Indian Railway Codes and Manuals-Mechanical code (Rolling stock )-Chapter- 11 (XI)
CHAPTER 11
Capacity Optimization and Product Development
1101.
Background. In this dynamic world, new products emerge and old ones disappear,
demand shifts form one product to another, innovation alters methods of
production and so on. Systems should therefore be in place for speedy and
unhindered development of new products and technologies for meeting challenges
such as: a. Product matrix and quantum of outturn varying widely in Production
units year after year, depending upon the growth projection and budget
availability. b. And this change is notified only during the year in question
without sufficient time for advance planning. c. Similar phenomenon witnessed
in the Repair workshops, and maintenance sheds though to a lesser extent, due
to change in the type/technology of rolling stock (conventional as well as
DPRS). d. Workshops and maintenance depots handling rolling stock (conventional
as well as DPRS) which were equipped with systems and technologies spanning
three to four decades. Therefore it is necessary to consciously create flexible
structures with complete freedom to adopt strategies like outsourcing,
flexibility with regard to deployment of manpower amongst different shops
within the same unit to match capacity with demand etc. The following
initiatives shall be adopted depending on the requirement. a. Staff
multi-tasking and multi-skilling b. Inter-shops staff transferability c.
Outsourcing (outside the shops) d. Outsourcing (within shops)
1102.
Multi skilling/ tasking and Inter-shop transfers In a Production Unit
(PU)/workshop, final assembly and production of certain critical sub-assemblies
and components has to be done in-house. To match changing product mix and
volume, manpower may have to be re-deployed amongst shops – within the
PU/workshop. Establishment rules should provide fora. Multi skilling b. Multi
Tasking c. Inter-shops transfer – with seniority protection d. Re-training and
re-development Above will enable outsourcing of non-critical jobs and the staff
that may be rendered excess in these shops to be re-deployed in assembly and
critical items of work. This strategy will provide flexibility in labour
availability to meet fluctuations in outturn.
1103.
Outsourcing – need to outsource While it may be ideal to do most of the jobs
in-house to ensure strict control over quality of inputs and processes,
outsourcing the work to other agencies may become inescapable, under
circumstances such as: a. There is no possibility of getting it done in other
Railway workshops with known capacity and capability for the product. b. Sudden
spurt in the requirement of components/sub-assemblies far beyond the capacity
of the shops c. Need to optimize and augment capacity of core shops (assembly
shops) resulting in re-deployment of personnel from non-core to core shops
(component to assembly shop) with consequent capacity reduction of component
shop d. Introduction of new material/technology for which skills/capacity/
equipment may not be available within the workshop e. Standard components that
can be procured from outside or the work outsourced, resulting in lowering of
cost. This is due to economy in scale of production available with the
supplier. f. Short-term / one time jobs for which permanent capacity cannot be
created within the workshop g. Need for heavy inputs of infrastructure not
commensurate with the quantum of required by Railways for its production. Under
these circumstances, the shop in-charge should decide to opt for outsourcing.
Outsourcing can be from either a unit outside the workshop premises or an
outside agency which will be required to execute the task inside the workshop.
1104.
Outsourcing to units outside the workshops. Components and assemblies can be
outsourced to unit a outside the PU through a system of tendering, keeping in
view the under mentioned guidelines: a. Decision on outsourcing shall be taken
at the level of the Workshop / Factory In charge, with Finance Concurrence,
except for certain critical components as excluded by the PHOD wherein criteria
for out sourcing as and when needed will be finalised by HOD of Workshop for
Zonal Railways only, in consultation with associate finance. b. Pricing
guidelines shall be established on the basis of in-house
manufacturingcost-excluding overheads and overheads to be added at commercial
rates for cost comparison.
1105.
