Moving 23 million passengers per day across a network long enough to circle the Earth 1.5 times, the Indian Railways is a mammoth undertaking1. It is India’s largest and the world’s eighth largest employer with a 1.3 million workforce moving 2.6 million tons of freight operating 19,000 trains per day1. As India looks to accelerate its growth story, infrastructure across the transportation sector has emerged as it’s Achilles heel. While top industrial houses like Mahindra, ITC, Birla and others digitize their supply chains, the railways is the bottleneck that lags behind, still operating with colonial-era infrastructure2, 3. Freight costs in India account for 14% of its GDP, compared to 8-10% share in advanced economies, highlighting glaring inefficiencies4. The need for an upgrade and investment is further underscored by the country’s mission to increase share of rail in all freight movement, up from 35% to 45%4. The increase is a critical piece in India’s commitment to combat climate change as seen in its ambitious stance on the Paris Climate Change Accord5. The lack of modernization in Indian railways not only impacts commerce and industry, but also affects passenger movement. IRCTC.co.in, the online ticketing platform of the railways is the tenth most visited website in the country with 1.2 million hits per minute6. The platform has been plagued by a dismal user experience emerging as a consistent source of anger and frustration among its massive user base7.
In an effort to combat the concern of its trailing position in modernization of its technology infrastructure, the organization is now taking concrete steps to shed its stone-age rapport. For passengers, it has begun work on the revamp of the platform and is planning to finally roll out mobile applications to ease the booking process7. On the commerce front, under the initiative to improve ease of doing business in the country, the railways announced the launch of Digital Contract, in April earlier this year. With 100 per cent e-tenders and e-auctions already assimilated into the system, the railways is further planning to build on these initiatives to achieve seamless flow of material, finances and information8. The system includes digitisation of processes such as bill submission, inspection, dispatches, receipt, bill passing and bill payments, warranty monitoring and the use of analytics for increasing supply chain efficiency in real time. With the new system, the railways is betting on the digitization push to enable use of analytics for decision-making, reduce inventories and shorten procurement cycle time8. The expected gains from the system are expected to improve the performance of the organization’s supply chain which involves numerous stakeholders spanning across an enormous geography, parts of which suffer from challenging physical as well as information connectivity. Enhancements in performance of the railways is expected to have a ripple effect in the India’s commerce with a large number of industries and companies expected to gain from the acquired competence and gain in efficiency.
While the steps taken by the railways towards digitization are commendable, especially in context of its sheer scale and existing infrastructure, it has a long way to go considering the large gap that it needs to cover to meet the needs and demands of Indian commerce. The current scope of its efforts has been focussed on software oriented solutions building basic tools to bring the various stakeholders on the same wavelength for information flow. It will soon have to work towards adopting tools such as AI and machine learning, to forecast demand, supply gaps and customer preferences, among other things. Adopting these technologies could help it achieve significant gains in operational capacity as well as financial efficiency. On the hardware front, it could gain from implementing more POS machines for vending, ticketing and other purposes that could further improve operations and potentially automate information sharing. In addition, it could work towards deploying sensors or RFID trackers along its network to track real time movements of not just certain trains, but also specific commodities or items to help delivery real time information about exact location of any item at any given time, thus truly proliferating the entire supply chain with information and valuable data points.
Going forward, it would be exciting to see the execution of these ambition plans. What would be the challenges that the railways would face in implementing the new systems at such a large scale? What are the best ways to roll out the systems across its large workforce? (Many of whom are not used to using technology and information systems in day-to-day work) How can this be rolled out best to outside stakeholders such as vendors, contractors in far flung areas to ensure adoption?
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