The ICF's ability to change with the times and to meet new demands is the key to its success.
THE Integral Coach Factory (ICF), which started its journey on the road to self-reliance 50 years ago, has reinvented itself over the last decade. Once it epitomised the spirit of self-reliance and reflected the hopes of newly independent India; it is now coming to terms with a policy regime that is different from the one that was in place 50 years ago. Since it started production in 1955, the ICF has established itself as one of the leading manufacturers of railway coaches in the world. It has redefined its role as the premier supplier of railway coaches to the Indian Railways, which operate the longest railway network in the world.
In these days, when everything is "readymade", it is easy to take an institution like the ICF for granted. But one would do well to recall that things were different 50 years ago, when there were no precedents to follow. Resources were scarce. The option of outsourcing was simply not available then, for the simple reason that nobody else did what the ICF did.
When it was established, the ICF was mandated the task of designing and manufacturing various types of coaches from its manufacturing base at Perambur in Chennai. This was a major challenge. Chennai is today well known for its large number of technical education facilities, but there were hardly any in the area then. The ICF had to start from scratch. One of the first things that it did was to set up the Technical Training Centre on its campus.
The ICF entered into a technical collaboration with the Zurich-based Swiss Car and Elevator Manufacturing Corporation in June 1953. This collaboration was for the design of the first coaches manufactured by the ICF. The design was only for Third Class coaches, which were subsequently phased out. It is significant that all subsequent designs for the variety of bogies and special coaches that the ICF made came from in-house capabilities. In fact, the collaboration with the Swiss company concluded in 1961. P. Raja Goundan, General Manager, ICF, points out that this meant that "the baby was now completely on its own".
In the early days the ICF made only the "shells" of the bogies. These shells were transported elsewhere for furnishing. The 1,000th shell rolled out of the ICF in January 1960. In 1962 the ICF established its own furnishing facility. By 1961 the first fully furnished Third Class and First Class sleeper coaches rolled out. In 1962, the ICF made its foray into the manufacture of Electrical Multiple Units (EMUs), which held great promise in the quick movement of people. That promise has been delivered in the last few years as the ICF has come to occupy the position of the leading supplier of a variety of EMUs.
The ICF took its first steps on the global stage in the 1960s. In 1967 it exported bogies to Thailand. By the 1970s, it widened its reach by supplying coaches and bogies to Taiwan, the Philippines, Tanzania, Uganda and Zambia. Meanwhile, the range of its products also widened. By the late 1960s, the ICF had started manufacturing coaches for the first Rajdhani Express. It also made the first air-conditioned pantry car, the first power car and the first EMU motor coach running on Direct Current (DC).
In the mid-1970s, the ICF started producing air-conditioned coaches running on broad gauge, while improving and widening its capacity for the production of EMUs. The ICF also established itself as a reliable supplier of special-purpose coaches for the Indian railway system. Among these were the first double-decker coaches, the first military ward-cum-dining car and military kitchen cars.
In the 1980s, the ICF's ability to handle a range of needs enabled the Indian Railways to introduce several "super-fast" trains. It turned out the first double-headed rake for the Rajdhani Express. Since then, it has steadily turned out coaches for the new generation of super-fast trains.
This widening of its capability has enabled the ICF to lay emphasis on value addition. In the 1990s, the ICF manufactured about 30 different types of coaches. In fact, in 2006-07 it made 54 different types of coaches, which indicates the complexity of the work done at the ICF. It is obvious that producing a single variant of a coach can enable a producer to increase output significantly, compared to a situation in which the manufacturer has to produce a variety of coaches with different specifications for different applications and needs. Handling greater levels of complexity has enabled the ICF to step up value addition significantly.
Raja Goundan points out that "more variety means more complexity in the production process". "This," he notes, "will mean lower output in terms of the number of coaches produced."
However, despite smaller numbers, there was substantial increase in value addition. Raja Goundan says Second Class coaches, air-conditioned two-tier coaches and First Class coaches form the ICF's "bread and butter". Last year the ICF produced a total of 1,251 coaches; 859 of these were non-AC coaches and 105 were air-conditioned coaches.
The metropolitan railway networks in the country have been a segment that the ICF has tapped successfully over the years. This has not only added to the ICF's capability but also played a significant role in bolstering its balance sheet. The demand for EMUs has been growing in the last few years. The value addition is higher in the case of EMUs, when compared with the regular coaches.
