The UK rail supply chain is in the midst of an exciting period of growth in the global rail market. In the recently released “Fast Track to the Future” strategy, the Rail Supply Group set out the industry’s plans to improve productivity and collaboration across the supply chain, to ensure the UK is a global railway leader.
Part of the plan is to seek out best practice from other industries. One of the current success stories is the motor manufacturing sector. In 2015, the UK manufactured 1,587,677 cars, 94,479 commercial vehicles and 2,368,477 engines. Exports were valued at £34.3 billion, that’s 12% of the UK’s total exports of goods.
So how could techniques that work in fixed location, mass production environments, where a relatively low number of variants roll off the production line every 16 seconds or so, work in a sector that physically spans the country and has a multitude of demanding stakeholders?
Rail is different
On the surface, there are many differences between the sectors. Automotive OEMs operate with a supporting structure of Tier 1, 2 and 3 suppliers, often vertically integrated, delivering direct to one site. The suppliers operate to a level schedule week in week out, and at each site deal with just one customer which has clear authority.
The rail supply chain, depending on the exact circumstances, is more diverse. While rolling stock providers or re-furbishers might operate in a similar workshop environment to an automotive OEM, they and their suppliers do not have a stable future forecast.
The world of a network infrastructure provider is considerably more complex. The place of work is remote to the supporting local depot, where stores and equipment are located, so transport has to be arranged for all supplies and services, suitable access points found and a multitude of contractors and suppliers organised to get all the right items to the right place at the right time.
In addition, staff require trackside qualifications and permits to work and possessions need to be booked years in advance. And, of course, every location and emergency situation poses different health and safety hazards, of which 125mph trains are just one.
If any one element fails, a spare not in stock, store keys not available, staff stranded on a broken vehicle, it can be a show-stopper and very obvious to the public very quickly.
Added to that is the legacy of the privatised rail industry and the subsequent rounds of centralisation and regionalisation. Despite the high level of interdependency between rolling stock procurement and reallocation, rail infrastructure and the TOCs, it is often unclear who is in charge or accountable for decisions.
But not so different
However, both sectors are challenged with an ever-increasing list of similar goals: provide goods or service at an ever decreasing cost and in shorter lead times, become more competitive in the global market, meet emissions targets and improve productivity.
Both operate in markets with growing demand, where customers want an improved experience and in an age where digital technologies are offering new opportunities as well as disrupting existing business models.
In short, both sectors are increasingly judged on their performance, not only by the public, but by industry regulators and government.
But the most important similarities are these; both rely on people to ensure they function and those people operate as part of a process. This is the same if they are doing physical tasks or delivering a service.
A process is the combination of manpower, materials and machines (equipment) to provide goods or services that the customer wants. And the customer, whether that be a TOC, a passenger or a car driver, will judge those goods or services in terms of quality, cost and delivery.
These similarities are why the lean techniques used in the automotive and many other sectors can support the rail supply chain. The techniques use cross-functional teams of people from the process to find better ways of combining the inputs to that process. The lean tools concentrate on doing this by eliminating what are known as the Seven Wastes. It’s not about making people work harder, it’s about removing wasteful tasks so people can work smarter.
Being able to produce more output by better combining inputs is key to solving the productivity puzzle.
The lean approach
Although often associated with companies like Nissan and Toyota, it’s vital to stress that lean practices do not just work in Japan. The Nissan plant in Sunderland is the largest in
the UK and one of the most productive Nissan plants in the world. In line with the other UK auto manufacturers, it exports 80 per cent of production and, over the years, has consistently won millions of pounds of investment.
How do they, and many other companies, achieve these results? The lean approach is a lot more than just running a level output final assembly line. It is applied across the whole business including design, new product development and testing as well as procurement, scheduling and customer service.
The key factors in the overall approach to lean include:
- Start with a clear strategy. Turn the strategy into plans and set clear targets for every item.
- Analyse where you are against those targets. Do this at business and process level to identify the problems and opportunities for improvement.
- Implement the most appropriate lean techniques for your situation to bring about the change you need. One size does not fit all. Experience from automotive shows that early in the improvement journey you will improve performance without significant financial investment.
- Develop a mind-set across the whole workforce that encourages and expects everyone to contribute to improvement. “Better is not good enough, improvement is infinite.” In Nissan, ideas from the workforce range from thousands to millions of pounds improvement in efficiency in any one year.
- Nurture the supply chain. Work in collaboration to make improvements in productivity, quality and working conditions and share the commercial benefits.
- Toyota works with their suppliers to introduce the Toyota Production System. Apart from reducing costs across the supply chain, suppliers also report improvements in employee-management relations.
What can be improved?
Here is just a small selection of issues that can be found in any business and that are improved by using lean techniques.
If analysis shows poor quality or late delivery of service or parts, then a Structured Problem Solving technique can be used to find the route causes of the problem. The team investigates and deploys the best countermeasures to eliminate them. To ensure that the fixes are sustained, other lean tools like 5S, Visual Management and Standardised Work are deployed.
It may be that business is suffering from low productivity in either a labour or equipment- intensive process. The most suitable analysis tool for the particular situation should be used to find the largest reasons for the low performance. As before, the countermeasures are investigated by the team and put into place. Once the top reason has been eliminated, the team repeats the process on the next biggest issue.
As in automotive new product or plant development, rail has a large number of project-based processes: track or station upgrades, new infrastructure and the design, delivery and ongoing maintenance of new fleets.
There are a number of key techniques that are used to ensure projects are brought in on time and on budget, but most importantly that they satisfy the customer. These techniques address the planning methods, the governance structure and people aspects such as team working, communication and stakeholder management. These are particularly important in a sector with so many different providers, contractors and stakeholders.
Performance may suffer because of space or capacity issues. This is not unusual in an industry that has developed over 200 years and is still growing. A greater number of sets in service, and doing more miles, need bigger service depots. Often there is little room to expand around existing facilities.
Problems like these have already been addressed using lean tools, like the Pendolino maintenance activities at the Alstom Longsight and Wembley depots. In these cases, the capacity issue was addressed using a tool called Set Up Improvement (or SMED). In essence, it works like an F1 pit stop to reduce the time to service each set. The crew can then deal with more units in the same time.
Alternatively competitiveness can be improved by reducing costs. Traditional techniques such as cutting heads and limiting spending usually result in reduced capacity and aren’t sustainable over the long term. Lean concentrates on eliminating the tasks that don’t add value to the process, the Seven Wastes, and produces better results the longer it is deployed.
Improvement activities can free up people. Best practise companies use them to do more proactive improvement, or retrain them to work where their skills are needed. This is becoming more important as the rail sector, like other engineering sectors, is facing a significant shortage of skilled workers.
The challenge to the rail supply chain is clear. It is now up to each company to analyse its own business and select the right responses to ensure the success of the whole.
Written by Dr Chris Owen, CEO of the Society of Motor Manufacturers and Traders Industry Forum.