Report

ANALYSIS AND EVALUATION OF OPERATIONS

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21212808
Managing Business Operations
BA50005
Marwan Elnaghi

London
November 2013

Table of Contents
1

Introduction......................................................................................................................3
1.1

Background...............................................................................................................3

1.2

Company size...........................................................................................................3

1.3

Customers................................................................................................................3

1.4

Competitors..............................................................................................................3

1.5

Performance.............................................................................................................3

1.6

External factors that affect the organisation.............................................................4

Business operations........................................................................................................4
2.1

Transformation processes........................................................................................4

2.2

The four Vs..............................................................................................................5

2.2.1

Volume...............................................................................................................5

2.2.2

Variety................................................................................................................5

2.2.3

Variation.............................................................................................................5

2.2.4

Visibility..............................................................................................................6

2.3

Operations performance objectives..........................................................................6

2.3.1

Quality................................................................................................................6

2.3.2

Speed.................................................................................................................6

2.3.3

Dependability.....................................................................................................6

2.3.4

Flexibility............................................................................................................6

2.3.5

Cost....................................................................................................................6

Process Design...............................................................................................................7
3.1

Layout of engineering...............................................................................................7

3.2

Main objectives.........................................................................................................7

3.3

Control and feedback mechanisms..........................................................................8

References......................................................................................................................9

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1 Introduction
The purpose of this report is to analyse and evaluate the operations in Metroline Limited.
This report also focuses on the transformation process, the five performance objectives,
the four Vs of operations management and the process design.
The information used in this report has been collected from various industry reports, news
articles, textbooks and internet resources.
1.1

Background

Metroline is a bus company operating services in Greater London. It was established in

1989 and is a subsidiary of a Singapore company ComfortDelGro since 2000. Metroline
Limited operations are split between Metroline Travel Limited and Metroline West Limited
(formed after purchase of 5 garages from First Group in 2013).
1.2

Company size

Metroline is operating 99 routes in London and has 14 garages with a fleet of 1682 buses.
The company employs over 4500 bus drivers, 250 engineers and other staff. Metroline is
currently the third largest bus company in London after Arriva and Go-Ahead. The total
revenue from Transport for London (TfL) for bus contracts and rail replacement services
for 2012/2013 was 18.5million. The parent company ComfortDelGro is the second largest
land transportation organisation in the world with operations in Singapore, China, Australia,
Malaysia, Ireland, Vietnam and UK. Its 46600 fleet of buses, taxis, trains and rental
vehicles turned over 1.7billion revenue last year.
1.3

Customers

Usually the passengers are defined as the customers of any bus company. Even though
customer care and support are kept in high standards Metroline and others are not
competing for passengers (except private hire). Any person who is travelling on a bus in
London is a customer of TfL. Metroline is carrying the passengers on behalf of TfL.
1.4

Competitors

TfL is governing over 700 routes around Greater London. Approximately 7500 buses carry
more than 6 million passengers every day. There are 14 private bus companies (22
including subsidiaries) undertaking all the work from TfL and operating the routes from
their 107 garages. Every route has a period of tendering where all operators can bid for
the operations. Metrolines garages are based in North and West London areas and the
routes operated are located locally. The main competitors to bid for the same routes are
London United, Sovereign, Tower Transit and Abellio.
1.5

Performance

The performance of all buses in London is monitored by London Buses (department within
TfL). Their reports show that Metroline West is performing better than Metroline (Metroline
Travel). However, in most instances Metroline is below the bus network average and does
not meet the minimum standard in Actual mileage operated. This may result in penalties.
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Table 1. Metroline operating performance in 22nd June 2013 to 13th Sept 2013 compared to London average.
1.6

External factors that affect the organisation

The main losses in mileage are due to traffic delays. Occasional disruptions are caused by
water main repairs, road works or other events like Notting Hill Carnival where the service
is diverted. Minor delays are caused by Police investigations, snowy weather or a
passenger incident.
On a bigger scale a loss of a route to another company or a change in TfL policy may
affect the company. But these issues are subject to mitigation and can be dealt with.
During the economic recession Metroline did well because people still needed buses for
everyday travel and staff losses were minimal.

2 Business operations
Metrolines main operation is transportation of passengers. The companys best known
activity is carried out with buses driven by its drivers. Metroline itself consists of many
more departments that act as a supply network for passenger transport operations.
2.1

Transformation processes

Metroline offers service for customers. It transforms (transports) passengers from A to B by

using buses and staff. The staff directly involved are 4500 drivers, supervised by 100
service controllers. The transformation begins with passenger boarding the bus and ends
with leaving the bus. The process takes as long as the journey lasts. In terms of output the
passenger is transported to new location. The process may be interrupted in certain
occasions, a bus breakdown for example. The process can then proceed with another bus
or be terminated altogether.

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Figure 2. Transformation process in Metroline.

2.2

The four Vs

Figure 3. The four Vs of operations management in Metroline.

