Executive Briefings

Next-Generation Rail Fleet Management

Analyst Insight: The shale gas revolution has fueled a resurgence of domestic manufacturing, driving rail shipments up over 6 percent and a two-year backlog for new cars. Maximizing fleet utilization is now a key management issue for most shippers. While current rail management tools are effective at tracking rail cars, an important gap exists with accurately predicting the usage and location of the cars over the entire planning horizon. – Alfred Sherk, CEO, SherTrack LLC

Next-Generation Rail Fleet Management

Next-generation rail fleet management solutions are providing effective rail process control tools by applying predictive analytics to manage the complex interaction of variable demand and transit times. Rail fleets are digitally analyzed to explicitly capture the capabilities and constraints of the rail network throughout the year so that process improvements can be evaluated accurately and quickly.

Similarly, predictive analytic support for day-to-day operations is emerging as well as the ability to predict, with confidence, future operating needs by route to maximize service and fleet utilization – all of which provides valuable insight for the sales and operations planning process.

Next-generation rail fleet management tools answer key critical logistics questions, such as:

What do I have and what do I need?

Lean fleet sizing needs to be complemented with Lean operating policies and targets in order to guide execution, and with enhanced daily operating procedures that take advantage of new predictive control capabilities (e.g., alerts of pending railcar-location discrepancies). Alerts provide advance warnings to operations – anywhere from seven to 75 days – to take corrective action for efficient operational control.

• Where are my rail cars and where should they be?

Next-generation rail fleet tools will improve management and operational control of rail transportation. It will provide rail management teams with important insight to participate and contribute in the S&OP process to improve overall business performance. Supply reliability is critical to business, and a rail management team needs to be able to respond quickly in a rapidly changing environment.

 “What-if” scenario analysis is very valuable for conducting business contingency planning. Estimates can be made concerning when railcars will return to the plants and be available for loading. Reports and graphics can be provided to highlight times when there will be car shortages at the plants or exceed railcar storage limits at the various yards (operational alerts).

• Can I synchronize my rail fleet with manufacturing output?

Companies pursuing operational excellence in their railcar operations need enhanced methodologies and tools to develop and sustain new high performance operating procedures. Toward that end, three stages of maturity for achieving a high performance Lean rail fleet are emerging: determining the Lean sizes of the component sub-fleets; tuning operating policies and set points to guide execution; and enhancing daily operating procedures with the appropriate predictive control tools.

With the above in place, companies should be able to determine optimum fleet sizes; run “what-if” scenarios for demand/supply variability, weather and other disruption-related possibilities; and aid in business continuity planning.

The Outlook

In 2015 and beyond, look for predictive analytic based rail fleet management to provide managers with innovative new tools. Lean operating processes, enhanced with predictive analytics, will provide new capabilities for improved management control. By applying predictive analytics with next-generation sales and operations planning techniques, rail service and fleet utilization will improve.

Next-generation rail fleet management solutions are providing effective rail process control tools by applying predictive analytics to manage the complex interaction of variable demand and transit times. Rail fleets are digitally analyzed to explicitly capture the capabilities and constraints of the rail network throughout the year so that process improvements can be evaluated accurately and quickly.

Similarly, predictive analytic support for day-to-day operations is emerging as well as the ability to predict, with confidence, future operating needs by route to maximize service and fleet utilization – all of which provides valuable insight for the sales and operations planning process.

Next-generation rail fleet management tools answer key critical logistics questions, such as:

What do I have and what do I need?

Lean fleet sizing needs to be complemented with Lean operating policies and targets in order to guide execution, and with enhanced daily operating procedures that take advantage of new predictive control capabilities (e.g., alerts of pending railcar-location discrepancies). Alerts provide advance warnings to operations – anywhere from seven to 75 days – to take corrective action for efficient operational control.

• Where are my rail cars and where should they be?

Next-generation rail fleet tools will improve management and operational control of rail transportation. It will provide rail management teams with important insight to participate and contribute in the S&OP process to improve overall business performance. Supply reliability is critical to business, and a rail management team needs to be able to respond quickly in a rapidly changing environment.

 “What-if” scenario analysis is very valuable for conducting business contingency planning. Estimates can be made concerning when railcars will return to the plants and be available for loading. Reports and graphics can be provided to highlight times when there will be car shortages at the plants or exceed railcar storage limits at the various yards (operational alerts).

• Can I synchronize my rail fleet with manufacturing output?

Companies pursuing operational excellence in their railcar operations need enhanced methodologies and tools to develop and sustain new high performance operating procedures. Toward that end, three stages of maturity for achieving a high performance Lean rail fleet are emerging: determining the Lean sizes of the component sub-fleets; tuning operating policies and set points to guide execution; and enhancing daily operating procedures with the appropriate predictive control tools.

With the above in place, companies should be able to determine optimum fleet sizes; run “what-if” scenarios for demand/supply variability, weather and other disruption-related possibilities; and aid in business continuity planning.

The Outlook

In 2015 and beyond, look for predictive analytic based rail fleet management to provide managers with innovative new tools. Lean operating processes, enhanced with predictive analytics, will provide new capabilities for improved management control. By applying predictive analytics with next-generation sales and operations planning techniques, rail service and fleet utilization will improve.

Next-Generation Rail Fleet Management