FINAL PPT OF IR
-
Upload
arvind-popat -
Category
Documents
-
view
1.460 -
download
3
description
Transcript of FINAL PPT OF IR
“From a black sheep to a blue eyed boy”
“The Indian Railways, which was declared to be heading towards bankruptcy, is today’s second largest profit making Public
Sector Undertaking.”
TURNAROUND
“Process that takes a company from a situation of poor performance to a situation of good sustained performance.”
(Brandes and Brege.)
JOURNEY OF THE PRESENTATION
1. WHY WE SELECTED INDIAN RAILWAYS2. INDIAN RAILWAYS AN OVERVIEW3. WHERE WAS INDIAN RAILWAYS IN 2000-014. FINANCIAL TURNAROUND OF INDIAN RAILWAYS5. MAGIC FORMULA6. STRATEGIES:- A) FREIGHT B) PASSENGERS C) OTHERS6. ENVIRONMENTAL FACTORS7. INDIAN RAILWAYS - WHEELS ON CHANGES8. INDIAN RAILWAYS – SHORTCOMINGS9. LIMITATIONS
1. Indian Railway is the world’s largest employer and it had turned around, without any layoff in its workforce.
2. Strong forward and backward linkages with core sectors.
3. Public sector symbolizes inefficiency (!!!).
BACK
WHY TO STUDY INDIAN RAILWAY?
INDIAN RAILWAY AN OVERVIEW
OWNERSHIP :- MINISTRY OF RAILWAY, GOVT. OF INDIA Founded :- 26 April 1853
First railway track:- Bombay to Thane, distance 34 kms. Now Indian railways has 66000 kms network coverage
INDIAN RAILWAYS AN OVERVIEW
Industry :- Railways and LocomotivesSERVICES :- Rail transport, freight transport, servicesRevenue :- Rs. 107.66 billionEmployees :- 1,406,430 (2007)Divisions :- 16 Railway ZonesWebsite :- www.indianrailways.gov.in
Key peopleUnion Railway MinisterLaloo Prasad Yadav
Minister of State for Railways (V)R. Velu
Minister of State for Railways (R):Naranbhai J. Rathwa
Chairman, Railway BoardK C Jena
Officer on special dutySudhir Kumar
BACK
“Today Indian Railway is on the verge of a financial crisis... To put it bluntly, the ‘business as usual low growth’ will rapidly drive IR to fatal bankruptcy, and in sixteen years Government of India will be saddled with an additional financial liability of over Rs 61,000 crores… On a pure operating level, IR is in a terminal debt trap.”
“It is very likely that Indian Railways would be a heavily-loss-making entity—in fact on the path toward bankruptcy, if it were not state owned.”
The Expert-Group committee govt. of India July 2001
Where the Indian Railway was in 2000-2001?
REASONS OF DECLINE OPERATION INEFFICIENCY
RIGID PRICING
INVESTMENT IN UN-REMUNERATION PROJECTS
POLITICAL PROFLIGACY
LACK OF ACCOUNTABILITY BACK
FROM LOSS TO PROFIT
-2000
0
2000
4000
6000
8000
10000
12000
14000
1981 1991 2002 2003 2004 2005 2006 2007 2008
-198 1751000
1115 10912074
6193
10206
11449
Operating profit
(Rs in crores)
02468
101214161820
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
4.9
7.58.0
8.7
15.4
19.018.0
Return on Investment
0
2000
4000
6000
8000
10000
12000
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
1000 1115 10912074
6193
10206
11449
Surplus
(Rs. In crores)
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
2337
31304478
5273
10143
14453
16022
Net Revenue
(Rs. In cr.)
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007 2008
98.396 92.3 92.1 91
83.278.7
75.9
Operating Ratio
back
MAGIC FORMULA - PROFFESIONALISM
EMPO
WERM
ENT EN
RIC
HM
ENT
ENTITLEMENT
FASTERHEAVIERLONGER
LEVERAGINGSYNERGY
OPTIMIZATION
INNOVATIONCOMPASSIONPARTNERSHIP
CONCEPTUAL LEVEL
OPERATIONAL LEVEL
EMOTIONAL LEVEL
BACK
FREIGHT (GOODS) 69%
PASSENGER27%
OTHERS 4%
SOURCES OF REVENUE
FREIGHT BUSINESS OF INDIAN RAILWAYS CORE INFRASTRUCTURE INDUSTRY IN INDIA
COMPRISES : CRUDE, REFINED PETROLEUM PRODUCTS, COAL, STEEL, CEMENT, FERTILIZERS.
