malaysian railways (ktm)

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Universiti Utara Malaysia Master of Business Administration Supply Chain Management (BJMP6023) Prof. Dr. Premkumar Individual Assignment Wilson Christopher Metric No: 809402 Date of submission: March-29 th -2012 1

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Page 1: Malaysian Railways (ktm)

Universiti Utara MalaysiaMaster of Business Administration

Supply Chain Management (BJMP6023)

Prof. Dr. Premkumar

Individual Assignment

Wilson Christopher

Metric No: 809402

Date of submission:

March-29th-2012

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Page 2: Malaysian Railways (ktm)

Rail System in Malaysia

1.0 Executive summary

This write up specifically discuss about one component of the Malaysian transportation system,

which is the railway KTMB (Keretapi Tanah Melayu). This entity is about 120 years old in

transporting people and goods. Being a son of an ex-KTM train driver and had been traveling

with my family to various locations I have witnessed the progress of KTMB for all these years.

This paper explains if KTMB is still relevant and the core of Malaysian transportation system.

As consumers become more sophisticated, they demand the right services at the right time, right

price and at the right place. Today, the major challenge that KTMB faces are loss in revenue.

This can be overcome if KTMB is willing to enhance the traveling time from one point to

another point. They should also consider increasing the number of trips on various important

destinations. For example, traveling by express train from KL to Butterworth1 will take from 6

to12 hrs whereas express bus takes about 5 hrs. The frequencies of the departure for the bus are

also on hourly basis whereby as for the train it is only one trip a day. If only KTMB could turn

around their priorities they could be the 1st choice of transporting from cities to cities. Page

number 10, explains how KTMB’s actions gain the confidence from the public by reducing the

waiting time and by increasing the speed of the trains. KTMB plans, design, make and deliver

the needs of today’s generations. While doing so, KTMB may find ways of meeting the needs of

all the stakeholders equally. In page number 8 & 9 we could see if KTMB will be able to sustain

in near future and the action taken. Problems arise when railway land are being sold to housing

developers where the residents need to vacate to newer place. With the high power modern

trains, more electricity energy is required to drive those engines. Will that erode our future

environment for the sake of making more profits? Finally we could see the actions taken by

KTMB by addressing to all these issues by increasing double lanes. This is a big investment for

the Government; with all this improvements, will KTMB be still the transport of choice to meet

the demand of the near future.

1 Train time table can be refer at http://www.ktmb.com.my/images/pdf/jadual%20page%201.pdf

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Page 3: Malaysian Railways (ktm)

2.0TABLE OF CONTENT

1.0 Executive summary…………………………………………………… 2

2.0 Table of Contents……………………………………………………… 3

3.0 Introduction…………………………………………………………… 4

4.0 KTMB History………………………………………………………… 4

5.0 General Information on the Railroad System in Malaysia……………. 4

6.0 Mission of KTMB…………………………………………………….. 5

6.1 Vision of KTMB……………………………………………………… 5

7.0 Strategic roles of KTMB……………………………………………… 5

8.0 KTMB Operations……………………………………………………. 5

8.1 Intercity Freight………………………………………………………. 5

8.2 KTMB Intercity Passenger Rail and Intercity Commuter Rail……….. 6

9.0 Stakeholder…………………………………………………………… 6

9.1 Stakeholder Chart…………………………………………………….. 7

9.2 Stakeholder Matrix………………………………………………........ 7

10 KTMB Sustainable……………………………………………………. 8

10.1 KTMB to be privatize…………………………………………………. 9

10.2 Sustainability Program of KTMB…………………………………….. 10

11 Sustainability Phase Model…………………………………………… 10

11.1 Sustainability Challenges……………………………………….......... 11

12 Recommendations……………………………………………………. 11

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14.0

14.1

14.2

Conclusion…………………………………………………………….

Appendices & References……………………………………………..

KTMB losses………………………………………………................

Provides a map of the KTMB railway network……………………

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Page 4: Malaysian Railways (ktm)

3.0 Introduction

The Malaysian railways are indeed a dynamic, diverse corporatized entity that has the potential

to play an important role in the development of a sustainable transportation system in the

country. The company is wholly owned by the Minister of Finance Incorporated, a corporate

body established in Malaysia. The seamless land and bridge connections with neighboring states

are a key characteristic that may define the rail aspect of the system. Malaysian railways are

facing the challenge to improve their reliability and speed in order to offer competitive services

and enhance their importance as a road alternative.

