time’ to manufacturers, to door-delivered
finished products ‘on demand’ to end customers.

Industries across domains have been at the receiving end of the advantages of efficient logistics
and supply chain management. Evolution in the changing relationships between the logistics
provider and organizations has resulted in a major shift in the industry dynamics.

In the Healthcare industry an efficient management of logistics and the supply chain has made
significant differences in terms of cost savings and inventory. The nature of supply chain in
Healthcare industry is complex. Leveraging information technology and industry best practices
has helped healthcare organizations convert silos of data that gets generated on integration of
various functions, into useful information that enables the top management make near-accurate
demand forecasts and take better supply-side decisions.

In the Retail Industry, for instance, till the 1980’s, the vendors and wholesalers controlled the
supply chain; often the merchandise sent was not in keeping with the consumer demand and
market requirement, with significant labour used for handling broken cases and inventory storage
space. Subsequently the decade between 80’s to 90’s saw the emergence of ‘Lean
Manufacturing’ and ‘Just-in-Time’ concepts in view of increasing customer demands. In the
2000’s leading software’s helped streamline the supply chain and squeeze costs. Companies
maximized use of the 3PLs to outsource their logistics needs. Concepts like Direct Store
Delivery, where the vendor directly replenishes the stores bypassing the retailer’s DC, came into
vogue. Companies like Coca Cola, Frito Lay, etc. effectively use this concept to streamline their
supply chain.

Future Trends:

Changing economic and business scenarios demand a logistics and supply chain which is flexible
enough to respond to the industry dynamics like growing global competition, shortened product
lifestyles, volatile demand and outsourced operations.

Upcoming trends point to a requirement for companies of the future to respond to demand, rather
than wholly rely on forecasting it. Response at the moment of demand generation seems to be the
key that will determine future logistics. Hence companies will require people at various stages of
the supply chain to be able to take informed decisions at the moment, and help streamline
operations and usher in multi-tiered advantages.

Utilization of Information Technology a step further, resulting into an intelligent system for
supply chain integration, where all departments of an organization are connected including
suppliers and customers in the loop, is another trend, heading for systems intelligence like auto-
replenishment. When the departments in an organization are connected, the silos of data
generated can be churned into information. This information has to be further processed to
enable top management of companies and the managers of the supply chain to find ways to make
the process lean, green and more efficient, resulting in an integrated approach at taking supply
chain decisions. Greater ROI from implemented software, managed hosting services and
Software as a Service (SaaS) are the future predictions for IT utilization in Logistics.

Competition is expected to take a new dimension, with companies tuned to compete on the level
of their responsiveness to customer requirements and situations rather than merely on their
product offerings and price. Predominantly a service industry, the niche cut out by companies
who focus on responsiveness will spell the difference between the sustainers and the ones which
fade in time. Hence response management as a key competitive differentiator will be another key
trend in this industry in the future.
GATI completes twenty years of being, in the logistics industry, in 2009. A pioneer in the
segment, GATI has undertaken multitude of initiatives, many a first in the domain. Be it in
exploring ways to bring premium value to the customer or responding to the demands of
businesses, GATI has been in the forefront of innovation and setting benchmarks in quality of
service and customer satisfaction. It has invested heavily in infrastructure in order to be able to
efficiently manage operations today and take care of the requirements of tomorrow. What started
as a cargo management company in 1989, has grown into an organization with more than 3500
employees and a turnover of INR630 crore in 2008-09.

GATI is dedicated to quality service and this obsession has helped them reach new milestones.
With the initiation of GATI Cargo Management Services in 1989, a new revolution was started
in the Indian Cargo Industry.

GATI has invested heavily in what it believes are the core areas that enable better service levels
to its customers - Technology.

The advent of the internet has changed the way corporates do business. GATI has invested in
technology to get real time updates and data of its operations, in its effort to provide the ultimate
customer service experience.

Shipment tracking system: GATI

has state-of-the-art IT
infrastructure to provide the latest
technological benefits to their
customers. It provides means and
modes for customers to track their
shipments from anywhere,
anytime using multiple
communication modes viz.
Internet , e-mail , IVR ,
Mobile(SMS) and telephone / toll
free number.

The Call Centre runs its services

24x7.
Automation of systems: GATI has implemented a custom built ERP on Oracle Technology to
cover the entire cycle of operation from order to billing. This is centralized and completely on-
line and is being accessed by 400 locations across India and in APAC countries where GATI has
a presence.

Disaster Recovery: Today’s dynamic business scenario demands 24x7 availability. To ensure
this business continuity, a Disaster Recovery Solution is in place in GATI, with remote servers
placed at Chennai and all 400 locations enabled to access and switch-over within a short span of
time to ensure that customers’ business is not affected.

GATI also has a system in place using a hand held device wherein the delivery details including
Proof of Delivery (POD) are updated in the ERP and visible to the customer via the website
almost on real time basis.

Truly Multi-modal

Gati is a truly multi-modal company – GATI can cater to every customized requirement of
businesses. GATI understands that no two requirements are the same, and hence have
customized solutions for all types of business needs. Be it single or multiple requirements, GATI
can cater to customers across several verticals.

Gati reaches 603 of 611 districts of India, delivering unmatched reach, meeting the requirements
of the customer across the length and breadth of the country. With a fleet of 4000 vehicles, 94
refrigerated trucks, 6 marine vessels and more than 2 million sqft. of world class mechantronic
warehouse space, Gati’s multi-modal model gives them an advantage over competition as it has
the capability operate on any mode from surface, air, rail and sea.