How a project-based approach serves to optimize railroad logistics

A project-based approach has been adopted in Russian Railway's transportation and logistics unit and its results for 2023 have been summarized.

Because of its flexibility, a project-based approach facilitates quick implementation of innovations.

"In structural terms, our holding company is going through transformation. Special divisions are being established in certain subsidiaries to handle project activities. Such divisions have already been established in JSC FGC (Federal Freight Company). JSC Russian Railways Business Asset is actively engaged in this effort," Alexey Shilo, Deputy General Director of JSC Russian Railways and Head of the Center for Corporate Transportation Services (CСTS), noted in his speech.

The first Russian Railways Project Center, whose specialists have provided comprehensive assistance to work teams implementing projects, was established in 2021. Projects are replicated once they have been completed. The product that results from the project is transferred to the assigned division for follow-up support, for which various tools are available. "In fact, we have organized a project incubator," said Alexander Voroshnin, deputy head of Center for Corporate Transportation Services (CСTS) (for the development of transport and logistics activities).

He noted that project concepts are mostly contrived in interaction with clients and taking into account their requests.

For efficient work on projects, CСTS utilizes a unique mechanism for their implementation - a so-called 'drop-off', when employees are transferred to the Project Center for the period of project implementation. In such an approach, employees are able to assume the responsibility for implementing the project and express themselves, allowing them to build competencies.

We are collaboratively developing the automated project management system (AC PRO) with the Design and Construction Technological Bureau for Informatization Systems - Center for Digital Technologies, a division of Russian Railways (PKTB-CTCT), which serves as a crucial tool. Using it, the Project Center can manage projects, track progress and bottlenecks, create tasks for executors, and generate reports. The program is now undergoing a trial run. We have already entered into the system the information about seven projects which involved 25 people implementing it," said Arsen Grigoryan, head of the project management department of the transport and logistics direction of the Center for Corporate Transportation Services.

Approximately 100 proposals were reviewed in 2023, 22 of which were recognized as feasible for further development. Thus, the portfolio had already been expanded by nine new products, services and lines of business by the end of the year, bringing stable financial results.

Employee motivation

By participating in project activities TLU employees get additionally motivated as well as obtain opportunities to grow their competencies in an accelerated manner. Everyone who has performed well on a project is also eligible for a priority promotion to roles with greater responsibility.

According to Alexey Grom, General Director of UTLC ERA, additional motivation is necessary both for employees to actively participate in project activities and for TLU managers to confidently "drop off" their subordinates into projects.

The best cases were selected in accordance with the rating assessment of those participating in TLU project activities of the Russian Railways "Osnova".

The "Declarant" project (registration of transit declarations of EEU goods in electronic declaration format) was awarded the first place. This project is already being implemented across the holding company's entire network without territorial limitation. In terms of promoting this service, Russian Railways offers a number of advantages. In particular, this concerns electronic interaction between the holding company and the Federal Customs Service, which reduces the time of customs operations, as well as ensures comprehensive customer service based on the one-stop-shop principle. Since "Declarant" was put into operation, more than 40 clients have enjoyed the service, with more than 2 thousand transit declarations issued.

The project continues to evolve. This year, we are introducing a novel concept to automate transactions through a single contract, all managed conveniently within the customer's personal account.

The concept behind the project "RZD Import. RF" came into being after the Russian Railways holding company's partners requested an establishment of a duty-free distribution center for imported goods in Kuzbass. Project implementation is divided conditionally into two stages - the opening of a customs warehouse and development and introduction of a consignment mechanism.

The first phase has been successfully implemented and the warehouse was put into operation last summer. This warehouse is not only a storage place for goods before sale without customs clearance; it also provides sorting, crushing, and segregation capabilities for incoming goods. The second stage, the consignment mechanism, is now under development. Its trial operation is scheduled to start in the second half of this year.

The project "Integration of 1C and AS Etran" offers information exchange between the holding company's and the clients' systems. The specialists in charge of the project have developed a package offer that can be installed in the client's 1C system. So far, 12 orders have already been completed.

According to Alexey Shilo, it is necessary to analyze organizational aspects and create a methodology for assessing the effects of projects. "We will approach any concept with utmost seriousness and respect. "I have personally experienced that even the most fantastic concepts can be implemented and yield positive results." he concluded.

Sergey Volkov