Outsourcing or contracting for works within the Railway Premises. In case of
certain sub-assemblies, assemblies and critical items, it becomes necessary
that manufacture, assembly and/or testing is carried out inside the Railway
premises by the contracting party due to reasons such as: a. Need to control of
quality of raw material b. Facilitate control of quality of workmanship through
stage inspections c. Specialized large-scale infrastructure needed for the
manufacturing process may not be available with vendors. d. Need for investment
in costly specialized equipment, which are otherwise not usable by the vendor
for other general products manufactured by the vendor. Since both these aspects
will inflate his bid price which will ultimately get loaded on the cost of
production. Special tooling required for the job e. Component/processes forming
part of an assembly line in the Production Unit or Workshop. f. Logistical
problems and disproportionate transportation costs.
1106.
While outsourcing within the shop facilities, all safeguards in Para 1103 shall
be ensured. In addition, to avoid contract disputes, care should be taken to
see that following conditions are fulfilled and precautions taken: a. Work area
for the contractor to be separated from that of Railway staff b. Shared machine
and equipment time available to the contractor to be clearly defined to avoid
mix up c. Wherever raw material and consumables are to be supplied by the
Railway, stock should kept separately and accounted for. d. Consumption norms
for raw materials and consumables to be evolved for each item issued to the
contractor by the Railways e. Documentation to be signed by both Shop
Supervisor and Contractor f. Electric power, water and utilities including
tools provided by the railways to be accounted and documented g. Control of
quality of workmanship by in process inspection h. Accountal of scrap / left
over material to be returned by contractor to be accounted and kept separate i.
Industrial safety standards as prevailing in the shop shall apply to the contract
workers. j. All relevant legal provisions and their compliance to be ensured.
Check list for precautions to be taken before contract is awarded for
outsourcing work inside the workshop with outside labour. Sl. No. Precaution to
be taken Yes No 1 Has separate work area for contractor been earmarked 2 Has
requirement of Railway supplied consumables – like special electrodes, water,
electricity etc. been computed and listed 3 Has material requirement for
outsourced job been separately worked out 4 Has machine hours for use of
Railway equipment for the job been computed and listed 5 whether payment to
contract workers is being made through bank, in a transparent manner 6 Have
contractor’s workers been issued separate ID 7 Is an accounting system in place
for contractor supplied items, raw materials and consumables 8 Has workshop
supervision been organized to check on the work 9 Has the contractor complied
with all legal provisions required under law, for which the Railway has an onus
of responsibility Note: The answer to all the items is to be ‘yes’, Before
outsourcing Contract is awarded.
1107.
ERP Based production management ERP based systems for production Management
optimizes resource allocation and utilization ERP has become a powerful tool in
cost optimization. ERP based system should be developed specifically to cover
various aspects on Material Management, M&P and Assets Management, Progress
of work and Quality in all workshops & major LCDs, in order to achieve cost
optimization. Details are covered in chapter 9:
1108.
RDSO’s role in vendor approval and product inspections/ development RDSO is the
technology centre of Indian Railways and has to perform the role of R&D.
Industries usually spend 2 to 3% of their turn over on R&D. To concentrate
on this core function, RDSO should confine themselves to approval of new types
of rolling stock (conventional as well as DPRS) new technologies and new
systems. Subjects like new manufacturing systems/related technologies should be
left to the Design & Development wing of PUs. In order that RDSO’s role is
focused on product / process research and in areas of new technologies and new
materials, their involvement in vendor development/inspection should be
restricted to important items of wagons only. Further RDSO should play the key
role in development of selected new products including prototype approval, as
directed and monitored by Railway Board. RDSO is authorized to form joint
venture with institutes in research and development related to Railways or its
activities
1109.
Innovation In a competitive environment, the survival of an organization
depends on innovation to a significant extent. Innovation helps attainment of
a. Cost optimization b. Higher productivity c. Quality enhancement and safety
d. Ease of maintenance The above objectives are relevant in the context of
Railways facing increasing competition from Road and Airways in both freight
and passenger segments. The areas of focus for innovation are: a. Process
improvement through advanced technologies b. Productivity enhancement through
process modification / simplification/ reengineering c. Cost reduction through
new material, technology and material substitution d. Worker motivation through
improved environment ergonomics transportation cycle time and effort reduction
e. Reduction of wastages, inter-shop movements and reduction in material usage
f. Reduction in rejections and consequent savings in cost of re-working and/or
wastage g. Reduced maintenance through design enhancement and quality
enhancement
1110.
