1. What are the important tasks that the GP Group has to get right if it wants to maintain the performance of its ‘consolidating’ business? The GP Group is a global trading and shipping company based in Bangkok. This company, a family firm, was established 125 years ago in Burma and comprises over 20 companies worldwide, specializing (amongst many other things) in commodity trading, ship chartering and ship management. Kirit Shah, the Chief Executive Officer and owner of the Group, explains the size of their trading operations: ‘We charter about 200 ships a year, so at any given time we have 20 or 30 ships somewhere in the chain between loading, sailing and discharging’.

One key capability of the Group is filling ships by consolidating cargoes. Mr Shah explains:

‘We consolidate lots of small buyers into filling as large a vessel as possible. Let me give an example. Take soya bean meal for India. A typical Indian seller is capable of delivering between 500 and 1000 tons. However, the ship is going to load 20,000 tons, so we put together a dozen or so sellers and five to seven buyers at its destination. So, what we have effectively done is consolidate a region’s supply and consolidate a destination’s demand. We manage this by having our own facilities at the port. We have our own warehousing, we have our own berths, and we carry it on our chartered ships. All the cargo is consolidated at our warehouse in the port and we ship it only when it is ready in terms of quantity and quality. That way we have been able to control shipments better than other traders. It takes a great deal of planning to have a shipment ready by a certain date. From experience, we know we have to “call forward” (give notice for) the goods from different sellers at different times. For some suppliers, you have to call forward the goods 30 days, others 15 days or 10 days, depending on how well organized they are. We have to make sure the shipment goes on time because there are large penalties for lateness. This is not easy because we are dealing with originators and purchasers from around the world’.