Railway transport business processes modeling. Textbook

During the work of the company, relationships with partners are built. There are three main motives for creating partnerships: optimization and economies of scale, reduction of risks and uncertainty, acquisition of certain resources and activities. Key partners can be divided into 4 classification groups (Figure 1.14). Partnership is necessary to support the company, its functioning through the attracted infrastructure, optimization, production savings, as well as in the framework of logistics (supplies) and joint activities.

9 Block – Expenses structure

Any business model should be based on minimizing expanses. In this block, it is possible to determine what expenses the company will have for the functioning of its business model. There are two broad classes of expenses structure: the focus on expenses and the focus on value, where most business models lie between these classes. The former always strive to ensure minimized expenses for providing their value, and the latter to ensure the quality of their products. Expenses, in turn, can also be divided into groups (Figure 1.15).

1.4 The business model of the Russian Railways Holding

The generalized business model of the Russian Railways holding company can be clearly demonstrated using the Osterwalder model. The main blocks of the model are shown in Figure 1.16.

In the target model of the Russian Railways holding, there are 5 blocks on which the main work of the company takes place (Figure 1.17) [4].

1 BLOCK – Transport and logistics business block

The main priority in this block is the formation of a diversified product basket of the holding. The cargo owner offers comprehensive integrated services according to the main logistics principle «door-to-door delivery of cargo», but with an additional expanded range of services from 2PL to 3PL, 4PL.

The main functions of the block:

– work with shippers;

– development and formation of transport services;

– development of operator and logistics activities.

The above-mentioned functions and performance of the business unit are carried out by subsidiaries and divisions of JSC Russian Railways, the largest of which are JSC FСC, JSC UTLC, GEFCO and others.

BLOCK 2 – Business block «Passenger transportation»

The business block is aimed at developing offers to consumers of transport services, by accelerating and increasing the multimodality of transportation, improving the quality of traditional service, improving additional and related services.

The main functions of the block:

– provision of passenger, baggage and cargo transportation services;

– passenger service and maintenance of passenger trains.

Passenger transportation activities are organized in suburban traffic by 25 suburban passenger companies, the Directorate of High-speed Communication, JSC «FPC».

BLOCK 3 – Business block «Railway transportation and infrastructure»

This block is the largest block in JSC «Russian Railways», as it plays a key role in the work of the holding. Priority areas of development in this block are to reduce costs, develop new and improve existing transportation and logistics products, purchase and modernize infrastructure for increasing traffic volumes.

The main functions of the block:

– ensuring an uninterrupted transportation process;

– management of train traffic and traction resources;

– development, repair and maintenance of railway infrastructure.

The block’s activities are carried out by structural divisions of JSC «Russian Railways», such as the Central Directorate of Infrastructure, the Directorate of Traction, the Central Directorate of Traffic Management, the Central Directorate for Railway Track Repair, the Directorate for the Repair of Traction Rolling Stock.

BLOCK 4 – Business block «International Engineering and Transport Construction»

This block strengthens and expands the Holding in the international transport market, affects the expansion of other types of business as contractors in the construction of infrastructure facilities.

The main function of the block:

– provision of services for the design, construction, supply of necessary equipment for the maintenance and operation of infrastructure facilities being created.

Activities within the business block are carried out by divisions of Russian Railways International LLC and RasonConTrans Joint Venture.

5 BLOCK – Social block

This block is based on an objective assessment of the added value, which is created due to the social support of the team and the effective use of the block’s assets to provide market services. The main priority is the social and public policy of the Holding, which is carried out outside the collective.

The main function of the block:

– carrying out activities on social responsibility to employees, society and the state.

The activities of the social block are carried out by structural divisions of JSC «Russian Railways»: the Department of Social Development, the Department of Personnel Management, the Department of Organization, Remuneration and Motivation of Labor, JSC «Russian Railways Health».

2 CUSTOMER ORIENTATION IN THE FIELD OF FREIGHT TRANSPORTATION

2.1 The concept of customer orientation and its role in the field of freight transportation

The undisputed leader in Russia in the transport services market is the largest Russian Railways holding, in terms of a wide geography of transportation and volumes. Despite the leading position in terms of transportation volumes, it is also necessary to take into account the level of financial and economic activity of the company. It is not always possible to get a high percentage of profitability from the price factor, since the tariffs of JSC «Russian Railways» for most services are regulated directly by the state, while imposing obligations to carry out more socially significant transportation instead of commercially efficient. At the same time, in many market segments, JSC «Russian Railways» operates in conditions of intense competition with alternative modes of transport.

The Company needs to develop non-price competitive advantages, which are based on the formation of a strategy to improve the quality of services provided and the level of customer service.

Customer orientation is the main element of anti-crisis management, which offers the Holding additional advantages, especially during a downturn in traffic volumes.

The interpretations of the concept of customer orientation are closest to the working conditions of the Russian Railways holding, in understanding the company’s ability to create an additional flow of customers and additional profit [1].

The main objective of the Holding is a mutually beneficial long-term partnership with customers, the constant development of a portfolio of products and services in the interests of consumers.

For the Holding, which has more than 30 types of business in its portfolio – from freight and passenger transportation, from logistics, construction services, design, IT and even healthcare, a cardinal reversal of all resources and processes towards the client is a unique task covering all processes, from planning to the direct implementation of transportation and its resource provision. It is made even more unique by regulatory conditions, social responsibility and a special role in the country’s economy, determined by the main shareholder – the state.

The model of Russian Railways that has existed up to now, where 90% of business depends on the basic rail transportation service, with tariffs regulated by the state, cannot generate a financial flow to implement the necessary level of investment. The new business model, defined by the Development Strategy of the Russian Railways holding for the period up to 2030, provides for the transformation of the company from a transportation to a transport and logistics company, providing, in addition to the basic transportation service, a full range of services with the expansion of the range of 3PL, 4PL services and the formation of end-to-end supply chains in the cargo segment and multimodality – in passenger transportation.

To form non-price competitive advantages of the Company today, it is necessary to develop and implement a strategy in the field of improving the quality of services provided and the level of customer service. As long as there is no customer orientation, full fulfillment of all obligations on the part of the railway, well-coordinated work between all structural divisions, the cargo will go to other alternative modes of transport, and the railway will have heavy losses.

2.2 Tasks and activities of the Department of Business Development and Customer Orientation

In December 2014, the Department of Business Development and Customer Orientation was established.

The main goals of the Department, fixed in the regulations approved by the President of the company, are (Figure 2.1) [8]:

– formation and implementation of a strategy for customer-oriented activities of the divisions of JSC «Russian Railways» and its subsidiaries in order to maximize customer demand for the services of the holding of the required quality as a basis for increasing its economic efficiency;