4.0 KTMB History

The first railway track in Malaysia was built in 1885. This was a 12.8KM length of road from the

tin mining town of Taiping to Port Weld (known today as Kuala Sepetang). 1885 also saw the

introduction of steam locomotive service. The early 20th century involved the completion of

several connections including Padang Besar (in Perlis) to Singapore (in 1913), Gemas to Tumpat

to Hatyai (Thailand) (in 1930) and the North South link from Singapore to Thailand border (in

1931).

5.0 General Information on the Railroad System in Malaysia

As of December 2010 Malaysia has 1849km total track of which 57KM use Standard

(1.435 M) gauge and 1792km Narrow (1.000M) gauge. Approximately 150 KM of rail in

Malaysia is electrified2. Keretapi Tanah Melayu Berhad is the largest railroad in the country.

(Keretapi is a Malay word that translates to “fire wagon”). KTMB owns 2262 km out of the total

2418 km of tracks in Malaysia and employs 5024 employees. Of the remaining 156 KM, the

Sabah State Railway has 134 KM. (The remaining mileage remains unaccounted). KTMB3 is the

major and most important railroad in Malaysia. It is government-owned but managed by a

private entity. (Fixture 1)

2 All the information from the introduction paragraph were compiled from the CIA World Factbook foundat http://www.cia.gov/cia/publications/factbook3 The information for the KTMB has been found on http://www.ktmb.com.my

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Page 5: Malaysian Railways (ktm)

6.0 Mission of KTMB

KTMB’s mission statement is as follows:

KTMB is to be competitive and responsive to market needs.

KTMB must achieve its goals through a highly trained and motivated • workforce using

modern technology and process innovation.

KTMB must provide reasonable profit and long-term growth to it’s • shareholders.

6.1 Vision of KTMB

To be the most preferred mode of land transport in the country.

7.0 Strategic roles of KTMB

KTMB has always been the nation’s established player in the logistic industry, moving

passengers, goods and services throughout the railway network in Peninsular Malaysia and

Singapore. Its rail network strategically links and helps to develop the industrial growth centres

in the hinterland to the seaports such as Penang Port, Port Klang, Port of Tanjung Pelepas and

Tanjung Pagar. It also connects cross-border movements of freight between Singapore, Malaysia

and Thailand.

8. KTMB Operations

8.1 Intercity Freight

KTMB can transport a wide variety of products including hazardous material. There are

currently 5 different types of freight cars available; each side of the car; Bogie Flat Low Sides

(BFL), which are open wagons that transports bulk materials such as iron, granite, etc; these cars

have “drop-down doors” on the side; Bogie Container Flat (BCF), which are flatbeds that can

facilitate intermodal transfer from ocean ships onto the trains; Bogie Log Wagons (BLW)4, which

are flatbeds used for carrying logs; and finally, Domestic Containers, which is a KTMB owned

container.4 The types of KTMB equipment or types of coach- http://www.ktmkargo.com/#/equipment/

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Page 6: Malaysian Railways (ktm)

8.2 KTMB Intercity Passenger Rail and Intercity Commuter Rail.

KTMB operates four Daytime express trains (Ekspres Sinaran, Ekspres Rakyat, Ekspres Kenali

and Ekspres Tebrau) and Four Nighttime (or evening) express trains (Senandung Malam,

Senandung Langkawi, Ekspres Wau and Ekspres Timuran)

9.0 Stakeholder

Stakeholders are the individuals, groups or organizations who are actively involved or engaged

into an organization. Whose interest and action may be positively or negatively affected the

result or performance of the company. On November 2011 a meeting was organized with the

Five (5) focus groups were successfully conducted with strong participation from stakeholders in

railway industry. It is to provide a forum to gather information on local railway industry, to

identify capability gaps, lessons learned and best practices in developing the Malaysian railway

industry. Five (5) focus groups each were conducted in MIGHT Building at Cyberjaya. Each

focus group used the same set of process, which concentrated around four (4) major topics5:

1. Identification of major components in each sub-sectors of railway industry.

2. Review on current capability.

3. Selection of focus areas.

4. Identification of related issues and challenges related to industry and technological capability,

human capital and market potential.

