The term "Transportation" can mean many things to many people. Most businesses, including IBM, who sell goods or services to transportation type companies refer to a Transportation Industry, at least for product, sales and marketing purposes. In IBM in particular we use a term that others use as well called Travel & Transportation. In reality, which companies or organizations that fall into these categories depends on how they see themselves.
My own experience is that transportation relates to the movement of passengers and goods, while travel is generally the services that support the movement of passengers or support them at their destination. The "Travel & Transportation industry" is not in fact an industry, but rather a grouping of industry "segments" that are industries themselves. These segments include Airports, Aviation, Public Transit, Rail, Shipping and Trucking. Travel includes segments such as Hotels, Casinos and travel related services such as Travel Agencies. At a high level this is an appropriate grouping of Travel and Transportation industry segments.
That said, federal, state and municipal agencies called Departments of Transportation (DOT) would see themselves as in the "Transportation Industry". While they are in most cases public agencies, they do manage and maintain the roads, bridges, tunnels and other structures needed for most ground transportation. And, it must be noted that DOTs have the word "Transportation" in their name.
These would seem to be a good assembly of industry segments who see themselves in the transportation industry or industries. Yet, I am reminded of a user group meeting I attended several years ago when I learned to keep an open mind on the subject. The company I was working for at the time was sponsoring the user group and to create an atmosphere of interaction between users with like interests they had designated tables in the group lunch area with industry signs. So, amongst the signs that said Utilities, Oil & Gas, Life Sciences, Government and others was a sign for the Transportation table. As I went to join my fellow "Transportation" interested people I introduced myself as the company's transportation leader, only to learn my table mates were all from General Motors. While my company would consider GM as in the Automotive or Industrial category, there were no tables marked Automotive so the GM group, who had a large number of attendees, saw themselves best fitting the Transportation industry. Who was I to argue as they are certainly a supplier of the assets that support transportation.
As I move forward with this blog on the topic of Asset Management in Transportation I thought it would be wise to first establish which industry segments will be addressed and share a bit of the company view on the subject. While my comments do not represent all of IBM and others may have different opinions, I think it is necessary to have some boundaries to set expectations. Feel free to share your opinions.
Transportation assets can include many different types of equipment, and are generally particular to a specific industry segment. As I mentioned in my earlier blog entry, there are many segments of the Travel & Transportation industry, each their own "industry". Likewise, the assets that support these industries can be common or unique to each. Those who offer asset management solutions typically segment assets by "classes", as each asset class must be managed differently in a enterprise asset management (EAM) system.
The five Asset Classes include Facilities, Fleet, IT, Linear and Production. Facility assets are generally things like buildings, and in an industry segment like Airports can include the landside and airside facilities. Fleet assets can range from cars & trucks to buses, trains, aircraft and vessels. Information Technology (IT) assets can include equipment like servers, network hardware, desktops and telephony. Linear assets include roads, railway, pipeline and cable, and Production assets can range from equipment on a production line to conveyers to power plants.
So, why are these different? Facilities tend to be one of the largest asset classes. When doing facility maintenance you often to work based on time, such as checking an air compressor monthly, or a safety system the first and third Tuesday of each month. Facility assets typically stay on one place, so have a fixed location. Fleet assets often use time and usage to determine preventive maintenance, similar to a personal car that has scheduled inspections every three months or 3,000 miles. These assets do not stay in one place and can be repaired in many different locations. IT assets are often repaired based on service requests, especially desktops and laptops, and can also move around. Linear assets, like a highway, use measurements such as mile or kilometer markers, and are maintained in place. Unlike Fleet or IT assets, Linear assets are not replaced with a new asset but are typically maintained or extended. Production assets are similar to facility assets, but may have much more complex preventive maintenance schedules.
All of these assets have benefited from technology advances. This is the "Smarter Planet" story for Asset Management. Facility assets can have smart security or heating, ventilation and air conditioning (HVAC) systems that have monitoring devices that alert the asset management system prior to failure. So, the air compressor on the roof of an office building can send an alert that it is failing and can be repaired before your office gets hot. This type of system is most often called Condition Monitoring. The Condition Monitoring devices can integrate to the asset management solution to send alerts that create service requests or work orders, initiating a repair or early preventive maintenance task. Newer devices can be very small and use the existing WiFi network in the building to communicate an early failure warning.
For Transportation assets this capability can be called Health Monitoring or Telematics. By sending a diagnostic code from the vehicle it allows the garage to know that engine temperature is high or tire pressure is low, and can alert the driver while also letting the dispatcher know so they can route the vehicle to a repair facility. The primary purpose of these same devices is often for dispatching and scheduling of equipment, where the operations or logistics teams to track assets, and reroute when needed, such as skirting traffic delays. The devices communicate over satellite, cellular, radio or WiFi networks providing critical information to both operations and maintenance.
