Interview with P. Raja Goundan, General Manager, ICF.
A TECHNOCRAT by training, P. Raja Goundan, General Manager of the Integral Coach Factory (ICF), believes in imparting a "humane touch" to everything he does at the workplace. For instance, he insists on being present when an employee leaves the ICF for the last time upon retirement. Employees recall that during the floods of 2005, when parts of the ICF campus were flooded, he ensured that relief was provided to the affected workers and their families. "I knew that I could not solve all their problems, but at least they were reassured that the management had not abandoned them," he said.
With a doctorate in electrical engineering from the Indian Institute of Technology Madras, Raja Goundan joined the Indian Railways in 1971. He assumed charge of the ICF in June 2005 and enjoys a reputation of being a hands-on administrator.
Raja Goundan believes in a human-centric approach to management and argues that the strength of an organisation depends on how well human resource is nurtured. Excerpts from an interview he gave Frontline:
The ICF is one of the leading coach-building units in the world. Can you describe its transformation over the years?
The first phase, in the 1950s, was what I would call the `Budding Fifties'. During this phase, the basic infrastructure was laid. The design capabilities were acquired from the Swiss Car Elevator Manufacturing Corporation. The ICF also established its own training centre because very little talent was readily available in educational institutions in those days. In this phase was that the ICF was given only one contract - to produce Third Class coaches for the Indian Railways. All subsequent designs evolved from this "mother" design, developed in-house. In the early days, the ICF made only the shells of the coaches, which were sent to the various railway divisional workshops where they were furnished.
In the second phase, what I call the `Sparkling Sixties', the ICF started designing and manufacturing a variety of coaches. We started manufacturing Electrical Multiple Units (EMUs) running on alternating current (AC). The ICF's collaboration with the Swiss company also came to an end in this period. The baby now had to walk on its own. Another significant development was that in 1962 the ICF started furnishing coaches.
The `Celebrated Seventies' was a phase in which exports increased sharply. Another major diversification was the supply of coaches for the military. We also built the first prototype for the Kolkata metro. This was the first time we set our sights beyond the Indian Railways. We consolidated our position in the matter of addressing the needs of the Indian Railways, while setting our sights on other markets in India and overseas.
During the 1980s, the `Elegant Eighties', the ICF started to showcase its products. It paid more attention to aesthetics and elegance. Meanwhile, exports continued to grow as we diversified to new markets. We also produced the first metre-gauge air conditioned coaches, as well as coaches for special trains such as the rakes for the double-headed Rajdhani Express, the Taj Express and the Shatabdi Express.
In the 1990s, the annual capacity of the ICF was enhanced to 1,000 coaches. We designed metre-gauge coaches for the Palace on Wheels. We introduced several air brakes in this period. We introduced MEMUs, mainline electrical multiple units. This was our baby but now the Rail Coach Factory, Kapurthala, is producing it. We started producing coaches for the broad-gauge version of the Palace on Wheels. We developed test cars for overhead electrification. During this decade we developed roof-mounted air-conditioning units; until then, they were always underslung. The coolant tubes used to suffer damage from flying ballast, while travelling at great speed. The roof-mounted solution solved this problem. We introduced air springs in EMU coaches. We switched over to bogie-mounted air brakes. Air brakes were earlier mounted on the underframe. The point is that many of these things were never attempted before, which is why I call this decade the `Never-before Nineties'.
Since 2000, we have gone further. We developed the first 1,400 horse-power (hp) Diesel Electrical Multiple Units (DEMUs), which made it possible for the Railways to run EMUs in non-electrified territories. It is a speciality of the ICF. In fact, the ICF is the sole producer of many of the special bogies and coaches for the Indian Railways. We have designed and produced coaches for the Multi-modal transport system in Hyderabad and bogies for the Sky Bus in the Konkan Railway. The ICF has patented the design for these bogies. Our target is to acquire at least four or five patents every year.
What are the different types of coaches that the ICF makes? How have changes in technology been incorporated?
First, we have shown the ability to adapt to the needs of the consumer. I cannot tell my customer that since I acquired only the technology for Second Class coaches from my Swiss collaborator, I can only supply those kind of coaches. This is why we always kept pace with demand. When the Railways wanted First Class coaches, we readily met the need. Later, when they wanted us to make airconditioned coaches, we started manufacturing them as well. Similarly, when the Railways wanted specialised coaches, we were equal to the task. The ICF's adaptability to the changing needs of the Railways has always been one of its main strengths. The nature of the demand from the Indian Railways is a function of economic growth as well as the diversification of the economy. That means that we have to adapt ourselves to the changing economic environment.
