Railways in Multiple Supply Chains Phil C. Ireland Consultant Jexi Inc. Cell: ca.linkedin.com/in/philcireland A Critical Conversation on Railway & Shipper Relations

Seeing the complete picture matters… Clouds... …Mist From Niagara Falls. Up close you see… …Step back and you see 2

Seeing the complete picture matters… Endless Dots... Up close you see… …Step back and you see …Modern Art! 3

Seeing the complete picture matters… A critical route for a customer …One link in the network Up close you see… …Step back and you see 4

Rail networks are very complex and their operations are fragile – require a continuous flow approach to maintain stability – all stakeholders need to embrace the “big picture” Key Message 5

Network – addressing total book of business Balance – to drive service reliability Velocity – faster transits and additional capacity Core Railway Design Principals 6

3. Establishing Takt Time 2. Harmonizing Cycle Time 1. Pulling to Demand Adhering to 3 critical principles creates Continuous Flow Link production directly with ability to exit demand – not ability to enter demand Establish a regular “heartbeat” to production flow to balance and level all network resources Create “conveyor belts” so that every segment of the production line runs at the same speed Continuous Flow 7

TRIP PLAN Executable shipment instructions TRAIN One or more blocks grouped together Deliver the Book of Business Locomotives Crews Compounds Yards/Terminals Locomotives Crews Work-blocks Inspections/ Fuelling Resource Plan Corridors Rail cars Fleets BLOCK A packet of cars grouped on common characteristics TRAFFIC Intimate understanding of every car/container move The Plan starts with shippers’ needs Network Planning 8

RTM’s __RTM__ GTM On-time performance Trip plan compliance Car velocity Locomotive Productivity ___GTM___ Train miles # Handlings # Block Swaps Train Schedules Yard Capabilities HP/ton Volumes (Demand) Train length Train weight Car miles Train miles Train starts Train Crews Trip time Fleet size: cars Yard crews & assignments GTM’s Fleet size: locos Key design parameters 1 st measurement level 2 nd measurement level Key Operating Measures Optimized in the design process Outputs of the design process Metrics Pyramid Many factors need to be carefully managed to create balance and ensure we hit the “sweet spot” 9

Shipping Line Port Operator Rail Line CapacityCar FleetCorridor BalanceShipment Flow Causes: Over-reaction to Backlogs Order batching Demand forecast inaccuracy Resource delays impacting capacity Solutions: Disciplined, slight corrections Focus on resource balancing Stay within capacities Collaborative channel management “The Bullwhip Effect” 10

Reality of the Challenges 11

VesselPortRailInland Terminal Railcar supply to meet import demand All supply chain participants need to work together to dampen “oscillations” in the network Elements of the Supply Chain 12

Entry to NetworkExit From NetworkSeasonality Visibility tools and process Improved customer-rail interfaces Optimized terminal and vessel interfaces Right product, right time, right place Actively mitigate peaks and valleys Pre-planning and notification Sales strategies Optimized handling and resource allocation Multi-modal planning Better capacity, asset & labour utilization 13 Supply Chain Coordination Implement strategies that level and balance demand on the network

14 Rail networks are very complex and their operations are fragile – require a continuous flow approach to maintain stability – all stakeholders need to embrace the “big picture” Key Message

Railways in Multiple Supply Chains Phil C. Ireland Consultant Jexi Inc. Cell: ca.linkedin.com/in/philcireland Thank You!