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Merging Operations, Production, Logistics and Financial Analysis
Engineering Significant Rail Efficiencies
Strategic Partners with
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Engineering
The application of scientific and mathematical principles to practical
ends such as the design, manufacture, and operation of
efficient and economical structures, machines, processes, and systems.
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What Issues / Frustrations do
you have?
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• Change happens over time• Safety, regulation, goals, bosses, organizations,
mergers, people• Production processes• Commodity and customer mix• Railcar type and size• Product handling requirements• Loading / unloading processes
• Solutions without full evaluation of the broad causes often lead to sub optimized use of resources and unintended results
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Observations from “the trenches”
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Be Wary of Unintended
Consequences!
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• Plant sites grow over time, capacity/production are added in “vacant” locations
• New rail shipping patterns, products, rail equipment
• Industrial plant processes and inbound/outbound requirements
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Product Loading/Unloading
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• Continual review of and integration of plant processes and rail capabilities is critical
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Rail Capabilities
Integrated Solution
Plant Processes
Review Results
Product Loading/Unloading
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• Railcars considered buffer capacity for inputs / outputs and production capacity
• Receiving inbound, shipping outbound, processing customer orders and product storage have major implications to rail operations
• Common solution more cars more track
• Evaluate current and future shipping needs around improving car cycle times
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Railcar Utilization & Shipping Patterns
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• Traditional instinct is to build more of everything = $$$
• Could there be operational improvements to reduce or avoid Capital Investment?
• Organizational coordination
• Conflicting goals between departments/divisions
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Where to Start?
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• Review Process, then look at Capital Investment
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Review Process
Where to Start?
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• The review should include Car order/Release
o Internal plant, railroad, customers Plant production processesMaterial handling and storage Carrier service levels and consistency Equipment availability and costs Timing Organizational structure Challenge of demonstrating financial benefits
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The List?
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• Where do you find communication, coordination or goal conflicts?
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• The standard approach is to blame the Railroad!
• Is the single biggest impediment to inefficiencies your own ORGANIZATION?
• Plant production, material handling, multiple modes of transportation, conflicting goals within plant divisions and within corporate hierarchy, lack of resources, ……
• Correct solutions can be counter intuitive (and counter culture) when viewed from inside your organization
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Assessing the “blame”
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• Safety, regulatory compliance, environmental stewardship
• Material handling, storage, loading/unloading
• Opportunity cost due to limits on through put
• Costs of asset delay, demurrage, redundant capacity
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Plant Site Review
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• Where are your bottlenecks…..REALLY??
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Plant Site Review
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• Processes
• Coordination
• Communications
• Cost Benefit Analysis and Justification
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Plant Site Improvement / Development
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• Plan, Execute, Measure, Repeat!
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PLAN
EXECUTE
REPEAT
MEASURE
Plant Site Improvement / Development
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• Serving Rail Carrier safety, processes, service levels
• Fleet performance
• Coordinate and integrate internal/external communications, loading locations, carrier placement of cars, timing of service, etc.
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Evaluate Serving Rail Carrier
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Now What?
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• Last step if process improvements do not lead to desired improvements
• Develop and model concepts to improve rail infrastructure
• Develop negotiation strategy to discuss improvement’s value to serving carrier and seek CapEx/rate participation
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Internal Rail ConfigurationOperations Evaluation
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• Finance & Operations (yeah!)
• Purchasing / Accounting / Engineering (do we have to really invite them?)
• Define the improvement / project ramp up and business case
• Develop “independent utility” phases that fit into the overall project ramp up
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Financial Justification
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• All ideas must be analyzed from a safety, process integration, and cost / benefit perspective
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Financial Justification
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• Chemical Plant• Reduced internal rail carrier switching time from 2 hours a day to less than
15 minutes (plant shut down production during rail carrier switching)• All product weighed inbound / outbound (250K scale capex)• Reduced total loading rack locations from 12 to 4 and improved safety
• Chemical Plant• Reduced time for internal switching by 37% thru track configuration
changes (2M versus original proposed 5.5M capex investment) / overtime• Improved inbound / outbound service by rail carrier thru dedicated tracks• Allowed increase in number of products that could be loaded into railcars.
• Ag Processing Plant• Redefined the internal rail operations for over 900 in-plant railcars and 50
plus loading locations to complete reorientation of contract switcher ops• Reduced 3 switch crew shifts per week• Improved car availability to individual load locations
Results
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Voilà!
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• Seek out experts who have experience and skills in multiple areas
• Sometimes the best view is from outside
• Debottleneck
• GOAL Use expansion of operations / infrastructure as last option
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Conclusion
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Our Mission
Help our clients become better rail shippers.
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Questions?
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What can we help you understand better?