Twinning project, activity 4Maintenance assessment

Tools and techniques used by ProRail to manage costs and performance

By Jan Swier and Ted Slump, ProRail, The Netherlands

Tel. +31 30 235 5315. e-mail: jan.swier@prorail.nl

© ProRail. All rights reserved File: g:\Js05\0406.Slovenia.outsourcing

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Outsourcing strategies in Europe

Conclusions:1. Within Europe there

are big differences in the degree of outsourcing.

2. Only in Holland all the execution of work is outsourced.

3. Outsourcing of maintenance is unusual.

4. Broadly speaking the cost effects of outsourcing are indistinct.

De

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Ma

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Ge

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Holland

Finland )* )* 100% inhouse

Ireland

Spain

England Unstable, big changes

Germany

Sweden )** )** 100% inhouse

Italy

Norway

Switserland

Austria

Denmark

Belgium

France

VS; Amtrak

Degree of outsourcing AppraochMost work inhouse Conservative

Partly outsourced Outsource initiatives

Most outsourced Innovative,broad adopted

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Result: a PRODUCTLong Term reaction time

Trigger: degradation

Renewal

Result: a PRODUCTMiddle Long Term reaction timeTrigger: quality improvements

Large-scalemaintenance

LC Costs RAMS quality Functionality

© ProRail. All rights reserved

Interaction

Result: a SERVICEShort Term reaction time

Trigger: RAMS & functionality

Small-scalemaintenance

Interaction

Context assessment

RAMS = Reliability, Availability, Maintainability, SafetyLC= Life Cycle

Outsourcing of Maintenance & Renewal

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STATIONS1x Management agreementwith NS Stations

TELEMATICA1x Framework contract16x Sub-process contracts1x Consortium of contractors

RAILINFRA39x Process contracts3x Process contractorsMany project contracts andcontractors

Small-scale maintenance is outsourced with three types of contracts

Stations

Track

Level Crossings

Bridges

Energy supply

Signalling

Posts (Traffic Control)

Telecom

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Contract boundaries between Signaling, Telecom and Posts

Failsafe technique

Operations

EBP

Sub PostSub Post

EBPContract boudary

Glass fiberCopper cable TEL.

Main Post

Copper cable signaling

EBP

EBS-gate

None Failsafe technique

Relais Case VPI

VPI

Process Contract A

B-relay

Relais Case

Process Contract B Process Contract C

EBSSub Post

Relais Case

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Specify

Measure

Audit

Evaluate &Improve

Planning of workPreparation of workExecution of workInspections

Evaluate &Improve

Report

Outsourcing; allocation of tasks

Check

Proces OutputInput

Measure

Check

ProRail

Contractor

Legenda:

Outsource

© ProRail. All rights reserved

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Typical OPC-contract*Integral maintenance contract for all technologies: electrical & civil engineering*Service contract; not calculated on results but on efforts*Separate accreditation scheme for maintenance and fault repair*Model OPC is standard; uniformity, unambiguity*Contracting guide with process worked out*Skeleton contract with a duration of 5 years, with annual meetings about changes*Prescribed inspections linked to specifications*Generic risk analysis of the process*Open budget as support for the offer*Specifications at four cohesive levels *Risk inventorisation of safety

Explanatory descriptions(Descriptions of what to do/in which order/by whom/in which context

Contract guidelineThe steps to be followed in sequence to arrive at a contract

AVPIAPPENDIX 4

Genericstandards/specifications

APPENDIX 5

Genericrelevant

informationbackground

APPENDIX 2ProRail B&I

Definition (What demand)

Risks + risk sharing

APPENDIX 3Contractor

Quality plan (How delivered)

Price + Description

Annual agreements

APPENDIX 1

Exceptions

supplementsand

to the genericConditions andspecifications

changes

Model contract

Model agreement

(General Conditions for Processcontract Upkeep)

© ProRail. All rights reserved

OPC = Output Process Contract

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FO

CU

S

Customer TO

Cs

Punctuality & CapacityTop requirement for public rail transport

RAMS(HE) SpecificationsRIB business targets per (contract) areaBoard

Integrated Quality IndicatorsTime-related quality figures for infrastructure systems

Managers

Performance is specified and managed at four (related) levels

Rai

lin

fra

mn

gt.