9.1 Stakeholder Chart

5 Read more from myForesight at http://www.myfutures.my/index.php/section-blog/28-slide-article/116-stakeholder-sees-grim-future-in-the-development-of-local-rail-industry-with-absence-of-focused-areas

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Page 7: Malaysian Railways (ktm)

Stakeholder

What they

contribute to the

company

What they expect from the

company

What the company

expects from themStrategic Implications

Customer Business,

Constant supply, quality goods,

good customer

service/environment

Loyalty, continues

support Keep happy

Employee Knowledge, skills,

effort, innovation

Fair compensation, health and

welfare, safety, and job training

Hard work, loyalty Monitor performances

Government Capital Good performancesEthical practices,

Support Monitor performance

Shareholders Capital Profit, ROI Support Keep happy

Supplier

Reach to customer,

maintain quality

service and products

Consistent supply and new

products

Ethical behavior,

Serve customer well

Audit, change retailer

if needed

9.2 Stakeholder Matrix

Stakeholder Power Commitment Interest ImpactCustomer Low Low High HighEmployee Low High High HighGovernment High High High LowShareholder High Low High HighSuppliers Low High High High

Power: Ability to influence company decision.

Commitment: Obligation to the company.

Interest: Level of concern towards the company decision/performance.

Impact: Effect of their actions towards the company

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10 KTMB Sustainable

Here is another sad story from residents of Kampung Railway in Sentul, Kuala Lumpur. Their

livelihood has been disrupted over a development project. This area was known to be a Railway

quarters for the railway man to stay with their families. There use to have football field, railway

sports club, small medical dispensary and other facilities. All these are gone for the sake of the

development of housing projects. Such of this typical strategy were applied here at Perai, S.Perai,

P.Pinang.

"Imagine the hardship our fathers had gone through when they first came from India to build

railway tracks here.6

"They built Kampung Railway but now we are forced to move out without consideration of how

the village played a vital role in the nation's railway track development," he said, adding that the

last eviction notice was served in October last year.

6 Read more: 'Change KTMB land status' - Central - New Straits Times http://www.nst.com.my/streets/central/change-ktmb-land-status-1.53731#ixzz1odCZ9b8c?

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Page 9: Malaysian Railways (ktm)

10.1 KTMB to be privatize

What will happen if 120 years old railway need to been privatized? As the railways started to

lose the revenue they have to consider selling their land, this is needed in order to liquidize the

cash flow. Through this privatize, some 1 billion ringgit will be injected to KTMB. This exercise

will increase the cash flow of KTMB for their double track projects however; they had to leave

somewhere 5,500 workers to be jobless. KTMB need to look into the live hood of their workers

and family rather that just focus one aspect of pumping cash.

If KTMB was privatized, it would mean higher ticket fares7; a burden for lower-income groups

dependent on these trains. “But KTMB cannot do business. Fares cannot be raised because they

are controlled by the government. If this is given to a private company, the cheap fares we are

seeing today will be raised to get better returns,” he said.

10.2 Sustainability Program of KTMB

7More than5,500 workers will be retrenched http://www.freemalaysiatoday.com/2011/12/22/union-tells-mmc-to-rail-off/

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Page 10: Malaysian Railways (ktm)

8.0.1 Electrified double track project (EDTP) can also form the backbone for future commuter

services in the northern area – similar to Klang Valley commuter services – that will allow for

development to be more dispersed as people working in cities can live outside. Better rail

services will benefit lower income groups and rural communities.

8.0.2 The long suffering of KTMB Komuter users can look forward to better commuting

experience as 38 cars been added with Electric Multipal Unit (EMU) is put into services. With

this EMU’S KTMB will be able to reduce the waiting time from the current 15 minutes to 10 or

7 during the peak periods.

11 Sustainability Phase Model

1. Rejection

- Signifies the lowest

degree of responsiveness

towards human or

ecological resources.

2. Non

Responsiveness

-Financial &

technological factors

dominate business

strategies.

3. Compliance

- Emphasis is on

compliance with

legal standards.

4. Efficiency

-Systematic attempt to

integrate human

resource functions to

reduce cost / increase

efficiency.

