This year’s Railway Strategies Live event featured some high profile speakers, a busy exhibition area and plenty of networking opportunities
Railway Strategies’ fifth annual supply chain conference, hosted in association with the Rail Alliance, was held on Thursday 7th April 2011 at The National Motorcycle Museum, Birmingham.
Conference chair Colin Flack commenced proceedings with a warm welcome to around two hundred delegates present in the hall. He then thanked the exhibitors, sponsors and speakers for supporting the event before introducing the first of the day’s speakers, Network Rail’s Ian Ballentine.
Ian Ballentine reviewed Network Rail’s strategy for engagement with the supply chain, with reference to the ‘road map’ that was created over three years ago. The supply chain had become fragmented, leading to segmented value rather than total best value. Network Rail now wants to instigate an end-to-end ‘value chain’ with market partners. This involves Network Rail setting the requirement, which is then passed to the appropriate devolved business unit and the supply chain before being handed back to Network Rail upon completion. By this means projects should proceed faster, more safely and give better value; partners should be able to help shape solutions and deliver them; they will be empowered to drive out bureaucracy, inefficiency and waste and the approach should provide a platform for innovation. ‘Man-marking’ should be eliminated.
Network Rail has created seven engagement models on the basis of contract value vs.business risk. Small programmes will continue be managed in the traditional way, but larger programmes will be outsourced. It is ‘probable’ that 60-70 per cent by value of Network Rail’s works will be carried out by alliances, with handback to Network Rail to operate and maintain upon completion.
The first phase of partnering roll-out has already been announced, amounting to about £6 billion over the next five years. The seven programmes included in this are:
- Edinburgh Glasgow Improvement Programme (EGIP)
- London Bridge (part of Thameslink programme)
- High-output delivery of the Great Western electrification scheme
- National major resignalling projects
- Birmingham Gateway
- Hitchin flyover on the East Coast main line
- Civils renewals programme
The eight steps to making partnering work are: create engagement policy; formulate
the asset supplier engagement plan; carry out supplier selection; supplier engagement
development; supplier engagement continuous improvement; supplier engagement management; supplier engagement exit plan.
In a wide-ranging presentation on the future of high-speed rail in the UK – notably HS2 – Professor McNaughton outlined what HS2 is and why it has been proposed. He then reviewed the potential involvement of the UK supply chain and the need to achieve value for money. In a relatively small, densely populated (and growing) country like the UK, high-speed rail can be a ‘game-changer’ in the air/rail/road debate for journeys of less than 100-150 miles on a door-to-door basis, but this is as much about station location and connectivity as it is about the journey itself. For example, it is proposed that London should have a city centre station (at Euston, for north-south dispersal) and an interchange station (with Crossrail/TfL at Old Oak Common for east-west dispersal).
When it comes to the infrastructure and rolling stock, quality is more important than
price. Steep gradients, ‘green’ tunnels and careful landscape design will be essential. Some world-class structures will be required. Other considerations will include loading gauge (GC rather than UK classic, as per HS1), signalling/control systems, turnout technology (230kph junctions), capacity (18 train paths per hour) and ballasted vs. slab track. Rolling stock should be automatically operated and incorporate automated inspection/examination.
Infrastructure UK’s view of what’s driving costs includes: systemic issues such as urban density, planning & statutory processes and regulatory compliance; client and funder issues such as stop-start investment, poor governance, poor asset information and cost data, over-specification and project insurance; and supply chain issues such as poor supply chain integration, lack of investment for innovation, the need to improve skills and training, low productivity and construction logistics.
The proposed timetable for HS2 is 2011 to 2033, with the period 2011-2017 involving consultancy, design and getting the Parliamentary Bill passed. Construction work would start in 2017 with stage 1 open in 2026 and stage 2 (the complete ‘Y’ network) open in 2033. One of the main priorities is to maintain the tunnelling ‘pipeline’ following on from the completion of Crossrail to avoid stop-start inefficiency.
In the morning’s third presentation, Colin Flack discussed the role of the Rail Alliance (RA) in bringing about the synergistic benefits of clustering. The Rail Alliance considers the UK as a whole to be a cluster, with worldclass research institutions, and seeks to reap the benefit of money spent in, for example, the defence sector through networking, collaboration and innovation. Many of the Alliance’s 200+ members are not railway companies per se. In order to assist smaller companies in getting new products into rail market, RA and Achilles have jointly created the Entry Level Supplier Initiative (ELSI). The Rail Alliance can provide suppliers with guidance, networking opportunities, access to trade shows and the opportunity to test products on a ‘real railway’ at Long Marston. Networking is all about building relationships, sharing experiences and innovation. Collaborative working is a natural extension of networking, once trust and confidence has been established. As Colin concluded, “It’s great to greet.”