Objects

Systems

Area

Activities Inspection & maintenance actionsContractor

Maintenance Specifications(Minimum) technical wear and objects’ wear limits

Technicians

© ProRail. All rights reserved

RAMSHE = Reliability,Availability,Maintainability,Safety,Health,Environment

TOC = train Operationg Company

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Measuring and reporting on Quality is outsourced. It is a highly skilled business.

Standardquality

measurements(according to

contract)

Non-standardquality

measurements/inspections

ProRail

Non-standardquality

measurements/inspections

Contractor

OUTSOURCED: measures and reports on quality

Defects

© Railinfrabeheer

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Four types of quality measurements/inspections

Types of inspection:Characterisation: Ordering method:

Operationalinspection

Qualityinspection

Technicalinspection

Inspection

• Visual inspection (compulsory by law)• Guaranteeing safe operation• Report limited to nonconformities• More frequent than operational inspection •Visual inspection• Guaranteeing operation• Report limited to nonconformities• Systematic, at least 1x per year

• Often involving specialist equipment• Quality assessment• Uniform inspection report• Performed systematically

• In-depth inspection with specific objective• Performed occasionally• Unique inspection report• Specialist

• 100% process contract

•100% process contract

•partly process contract•partly project order

•100% project order

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1. Failure and punctuality recording2. Measuring trains (track, US, catenary, ATC,..)3. Inspections:

* “schouw” (frequent inspection of lines on foot )

* functionality* quality* technical

4. Telemonitoring systems5. Audits

Overview of Quality measurements

Quality measurements are a part of the Maintenance

Specifications in the Process Contract

ATC – Automatic Train Control

US = Untra Sonic

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Output management tools (to manage costs and performance)

1. Specifying and measuring performance at levels

2. Calculating and accounting costs at levels

3. Maintenance management techniques & tools(e.g. RCM, FMECA, Risk Analysis, Maintenance Concepts, etc.)

4. Process Control / Quality Management

5. Benchmarking; internal and external

6. Modelling:* Costs and Performance* Conditions and Costs * Utilisation and Functionality

© ProRail. All rights reserved

RCM = Reliability Centrend Maintenance

FMECA = Failure Mode Effect and Criticality Analysis

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The contract and contracting process were quite satisfactory, but …………..:–A market with nearly no competition,–no clear insight into costs and the relationship with the performance delivered,–insufficient specifications and instruments to work with RAMS,–insufficient collaboration, –sub-optimisation; contractor too focussed on own operating results, and ProRail specified the results insufficiently.

Evaluation of outsourcing small scale maintenance in 2001

© ProRail. All rights reserved

In 2001 the OPC+ project has started

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OPC+: changing the relation with small scale maintenance contractors

* Need of short term improvement.

* Introduce professional asset management skills and instruments.

* Share information and knowledge with Process contractors.

* Shared targets for 2006.

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Results OPC+

Data systems linked to automatic data synchronisation for failures

First transition step organisations Management Control and Reporting System installed and

KPI dashboard Failure reduction –20% compared to 2002 EUR 40 million (20%) efficiency improvement New maintenance guidelines with classes Experiment with new schedule for train free periods for

maintenance Joint vision of relationship in 2007and sustainable results

KPI = Key Performance Indicator

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Lessons learned

1. Outsourcing of maintenance projects (like renewals and large scale maintenance) has big advantages and is not very risky.

2. Outsourcing of small scale maintenance is difficult because: – There is no real competition. – The result is a service (RAMS) and not a product.– Integral skills of the contractors are needed (civil, signaling, high voltage) – New instruments and management skills are needed. – An unusual attitude of the contractor; dedicated to maximize quality/cost ratio

3. You have to know your business and be in control of it:– Only if you can specify and measure it, you can manage it.– Skilled people and dedicated instruments are needed to manage costs and performance.– Know your infrastructure, costs realised and minimum quality accepted. – Reorganise your processes, instruments and skills to control improve results.

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Advice1. Do not outsource maintenance if you don’t know how to

stay in control of costs and performance.

2. Outsource step by step: plan, separate, split-off and outsource.

3. Outsourcing should not be a goal but a way to improve.

4. Outsourcing needs a cultural change and takes time.

*The market will not give you anything for free.

*Outsourcing is not a solution for your financial or managerial problems.

*Tasks are outsourced, but the end-responsibility for the overall result not.

© ProRail. All rights reserved

Statements

Maintenance management; how to manage the relation cost-performamce

Introduction and developments

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RailinfrastructurRail infrastructure

..

