turnaround of indian railway

8/6/2019 Turnaround of Indian Railway

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TURNAROUND OF INDIAN TURNAROUND OF INDIAN

RAILWAY RAILWAY



Whenever a situation develops toWhenever a situation develops to

its extreme, it is bound toits extreme, it is bound to turnturnaroundaround and become its oppositeand become its opposite



My mother always told me not to handle aMy mother always told me not to handle abuffalo by its tail, but always catch it by itsbuffalo by its tail, but always catch it by its

horns. And I have used that lesson in everythinghorns. And I have used that lesson in everythingin my life, including the Railways.in my life, including the Railways.Lalu Prasad YadavLalu Prasad Yadav

Lalu Prasad YadavLalu Prasad Yadav

leadership styleleadership style



The solution lay in increasing volumesThe solution lay in increasing volumes

and not the cost .and not the cost . Dont micro manage ,delegate yourDont micro manage ,delegate your

work , take calculated risks.work , take calculated risks.

If you dont milk the cow fully ,it fallsIf you dont milk the cow fully ,it fallssick.sick.

Think out of the boxThink out of the box

leadership styleleadership style



THE LOSS MAKING ER ATHE LOSS MAKING ER A

The Expert The Expert--Group report submitted in July 2001Group report submitted in July 2001stated:stated:

Today Indian Railway is on the verge of a Today Indian Railway is on the verge of afinancial crisis... To put it bluntly, the businessfinancial crisis... To put it bluntly, the businessas usual low growth will rapidly drive IR to fatalas usual low growth will rapidly drive IR to fatalbankruptcy, and in sixteen years Government bankruptcy, and in sixteen years Government

of of IndiaIndia will be saddled with an additionalwill be saddled with an additionalfinancial liabilit y of over Rs 61,000 crores On afinancial liabilit y of over Rs 61,000 crores On apure operating level, IR is in a terminal debt pure operating level, IR is in a terminal debt trap. trap.



key strategies thekey strategies the

IndianR ailwaysIndianR ailways

adopted adopted DownsizingDownsizing

The number of employees, which peaked at The number of employees, which peaked at 1.652 million in 1991, was brought down1.652 million in 1991, was brought downprogressively to 1.472 million by 2003,progressively to 1.472 million by 2003,and to 1.412 million by 2006. One of theand to 1.412 million by 2006. One of theelements of retrenchment strategy is toelements of retrenchment strategy is totrim off excess staff. The approach that trim off excess staff. The approach that the IR adopted was not to fill in vacanciesthe IR adopted was not to fill in vacanciescreated due to retirement or other reasonscreated due to retirement or other reasons





adopted adopted

OutsourcingOutsourcing

Besides the catering and parcel serviceBesides the catering and parcel serviceactivit y, the IR also outsourced advertisingactivit y, the IR also outsourced advertisingactivit y. In the other business areas of activit y. In the other business areas of parcel, catering and advertising, theparcel, catering and advertising, the

strategy of outsourcing through publicstrategy of outsourcing through publicprivate partnership and wholesaling ratherprivate partnership and wholesaling ratherthan retailing was adoptedthan retailing was adopted





adopted adopted Product InnovationProduct Innovation

The IR introduced double stack container trains onThe IR introduced double stack container trains on

some diesel routes. These containers increased thesome diesel routes. These containers increased thecarrying capacit y of each train to 2,500 tonnescarrying capacit y of each train to 2,500 tonnesagainst 1,500 tonnes.against 1,500 tonnes.

Further, it introduced new design of wagons withFurther, it introduced new design of wagons with

higher pay load (carrying capacit y) but lower tarehigher pay load (carrying capacit y) but lower tareweight (weight of the empt y wagon) that improvedweight (weight of the empt y wagon) that improvedsafet y features. The effect of these measures cansafet y features. The effect of these measures canbe seen in higher freight revenue.be seen in higher freight revenue.





adopted adopted

Rise in demandRise in demand

The rise in freight revenueThe rise in freight revenue -- the mainthe mainplank of the IR turnaround. IR raisedplank of the IR turnaround. IR raised

the freight on iron ore by 17%.the freight on iron ore by 17%.



Lalu and IndianLalu and Indian

R ailwaysR ailways

He disallowed plastic cups used for servingHe disallowed plastic cups used for servingtea at railway stations and announced that tea at railway stations and announced that

they will be replaced by kulhads (earthenthey will be replaced by kulhads (earthencups) cups)

generate rural employment generate rural employment

reduce garbage as kulhads are bioreduce garbage as kulhads are bio--degradabledegradable




R ailwaysR ailways

He made personal inspections in theHe made personal inspections in therailways . He undertook surprise check at railways . He undertook surprise check at

Rail Bhavan. He deducted the salaries of Rail Bhavan. He deducted the salaries of 500 latecomer employees and sent them500 latecomer employees and sent themback.back.

He maintained passenger profile so that He maintained passenger profile so that compartments could be taken off or addedcompartments could be taken off or addedto trains according to seasonal demands.to trains according to seasonal demands.




R ailwaysR ailways

As a part of his drive to modernize the As a part of his drive to modernize the

railways , he decided to send nearly 100railways , he decided to send nearly 100top officials abroad for training in latest top officials abroad for training in latest techniques and sharpen their managerialtechniques and sharpen their managerial

skills in management schools of USA andskills in management schools of USA andFrance.France.




R ailwaysR ailways

He said that he would revoke the contract He said that he would revoke the contract of AH wheeler & company which runsof AH wheeler & company which runsnewspaper stands on most Indian railway newspaper stands on most Indian railway stations, because they were enjoyingstations, because they were enjoying

monopoly ever since British left India andmonopoly ever since British left India andwould invite open tender.would invite open tender.



´Turnaroundµ´Turnaroundµ

The essence of the turnaround was in thefact that -

(i) total revenues increased by asignificant percentage in the last twoyears

(ii) the net revenues continued a robust upward trend.



Fully airFully air--conditionedconditioned

GaribR athGaribR ath

A view of the Garib Rath, train for the poor that A view of the Garib Rath, train for the poor that provides comfortable , airprovides comfortable , air--conditioned travel at conditioned travel at affordable cost to India's poor.affordable cost to India's poor.



IRCTCIRCTC

The site which serves online ticketing forThe site which serves online ticketing forIndian railways is the largest eIndian railways is the largest e--commercecommerce

website (www.irctc.com)website (www.irctc.com)



A dead end street is a good A dead end street is a goodplace toplace to turn aroundturn around

Tanya groverTanya grover

Parvinder kaurParvinder kaur

Gaurav duttGaurav dutt

Shakti vohraShakti vohra

turnaround of indian railway

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