Cost reduction and inefficiencies
Financial & operational prudence is the key to success for any organisation. One of the largest organisation of India having million work force engaged directly or indirectly is plagued by lack of will to develop into a modern organisation. The present Railway Minister Mr.Suresh prabhu’s initiative is in the right direction. Lots of suggestion have been forthcoming on various issues ranging from ticketing, pantry service to issues at platform.
It is a well known fact that modernization of Railways is imperative & long overdue , but paucity of funds is holding it back.
Albeit, there are ways to raise funds through bonds, or increase cash inflows through
a) raising freight rates & passenger fares ; b) cost reduction by plugging various inefficiencies that have crept in this system.
Inefficiencies in the system is a major cause of concern for any organisation & there is no simple way to address these problems. It requires a lot of in-depth study to get into the issue.
For the sake of raising fund, hike in freight rates and passenger fares should be the last resort, without gauging into the degree of actual inefficiencies that is prevalent in the system. Inefficiencies ,if properly, plugged in can save millions of scarce resources.
I would like to present few points concerning mostly on finance & costing part of operations of Railway.
1. Computerization of all the departments :: Apart from ticketing and some departments, which are already computerized across the country, most of other commercial departments are not yet computerized, resulting in day to day work being carried out in age old system of maintaining manual log book, ledger, etc resulting in
a) slow pace of progress of daily work,
b) use of more than required man power (i.e excessive manpower).
c) increased cost in the form of salary, wages, and other benefits /expenses forming part and parcel of salary & wages.
Computerization should be taken up across all departments and existing staff should be trained/re-trained , where ever necessary, to bring them upto the desired level of competency.
VRS scheme can be introduced for staff failing to reach the desired level of compentency.
Focus should be on Cost reduction with stress on enhancement in quality of service .
2.Time –Study-::
Setting up standard for completion of job on time for all department, . (This can be achieved only after full computerization is carried out). Accountability can be set for delay across all departments.
3. Appraisal system::
There is need to overhaul appraisal system in vogue. Carrot for performers and stick for non-performers should be introduced. The present system leaves no room for rewarding good workers . A fixed percent increase in wages based on pay commission recommendation is based on the assumption that all workers are equal performers should be done away with a system whereby performers are rewarded .
4. Wages to revenue ratio::
Study should be made on the total wages to total revenue ratio and efforts should be made to bring it down. A prudent & detailed study is required to carry out such a task.
5. Ambiance within the office :: Most of the Railway offices are housed in old buildings. Ambiance is very poor.
Old / outdated furnitures are used. This has a negative impact on the efficiency of the workers.
6. Recruitment system – Age old system of hiring is still prevalent.
Large private houses hire from colleges, management institutes, engineering colleges and they getting the good results .
Campus hiring should be given a chance and there is no reason why this will not work for organisation like Railways ?
For an organization with a million work force, there should be a **dedicated** institute which will cater to the requirement of different departments of Railway only, like engineering, commercial, customer service, hospitality, catering, etc. Recruitment are to be made
from such institute directly.
Last but not the least,Service of reputed management consultant can be sought for in-depth study and recommendation for the all the above mentioned points. more
It is a well known fact that modernization of Railways is imperative & long overdue , but paucity of funds is holding it back.
Albeit, there are ways to raise funds through bonds, or increase cash inflows through
a) raising freight rates & passenger fares ; b) cost reduction by plugging various inefficiencies that have crept in this system.
Inefficiencies in the system is a major cause of concern for any organisation & there is no simple way to address these problems. It requires a lot of in-depth study to get into the issue.
For the sake of raising fund, hike in freight rates and passenger fares should be the last resort, without gauging into the degree of actual inefficiencies that is prevalent in the system. Inefficiencies ,if properly, plugged in can save millions of scarce resources.
I would like to present few points concerning mostly on finance & costing part of operations of Railway.
1. Computerization of all the departments :: Apart from ticketing and some departments, which are already computerized across the country, most of other commercial departments are not yet computerized, resulting in day to day work being carried out in age old system of maintaining manual log book, ledger, etc resulting in
a) slow pace of progress of daily work,
b) use of more than required man power (i.e excessive manpower).
c) increased cost in the form of salary, wages, and other benefits /expenses forming part and parcel of salary & wages.
Computerization should be taken up across all departments and existing staff should be trained/re-trained , where ever necessary, to bring them upto the desired level of competency.
VRS scheme can be introduced for staff failing to reach the desired level of compentency.
Focus should be on Cost reduction with stress on enhancement in quality of service .
2.Time –Study-::
Setting up standard for completion of job on time for all department, . (This can be achieved only after full computerization is carried out). Accountability can be set for delay across all departments.
3. Appraisal system::
There is need to overhaul appraisal system in vogue. Carrot for performers and stick for non-performers should be introduced. The present system leaves no room for rewarding good workers . A fixed percent increase in wages based on pay commission recommendation is based on the assumption that all workers are equal performers should be done away with a system whereby performers are rewarded .
4. Wages to revenue ratio::
Study should be made on the total wages to total revenue ratio and efforts should be made to bring it down. A prudent & detailed study is required to carry out such a task.
5. Ambiance within the office :: Most of the Railway offices are housed in old buildings. Ambiance is very poor.
Old / outdated furnitures are used. This has a negative impact on the efficiency of the workers.
6. Recruitment system – Age old system of hiring is still prevalent.
Large private houses hire from colleges, management institutes, engineering colleges and they getting the good results .
Campus hiring should be given a chance and there is no reason why this will not work for organisation like Railways ?
For an organization with a million work force, there should be a **dedicated** institute which will cater to the requirement of different departments of Railway only, like engineering, commercial, customer service, hospitality, catering, etc. Recruitment are to be made
from such institute directly.
Last but not the least,Service of reputed management consultant can be sought for in-depth study and recommendation for the all the above mentioned points. more
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The Railway should introduce modern methods and cost reduction should be given top priority. Some departments within Railways have excessive manpower. Visit the Railway office near BBD at Kolkata. One can see most of the staff moving here & there near GPO, stock exchange more
Aug 19
Railway should think of introducing concept of Five -S/TPM/TQM, Six Sigma and other modern methods, if not introduced already, to improve work culture at different levels. Numbers of private concerns have already gained from such techniques. This will reduce malfunction of various railway equipment, reduce cost and prevent accidents. The concept of ownership will generate new innovations from old but sincere workers leading to unaccepted progress in the organization. more
Aug 19
