Taj Mahal Cycle Taxi Improvement Project - Cost and Value Management - Case Study Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Title : COST AND VALUE MANAGEMENT Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2010 Table of Content Title : COST AND VALUE MANAGEMENT 1 Executive Summary 4 Introduction 5 Literature Review 7 Cause and effect diagrams 7 Building consensus 8 Brainstorming 9 Tree diagrams 10 Relations Diagram 11 Discussion 17 Description of the organization 17 Specific cost 18 Tool and overall project 19 Analyzing the relation between the cost, value and tools 19 Selection of particular of particular cost, value management problem, opportunity and characterization 19 Contrast in the observation and information with the method and tools use in the modules. 20 Recommendation 21 Planning strategy 21 Operation/business model analysis 21 Process definition and design 21 Business analysis 22 Conclusion 22 Bibliography 23 Executive Summary 2 Introduction 3 Literature Review 4 Cause and effect diagrams 4 Building consensus 5 Brainstorming 6 Tree diagrams 7 Relations Diagram 8 Discussion 13 Description of the organization 13 Specific cost 14 Tool and overall project 15 Analyzing the relation between the cost, value and tools 15 Selection of particular of particular cost, value management problem, opportunity and characterization 15 Contrast in the observation and information with the method and tools use in the modules. 16 Recommendation 17 Planning strategy 17 Operation/business model analysis 17 Process definition and design 17 Business analysis 17 Conclusion 18 References 19 Executive Summary Taj Mahal cycle Taxi improvement project is a public-private partnership project between India and USA. The Institute of Transportation and Development Policy (ITDP) following a request from municipality of Agra, the Indian Government and the U.S. Agency, initiated it. Its main objectives were to promote environmental sustainable and equitable transportation. Taj Mahal was a tourist attraction site and to get to the monument, the tourist had to use the motor vehicles. The emissions from these motor vehicles such as carbon monoxide (CO) and Hydrocarbon (HC) damaged the monuments and also caused some health problems to the residents. The major concern was to manage the value derived from the site, through the use of approaches which were cost effective. The importance of this project was to safeguard the environment and its adverse effects, an objective that was achieved by the adoption of rickshaws instead of motor vehicles. The rickshaws were therefore used as a tool to reduce emissions of carbon monoxide (CO), hydrocarbon (HC) and suspended particle matter (SPM). The rickshaws or the cycle taxis thus contributed minimally to pollution was less costly and also provided employment opportunities to the residents of the Indian cities. The new cycle taxis lowered the cost and encouraged tourists to visit the tourist sites in Agra more often. The tourists were much willing to pay an extra cost to get the service of the superior rickshaw. The growing use of cycle rickshaws in the cities of the U.S. and Western Europe created a good example where cycle rickshaws were being successfully used as opposed to India. The superior cycle rickshaws were to be also sold to schools. The need to conserve the tourist attraction sites at Taj Mahal prompted the initiation of this project. The Aga Fart, Akbar Tomb, and Krishna’s birth site were being discoloured by orange, black, and brown staining from suspended particulate matter (S.P.M) and hydro carbon emissions (HC). Introduction The study is dividend into several sections which include the Literature review that is based on Taj Mahal Cycle Taxi, a development project in India. The project is an initiative from the Institute for Transportation and Development Policy and is a public and private partnership between India and USA. The project works in collaboration with the Environmental Protection Agency to protect the worlds Monuments which were polluted by the Hydrocarbon (HC) emissions from the motor vehicles and bicycles at Taj area. It also discusses the organization and its projects, the specific cost and the approaches adopted to reduce these costs. Recommendations are also given on how to improve cost and value management capabilities and finally a conclusion on the study. Literature Review Cause and effect diagrams The cause and effect diagrams are used to analyze all potential cause that result in a single effect. The causes are tabled according to their level of importance or characteristic, culminating into an illustration of hierarchy and relationships of events. This will assist in searching for cause by identifying areas where the problem might be emanating from and comparing the relative importance of different causes. In the case of Taj Mahal cycle improvement project many problems have been pointed out are being the cause of unpopularity of the cycle rickshaw which would have tremendously improved the environmental preservation of the historic monuments at the side. The rickshaw venture is being seen some time as being exploitative to the driver and the language barrier problem existing between the tourists and the driver makes the tourists to avoid the rickshaws which could have otherwise reduced the problem that is majorly environmental pollution by hydro carbon emission and suspended particulate matter. The problems rendering the success of this project are: the cycle rickshaw being viewed as old fashioned, the drivers inability to communicate in English, the tourist thinking that they have been conned, the high levels of poverty, lack of a motivation package or program to encourage the use of rickshaw cycles as opposed to the fuel powered engines, the safety of the driver, and availability of cheap materials for manufacturing low quality rickshaw cycle. Lay-out of Cause and Effect Diagram Particularly the environmental pollution concern has been depicted in this picture. Similarly, the other problems could be put into a cause effect diagram. Building consensus In for the menacing problem to be solved about the cycle rickshaw there should be consensus building as one of the management tools used. This project involved so many stakeholders and therefore there is need to