5. Strategic Proactively

-Intellectual & social

capital is used as part of

corporate strategy.

6.Sustaining

- Corporation

Organizations seeks to

promote change with

other industries/society

participants.

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Page 11: Malaysian Railways (ktm)

-KTMB falls under the Compliance phase because it meets the minimum requirement. KTMB

also able to reduce the usage of fuel comparing to the public transport by road thus, this leads to

less pollution and better environment.

-KTMB faces competition from road transportation companies however; KTMB can be

considered being 6 times more efficient in cargo transporting compared by road.

Example: - Railway trains consume 80% less fuel than a truck whereas for the passenger train it

reduces by 20 times and more efficient.

-With the Electrified double track project (EDTP), KTMB would tap energy from the national

grid, which currently has a reserve margin of 38% over 70% of the grid. This is currently

powered by natural gas thus, these gasses are much cleaner than diesel or petrol used in car and

trucks.

- KTMB helps reduce road fatality rate; Malaysia has one of the world highest fatality rates8.

Trains are much safer and can save the country an estimated of RM400million annually in road

accidents.

-KTMB faces a big challenge with regards to the land issue of Kampung Sentul. The KTMB

finds way with the developer YTL Land & Development Bhd to provide every resident a flat

with 3 rooms and one bathroom for a price of RM45, 000 in Kuala Lumpur with other facilities.

12 Recommendations

With the doubled track extension from Ipoh to Thai border, KTMB services in terms of speed

will lead KTMB to increase the numbers of trips from major towns. This increment will increase

the revenue of KTMB. For an example, KL-Butterworth (390 km) by having double track the

speed of the train could be increase and as a result each trip will take only about 3 hours leading

to a total saving of 6 hours. 9 KTMB could also consider using solar power or reuse energy for

8 See the details of road fatality http://thestar.com.my/news/story.asp?sec=nation&file=/2010/9/18/nation/70613849 Explains the details on the time saving with the double track http://www.2t.com.my/EN/project/how.html

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Page 12: Malaysian Railways (ktm)

other railways gadget. KTMB should have road shows on their new services so that the public

will know the progress of KTMB and the new offers provide service operators.

KTMB must approach Government during (Balik Kampung) and encourage the travelers to

travel by train, this is vital as to compare by road and bus, the number of accident are at the

rising state. According to statistics provided by the Royal Malaysian Police (PDRM) 414,421

accidents were recorded in 2010, an increase of 4 per cent over 397,330 accidents in 2009.10

With KTMB increases the numbers of trips, the public will gain confident as a result railway will

be transport choice from road to train.

13 Conclusions

KTMB will continue its effort to turn railway as a preferred mode of public transportation, as

they are the only rail operator that has a nationwide network. The possibilities of expanding to

the rest of other regions in this country by providing commuter service like in Penang and Ipoh is

highly possible. With the electrified double track and with purchasing more electric locomotives

KTMB will be able to provide a faster service. At the same time the new trains are also

environmentally friendly system that will cut down on CO2 emissions. We could conclude that

KTMB considering being compliance and sustainable since they are working towards

minimizing global warming and climate change. Apart from that, they are also upgrading their

line from a middle gauge to a standard gauge, as it is used in Europe and Japan. This could

enable the train to run faster at a top speed of 200 km/hour. Currently, it takes six and a half

hours to travel from Kuala Lumpur to Singapore. With the high speed train, this journey could be

reduced to one and a half hours, and possibilities of replacing the airline route is in hand. In

relation to the rest of the country, KTMB could be able to reach cities in west Malaysia each

within an hour. With this KTMB will once again be the core of Malaysia transport provider.

10 Read more on the road accident http://www.theborneopost.com/2011/08/25/don%E2%80%99t-just-add-up-to-accident-statistics/

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14 Appendices & References

http://www.thesundaily.my/news/192621

14.1 KTMB losses

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Page 14: Malaysian Railways (ktm)

http://www.themalaysianinsider.com/litee/malaysia/article/ktmb-recorded-rm1.45b-in-losses-up-

to-2008-says-audit-report/

14.2 The following figure provides a map of the KTMB railway network

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Page 15: Malaysian Railways (ktm)

(Figure 1)

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