presentation case study rajsthan roadways

7/30/2019 Presentation Case study Rajsthan roadways

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P R E P A R E D B Y :

A D N A N A L I

A R S H A D K H A N

A D I L K H A N

S A M A N N A A Z

Rajasthan State Road TransportCorporation

C GOPALAKRISHNANG RAGHURAM


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RSRTC : An Overview

Established on 1st of October 1964

Objective was to provide reliable, adequate, and efficient

transportation service to the public

Headquarter at Jaipur.

Primarily operates on the trunk routes


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A Senior IAS officer

Belongs to RajasthanState Cadre


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Prior Conditions

Prolonged strikes deteriorated the conditions

Continuous decline in productivity

Trust of the public had faded significantly

Urgent need of effective managerial intervention


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Measures Applied By Kaurani

Transformed the organization from three-tiered totwo-tiered

Assigned crucial powers to Depot Manager

Introduced a profit linked incentive scheme


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First 25 years

Years 1964-65 1968-69 1989-90

Fleet size 421 536 +3000

No. of Depots - 10 39

Passengerstransported(perday)

- 43175 634227

Divisions - 1 8

Buses/division - 536 393

Routes operated - 81 1676


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Contd

Gradual increase in fleet utilization, vehicleutilization, km/ litre etc.

Load factor remained more or less constant

Improvement in service figures

Profitable in initial years and incurred losses thereafter


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Change of chairman

In April 1991, Mr. Kaurani appointed as a newchairman

Also headed the organization between 1981 1984 asmanaging director

Determined to give overall boost to the corporation's

functioning productivity

Felt RSRTC having financial viability


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Strike(sep-nov 1990)

Reason for the strike:

Demanding benefits up to Rs 5 Crore

Wage structure higher than that of Government scale

Managements discontent with the amendment

Lasted for 72 days


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Strike contd...

Impact of the strike:

Load factor increased

Corporation incurred the loss of Rs 1209.7 lakh

Fleet utilization decreased from 90 to 75 percent

Strike called off on november 30th:


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PROBLEM ANALYSIS


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Three-tiered organization structure

CHAIRMAN MANAGING DIRECTOR DEPARTMENTAL CHIEF

1st tier

DIVISION CONTROLLER DEPUTY GENERAL

MANAGER2nd tier

ASSISTANT DIVISIONALMANAGERS

DEPOT MANAGERS3rd tier


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Two-tiered organization structure

CHAIRMAN MANAGING DIRECTOR DEPARTMENTAL CHIEF

1st tier

CHIEF MANAGERS

(Traffic/Accounts/Operation workshop)2nd tier


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Problem of Redeployment

Restructuring of the organization

Problem regarding the utilization of relieved manpower

Existence of vacancies enabled easy redeployment

Officers to opt for position of Chief manager or to join

Head office

Many of them opted for head office except few.


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Responsibility vs Authority

Depot managers Division managers

Report to division manager Report to chief manager

Administrative reporting Functional reporting

Vested with entire operational

responsibility

No responsibility in operations

Hardly had any disciplinary/financialpower

Vested with all disciplinary/financialpower


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Fare structure

Last fare fixed at an average of 13.65 paise/passengerkm on 3rd aug,1989

Substantial increase in input cost leading tocorporations loss

30 percent increase in fares rose the fare level to 17.6paise/passenger km

Kauranis comment on fare hike:

This fare hike was different in that it was granted withthe presumption of earning Rs 7 crore profit during1991-92. The past fare hikes generally covered onlythe cost increases and didnt lead to profits


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Age Of Fleet

Buses (%) Age of Fleet

45 > 6 years

32 > 10 years

17 > 12 years

Kauranis perception:

High Operation cost High Maintenance cost Breakdown of services Cancellation of schedules


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Comparison with other STUs

viz-a-viz GSRTC, UPSRTC, APSRTC

These STUs were better than RSRTC in terms of fleetand vehicle utilization

In terms of load factor and punctuality RSRTC ismuch better

M D Kauranis decisions:

Strengthening of depots to increase operationalefficiency

Abolition of divisions

Integration of command at depot level


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Integration of Command

Empowering depot managers

Depot managers designated as Chief manager

Transfer and removal power given to Chief manager

No involvement of Chief manager on issues relatedto deployment


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Other Related Reorganization

Workshops at Division level were abolished.

New workshops were made at depot level.

Garages and workshops were upgraded.


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Other Related Reorganization

No. of central workshops increased from 1 to 3

Major bus stations were made independent entities

Collaboration with Sulabh international for toiletcomplexes.


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Profit linked incentive scheme

Each Depot was declared as an independent profit centre

There were Monthly action plan.

The targets in action plan were considered as minimumrequirement.

The depots which earned more profits than the targetwere given 50 per cent of the excess amount earned.


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Profit linked incentive scheme

The profitability target was fixed based on three majorparameters

load factor.

earnings per kilometer (EPKM)

cost per kilometer (CPKM)


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Additions/Modifications to the Incentive Scheme

Sick Depot Rehabilitation:

Incentive for Depots Achieving Profits, but not

Targets

Incentive for Depots Achieving Targets, but not

Profits

Revision of Incentive Amount to the DepotOfficers.


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Additions/Modifications to the Incentive Scheme

Production Incentive for Central Workshop Employees

Special Cleaning Drive for Bus Stands and Buses

Incentive for Ticket Booking


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Reorganization and After

During 1991-92 and 1992-93 corporation hasshown a profit of Rs 13.6 crore and Rs 6.1 crorerespectively

Improvement in physical parameters.

daily kilometers operated fleet utilization,

vehicle utilization, and

passengers transported per day


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conclusion

Corporation was in turbulent phase and there was a needfor strong leadership.

Mr. Kaurani emerged as an effective leader for the

organization.

He proved that even loss making organizations can beturned into profit making entity without compromisingwith quality.

Mr. Kaurani get the full support from the government formaking reasonable changes.


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conclusion

He reorganized the corporation for better control.

Performance linked incentive schemes boosted the

employee motivation and sense of belongingness.

These changes resulted in organizations visibility


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conclusion

There was fair improvement in customer service.

This became an example for other state transportcorporations to follow.

Many magazines praises these phenomenal changes andrecommended for other PSUs.


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conclusion

Strong leadership can help achieve even so

called unrealistic and unachievable targets.


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presentation case study rajsthan roadways

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