IN INDIAN RAILWAY ABOUT 75% OF FREIGHT COMPRISES COAL, STEEL, CEMENT AND PETROLEUM PRODUCTS
GROWTH 05-06 06-07 5.8% 8.4%
FREIGHT REVENUE AND LOAD PERFORMANCE
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2001 2002 2003 2004 2005 2006 20070
100
200
300
400
500
600
700
800
2000 2001 2002 2003 2004 2005 2006 2007
YEAR YEAR
Rs
IN C
RO
RES
LOA
D IN
TO
NN
ES
TRACK UTILISATIONIncrease in Traffic Density
15
15.5
16
16.5
17
17.5
18
18.5
19
19.5
1999-00 200-01 2001-02 2002-03 2003-04 2004-05 2005-06
15.3515.55
16.34
16.85
17.46
18.34
18.83
FREIGHT RATIONALIZATION THE STRATEGIES INCREASE VOLUMES- PILOT PROJECTS ON HIGHER AXLE LOADS
PRODUCT INNOVATION-IMPROVED DESIGN OF WAGONS
CUSTOM DESIGN - THE WAGONS BY END USERS
PRIORATIZATION - TIMELY DELIVERY OF THE GOODS
FREIGHT CHARGES STRATEGIES
MODERNIZATION - TRACK AND STRUCTURES.
REDUCED WAGON TURNAROUND
MARKET ORIENTED TARIFF AND SCHEME
INCREASE VOLUMES
ALLOW TO INCREASE IN CARRYING CAPACITY (20.32T TO 22.82T)
OUTPUT INCREASE IN REVENUE BY Rs. 6000 Cr.
back
PRODUCT INNOVATION1. INTRODUCE DOUBLE STACK CONTAINER ON
DIESEL ROUTE
2. INTRODUCE NEW DESIGNED WAGONS WITH HIGHER CARRYING CAPACITY
3. LOWER TARE WEIGHT
4. NEW REFRIGERATED PARCEL VANS WERE INTRODUCED
back
PRIROTIZATION
1. SEPARATE TRACKS FOR THE FREIGHT TRAINS
2. LINE CLEARANCE ON THE STATIONS
back
FREIGHT CHARGES STRATEGIES
MAJOR STRATEGY
DUAL PRICING POLICY
back
MODERNIZATION
CONVENTIONAL MODERN RAILS 90R/52KG 72UTS 52/60KG 90UTS HH
FITTINGS RIGID ELASTIC
BALLAST 150/200mm 250/300mm
JOINTS FISH PLATED WELDED WITH SEJs
SWITCHES STRAIGHT CURVED/TWS
MAINTENANCE MANUAL MECHANISED
back
REDUCED WAGON TURNAROUND
CASH INCENTIVES TO FREIGHT CUSTOMERS
FREIGHT OPERATION INFORMATION SYSTEM
ROUND THE CLOCK LOADING AND UNLOADING AT TERMINALS
CONNECTIVITY TO PORTS WAS INCREASED
back
PASSENGER REVENUE AND VOLUME PERFORMANCE
0
5000
10000
15000
20000
25000
2001 2002 2003 2004 2005 2006 20070
1000
2000
3000
4000
5000
6000
7000
2001 2002 2003 2004 2005 2006 2007
YEAR YEAR
Rs
IN C
RO
RE
PA
SSE
NG
ER
S IN
MIL
LIO
NS
REVENUE VOLUME
PASSENGER STRATEGIES PRODUCT DIFFERENTIATION
COMPETITIVE PRICING
OUTSOURCING
DOWNSIZING
SAFETY MEASURES
HUMAN RESOURCES INITIATIVES
IMPROVE IN EFFICIENCY
PRODUCT DIFFERENTIATION
INTRODUCE NEW TRAINS
INTRODUCE NEW PASSENGER COACHES
INTRODUCE E-TICKTING
NEW SIGNALLING TECHNOLOGY
SUBSTANTIAL INCREASE IN PASSENGER COMFORT AND AMMENITIES
UPGRADATION back
COMPETITIVE PRICING
AVERAGE RATE PER PASSENGER PER KM REMAIN UNCHANGED ( Rs. 0.24 / Km)
REDUCE FARE FOR AC COACHES TO COMPETE WITH AVIATION
back
OUTSOURCING
LEASE OUT PARCEL AND CATERING SERVICES
ADVERTISING SERVICES
back
DOWNSIZING
NUMBER OF EMPLOYEES WERE BROUGHT DOWN
[1.652 mn(1991) TO 1.41mn(2006)]
back
SAFETY MEASURES SPECIAL RAILWAY SAFETY FUND OF Rs 170 bn.