forge a good relationship between the different parties to make the process manageable. We have the owners of the cycle rickshaws who employ poor drivers in their thousands. The tourists, manufacturers, the local community, Agro municipality, the U.S government, and the private stakeholders are other parties that are interested in this project. For them to work together consensus building should be enhanced so that the whole group works as ateam towards attaining the main objective, which is to reduce the environmental pollution impact on the monuments at Taj Mahal, at the same time creating jobs for the impoverished drivers. If the involved parties do not speak with one voice then their progress will definitely be retrospective because there will a lot of in fighting as every party pulls the cake to itself as seek recognition. The stakeholders should to get to the table and brainstorm about the issue and try getting possible solutions. The alternative selected should in turn be evaluated to see their practicability. Every party should make sure that it participates fully. After conses has been reached the best possible solutions should be implemented. Brainstorming Apart from it being an aid to other tools of quality management and control, brainstorming is a tool on its own used in quality management. Ideas are generated randomly without so much about them. All the ideas are listed and one by one, the weak or unlikely ideas are eliminated remaining with only ideas that are functional. In the case of Taj Mahah taxi improvement project, the stakeholders involved should be gathered in a conference room and each one of them ask to at least name the possible cause of environmental degradation of the monuments and the possible solutions to the problems. The moderate then leads the group in analysizing each of the selected problems and solutions while eliminating the weak ones or those are unlikely to be implemented. Through this tool the group will unanimously agree on the best approach of solving the problem and possibly every one designated with a role to play in the implementation. The Wallahs, the rickshaw owners, the Agro municipality, manufacturers, environmental experts, the local community and the tourist board can all have a representative involved in the constituting of the brainstorming group and fully participate in the brainstorming session. Tree diagrams Tree diagram is one of the management tools also used. It is applied in figuring out all the various tasks that must be undertaken to achieve a given objective. The main goal of this project in Taj Mahal is to do away with the environmental pollution being impacted on the tourist monuments and at the same time provide meaningful employment to the wallahs who are the rickshaw drivers that can sustain their livelihood. We see that the Wallahs should improve their communications with the tourists by learning at least some English. The manufacterures also should be willing to produce or manufacture technologically advanced cycle rickshaws so that the tourists do not abhor them as being outdated. Concerning the drivers also they should be learn etiquette to be able to relate well with the tourists. The tourist management board should provide clear guidelines concerning the monuments and more so there should be a set fixed price concerning journeys so that the tourist do not feel coned. The Agro municipality can act as the supervisory party to see to it that all the regulations set in consensus with the various different parties are adhered to. The diagram above could just be part of a comprehensive tree diagram that can be enacted in the case of Taj Mahal taxi improvement project. Relations Diagram Relations diagram are drawn to show all the different relationships that exist between different factors, processes or areas. We analyze the importance of each of the factors to the problem being discussed. This makes it easier to point out the factors, which are responsible for the occurrence of the problem being discussed. In the case of Taj Mahal Taxi improvement, project the various factors that cause environmental degradation to the monuments can be analyzed by drawing a link between them. We see that the inability of the drivers to communicate in English is making them not to communicate effectively with the tourist. The poverty levels are attributed to the poor living standards of the community. The tourist avoidance of the rickshaw cycles is caused by them thinking are being conned by the Wallahs. The owners are also exploiting the drivers by overworking them and at the same time underpaying them. The Institute for Transportation and Development Policy (ITDP) main objective is to promote environmentally sustainable and equitable transportation. Apart from damaging the monuments, the emissions had some effects to the residents of the surrounding cities in India. They developed health problems and deaths from respiratory and cardiac diseases as a result of exposure to high levels of lead, Hydrocarbon (HC), Carbon Monoxide (CO) and Suspended Particulate Matter (SPM). The Indian Government, the U.S. Agency for international development policy and the Environmental Protection Agency, worked together to develop strategies to save the world’s famous monuments and also the residents living in the India’s cities. Since the adverse effects of these pollutants are quite localized, the immediate threats to the monuments could be avoided by controlling access of the motorist vehicles to the Taj Mahal area (Demming, 1986). Tourism is one of the most important sources of income and employment in Agra, and a visit to the Taj Mahal is a major draw for tourists to come to India, bringing critical foreign exchange. The environmental and social problems in Agra are the major reasons why tourists don’t stay longer. The Associated Chambers of Commerce, the Tourist Promotion Board and the Municipality in Agra have therefore taken a serious role in working to improve the environmental and social conditions to make the city a hospitable place for tourists and also the residents. The cycle rickshaw or the cycle taxi, which is a means of transport used by tourists visiting India, contributes minimally to pollution. The cycle rickshaw is an important source of employment for many of India’s