Strategies for innovation a. Employee participation b. user and the
manufacturer c. Interaction between Design office and the production shop. d.
Suggestion schemes e. Reward schemes for successful innovative practices f.
Study of new technologies and material science g. Continuous and focused market
watch/research, to observe emergence of new technologies, materials, practices
h. Effective inter-change of information amongst different workshops i. Focused
R&D effort j. Creation of cross functional teams for innovative
suggestions. k. Encourage patenting by railway employees for all inventions
including those used in railways. l. Railway Workshops to provide reasonable
prototyping support to innovative personnel who have registered for patents
relating to railways while permitting reasonable rights to the inventor to
promote the spirit of invention for perpetuating technological development and
growth. m. Institutionalizing the process of assimilation of new patented
technologies developed by inventors amongst railway men by assigning this
responsibility to a senior official.
1111.
Utilization of surplus shop capacity Surplus capacity can arise in a Production
Unit or Workshops due to downward fluctuation of loads, addition of new
equipment or induction of new technology. Many production units in the public
sector are augmenting revenue by taking short run orders from private parties
to utilize such capacities. Outside jobs can be undertaken by Railway units
provided: a. Full capacity utilization is not achieved by existing Railway jobs
on hand b. Advanced production against Railways’ requirement for succeeding
years cannot be undertaken now due to budgetary constraints c. Not taking extra
orders would result in idle man-hours and idle machine-hours
1112.
Process of procuring outside orders. Before setting out to exploit the surplus
shop capacity, following action must be taken: a. Classify the types of jobs to
be undertaken. b. Advertisements are issued specifying types of jobs that can
be undertaken and production facility available. c. Decision based on i.
“Available capacity” ii. “Capacity job match” d. Man-hour rate and machine hour
rate excluding overheads should be computed. e. Cost of support services like
power, water, compressed air to be computed in unit consumed basis. f. Cost of
consumable materials like electrodes, lubricants, cleaning items etc. to be
computed on unit basis. g. Records to be maintained for each jobs for all the
above on actual utilization basis. h. Correlation between consumable items and
man-hour and machine hour to be worked out as a standard for costing.
1113.
Profitability: Wherever Railway overheads are high, cost of undertaking jobs to
outsiders inside the Railway Workshops would be uncompetitive and
un-remunerative for potential clients. In such cases, principles laid down at
Para 723 for costing of export should be followed to establish the bottom line
so that viability is ensured both to the potential client and the PU/workshops.
1114.
Annual Maintenance Contracts for M&P The millwright organization in
production units/ workshops and open line takes care of M&P maintenance.
Over the years, with increasing sophistication and extended use of electronics
based control systems in M&P, the skills of millwright staff have not been
upgraded to keep pace with maintenance requirements. The maintenance cover for
M&P therefore should be adequately provided by way of annual maintenance
contracts with the original equipment manufacturers (OEMs) or their authorized
agents, where feasible, to ensure that the assets is productively utilized with
adequate uptime. Such annual maintenance contracts can also be concluded at the
time of purchase of M&P item by factoringin the AMC cost along with the
purchase price. The objective of AMCs shall be to provide a high up-time for
the M&P items by providing a reliable maintenance support. However, efforts
shall be made to get the millwright staff trained in maintenance of machines to
gradually reduce the expenditure on AMC. Proven sources for AMC/Overhauling/Repair
contracts for M&P, Rolling stock assemblies etc. can be considered besides
OEMs in case OEMs are not responsive or quoting exorbitant rates/ unacceptable
conditions.
1115.
General The contents of this chapter are applicable to all establishments of
Rolling Stock Production and Maintenance i.e. Production Units, workshops &
LCDs of open line establishments.
Multiple choice questions:
- Which of the following is NOT a reason for the
necessity of flexible structures in production units?
