Background
An operator of a large metro railway runs trains from six main depots carrying around 200,000 people every day. In addition, it is responsible for the system using a mix of internal and external maintenance teams to look after rolling stock, stations, signals, 150km of track and associated infrastructure. Each day the majority of the work needs to take place between midnight and 5am each morning. In total it employs 3,000 people directly and a further 3,000 through contractor organisations.
Although still in development, the organisation was largely a reflection of its previous status under state ownership and was unsuited to rapid decision-making and continual improvement. With much of the work previously undertaken in-house having been contracted to third parties, there was also a need to review core-competence skills and roles and responsibilities.
Task
T.A. Cook was contracted to undertake an initial review of the organisational effectiveness and determine opportunities for short and medium term improvement. Because of the largely unionised work-force, the exercise was to be undertaken in an especially considered and non-invasive manner.
Approach
The exercise was initiated with a review of the existence and accuracy of existing organisational charts. Recognising that these were imperfect it became necessary to develop a secondary and independent picture of employee numbers and structure.
Under normal circumstances and in order to validate the structure, the T.A. Cook team would have mapped the key processes and spent considerable amounts of time asking staff about their role, their understanding of their tasks and hence priorities. Whilst mapping was possible, detailed observations of staff, their behaviour and workload was not acceptable. T.A. Cook therefore decided to corroborate findings and ensure buy-in by undertaking six different types of study to arrive at valid results. These were:
• Simple inter-departmental benchmarking exercise
• Time extrapolation of the perceived daily split of activities
• Time requirement calculation based on repetitive processes
• Reverse engineering of management fees charged by contractors
• Subjective required-to-run exercise generated by managers
• Zero-based / best practice exercise
These studies showed that staff numbers were inflated due to a number of reasons:
• Internal duplication of contractor management activities and structures
• Some service contracts not actively managed or linked to appropriate service level agreements (SLAs) and key performance indicators (KPIs)
• Insufficient levels of co-operation and interaction between units and departments
• Staff skills not well linked to requirements of asset management
• Predisposition to arrange meetings with excessive numbers of participants and poorly-defined goals, controls and outcomes
• Little proactive supervision of teams
• Insufficient departmental cost control and lack of cost and performance oriented key performance indicators for overhead and support departments
• Some contracts and spend aligned to asset performance either not completely understood, or consistently measured
• Whole life costing not generally applied
• Many opportunities for consolidation of smaller and low-risk goods and services
The solution
T.A. Cook identified that uncertainty relating to accountabilities, roles and responsibilities was the key factor inflating over-all staff numbers on both client and contractor sides. The team interviewed a number of major contractors as well as client staff managing the contractors to assess key requirements and performance to-date.
Coupled with quantitative findings from the process analysis, this information made it possible to determine optimal client and contractor structures and specifically the creation of a smaller, focused account team with clear longer-term commercial, day-to-day performance as well as longer-term technical accountabilities. For each of these and several other subsidiary roles the T.A. Cook team defined a list of tasks, expectations and escalation procedures reflecting the most probable 25 or so known events and situations encountered during the set up, commissioning and running of a contract.
Having drawn up these structures, the consultants then conducted an appraisal process to begin to populate the most important roles with appropriate personnel and determine required support and training. Additionally, to ensure understanding and sustainability, a simple management and reporting system with terms of reference was created and rolled out with appropriate key performance indicators.
Immediate Benefits
• Agreement of short-term headcount reduction based upon part-time and consultant avoidance saving £500k
• Installation of skill matrix and assessment methodology
• First goal-oriented meetings with key contractors using simple KPIs
• Immediate improvement in contractor performance and identification of corrective actions
Longer term recommendations
• Identification of lower headcount targets based upon internal staff reduction due to realigned contract management structures saving £2m
• Hiring plan for new staff aligned to requirements of asset management
• Introduction of formalised co-ordination between operations and project
For more information contact:
Rupert Clark
Marketing Manager
Direct: +44 (0) 1183 260 229
Mobile: +44 (0) 7792 926 696
r.clark@tacook.com |
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