lower income people. In Agra the cycle rickshaws provide employment for roughly 10% of the adult population, and a critical source of low cost basic mobility for India’s lower and middle classes. Agra is also an important regional manufacture of cycle rickshaws, and is known for producing a high-quality cycle rickshaw. The cycle rickshaw manufacturing firm employs 20 or more people and also provides extra jobs to the contactors who construct the seats and other components. The particular circumstances in Agra, with the large tourist industry, a famous monument, and having both a private and public sector dedicated to a cleaner environment, created the market and political conditions ideal for the introduction of a superior technology. Following the instability and poor maintenance of the current rickshaw which made the tourists uncomfortable, superior rickshaws were adopted. The new cycle taxis lowered the cost and encouraged tourists to visit several tourist sites in Agra entirely on cycle rickshaw. The tourists were much willing to pay an extra cost to get the service of the superior rickshaw. The growing use of cycle rickshaws or the cycle taxis in the cities of the U.S. and Western Europe created a reliable market where they were exported. The superior cycle rickshaws were also sold to schools to be used by school children of both middle and upper income families. According to Gallagher (1992), despite the environmental benefits of the cycle rickshaw and the economic importance of the industry particularly to low income families, public attitudes towards the cycle rickshaw in India are negative. Negative attitude about the rickshaw are based on views that their use is exploitative to the driver and the vehicle are not safe. Many of the strongest firm in the industry contributed to the failure of the new technology since they regarded it as a threat to their business. For the Bangladesh project, the project sponsors decided that the new rickshaws should would be sold only to rickshaw puller cooperatives rather than large business owned by a single family firm. They manufactured the fleets themselves, rather than hiring a current manufacturer of the vehicles. The institute for transportation and development policy (ITDP) realized that unless the legitimate criticisms of the cycle rickshaw could be addressed, the positive environmental and social benefits of the industry would be lost. Improved vehicle designs were developed that had no negative effects on the environment but they were incorporated into commercial production. There were several reasons that resulted to the failure of the improved vehicles to gain commercial acceptance. According to the analysis done, the most typical causes were the failure to work closely with industry and the failure to identify a clear target market for a superior cycle rickshaw that can inevitably cost more in the initial years of production. The vehicles manufactured could not be adopted since they were seen as less popular and there were no facilities for their maintenance (Gallagher, 1992). Several attempts have been made to introduce commercially viable intermediate transport technologies in India. This initiative is promoted by the IT Transport and the Intermediate Transport technology Development Group in England. IT transport successfully introduced a bicycle trailer in the Indian states of Andhra and Uttah Pradesh which are located in Agra Region. Many trailers were made and purchasers of the trailers were said to double their income. This helped them generate sufficient revenues to repay the cost of the trailer (Zille, 1989) In his study of transport in Ghana (Amegbletor, 1993) argued the World Bank to sponsor local projects that will lead to the development of commercially viable bicycle trailers and small farm vehicles. IT Transport in U.K. also developed the same trailers and small farm vehicles. The small farm vehicles were adopted by many small scale entrepreneurs without need for credit and are now in wide commercial production and are being used in the whole of Ghana. Several local manufacturing facilities were hired to manufacture some bicycles and vehicles which relied heavily on imported wheels. The first vehicles were then distributed to project beneficiaries at minimal cost. To continue lowering the cost and add the value of the project in India and in particular Taj Mahal, improvements are being made on the available projects. This is made easy by the capabilities of the Indian Cycle Industry. There are also some public policies to facilitate project implementation. Clear restrictions are placed on the use of cycle rickshaws in Agra and excise taxes are currently being avoided which help to lower the cost of production and thus improve the quality. There are also manufacturing license restrictions on type of vehicle produced and the cycle rickshaws must meet certain design criteria in order to be eligible for a license (Garvin, 1984). Discussion Description of the organization Taj Mahal cycle improvement is not a business of promoting tourism or preserving international monument. Their mandate is to promote environmental sustainability and equitable transportation. They became interested in the project because they saw in those very particular circumstances and opportunity to build a private sector and government support to address critical environment in India which over long time have been working towards solution. The project is concern about the environmental ramifications of trend of in India rapid increase in motor vehicle use. As income rise, individual switch from using non-polluting, energy-saving bicycles and non-motorcycle and three-wheel Bajaj taxis, resulting in a dramatic increase in transport sector air emissions. The major treat to public health from motor vehicle emission in India cities is airborne lead, which has been proven to hurt early childhood cognitive development. The fundamental objective of Taj Mahal cycle improvement is to come with away of encouraging the use of human powered taxi, cycling, and working in population centers where the air quality benefit are most important, and where distance are short enough to make this mode of economically and economically and commercially viable. In order to do so, however, many criticisms of cycle