REPLACE OVERAGED ASSETS
USE OF HIGH TECHNOLOGY IN SAFETY
STRENGTHEN RAILWAY PROTECTION FORCE
DECENTRALIZATION back
HUMAN RESOURCES INITIATIVES CHANGES IN ORGANIZATIONAL CULTURE
CREW FRIENDLY DRIVER’S CABINS AND BRAKE VANS WERE DESIGNED.
ESTABLISHMENT OF INTERNATIONAL RAILWAY STRATEGIC MANAGEMENT INSTITUTE.
PARTICIPATION OF RAILWAY EMPLOYEES IN MANAGEMENT (PREM)
SPORTS FACILITIES back
IMPROVE IN EFFICIENCY INTRODUCE IMPROVED ACCOUNTING
TECHNIQUE IMPROVED MANAGEMENT INFORMATION
SYSTEM(MIS)
LONG-RANGE DECISION SUPPORT SYSTEM (LRDSS)
ENTERPRISE RESOURCE PLANNING(ERP) back
OTHER STRATEGIES
ADVERTISEMENT INITIATIVE (with vinyl wrapping)
PALACE ON WHEELS
TAMPLE TRAIN
back
ENVIRONMENTAL FACTORS CHANGE IN THE MACRO-ECONOMIC CONDITIONS
RISE IN DEMAND
CHANGE IN THE LEGAL POSITION
CHANGES IN THE ACCOUNTING PRACTICE
DECLINE IN THE FINANCIAL COST
BACK
WHEELS OF CHANGES MoU WITH CHINESE COUNTERPART
RAIL FLEET WITH ECO-FRIENDLY TECHNOLOGY
TRAIN TRAFFIC CONTROL WILL BE COMPUTERISED SOON
WI-FI WILL BE INTRODUCED SOON IN BUSINESS CLASS
RAILWAY WILL UTILIZE SOLAR ENERGY
BACK
SHORTCOMINGS
OVER UTILIZATION MAY BECOME A PROBLEM
COMMERCIALIZATION MAY BECOME A PROBLEM
TRAVELLING TIME IS STILL NOT IMPROVED
IMPROVEMENT IS STILL NEEDED BACK
LIMITATIONS SPHERE NEED TO BE INVESTIGATE FURTHER
COMPARISON WITH WORLD CLASS RAILWAY
FINANCIAL PROFIT ANALYSIS AND ACCOUNTING SHOULD BE SEE IN DETAIL FURTHER.
BACK
MILES TO GO
PALACE ON WHEELSINDIAN RAILWAY
Thank You……….
Who will be the beneficiaries?
You & Me
BIBLIOGRAPHY www.indianraiways.gov.in www.indianrail.gov.in [email protected] www.rbi.org.in www.reservebank.com www.irfca.org en.wikipedia.org Rakesh Mohan Committee. 2001. Highlights of the Executive
Summary Raghuram, G. 2007. ‘Turnaround’ of Indian Railways: A critical
appraisal of strategies and processes’, Indian Institute of Management Working Paper no. 2007–02–03, Indian Institute of Management, Ahmedabad.
A Case Study Desh Gupta and Milind Sathye* Faculty of Business & Government University of Canberra, Canberra, Australia.
Vinyl wrapped train by Airtel80 crores contract with airtel and kurkure for ad
back
PALACE ON WHEELS
BACK