- a. Outsourcing of all tasks
- b. Shifts in demand for different products
- c. Introduction of new materials and technologies
- d. Budget availability affecting product output
Answer: a. Outsourcing of all tasks
- What is one of the key strategies for handling fluctuating
demand in production units?
- a. Permanent hiring of additional staff
- b. Establishment of static structures
- c. Multi-skilling and multi-tasking of staff
- d. Limiting production to a fixed number of products
Answer: c. Multi-skilling and multi-tasking of staff
- Outsourcing becomes necessary under which of the
following circumstances?
- a. Sudden increase in the requirement of components
- b. Consistent and predictable production volumes
- c. Adequate in-house capacity for all production needs
- d. All production jobs requiring strict quality
control
Answer: a. Sudden increase in the requirement of components
- Which entity is primarily responsible for the approval
of new types of rolling stock and technologies?
- a. Production Units
- b. Maintenance Depots
- c. RDSO
- d. Workshop In-charge
Answer: c. RDSO
- Why is it important to control quality when outsourcing
within railway premises?
- a. To reduce costs
- b. To facilitate contractor compliance with legal
provisions
- c. To ensure quality of workmanship and raw materials
- d. To increase production speed
Answer: c. To ensure quality of workmanship and raw materials
- What measure should be taken before awarding an
outsourcing contract inside a workshop?
- a. Computing machine hours for railway equipment
- b. Reducing supervision of the work
- c. Eliminating documentation of consumables
- d. Allowing the contractor unrestricted access to
resources
Answer: a. Computing machine hours for railway equipment
- What is the main role of ERP-based systems in
production management?
- a. To increase the number of products produced
- b. To optimize resource allocation and utilization
- c. To reduce the need for skilled labor
- d. To eliminate the need for outsourcing
Answer: b. To optimize resource allocation and utilization
- Innovation in the railway industry aims to achieve all
of the following EXCEPT:
- a. Cost optimization
- b. Higher productivity
- c. Increased bureaucracy
- d. Quality enhancement and safety
Answer: c. Increased bureaucracy
- Which of the following is NOT a strategy for fostering
innovation?
- a. Employee participation
- b. Eliminating suggestion schemes
- c. Study of new technologies and materials
- d. Reward schemes for innovative practices
Answer: b. Eliminating suggestion schemes
- Under what condition can surplus shop capacity be
utilized for outside orders?
- a. Full capacity utilization by railway jobs
- b. Idle man-hours and machine-hours are expected
- c. Budgetary constraints prevent advanced production
- d. Both b and c
Answer: d. Both b and c
- What is the purpose of annual maintenance contracts
(AMCs) for machinery and plant (M&P) items?
- a. To increase the cost of production
- b. To ensure high uptime for M&P items
- c. To replace old machinery with new ones
- d. To reduce the need for skilled maintenance staff
Answer: b. To ensure high uptime for M&P items
- When outsourcing work within the railway premises, what
documentation should be signed by both the shop supervisor and the
contractor?
- a. Payment receipts
- b. Quality inspection reports
- c. Equipment usage logs
- d. Supply documentation for raw materials and
consumables
Answer: d. Supply documentation for raw materials and consumables
- What should be ensured before outsourcing work to an
outside agency within the workshop premises?
- a. Work area for the contractor should be shared with
railway staff
- b. Contractor's workers should be paid in cash
- c. Separate accounting system for contractor supplied
items
- d. Contractor should provide all consumables
Answer: c. Separate accounting system for contractor supplied items
- What should be done to optimize the process of
procuring outside orders?
- a. Issuing advertisements specifying available
production facilities
- b. Keeping costing methods confidential
- c. Avoiding correlation between consumable items and
man-hour rates
- d. Reducing transparency in cost computation
Answer: a. Issuing advertisements specifying available production
facilities
- What is the role of RDSO in the context of new product
development?
- a. Routine inspection of all products
- b. Approval of new types of rolling stock and
technologies
- c. Day-to-day manufacturing oversight
- d. Marketing and sales of railway products
Answer: b. Approval of new types of rolling stock and technologies
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