The relation between Costs and Performance has to be managed in levels

Organization

Costs Performance (RAMS)

Network

Lines

Systems

Objects

Components

Mechanics

Director

Managers

Technicians

Network

Lines

Systems

Objects

Activities

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To manage performance (RAMS) dedicated instruments and quality assurance are needed.

RAMS specs

Safety case

Risk AnalysisMaintenance Concept

Work plan

RAMS specs ina contract

Consequence:full process control & dedicated instruments

SeeEN 50126RAMS

specs

MaintenanceEngineering

Reliability-centred

Maintenance

RAMS specs

© ProRail. All rights reserved

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EN 50126 give ProRail a frame work to organize processes and process control

Application EN 50126:*how to control Processes to optimise RAMS and Costs

*based on Specification and Demonstration of RAMS-requirement / risks

….for the whole life cycle

….for all railway systems

….for all parties in the business

….for new and existing systems

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Maintenance Concept is the tool to relate costs and performance

PartFailure form

Object Failure ModesFailure cause

Condition of the fault

Chances & EffectsFailure duration

Life Time

Effect on: RAMS Costs

M&R strat.

Activity Costs/ activity

Sequel action failure

Costs/ action

M&R activities SpecsMinimum technicalspecs

SAO

TAO

GAO

SAO = Failure dependent maintenanceTAO = Condition dependent maintenanceGAO = use dependent maintenance

Maintenance, Renewal, Inspections

Risk Analysis Maintenance Concept

From failure registration

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Infrastructure

Utilisation

Money

Environment

Infrastructure according to specifications

Knowledge

Maintenance Mgmt. tools are introduced to manage the relation between RAMS-Risks and Costs

Safety

Maintenance & Renewal

Availability Reliability

Costs

Risk Analysis

Maintenance Concepts

The “maintenance & renewal” black box

Circumstances

© ProRail. All rights reserved

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Risk Analysis &Maintenance Concepts

Data & knowledge will be (re)organised

“Object tree”FMECA library

Modeling installations (Optimizer+)

ComparingConcepts

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Life Cycle Management (= LCM)

Implemented process and skills

Example: LCC analysis of a switch 1:9 and LCM optimized renewal plan track & switches

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Avoid decisions based on short-term thinking and/or “emotions”.

LCC helps to make consequences visible on long term.

Improved reasoning behind and determination of decision.

Availability of the infrastructure and expenditure are set off against one another.

Why Life Cycle Cost Management?

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0

5

10

15

20

251 4 7 10 13 16 19 22 25 28 31 34 37 40

Realized life

Co

st

ind

ex

Yearly maintenance costsAverage yearly depreciation costs renew alLCC; maintenance + renew al

Lowest LCC

Economical LifeTechnische life

Loss of Function ControledLoss of quality

(Growing) loss of Quality

Principals of Life Cycle Cost Management

LCC = Life Cycle Costs

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High Life Cycle Cost reduction potential in an early phase of a project

Strategy Design

Building proces

% C

os

t re

du

cti

on

po

ten

tia

l

Build

In o

pe

rati

on

Maintain & Renew

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(Life Cycle) Cost reduction potentials in the Value Chain

Strategy Design Build

“Value Chain”

“Efficiency Chain” and examples of cost reduction solutions

Maintain & Renew

Functional specifications instead of technical solutions.

Operationaldemands

Layout,Complexity

Infra solutions.

Switch density.

Quality.

Specifications.

Norms.

Technical solutions.

Systems,Parts

Processes,Organisation

Mechanisation.

Planning.

Tendering.

Market developments.

Productivity

Train Free Periods.

Site management.

Efficiency & Effecitivity

Optimize M-cost and R-costs

Maximize life time

Continuous improvement

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LCC Management has introduced in 2000

LCC calculation programme

LCC training with course material

Infranet

Helpdesk

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LCM-step-by-step method ProRail M&R

1. Define project2. Generate variants3. Determine preference variant4. Report findings

M&R = Maintenance & Renewal

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Results following introduction of LCC Management

LCM knowledge database with >150 LCC considerations

M&R: for production planning process & investments

New lines: for availability request

Increased interest for financial aspects

Improved recording of decisions

LCC as basis for (new) M&R policy

LCC = Life Cycle Costs

M&R = Maintenance & Renewal

Dashbord / kpi’s

Kpi = key performance indiactor

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Dashboard Board of Directors

