In the article, “Dubbed ‘the best in class’: 6 things about Hong Kong’s MTR rail system,” Khaw (as quoted in Lee, 2015) claims that Hong Kong’s Mass Transit Railway (MTR) is considered the best railway operator in the industry, and it is being used as a benchmark for railway operators from other countries. Lee states that Hong Kong’s government allows private companies to operate public utilities, that allows for MTR to be one of the world’s most profitable rail systems. Lee mentioned that the MTR has more than 100 stations, carrying millions of passengers daily and also stretches over 200km. He also commented that the MTR is very consistent in the frequency of train arrival times. Lee implied that the reason why MTR’s operations are running smoothly is because of spending more than one third of MTR Corporation’s (MTRC) revenue on maintenance, and also it has a large workforce to maintain the railway system. Lee remarked that MTRC has an efficient communication system in place to relay critical information to all its stations when a problem arises. With the commendations of MTRC’s operations, it is good practice for organisations to benchmark their performance against other corporations that are successful in their business model.
Benchmarking allows for an organisation to evaluate on the success of their operations and business model in order to identify areas to improve on. By doing so, the organisation will be able to keep up with upcoming trends in the industry, closing the gap between the services the organisation provides and what the customer wants, which results in attaining the capability to meet the demands of its consumers. Recently in Singapore, there have been numerous disruptions in Singapore Mass Rapid Transit (SMRT)’s railway services, causing delays that could exceed an hour in the commuters’ travel time. Whereas MTRC have perpetually provided an “on-time rate of 99.9%” that delays commuters’ travel time by at least 5 minutes, according to Lee in the original article, (2015). Passengers do not want to be set back by the railway operators and MTRC minimises its delays, providing a service closer to the needs of its consumers.
Another benefit to benchmarking is that it also analyses the performance of competitors in the same industry, which gives the organisation a competitive edge over its competitors. Having competitors in the same industry serves as an incentive for an organisation to differentiate itself from others, inducing a competitive environment where the different organisations will have to continuously upgrade themselves. MTRC is a private listed company, meaning that it have to provide better services as opposed to its competitors (Lee, 2015). However, being a public listed company, SMRT holds monopoly in the railway operations in Singapore and will focus on maximising on its revenue to keep the interest of its stakeholders as mentioned by TLS (2015). As there are no private listed companies competing against SMRT, there is little incentive for it to better services for its consumers, rather, its main objective is just to meet the the customers’ needs.
There can also be comparisons against other organisations in terms of weaknesses, to determine which areas the organisation is strong in as opposed to its competitors. Doing so can help in avoiding the less desired outcome achieved by other competitors, and maintain its own success or improve on it. This can be seen in an article, “How does our MRT compare with the subways of other cities?”, the National Library Education & Outreach (NLB, n.d.) found that SMRT have strengths in terms of travel fare on the consumers. The Land Transport Authority (LTA) announced that the fares imposed to the commuters are based on the distance they travelled, instead of per trip. This allows for no transfer cost when commuters transfer between train lines and even to buses, which also mitigates the issue of congested trains and buses.
References:
Dubbed ‘the best in class’: 6 things about Hong Kong’s MTR rail system. (2015). The Straits Times. Retrieved, September 26, 2017 from
http://www.straitstimes.com/asia/east-asia/dubbed-the-best-in-class-6-things-about-hong-kongs-mtr-rail-system
7 Steps to better benchmarking. (2009). Business Finance. Retrieved, September 26, 2017 from
http://businessfinancemag.com/business-performance-management/7-steps-better-benchmarking-0
Why HK’s MTR system more reliable as compared with SMRT?. (2015). The Local Society. Retrieved, September 26, 2017 from
http://www.thelocalsociety.com/why-hks-mtr-system-more-reliable-as-compared-with-smrt/
HK rail’s ‘always improving’ ethos. (2015). The Straits Times. Retrieved, September 26, 2017 from
http://www.straitstimes.com/asia/east-asia/hk-rails-always-improving-ethos
How does our MRT compare with the subways of other cities. (n.d). National Library Education & Outreach. Retrieved, September 27, 2017 from
http://www.nlb.gov.sg/sure/how-does-our-mrt-compare-with-the-subways-of-other-cities/
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