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, allowing for MTR to be
one of the world’s most profitable rail systems. Lee mentions that the MTR has
more than 100 stations, carrying millions of passengers daily and stretching
over 200km. He also comments that the MTR is very consistent in the frequency
of train arrival times. Lee implies 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 it has a large workforce to
maintain the railway system. Lee remarks that MTRC has an efficient
communication system in place to relay critical information to all its stations
when a problem arises. As the case of MTRC shows, 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 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. In contrast, MTRC have perpetually provided an “on-time rate of
99.9%” that delays commuters’ travel time by at least 5 minutes every 1,000
trips. (Lee, 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, which is an aspect that other railway operators
could consider improving.
Another benefit to
benchmarking is that it also analyses the performance of competitors in the
same industry, which might give 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. As MTRC is a private listed company, it has to provide better
services as opposed to its competitors according (TLS, 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 (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, SMRT’s main objective is just to meet the
customers’ needs.
In conclusion, benchmarking can help any organisation in
improving their performance by conducting an analysis of its own business model
against its competitors. SMRT can conduct a benchmarking exercise to identify
the strengths of MTRC, that contributes to MTRC’s success. Doing so will aid in
bettering SMRT’s services and maximising its revenue.
References:
How does our MRT compare with the subways of other cities. (n.d.).
National Library Education & Outreach.
Retrieved, September 27, 2017 from
Lee, M.K. Dubbed ‘the best in class’: 6 things about Hong Kong’s
MTR rail system. (October 29, 2015). The
Straits Times. Retrieved, September 26, 2017 from
Li, X.Y. HK rail’s ‘always improving’ ethos. (October 25, 2015). The Straits Times. Retrieved, September
26, 2017 from
Nayab, N. Pros and cons of
benchmarking. (August 14, 2010). Bright
Hub. Retrieved, October 1, 2017 from
Why HK’s MTR system more reliable as compared with SMRT?. (July 14,
2015). The Local Society. Retrieved,
September 26, 2017 from
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