So, how does Smarter Planet help in Transportation? Within asset management if the maintenance team knows of a failure before it occurs then they can get the asset repaired and the operations team can work to reroute passengers or freight if needed. Early information leads to better service, and can also reduce costs associated with in-service failures, often called road calls or incidents. This improved performance will result in lower fuel costs and carbon emissions and can extend the useful life of the assets. For many of IBM's clients this has also led to higher labor utilization, greater understanding of inventory needs and improved asset reliability and availability. Those seem like some pretty smart benefits to me.
I traveled to New Zealand this week to meet with some IBM transportation clients and discuss IBM’s thought leadership in Rail. Coincidently, IBM opened a Global Rail Innovation Center in Beijing, China this week as well, coinciding with my meetings in New Zealand. IBM has issued several documents and press releases on Smarter Rail. If you would like to see those please follow the link in this paragraph.
Over the past several years I have been visiting clients globally and hearing their challenges and share IBM’s vision for improving asset management in transportation. A large portion of these meetings have been with rail clients. There has certainly been an increase for IBM in proposals and tenders in the rail industry segment. Our investments in asset management solutions has helped IBM to be selected by many rail and transit organizations worldwide by aligning with the needs of those clients and showing value, both in software and services, but also in the benefits achieved by existing clients.
For many rail organizations there is a need to manage a wide variety of assets. In some countries, like England and the Netherlands, privatization has led to the separation of asset management of rolling stock from linear assets. Whereas in most countries the rail system must manage all the assets. These assets are: Rolling Stock, which includes locomotives, passenger cars and freight cars; Linear Assets, such as track, signals, bridges, tunnels and power; Facilities, including buildings, stations, depots and other repair facilities; Support Fleet, such as cars, trucks and other specialized equipment for repairs; and IT assets, which can include data centers, network hardware, desktops, laptops, telephony, etc. Whatever the case, the rail system must support a variety of equipment and are focused on providing increased value to their customers.
Because the rolling stock and linear assets are both “revenue generating” assets for a rail system, organizations will typically address these first with an asset management system. However, these assets fall into two different types. Each share some challenges, such as aging workforce, safety, security and regulatory changes, and improving service levels, but in general have different needs. Those managing rolling stock assets are concerned with increasing asset reliability and availability, improving asset performance to reduce the impact of rising fuel costs, recovering warranties on components and parts, optimizing inventory levels and reducing material costs, and capturing accurate data to drive condition based maintenance programs. For the companies or divisions managing linear assets, their challenges include managing aging infrastructure while also supporting growing service demands, managing continuous assets with dynamic segmentation, supporting visual and automated inspection systems and addressing lost revenue due to track occupancy. Those clients I have talked with are seeking systems with out of the box capabilities that address these challenges.
Meeting these challenges was clear in my meetings in New Zealand and will be demonstrated in the Global Rail Innovation Center in Beijing. I have been working with Keith Dierkx, the center’s director, for several years and we share a similar focus on improving asset performance and service delivery through improved asset management. With many countries investing in their rail infrastructure, in some cases with stimulus funding, the ability to provide new innovations that can help upgrade the infrastructure and reduce costs will be critical in providing what we have been calling “Smarter Rail”. I believe this is one of the most important opportunities in a move towards a Smarter Planet.
Before discussing what are some Best Practices for Asset Management for the Transportation segments, it is important to define what we mean by a "Best Practice". I find the easiest business example is Three Way Matching in Accounting. With three way matching, an accounts payable (AP) person will first match three documents before issuing payment to a vendor. The AP person will look at the Purchase Order, compare that to the Vendor's Invoice and the Receiving documents from the company's receiving department. So, in essence, making sure you are billed for what you ordered, both in product, quantity and price, and making sure that the product and quantity was what was received, and undamaged. This seems to be common sense for most people, but when dealing with large numbers of orders, vendors who have historically provided proper quantities and documentation, and backed up receiving departments, it is possible to get sloppy. Enforcing three way matching makes good business sense and is a best practice, or a practice that the best organizations use.
In Transportation Asset Management there are many best practices. For instance, capturing all the tasks performed as well as all the costs of a repair on a work order is a best practice. Many companies fall short of this today, even those who have invested in industry leading Enterprise Asset Management (EAM) solutions. First, let's consider companies without a good EAM system. It is not uncommon for me to hear that a company is charging material to the asset, labor to the shop or depot, and services to a General Ledger (GL) code or account setup for that vendor, while tooling is not charged or tracked at all. Typically these companies use work orders only to identify work that needs to be performed and may not close out their work orders.
Like the three way matching best practice, good asset management best practices need to be enforced and technicians need to be trained. In moving towards this best practice of capturing all costs, the first step is to evaluate the EAM solution and make sure it is capable of capturing all costs: labor, materials, services and tooling. If the EAM solution can collect each of these, then the next step is to put in place a program to train the mechanics/technicians, storeroom staff, supervisors, administrative support, planners, managers - everyone that will use the EAM system - on how to record time, charge materials, capture tooling and connect internal or outside service costs back to the work order. The work order is there as a record, at a specific point in time, of all work and costs performed.