The application of lean management techniques to improve efficiency was the central theme for Richard Holland’s presentation. TBM has been providing lean support in the UK for the last 5-6 years and there are major opportunities for business in the UK rail sector in the foreseeable future. Even if you do everything right, you may make no change to the overall performance of the business. Dramatic change is required, Richard contends. There is a need to move to process focus, with greater transparency, and to communicate this message right through the business. What is required is an environment of trust, coupled with a strategy for growth, an understanding of the how the business is performing on a daily basis and an ability to make change happen quickly. Lean Sigma provides this via Vision & Leadership, Daily Execution and Improvement Methodology. The Kaizen Breakthrough experience is a cross-functional team-based workshop for rapid improvement. TBM has been working with Alstom since 2006 and the client (Virgin Trains) has seen the difference through the introduction of the pit-stop approach to maintenance. Sales/employee have doubled over this period. Other rail clients include Norfolk Southern in the USA and Eurostar, within the Temple Mills depot.
Next to speak was Colin Stewart, who discussed the challenges and benefits of delivering high-speed rail (HSR) from the perspective of an organisation that was heavily involved in the delivery of HS1. The competition within HS2 will be significant and the sheer scale of the project will be challenging. Three major industries will be involved – civil engineering, systems engineering and rolling stock manufacture. They must have the ability to operate jointly and share the risk. Projects must be organised so that volume and scale of packages is 27attractive to contractors. Construction packages should be matched to market capacity: there needs to be an intelligent division of works matching project scope with market capabilities. Alliances are the only realistic way to operate. Colin concluded by commenting that HSR can be a driver of change and growth and that there is a significant opportunity for the UK to support the high speed rail industry.
With publication of his Value for Money Study imminent, Sir Roy McNulty provided an overview of the work of his committee to date. His terms of reference were to examine the cost structure of the rail system, the barriers to efficiency improvement, and the means to generate revenue.
There are a lot of positives in the rail industry: safety; passenger growth; passenger satisfaction; growth in freight tonne-km; good punctuality; investment – particularly since privatisation; and sustainability. But costs are a major problem. The unit cost/passengerkm has been unchanged for 15 years. In a ‘should cost’ exercise, Sir Roy concluded that Network Rail’s regulated asset base should cost about 20-30 per cent less than it does. When benchmarked against four other international rail operations the UK needs to reduce costs by about 40 per cent to be commensurate. Network Rail needs to be more efficient, passenger cost per km needs to be reduced and TOC costs need reducing. At present, passengers and taxpayers are not getting a good deal.
So what needs to be done? Sir Roy’s list of the top 12 barriers to increased efficiency included supply chain management and his recommendations in this respect included:
- Clearer framework of best practice, driven from the top
- Better forecasting, planning and visibility of future requirements
- Selection of the most apapropriate procurement approach for each situation
- Earlier involvement of contractors and suppliers
- More collaborative business relationships
- Improved supplier assurance processes
- Improved staff competence and behaviours.
The Study is currently completing a full update of its interim cost saving estimates. The update seems likely to confirm that savings of 20-30 per cent are achievable if all of the areas of potential improvement are addressed effectively (a significant proportion of these savings is already reflected in NR’s CP4 targets).
Sir Roy concluded by saying that his vision for the future was one in which the rail industry continues to grow, provides better service, has a stronger safety culture and delivers increased environmental benefits at a cost to passengers and taxpayers equivalent to European comparators.
The potential for such a future exists but only if the cost challenge is dealt with and he proposed that a ‘change team’, reporting to the Secretary of State, should be set up to ensure that his recommendations are enacted.Panel debate
To conclude the conference programme, a panel debate took place involving Sir Roy McNulty, Colin Stewart, Ian Ballentine, Professor Andrew McNaughton and Jeremy Candfield – director general of the Railway Industry Association. Questions ranged across a number of topics including whether Network Rail has a policy of publicising new products across its business units and how can a small innovative non-rail company get involved in the industry, to the arrangements for franchising and network access.
Railway Strategies Live 2011 in association with the Rail Alliance
was sponsored by:Gold
Railway Industry Association
Unipart RailWhat delegates had to say about Railway Strategies Live 2011
- “Well worth visiting….good catering, good contacts, good atmosphere…”
- “A lot was learned in a remarkably short time…”
- “...a good conference, which attracted a large and varied audience from across the whole rail industry…”
- “An excellently organised conference which draws together the full spectrum of the railway supply industry to discuss hot topics in a constructive atmosphere, with good opportunities for networking through the day.”
- “Excellent. Really well organised”
- “A very thought-provoking event”
- “Event gets better each year. Thank you!”
All images are credit Martin Axford Photography, Tel: 01793 525 083,
For information on attending or participating in next year’s event, please contact:email@example.com
or Tel: 01277 368 318