D A S H B O A R D B O A R D O F D I R E C T O R S

K P I / N P I D e s c r i p t i o n

1 A v a i l a b i l i t y1 . 1 U n p l a n n e d N o n - a v a i l a b i l i t y ( T A I ( # ) * F R T ( h o u r ) ) I M / I P / I C T

1 . 1 . 1 A v a i l a b i l i t y d u e t o u n p l a n n e d t r a c k w o r k s ( T A I ' s ) I M / I P / I C T

1 . 1 . 2 A v e r a g e f u n c t i o n r e c o v e r y t i m e o f a T A I ( F R T ) I M

1 . 2 P l a n n e d N o n - a v a i l a b i l i t y ( T F P ( # ) ) * I M / I P

1 . 3 T A I ( # ) * F R T ( h o u r ) * T r a c k s e c t i o n v a l u e ( i n d e v e l o p m e n t s t a g e ) * * I M / I P / I C T

2 T r a n s f e r2 . 1 S o c i a l s e c u r i t y r a t i n g ( d u r i n g d a y h o u r s ) I M

2 . 2 S o c i a l s e c u r i t y r a t i n g ( d u r i n g n i g h t h o u r s ) I M

2 . 3 A p p r e c i a t i o n o f c l e a n n e s s I M

3 A d j u s t m e n t s o f t r a i n p a t h s d u e t o t r a c k w o r k3 . 1 I n f o r m a t i o n s u p p l y a c c o r d i n g t o a g r e e m e n t s V L

3 . 2 A d j u s t m e n t s t o s t e e r i n g a c c o r d i n g t o a g r e e m e n t s V L

3 . 3 A m o u n t o f i r r e g u l a r i t i e s c o n c e r n i n g t r a i n p a t h a l l o c a t i o n V L

4 U s a g e4 . 1 S u c c e s s f u l a p p e a l s t o N a t i o n a l C o m p e t i t i o n A u t h o r i t y C M

5 S a f e t y5 . 1 S a f e t y i n d e x I M / I P

6 F i n a n c i a l i t e m s6 . 1 O v e r h e a d P & C

6 . 2 C o s t s p e r t r a i n p e r k m ( T K M ) P & C

7 H u m a n r e s o u r c e s7 . 1 A b s e n c e t h r o u g h i l l n e s s H R M

7 . 2 R O A m e e t i n g s ( p l a n n i n g a n d a s s e s s m e n t ) H R M

7 . 3 E m p l o y e e s a t i s f a c t i o n H R M

8 I n n o v a t i o n ( i n d e v e l o p m e n t s t a g e )

TAI Train Affecting Irregularity > 3 min.FRT Function Recovery TimeTFP Train Free PeriodKPI Key Performance IndicatorsBoD Board of Directors

BoC Board of CommissionersMoT Ministry of Transport, Public Works and Water ManagementIM Infra ManagementIP Infra Projecten

TC Ttraffic ControlCM Capacity ManagementICT Information ManagementP&C Planning and Control

HRM Human Resource ManagementROA Result Oriented Assessment of employees

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Dashbord M&R Director

Activities

Upkeep specifications

SKI

KPI (RAMS)

* Utilisation of maintenance schedule and Train Free Periods

RAMS KPIs:

•Number of TAOs •* Duration of TAOs * Type of TAO: four origin codes and endogenous/exogenous

RAMS KPIs:

* Track geometry figure * Track geometry incidents * Visual quality of switches * Guide geometry of switches

TRACK:

POWER SUPPLY:* Contact wire thickness * Incidents because of geometry

* Visual quality of crossingsLEVEL CROSSINGS:

SAFETY: * ATC incidents

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Main developments within ProRail M&R

1. Growing income from user charge (15-20%)2. Performance contracts with train operators and government3. Transformation from a task- into a process-orientated organisation4. Introduction of RAMS/Maintenance management techniques5. Introduction of dashboard with key performance indicators6. RAMS specifications in Maintenance, Design and Build contracts7. Improved cost and quality management and their interrelationships8. Alliance contract for relationship with maintenance contractors9. Combined database with maintenance contractors10. Introduction of Decision Support Systems to improve foundations and prioritising of projects in production

plan11. Long term renewal plans (25 years)12. ProRail database with cost norms, cost calculations and LCC cases13. Innovation in: contracts, quality measurement, telemonitoring, management information systems and

modelling & forecasting

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Our ambition: the best rail inframanager

of Europa

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Thank you for your attention

Any questions?