2.2.1 Volume
Metroline serves over 720000 passengers every day. Some routes are busier than others.
The buses can carry up to 100 passengers at a time. The process is highly repetitive and
has low costs per passenger. The drivers main duties include driving the vehicle and
loading/unloading passengers.
2.2.2 Variety
By law the buses can pick up and drop off passengers only in bus stops. There is not
much variety in terms of where passenger can board the bus or travel to. The routes are
well-defined and run in a set schedule. Some stops may have many routes serving it with
different destinations. The network is constantly being improved.
2.2.3 Variation
The timetables for bus service are carefully produced by TfL based on demand. There are
peak times where buses come more often to satisfy the customer travel needs. Metroline
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keeps the service stable by monitoring the running times of each vehicle via GPS tracking
system. Heavy traffic may cause delays and Metroline has strategy to keep the process
moving by turning the late running buses around before the final destination. This helps to
even up the long gaps between buses. All irregularities are predictable.
2.2.4 Visibility
Customers can directly experience the operations of Metroline by travelling on its buses.
They have short waiting tolerance and may just walk or take a taxi if they cannot see any
bus coming. With high-visibility operations the bus drivers need customer contact skills.
However, the passengers do not have the complete overview of the traffic ahead or how
late the bus is running. Sometimes drivers inform passengers about their supervisor
decisions to change the route (diversion) or destination.
2.3

Operations performance objectives

Metroline is closely monitoring its performance. Their aim is to become the Londons best
bus company.
2.3.1 Quality
Metroline is constantly updating its fleet of buses to replace the old diesel engines with
environmentally friendly hybrid buses. It was the first company to lease the Borismaster
double-deckers. Keeping the buses clean and tidy, running accurate and user-friendly
timetables and using helpful staff, improves the service quality of Metroline. Quality is also
a key to win new routes from TfL.
2.3.2 Speed
This is not about speeding off quickly and getting to the destination fast. Time keeping is
more important. Speed for Metroline means fast acting in case of disruptions. They have to
adapt to the situation and use measures to keep the losses to minimum. However, there is
strong correlation between bus running speed and fast service delivery.
2.3.3 Dependability
Passengers rely on Metroline service every day. Metrolines high performance is only
established when customers can depend on its service. This means keeping to the
timetable at all times. Internal dependability between different departments within
Metroline helps operations run more effectively. Dependability is probably the most
valuable objectives for customers.
2.3.4 Flexibility
Flexibility is the least important objective for Metroline because its routes and times are
regulated by TfL. But during weekends when there are fewer buses on the road Metroline
is operating rail replacement services and other profitable private hire services. Its large
fleet and manpower can cope with unpredictable demand.
2.3.5 Cost
The biggest operating cost for Metroline is staff wages. Metroline has kept drivers pay
rates at one of Londons highest in order to keep them from leaving for competitors.
Another large cost is the operating of buses, mainly fuel. Approximately 100-120 litres of
diesel fuel is filled in every bus daily. This mounts to 6million worth of diesel used for
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running the routes every month. Investment in new hybrid technology will hopefully pay off
soon. It is also the TfL requirement to own a number of hybrid buses. As a profit orientated
company Metroline still aims to cut cost and boost revenue.

3 Process Design
The most important role in bus industry is carried out by the bus drivers, followed by
engineers. Without them there would be no service. Metroline has extra drivers on standby
and spare buses available in depots. One of the key processes is to keep the buses in
working order.
3.1

Layout of engineering

There is an engineering manager and many engineers in almost every Metroline depot.
The layout used in these facilities is similar to Jobbing processes. Drivers are the internal
customers who bring in the faulty buses. Engineers use a wide range of tools and
specialised machinery to maintain the fleet. The variety of faults is high but the repetition is
low, ranging from changing a light bulb to complete replacement of the chassis. Very broad
skills are required to complete the work. Some specialised tasks are usually outsourced to
external partners. For example fuel management systems (Triscan Systems), CCTV
maintenance (Synectics) and iBus radio equipment (Siemens AG). Metroline also owns a
state of the art Central Engineering and Logistics Facility which contains the industrys
latest technology and machinery.

Figure 4. Engineering process layout.

3.2

Main objectives

The main objective of the engineering department is to keep the buses running. If every
driver had an accident once a year, 12 buses would be off the road every day. This costs
lot of money to the company. In addition engineers perform preventive maintenance that
ultimately saves the company money. Speed and flexibility are the main objectives in
Metrolines engineering. These objectives are met with average success rate so far.
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3.3

Control and feedback mechanisms

Drivers perform a visual vehicle check before taking it out from garage. All faults are
reported to supervisor or engineers and recorded on defect sheet. Engineers have to
record all repairs done and sign it off. Engineering manager controls the defect sheet and
signs it when all work has been done. Any works due will be scheduled and specific tasks
with dates are recorded. Any repairs missed will be reported to engineering manager by
service controllers. All unsatisfactory work can be re-reported by drivers via defect sheet.

Figure 5. Engineering control and feedback loop.

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4 References
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