Executive Management Programme (EMP: Apr 2008)

Term: IX (5 Apr – 27 Jun, 2010)

Management Development Institute - Gurgaon

Operations Strategy

Case-02

Changing lanes of Transport Ecosystem

IDID NameName

11 02 Achal Garg

22 14 Ashok Pershad

33 15 Dhiraj Gaur

44 18 Gaurav Grewal

55 22 Manoj Agarwal

66 51 Umesh Raheja

OSCase Presentation

Presentation Date: 29 April 2010 Presentation Date: 29 April 2010

TRIP (Mass) transit journey is too tiring

ROUTE Transit routes are very complicated

PLATFORM Transit points are not accessible

TRIP Collective movement of people

ROUTE Servicing common corridor with greater efficiency

PLATFORM

Facilitated by pooled resources (stations, street signals, dedicated lanes etc)

The single most important competitor to public transport is private transportTaxpayers’ money has not been used to fund common infrastructure to support

public transport the way it is used tobuild and maintain roads for cars.

Operators pitted against each other will take every cost savings they can get away with in absence of any reasonable standards, regulations and enforcement

Mass transit vehicles SHARE travel space with private vehiclesOperators maximize whatever they can squeeze from any loophole in public

infrastructure (i.e. loitering of parked buses, unruly road hogging and speeding)

TRIP (Mass) transit journey is too tiring

ROUTE Transit routes are very complicated

PLATFORM Transit points are not accessible

MAKE TRIP FAST AND COMFORTABLE

MAKE GETTING TO PLACES SIMPLE AND STRAIGHT FORWARD

MAKE TRANSFERS CONVENIENT AND HASSLE FREE

KEY PERFORMANCE INDICATORS : Accessibility Availability Reliability Safety Comfort

The measurement of performance is the key, because……•If you can’t measure it, you can’t control it…•If you can’t control it, you can’t manage it…•If you can’t manage it, you can’t improve it.

•But who watches and measures the KPI???

MAKE TRIP FAST AND COMFORTABLE MAKE GETTING TO PLACES SIMPLE AND STRAIGHT FORWARD

MAKE TRANSFERS CONVENIENT AND HASSLE FREE

TRIP Collective movement of peopleROUTE Servicing common corridor with greater efficiency

PLATFORM Facilitated by pooled resources (stations, street

signals, dedicated lanes etc)

This highly systemic and strategic task should be entrusted toa centralized authority with a high-level of

legislative and enforcement powers

This operational task is typically taken by private orquasi-government operators.

Pooled resources refer to commonly shared infrastructures funded by taxpayers.Ownership by local and regional level authorities is a must.

Public transport provides 3 functions for society

Mobility for those not using private transport

Development tool to reduce infrastructure costs

A business operation with potential for profits

Building Blocks of the new Ecosystem

Transformation from auto companies to mobility solution providers

Integration of Various forms of transportation system

Unified access by way of technology Service design to meet supply chain constraints Re-engineering infrastructure to accommodate

scalability requirements

Transportation system as a seamless system in which travelers can conveniently shift between modes and operators to complete trips that meet their individual and business needs.

Ticketless systems Octopus – Hong Kong Predicting Demand and optimizing capacity, assets and

infrastructure Improving end-to-end mobility experience Reducing the environmental impact Assuring safety and security

Various private equity players and venture capitalists has shown interest in mobility solutions DLF is designing Rapid Transit System (RTS) a medium

metro rail in Gurgaon which will connect to the Delhi metro

DLF wants an RTS in some of its major project like 10,000 acre township in Bangalore

Infusion of Radio Taxis by V-Link Web-based Indmoto has organised car pooling system

by enabling commuters to find matches based on city, time and pincode

Bus Rapid Transit (BRT) has reorganised urban traffic and ensured equity in road space allocation. BRT is described as bus priority corridor

Authority provides & owns all vital infrastructure (incl. routes)

Operators contracted to the Local or Regional Authority for a 3-5 year period

Contract through open tender and KPI Operators are paid a contract fee for services

provided with additional incentives for meeting/exceeding KPI

Feedback from passengers becomes vital

Public Transport is a “rakyat issue” The people must be engaged to use, support, and

keep watch in public transport A Centralized Authority will:

Create national standards for public transport Integrate planning with National Physical Plan Determine funding needs and provide funds Invest in critical improvements to infrastructure

Local / Regional Authorities are empowered to carry out the regulation of public transport with public/user feedback Local / Regional Authorities would be integrated with

economic growth regions Focus on local and regional planning as identified in the

National Physical Plan Ownership of crucial public transport infrastructure Provision of investment capital and funding

KPIs are: Accessibility Availability Reliability Safety Comfort

INPUTSTaxpayers Money

Infrastructure TechnologyResources Labor

CONSUMED OUTPUTS

Passenger/milePassenger/energy unit

Infra. KPIs Service KPIs

PRODUCED OUTPUTS

Journey covered/labor Operational cost/mile

Vehicle seats/mile

COST EFFECTIVENESS COST EFFICIENCY

SERVICEEFFICIENCY

OPERATORS’

SCOPE

AUTHORITIES’ SCOPE

Fair allocation of risks and responsibilities between operators and authorities

20

Ministry ofPublic Works

One Stop Transport Solutions20%Equity-80% Debt

Cargo ownersCommutersCompanies

Credit line

Credit Institute of India

National TransportReg. Auth.

Contributes Land andWater rights

Payment for services

Interest payments

Regional Environmental

Office

servicesServices:

Basic non commercial

Complementary

Commercial

RITES (Construction Companies)

Specific contract

MOU

Inspection / cargo control

Environmental Regulation

ManagementFee

21

One Stop Transport Solution

ParkingReal EstateDevelopment

CommercialServices

Road to RoadOperation Warehouse

Rail to RailOperations

Revenues from theBusiness or fee

Revenues from theBusiness or fee

Rental tariff for m2and % of business

Fee Fee Fee

New York City Transport Masterplan 2030 https://www.nysdot.gov/portal/page/portal/main/transportation-plan/repository/masterplan-111406.pdf

IBM Case Paper on Smart Transports http://www.ibm.com/smarterplanet/global/files/uk__en_uk__rail__smarter_system_trasportation.pdf?ca=content_body&met=uk_smarterplanet_rail_examples&re=spc

Bangalore Transportation – Research & Reports http://www.praja.in/en/gyan/bangalore-transportation-research-and-reports

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