Second, in order to remain competitive in the new environment we had to adopt new materials. Third, we have had to change our methods of production, keeping in mind the economic environment we are situated in. For instance, when we started 50 years ago, even a pin had to manufactured in-house. In those days the Ambattur Industrial Estate did not exist. The ICF was the only large industrial unit in this part of Chennai. In fact, the Training Centre was the most sought after training institute after the Guindy Engineering College in those days.
The situation is very different now. The ICF will become obsolete in terms of technology if we are not on our toes. Many units in the industrial estates here can do many of the things we do now. How do I adapt myself to the new situation? I cannot simply say that I will make everything I need at costs which are far higher than those made by the other units. We realise that other units can manufacture non-core items used in our products at costs far below ours. By outsourcing from them, I am utilising the economic environment to our advantage by keeping the costs of our products down. Moreover, by doing this I can use my manpower to make more coaches. This is what has enabled us to increase our coach production capacity from 100 to more than 1,250 coaches in the last five decades. We started with about 16,000 employees and now we have about 13,000 employees. This means that our productivity has increased substantially during this period.
But does outsourcing not create friction at the workplace?
No. As I said, this is done only in the case of non-core items, such as door handles for coaches. But there is no outsourcing of bogies, wheels or welding work or any work in which safety is a critical issue.How much is outsourced?
In value terms, only about 10 per cent of the work is outsourced. We are manpower-rich. It makes sense for me to use what I have fully. Moreover, there are industrial relations implications if I blindly outsource everything. It would not be right to do that because that was not the purpose for which the ICF was established. But at the same time it does not make sense for me to manufacture pins or fans and to do electroplating in-house. I need to strike a sensible balance so that I take advantage of the competitive rates outside while utilising the skills of the workforce within the ICF.What are the major components of the ICF?
At the macro level, the major units are the shell division, the furnishing division and the spring shop. The ICF makes springs not just for our own consumption but for other units of the Indian Railways. We also have a painting subdivision, a bogie subdivision and the shell and shell assembly subdivisions. On the welfare and amenities side, the ICF has quarters for its employees - about 3,000 houses - a hospital, a club, the training institute, community halls, marriage mandapams and other such facilities within the 500-acre [200 hectare] campus.
The ICF uses materials worth about Rs.500-600 crore, a workforce of about 13,000 and about 300 acres of land to produce goods worth about Rs.900 crore.
What are the challenges for the ICF in the new environment?
First, the ICF is an organisation whose main strength is its human resources. This is why we adopt a human-centric approach.
The second issue pertains to the kind of relationship we maintain with our suppliers. That is why inventory management is a big challenge. We have about 750 suppliers all over the country, about 300 of whom are in the Tamil Nadu area. We have to nurture and develop [our relations with] them. This requires transparent processes and is linked to quality management. All this means that I must maintain a well-lubricated supply chain so that production is not hampered.
The third important issue relates to the modernisation of the ICF's machinery. We are 50 years old. Naturally, our machines need to be replaced. For this we need to have a road map of the technology available in the market. We also need to anticipate how the technology is going to change in the years ahead. I cannot buy the most automated versions because that would displace my workforce, which is my main strength. I can buy the latest technology in some areas, but I must find alternative work for the displaced workers. For this I must first ensure that these workers are trained adequately in new tasks. This requires strategic planning.
The social environment has changed dramatically in the last 50 years. How has the ICF coped with the new situation in industrial relations, welfare policies and as a socially responsible employer?
The pressure on us is mainly from our employees. If I can take care of this, there is no problem. For instance, we ensure that the incentive system works properly. Last year we increased the incentive to 70 per cent. We also produced about 200 more coaches. So it is a win-win situation. We have initiated the ISO 18000 exercise in the ICF. BHEL [Bharat Heavy Electricals Limited] is perhaps the only other PSU [public sector undertaking] that has implemented ISO 18000. This requires us to improve the environment at the workplace - reduce noise levels and pollution - and to provide a safe and congenial workplace. We are willing to benchmark ourselves to the best industrial practices. This will ensure less pollution, clean bathrooms and toilets and cleaner and happier working environment. For instance, we are spending Rs.2 crore on fume extraction equipment so that pollution is reduced substantially in our welding units; welding is one of our main activities. We have removed 2,000 truckloads of muck from within the premises.