Case Study
CASE STUDY SOLUTION OF PROFESSOR’ LALU SCRIPTS INDIAN RAILWAY’S TURNAROUND FOR PRODUCTION AND OPERATION MANAGEMENT
CASE-1
‘PROFESSOR’ LALU SCRIPTS INDIAN RAILWAY’S TURNAROUND
Summary
In December 2006, as many as 137 undergraduate students from the universities of Harvard and Wharton gathered to listen Indian Railways minister, Lalu Prasad Yadav at Rail Bhavan. These foreign universities had expressed to know how Lalu converted the loss making Indian Railway into Rs. 20 billion profit making organization within 2 years, without increasing fares.
Mr. Lalu Prasad Yadav explained students in Hindi and his speech was translated in English by his aids. However the students of various countries questioned the sustainability of his model, they asked Lalu why he could not turnaround Bihar in the 15 years rule of Rashtriya Janta Dal (RJD) in that state, while he changed railways within 30 months. Lalu said, ‘Bihar needed an outside push. It had too many problems, while the railways had a lot of potential. It is like an empire’. Jeffrey Immelt, the chairman of General Electric, who visited Rail Bhavan recently, was surprised that the Rail Bhavan is now talking about unit cost, volume increment and competition. The IR has just become the second most profitable public enterprise after ONGC.
Indian Railways is the world's largest employer, providing 1.6 million jobs, one of the largest and busiest rail networks in the world, carrying 18 million passengers daily. Yet it has, so far, stayed ahead of global recession. Thanks to Mr. Lalu Prasad Yadav for a job well done. He has surprised many by emerging as one of the top performing ministers in Prime Minister Manmohan Singh’s cabinet. He is being credited for the impossible—the turnaround of the monolithic Indian railways.
When he took over as Railway Minister in 2004, the 156-year old Indian Railways was dismissed as a hopeless, loss-making organization, with too little revenue, too many problems and too many employees.
CASE-1
‘PROFESSOR’ LALU SCRIPTS INDIAN RAILWAY’S TURNAROUND
Summary
In December 2006, as many as 137 undergraduate students from the universities of Harvard and Wharton gathered to listen Indian Railways minister, Lalu Prasad Yadav at Rail Bhavan. These foreign universities had expressed to know how Lalu converted the loss making Indian Railway into Rs. 20 billion profit making organization within 2 years, without increasing fares.
Mr. Lalu Prasad Yadav explained students in Hindi and his speech was translated in English by his aids. However the students of various countries questioned the sustainability of his model, they asked Lalu why he could not turnaround Bihar in the 15 years rule of Rashtriya Janta Dal (RJD) in that state, while he changed railways within 30 months. Lalu said, ‘Bihar needed an outside push. It had too many problems, while the railways had a lot of potential. It is like an empire’. Jeffrey Immelt, the chairman of General Electric, who visited Rail Bhavan recently, was surprised that the Rail Bhavan is now talking about unit cost, volume increment and competition. The IR has just become the second most profitable public enterprise after ONGC.
Indian Railways is the world's largest employer, providing 1.6 million jobs, one of the largest and busiest rail networks in the world, carrying 18 million passengers daily. Yet it has, so far, stayed ahead of global recession. Thanks to Mr. Lalu Prasad Yadav for a job well done. He has surprised many by emerging as one of the top performing ministers in Prime Minister Manmohan Singh’s cabinet. He is being credited for the impossible—the turnaround of the monolithic Indian railways.
When he took over as Railway Minister in 2004, the 156-year old Indian Railways was dismissed as a hopeless, loss-making organization, with too little revenue, too many problems and too many employees.