The ICF's production of about 1,250 coaches in 2006-07 has been the highest ever. In fact, its performance in the last two years indicates that it has overcome a period of stagnation, which started in the mid-1990s. It must be remembered that the ICF's agenda is set by the railway establishment. The period of stagnation occurred because of lack of orders rather than the ICF's inability to produce coaches. The ICF has enjoyed greater success in foreign markets in recent years. In 2006-07, it exported 24 coaches to Angola. In recent years it has expanded its reach by exporting to Bangladesh, Vietnam and Mozambique.
The ICF's role as a credible supplier of EMUs has been bolstered by its readiness to offer solutions to its clients. For instance, the Mumbai metropolitan railway system had EMUs running on DC traction. The general consensus was that these have to be converted to Alternating Current (AC) traction. The system needed a conversion solution, which could be phased over time so that the entire system is not thrown out of gear.
Raja Goundan said that the ICF had started implementing this without causing major disruptions of service in the metropolis. This project required that EMUs should be able to run on both AC and DC traction, with trains adjusting automatically to the nature of the traction. The ICF has produced 15 AC/DC EMUs for the Mumbai metropolitan rail system in collaboration with Bharat Heavy Electricals Ltd. In fact, the second phase of the project envisages the production of 1,420 coaches, worth more than Rs.2,000 crore, for the Mumbai metro. The prototype for these trains, incorporating improved technology, is likely to be ready soon.
Asked to evaluate the ICF's contribution to the development of the Indian rail system, Raja Goundan said that the ICF had played a key role in three out of the four most significant changes in the Indian Railways in the last 50 years. He lists the biggest improvements in the following order, in terms of their popular impact: the computerised passenger reservation system, the greater availability of air-conditioned travel, the widespread use of EMUs and the improvements in coach interiors which have increased passenger comfort levels significantly. "These major improvements," he claimed, "are a measure of our [the ICF's] impact on rail travel in India."
When the EMU brakes, energy is generated in the form of heat and then dissipated. The ICF is now producing EMUs in which the energy generated by braking will be converted into electricity and fed back into the electrical system, which can be used by other trains using the same grid. Raja Goundan says that this will result in energy savings to the tune of 20-30 per cent. The prototype for these EMUs is ready and the ICF has supplied 15 trains to the Mumbai metropolitan railway.
The ICF has also been flexible in the adoption of new materials. Composites, for instance, have been used in the building of modular toilets in coaches. Moreover, the ICF is also building stainless steel coaches, particularly after the success of its exports to Malaysia. It has also tried several new materials in the air-conditioned EMU coaches that were supplied for the Multi Modal Transport System in the Hyderabad metro project.
Raja Goundan says, "The ICF has always been alive to the new materials available in the country - whether it is stainless steel, composites or fire-retardant materials." Last year, the ICF started designing stainless steel coaches. The main advantage is its long life - stainless steel coaches have a life of 35-40 years, compared with 25 years in the case of conventional coaches. These coaches will not corrode and will not need to be painted. In short, the lifecycle cost of stainless steel bogies will be much lower.
The ICF has always had a good track record as a caring employer. Raja Goundan said: "We have also made processes transparent to employees. Dates of promotional exams for employees are circulated well in advance so that they are prepared. After all, the purpose of promotions is to enable employees to grow with the organisation; it does not make any sense to make it difficult for them. We have also provided touch screens close to the shop floor so that workers can get details of their PF [Provident Fund], leave position and other details without having to run around for the information. Why should a worker have to beg someone for this basic information that he is entitled to?"
The ICF has a reputation for paying heed to the needs of the environment. It has successfully got recertification of ISO accreditation for ISO 9000 (quality management) and ISO 14000 (environmental management systems). It is in the process of getting accreditation to ISO-18000 (occupational health hazard management). Raja Goundan says that by doing this the ICF has shown its willingness to "benchmark" itself to global best practices in the relevant fields.
The range of welfare activities it has organised bears out its reputation as a socially conscious employer. For instance, Karuna, a special school, provides physiotherapy and vocational training to about 35 differently-abled children. The school is run by the ICF Women's Organisation. The children at Karuna produce products such as phenyl and paper plates. The income is shared among the children. The women's organisation has also organised women on the ICF campus into self-help groups (SHGs).