Strategic Transformation at Prague Public Transport Co. Inc.

Transcription

1 Strategic Transformation at Prague Public Transport Co. Inc. Jan Barchánek Brussels, July 3 rd 2009

2 Basic data of Prague Public Transit Inc. (PPT) Prague: City area 496 sq. km Population about 1,200,000 Job opportunities about 780,000 Road network km PPT: Public ownership 100% by City Market share 100% metro, tram 71% bus (92% in city) Personnel employee PPT network: Metro (underground) 59 km 3 day lines 720 coaches Tram 142 km 25 day + 9 night lines 991 trams Bus (PPT - within the city) 690 km 163 day + 13 night lines 1158 buses PPT performance: 167 millions vehicle km per year 1262 millions passengers per year

3 Reasons for Transformation Pressure on owner (Prague Municipality) to decrease costs. Overstaffing Large and complicated company structure Low flexibility of staff Fear of competition on PT market

4 Concept Strategies for Transformation of PPT Inc Realization 1st phase Realization 2nd phase Main objectives: Hold high quality level of public transport service Be competitive on free market of public transport in European Union Reach European standard of company economical efficiency (better utilization of company resources) Increase efficiency of company management

5 Before Transformation hierarchical structure General directory BUDGET BUDGET BUDGET Metro division Tram division Bus division Operation Vehicles Infrastructure Financial mgmt HR mgmt Internal services Operation Vehicles Infrastructure Financial mgmt HR mgmt Internal services Operation Vehicles Financial mgmt HR mgmt Internal services Economic responsibility = DIVISION

6 After Transformation process structure General director BUDGET BUDGET BUDGET BUDGET Operational section Technical section Internal Services Financial mgmt. Metro operation Metro vehicles Metro infrastructure Information technologies BUDGET Tram operation Tram vehicles Tram infrastructure Internal Transport HR mgmt. Bus operation MAIN processes Bus vehicles TECHNICAL SERVICE processes Supply Assets mgmt. BUDGET Safety and security mgmt. service level agreements... CENTRAL SERVICE processes Economic responsibility = each UNIT

7 New strategy Evaluation of results of transformation ( ) 2007) SWOT analyses of actual situation Direction statement mission, vision, values Strategic Objectives (Balanced scorecard method) Priority issues Action plans for implementation

8 Strategy brochure for each PPT employee

9 PPT Vision high-quality, progressive and flexible operator the biggest PT operator in frame of Prague integrated transport system provide wide and high-quality metro and tram network provide high-quality and environmental friendly bus transport operate modern and environmental friendly vehicles provide barrier-less network provide complex and quality services for proper price

10 Strategic objectives Balanced scorecard Financial stability Customer Cost management management Revenues increasing Assets management Offering PT services according to Increasing of covering costs by customer demands internal revenues Systematic working with customers Decreasing of capital frozen in to attract them supplies and outstanding Increasing of customer satisfaction Increasing of capital assets covering by internal sources PPT Inc. Top European PT operator HR management Effectiveness and quality of internal processes Fulfilment of contracted traffic obligations Keeping of reliability and safety Increasing of internal process effectiveness Using of new technologies Increasing of productivity Decreasing of administrative staff Consolidation of staff competences and optimise age structure Consolidation of ethic standards Internal communication and staff satisfaction Decreasing of illnesses, incidents, fluctuation of staff

11 Priority issues 1. Quality of service Renewal and modernisation of rolling stock Electronic ticketing Development of technologies 3. Responsibility Environment friendly vehicles Barrier-less transport Staff satisfaction 2. Scope of service Metro and tram extension Close cooperation to Czech railways Increasing transport output 4. Economic efficiency Increasing cost coverage by revenues Effective HR management Increasing bus market share

12 Increasing cost coverage by revenues Cost coverage and subsidies expectation subsidies -16%

13 Decreasing costs, increasing revenues HR Audit employee 430 mil. Kč Outsourcing of supportive processes 150 mil. Kč Increasing productivity 100 mil. Kč Centralisation of Purchasing 410 mil. Kč Property management, leasing 100 mil. Kč Tariff policy 550 mil. Kč Planned annual cost savings 1090 million CZK (more than 42 million Euro)

14 Strategies for Planned network extension

15 1 2 3 Strategies for Action plans example for bus units name content KPI Long term contract for bus operation Bus rolling stock renewal Bus driver recruitment 4 Polite driver Award a contract for term Purchase of 720 busses for term Training of communication skills, institution of foreman drivers, marketing campaign Duration of contract 1 year 8 years Average age of bus 9 years 6,3 years % overtime work 11,5 % 6,5 % Quality standard Customer care 81% 90 % 5 Timetable optimization Decreasing non-productive working time of drivers, optimization of vehicle demand Average output per vehicle per day 199,1 km/day 210 km/day 6 Increasing travel speed Bus priority, stops on demand, etc. Average travel speed 25,71 km/h 28,57 km/h

16 Barriers and actions Main problems: lack of motivation and resistance to change Using actions: Involvement of (middle) management with new targets and processes Communication on changes (both in- and external) Promotion and support of teamwork Setting up of measurable targets and data evaluation using BSC (Balanced Scorecard method) and KPI s (Key Performance Indicators) Increase flexibility of some staff members Introduction of new technologies Implementing new control and safety systems

17 Thank you for your attention and see you in Prague!