Lean Railroading

7/31/2019 Lean Railroading

1/13

Improving Railroad Classification Terminal Performance UsingConcepts of Lean Railroading

Jeremiah R. Dirnberger, Canadian Pacific RailwayChristopher P.L. Barkan, University of Illinois Urbana-Champaign

INFORMS RASIG Roundtable II - November 5, 2006


2/13

Page 2

Problem Statement

Inadequate terminal capacity is abarrier to improved service

reliability and network efficiency

Building new terminals and/or

expanding existing terminals arethe most costly alternatives

New methods are needed toharness as much capacity fromthe existing infrastructure


3/13

Page 3

Presentation Outline

1) The Terminal as a Production

System2) Lean Railroading

3) Factory Physics The Science

of Lean

4) Implementation Steps

5) Conclusions


4/13

Page 4

1) The Terminal as a Production System

[The Union Pacific] is a 33,000 mile factory with no roof.

Dick Davidson, 2003

Chairman and former CEO

This situation is analogous to a manager of an automobile

assembly plant . . . In the railroad industry, the terminalsuperintendent is the plant manager and his function is toassemble inbound trains or parts of trains into completed

outbound trains.Ferguson, 1980AAR No. R-412


5/13

Page 5

The Terminal as a Production System

Inbound trains

Methods/

procedures

Information

People

Weather

Infrastructure

Equipment

Outbound trains

Services

Information

Paperwork

Enables use of proven production management techniques inthe form of Lean Railroading


6/13

Page 6

2) What is Lean Railroading?

The adaptation of proven production management methodsto the railroad environment

- Lean

- Theory of Constraints (TOC)

- Statistical Process Control (SPC or six sigma)

- Scheduled railroading is key

Define value for the ultimate customer

- The ideal product for my customer is . . .

Then eliminate waste (any activity that does not add value)

- Direct waste (bad railroading)

- Variability (the root of all waste!)


7/13

Page 7

The Building Blocks

Factory Physics(the science of manufacturing)

Lean

Statistical

Process Control

Theory of

Constraints

Variability reductionEliminate

direct waste

Bottleneckimportance

Increased terminal capacity

Increased service

reliability and value

Previous railroad reliability studies(FRA, AAR, MIT)

Improved networkefficiency


8/13

Page 8

Waste on the Railroad

We seldom reduce any single type of waste . . .

without increasing another.

Reducing waste often results in tradeoffs:

Run shorter, more frequent trains

Increase locomotives and crews

Reduce mainline capacity

Decrease terminal dwell

Purchase or lease additional

railcars (safety stock)

Increase capital and

maintenance costs

Reduce lost sales, emptydelivery lead time


9/13

Page 9

3) Factory Physics Science of Manufacturing

Variability Buffering Variability in a production

system will be buffered by some combination of:- Inventory

- Capacity- Time

Variability is the root of all waste and takes two

forms: internal and external- Internal: outages, variable process times, rework,

sorting, etc.- External: arrival times, weather, traffic volume

and flow, yield management, etc.

Provides the Theory behind Lean


10/13

Page 10

4) Implementing Lean Railroading in the Yard

0. Eliminate direct waste: Take a fresh look at

the terminal system, try to eliminate obvioussources of waste (Value Stream Mapping)- Rework, car damage, unnecessary

motion, yard engine failure, long setups,

unnecessary information collection, etc.

1. Swap buffers: Decrease the time buffer by

reducing idle time (continuous flow), increasethe capacity buffer by improving bottleneckperformance

Implementation steps:


11/13

Page 11

Implementing Lean Railroading in the Yard

2. Reduce variability:a. Address problems in sorting, rework, car damage,

down time and setups (apply SPC/six sigma)

b. Implement standardized work plansc. Work with network management to increase on-time arrival of inbound trains

d. Level the production schedule in the yard and set

the network operating plan

3. Continuous improvement:Once variability is significantly reduced, we can

reduce the capacity buffer while continuing to identifyand eliminate variability. Only at this point do webegin to make real gains in productivity.

Spearman (2002) Factory Physics White Paper SeriesPart II


12/13

Page 12

5) Conclusions

Lean Railroading is just beginning

CPR Yard Operations Performance Group

GE Yard Solutions Group

UP VP Continuous Improvement

BNSF Value Engineering Group

The CN Philosophy

GE estimates dwell time reduction could resultin 15-30% terminal capacity improvement

Combining scheduled railroading with lean,CPR has reduced average terminal dwell

Many railroad applications beyond terminals


13/13

Page 13

Railroad Support while at Illinois

Research Fellowship

Documents

Lean Railroading