TY - BOOK
T1 - Performance improvement strategies for railway enterprises
AU - Tervonen, Juha
AU - Seneviratne, Prianka
AU - Kilpala, Heli
PY - 2000
Y1 - 2000
N2 - This report addresses the performance measurement of
railway enterprises from two perspectives. First, the
on-going separation process of European railway companies
into infrastructure companies and operating companies
allows a clearer identification of stakeholders and their
expectations, according to which performance targets
should consequently be set. Second, based on an extensive
review of empirical research on railway productivity, a
set of performance strategies likely to be meaningful in
the future of European railway enterprises has been
formulated.
In the past, European railway enterprises have aimed at
satisfying public perceptions, policy makers and
community goals. In addition, performance measurement in
scientific literature has concentrated more on describing
the differences in market geography, rather than pure
economic efficiency. Due to the now granted managerial
autonomy and exposure to competition, railway companies
are formulating their business and operational strategies
according to commercial lines. Therefore, there is a need
for setting goals and selecting indicators for monitoring
the success of these strategies. There exists a timely
opportunity to adopt strategies for significantly
improving railway performance. Such strategies can be
formulated, e.g., based on the experiences gained from
deregulation in North America.
The North American railway companies were granted more
pricing freedom and the freedom to choose their markets,
which they serve by government deregulation acts in both
the US and Canada in the 1970s and 1980s. Such managerial
autonomy resulted in abandoning unprofitable lines,
mergers and exposure to competition, which resulted in
significant decreases in the costs of production and
prices of services. However, the impacts of deregulation
are not indefinite. Other cost, pricing and market
strategies are required for sustaining competitiveness.
According to the authors of this report, the performance
strategies of European railway enterprises should focus
more on revealing the differences in relative cost and
revenue ratios of different parts of the network and on
the different types of services provided. Furthermore,
diversified pricing, marketing and quality-of-service
strategies should be developed for capturing higher value
segments in the transport markets. A set of indicators
for highlighting the importance of cost, revenue and
profit orientation and quality of service are proposed.
Suitable long-term productivity measurement techniques
are also discussed.
AB - This report addresses the performance measurement of
railway enterprises from two perspectives. First, the
on-going separation process of European railway companies
into infrastructure companies and operating companies
allows a clearer identification of stakeholders and their
expectations, according to which performance targets
should consequently be set. Second, based on an extensive
review of empirical research on railway productivity, a
set of performance strategies likely to be meaningful in
the future of European railway enterprises has been
formulated.
In the past, European railway enterprises have aimed at
satisfying public perceptions, policy makers and
community goals. In addition, performance measurement in
scientific literature has concentrated more on describing
the differences in market geography, rather than pure
economic efficiency. Due to the now granted managerial
autonomy and exposure to competition, railway companies
are formulating their business and operational strategies
according to commercial lines. Therefore, there is a need
for setting goals and selecting indicators for monitoring
the success of these strategies. There exists a timely
opportunity to adopt strategies for significantly
improving railway performance. Such strategies can be
formulated, e.g., based on the experiences gained from
deregulation in North America.
The North American railway companies were granted more
pricing freedom and the freedom to choose their markets,
which they serve by government deregulation acts in both
the US and Canada in the 1970s and 1980s. Such managerial
autonomy resulted in abandoning unprofitable lines,
mergers and exposure to competition, which resulted in
significant decreases in the costs of production and
prices of services. However, the impacts of deregulation
are not indefinite. Other cost, pricing and market
strategies are required for sustaining competitiveness.
According to the authors of this report, the performance
strategies of European railway enterprises should focus
more on revealing the differences in relative cost and
revenue ratios of different parts of the network and on
the different types of services provided. Furthermore,
diversified pricing, marketing and quality-of-service
strategies should be developed for capturing higher value
segments in the transport markets. A set of indicators
for highlighting the importance of cost, revenue and
profit orientation and quality of service are proposed.
Suitable long-term productivity measurement techniques
are also discussed.
KW - railways
KW - railway companies
KW - performance evaluation
KW - improvements
KW - productivity
KW - indicators
KW - infrastructure
KW - deregulation
KW - logistic operations
KW - administration
KW - management analysis
M3 - Report
SN - 951-38-5643-7
T3 - VTT Tiedotteita - Meddelanden - Research Notes
BT - Performance improvement strategies for railway enterprises
PB - VTT Technical Research Centre of Finland
CY - Espoo
ER -