2 CUSTOMER ORIENTATION IN THE FIELD OF FREIGHT TRANSPORTATION
2.1 The concept of customer orientation and its role in the field of freight transportation
The undisputed leader in Russia in the transport services market is the largest Russian Railways holding, in terms of a wide geography of transportation and volumes. Despite the leading position in terms of transportation volumes, it is also necessary to take into account the level of financial and economic activity of the company. It is not always possible to get a high percentage of profitability from the price factor, since the tariffs of JSC «Russian Railways» for most services are regulated directly by the state, while imposing obligations to carry out more socially significant transportation instead of commercially efficient. At the same time, in many market segments, JSC «Russian Railways» operates in conditions of intense competition with alternative modes of transport.
The Company needs to develop non-price competitive advantages, which are based on the formation of a strategy to improve the quality of services provided and the level of customer service.
Customer orientation is the main element of anti-crisis management, which offers the Holding additional advantages, especially during a downturn in traffic volumes.
The interpretations of the concept of customer orientation are closest to the working conditions of the Russian Railways holding, in understanding the company’s ability to create an additional flow of customers and additional profit [1].
The main objective of the Holding is a mutually beneficial long-term partnership with customers, the constant development of a portfolio of products and services in the interests of consumers.
For the Holding, which has more than 30 types of business in its portfolio – from freight and passenger transportation, from logistics, construction services, design, IT and even healthcare, a cardinal reversal of all resources and processes towards the client is a unique task covering all processes, from planning to the direct implementation of transportation and its resource provision. It is made even more unique by regulatory conditions, social responsibility and a special role in the country’s economy, determined by the main shareholder – the state.
The model of Russian Railways that has existed up to now, where 90% of business depends on the basic rail transportation service, with tariffs regulated by the state, cannot generate a financial flow to implement the necessary level of investment. The new business model, defined by the Development Strategy of the Russian Railways holding for the period up to 2030, provides for the transformation of the company from a transportation to a transport and logistics company, providing, in addition to the basic transportation service, a full range of services with the expansion of the range of 3PL, 4PL services and the formation of end-to-end supply chains in the cargo segment and multimodality – in passenger transportation.
To form non-price competitive advantages of the Company today, it is necessary to develop and implement a strategy in the field of improving the quality of services provided and the level of customer service. As long as there is no customer orientation, full fulfillment of all obligations on the part of the railway, well-coordinated work between all structural divisions, the cargo will go to other alternative modes of transport, and the railway will have heavy losses.
2.2 Tasks and activities of the Department of Business Development and Customer Orientation
In December 2014, the Department of Business Development and Customer Orientation was established.
The main goals of the Department, fixed in the regulations approved by the President of the company, are (Figure 2.1) [8]:
– formation and implementation of a strategy for customer-oriented activities of the divisions of JSC «Russian Railways» and its subsidiaries in order to maximize customer demand for the services of the holding of the required quality as a basis for increasing its economic efficiency;
– ensuring the achievement of the strategic objectives of the production and economic activities of the Russian Railways holding and the established parameters of its effectiveness through business development and customer orientation.
To fulfill these goals, the new department focused on the following main areas of activity:
1) development of corporate policy of internal and external customer orientation of the Russian Railways Holding;
2) organization of the development of new transport products and the formation of an optimal portfolio of services provided by the Russian Railways holding to external customers, taking into account the exclusion of intra-holding competition;
3) coordination of the interaction of business units in order to ensure the balance of their activities aimed at business development and customer orientation;
4) development of tools for researching the needs of internal and external customers and assessing their satisfaction with the quality of services;
5) development of industry standards and creation of a unified catalog of internal and external services of the Russian Railways holding.
The Department of Business Development and Customer Orientation was abolished in 2015 and now the model of a customer-oriented company is formed by the corporate system of internal and external customer orientation of Russian Railways.
2.3 Corporate system for the development of customer orientation formation of the Russian Railways Holding
In 2010, the concept of «Customer orientation» was fixed in the Model of corporate competencies of JSC «Russian Railways» «5K+L» as one of the main values of the Company’s brand. The world does not stand still: technologies are rapidly developing, the level of digitalization of transport is growing, customer needs are changing, which means that the strategic objectives of the company are also changing. In order to develop and improve the customer-oriented approach in JSC «Russian Railways», extensive analytical work was carried out with the participation of a large number of managers, including top managers of the company, and in 2019 an updated model of corporate competencies of JSC «Russian Railways» was approved, which consists of 8 blocks: innovativeness; customer orientation; responsibility for the result; organization of work process; teamwork and mutual assistance; development and care of employees; integrated thinking; effective communication.
Each of the 8 corporate competencies has a different interpretation of concepts for each level of employees and is divided into two types: professional and corporate.
There are four management levels of the Russian Railways holding company. The first three levels include managers, the degree of importance begins with the first level of managers, which is evaluated at the Corporate University of JSC «Russian Railways», the second and third levels include positions from the deputy head of the linear enterprise to the deputy head of the service. The fourth level includes workers and specialists of the holding.
Personnel evaluation is one of the main tasks for a systematic unified personnel reserve, since in the process of this procedure, the qualification knowledge of employees and the assessment of the effectiveness of performing due duties are determined.
There is a single stage in the development of customer orientation in large Russian and foreign holdings.
Stage 1. Understanding customer orientation.
Stage 2. Education of customer orientation.
Stage 3. Customer orientation training.
Stage 4. Reward of customer orientation.
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