rick-shaws, both legitimate and unfair, would need to be overcome. The project was initiated by the institute for transport and development policy (ITDP) based on request from the request from the municipality of Agra, India government, the US agency for international development’s energy, environmental, and enterprise program, and the U.S Specific cost Despite the environmental benefits of the cycle rickshaw and the economic importance of the industry particularly to law income earners, pubic attitude towards the cycle rickshaw in the India are negative and their use is being base out in many Indian cities and elsewhere in Asia. Negative attitude about the cycle rickshaw are based on view that their use is exploitative to the driver, the vehicle are not safe, the driver are not trustworthy. The creativity and innovation required in order to modernize the cycle rickshaw is costly. Capital is required to induce the motivation and to improve on the cycle rickshaw. To strategically overcome the cost which seems to be a major barrier to the implementation of this project Tar Mahal chose to base on indigenous modification of a British design bicycle, and only limited modifications have occurred after a long period of time. They therefore set up project designed to not only develop a superior vehicle, but to induce a process of ongoing, commercially-induce technology in the India private sector bicycle-rickshaw industries. They demonstrate cost effectiveness by human power technology and superior vehicle to concrete test market, by beginning to change the image of rickshaw, reduce the exploitation of the driver. The firm is focusing on producing a higher quality bicycles, at a lower cost at around $100 rather than producing the lower quality at lower price. Tool and overall project India currently is not a major contributor of greenhouse gas emissions; motor vehicle is emissions are the major source of carbon dioxide India which the major source of global warming. The rickshaw and wallah (cycle rickshaw driver) contribute minimally to pollution. Analyzing the relation between the cost, value and tools Value is to be safeguarded through the use of tools. The tools in the other hand are costly to be put indo use. The emission of carbon dioxide causes pollution and leads to global warming. To improvise on the cycle rickshaw calls for creativity and innovation in itself a costly exercise. The relationship between the value management, cost and tools is that value is safeguard with the use of tools which has a cost attach in it. Selection of particular of particular cost, value management problem, opportunity and characterization Lack of innovation is not restricted to non-motorist vehicle industry, but typifies much vehicles technology in India. The firms have to focus on producing a higher quality bicycle, costing around $100, rather than producing the lower price or lower quality bicycles. The large share of their market should be for export and they should also focus on the higher quality vehicles. The vast majority bicycles tend to be made using technologies and design which are many decade old, with low cost material and components that are widely available India. They tend to use low-carbon steel tubing, dipped in molten brass, or furnace brace. The frame is sand-blasted then chrome plate or painted in electrostatic painted chamber, a reasonable method irregular quality. Most of the vehicle are sold completely knockdown (CKD) and assemble in locally, to safe money on shipping, although some export are sold semi-knockdown (SKD). Famous monument, cleaner environment ideal political condition is factors that create market for introduction of superior technology. The tourist represents a significant potential market for superior vehicle. Another possible market opportunity for superior cycle rickshaw is the school children of middle and upper income families. The only major concern is the safety that might induce some families to switch to a superior vehicle even if it more expensive. Contrast in the observation and information with the method and tools use in the modules. The major concern in the analysis was drawn to value creation, cost minimization and the tools used. The value creation is to safeguard environment being a basis of economy i.e. example attraction tourist. The tools that were considered as cost effective and environmental friendly are non-carbon emission machine such as cycle rickshaw. All this contrast the observation and information obtain in the project. The public are holding a different belief. They priorities status, lifestyle and their seeking seek short satisfaction in the expense of future prosperity avail by the environment. They appreciate new super new technology rather than going back to the non-carbon old mode of transport. Recommendation Planning strategy Create awareness in all works of life in the importance of environmental conservation and undesired effects of global arming. The institution of learning and media should take a lead in educating the public on the environmental issues. Operation/business model analysis The issues of climatically condition should be made a priority in every government policies. The policies should be tailor made to boost non-governmental initiative on environmental mater. Such organization should be given financial subsidies and tax exemption. Process definition and design Though the issue of environment touches on all the aspect of life and businesses not being exemption, business approach strategies have play important role in shaping aspect of environment. Structure use in business have been use to advocate for environment. The most utilize business design or function in advocating for environmental issue marketing function. All other function use in business should also be incorporated into environment base organization. Business analysis Environmental matters have technical issues that require expertise that can advice the on the same. It is therefore important to develop career on environment issues. Conclusion Strategic cost accounting together with value management is fundamental ingredient towards the environmental conservation. Both subjects inter-relate such that one cannot effective without the other. 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