By having all costs and tasks on a work order, including costs by task where appropriate, the organization can do many things. They are able to compare repairs of similar equipment, thereby identifying equipment accruing greater than average costs. The organization can compare similar repairs between shops or people, identifying a need for training or standardization of processes. They can view trends, perhaps how costs increase based on age, resulting in better plans for overhauls or asset retirements. The best Transportation companies are very effective in capturing all their costs and see this as a cornerstone to having solid data for making decisions. Some industries organizations, such as the American Trucking Association (ATA), use specific standards called Vehicle Maintenance Reporting Standards (VMRS) to capture costs and work more consistently, allowing for its members to compare to others in the industry. Other transportation segment like railways, metro systems, shipping, airports and seaports, do not have similar "universal" standards for recording work and capturing asset management costs. It is left up to the company or their advisers to choose the best way to capture costs consistently. Regardless of whether standards exist, the company should have consistent coding schemes within the organization and ensure all costs are captured so proper analysis can be performed.
So, what are some other Transportation Asset Management best practices? Here are some examples:
- Warranty tracking and recovery on the asset, its components and sub assemblies, as well as spare parts
- Cycle counting critical spare parts inventory, particularly for unique assets with high cost spare parts
- Driving preventive maintenance programs based on time, usage and condition, such as changes in fuel consumption
- Tracking and posting asset reliability and availability statistics in the shop
- Managing by exception, including using Key Performance Indicators (KPIs) that are updated in real time to monitor the assets, the shop and the business
These are some of the key items that every Transportation organization I speak with has at the top of there list. As with any list like this, it is not all inclusive, but these are often the first areas of focus that a top organization will pursue on the path to becoming a Smarter Transportation organization.
If you have questions about these, or would like to know more about some of the best practices I listed, please let me know and I will provide greater detail in future blogs.
IBM recently issued multiple press releases discussing the use of Maximo with several key public transit systems in North America. These included Long Island Rail Road (LIRR), San Francisco Bay Area Rapid Transit District (BART) and Washington Metropolitan Area Mass Transit Authority (WMATA). Here are the links to these press releases.
- IBM and the Long Island Rail Road Improve Commuter Experience
- The San Francisco Bay Area Rapid Transit Uses IBM Technology to Improve Safety and Reliability
- Washington Metro Uses IBM Software to Keep Mass Transit System Safe and On Time
In particular, the press release with LIRR talked about improving the commuter experience, but all of the press releases had a relationship to the commuter experience, or as I like to call it, "passenger experience".
I recently had the opportunity to speak to several rail organizations at a rail event at the IBM Industry Solution Center in La Gaude, France. Like the press releases, the topic was the passenger experience and how asset management plays a greater role for a metro or other passenger rail system, as opposed to other travel modes such as flying.
When traveling by air it is a bit challenging even for a seasoned traveler. Getting the ticket, choosing a seat, checking in, getting through security, finding the gate, choosing to get food before boarding, etc. are all things we have to deal with before we sit down in our seat. Then there are delays. We have come to expect delays as a regular part of air travel, especially when weather is the culprit. Because getting on the aircraft is frequently challenging, airlines and airports have worked to smooth the process with online ticket purchases, choosing seats and checking in online, kiosks at airports, along with advising what will be served on the plane. These benefits are all focused on the passenger experience, but have little to do with asset management.
On the other hand, traveling on a metro system tends to have much to do with asset management. The process of getting to the train often involves a lot of unconscious type activity. While a regular air traveler will still struggle at the destination airport, the metro rider can usually move quickly through the ticket process and fare gate systems to the departure platform, often only needing to verify which platform is correct.
I feel its when the passenger is on the platform, then on the train, that their "passenger experience" can have its greatest impact. Is the train on time? If it should be a 10 car train, did only 8 cars arrive? Once on the train, is there an in service delay? All of these items can affect the passenger's experience, and can be heavily impacted by the asset management systems. Many metro systems have studied the affect of things like a short train (8 or 9 cars, when 10 should have arrived). The impact is not seen that day. The passengers are already on the platform, so they squeeze in or wait for the next train. However, for the next few days there is often a drop in revenue as this event is a "tipping point" as some passengers will finally be fed up with the metro experience and go back to driving. After a few days of dealing with traffic and parking challenges they will return to the metro, but the transit system has lost revenue during this time.
A good asset management system will improve preventive maintenance, often increasing reliability and availability. We have seen this occur in many of our IBM Maximo clients. Greater availability means that all 10 cars arrive as planned. Greater reliability means the cars don't break down in service as frequently, reducing or eliminating in service delays to that train or the others behind it. It also means the track, signals and structures are being maintained properly so they don't cause delays either. An IBM Maximo client I've mentioned in the past, Taiwan High Speed Rail Corp. (THSRC), was able to achieve over 99% on time performance - and that is within a six second window to the posted schedule! In comparison, most US and European metro systems use two to three minutes to measure their on time performance.
So, if you are a metro system like those at BART, LIRR or WMATA, or a high speed rail system like THSRC, and you have challenges achieving high availability and reliability of your assets, you might consider a review of your Enterprise Asset Management system.