1. Twinning project, activity 4 Maintenance 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

2. 2 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.

3. 3 Result: a PRODUCT Long Term reaction time Trigger: degradation Renewal Result: a PRODUCT Middle Long Term reaction time Trigger: quality improvements Large- scale maintenance LC Costs RAMS quality Functionality © ProRail. All rights reserved Interaction Result: a SERVICE Short Term reaction time Trigger: RAMS & functionality Small- scale maintenance Interaction Context assessment RAMS = Reliability, Availability, Maintainability, Safety LC= Life Cycle Outsourcing of Maintenance & Renewal

4. 4 STATIONS 1x Management agreement with NS Stations TELEMATICA 1x Framework contract 16x Sub-process contracts 1x Consortium of contractors RAILINFRA 39x Process contracts 3x Process contractors Many project contracts and contractors Small-scale maintenance is outsourced with three types of contracts Stations Track Level Crossings Bridges Energy supply Signalling Posts (Traffic Control) Telecom

5. 5 Contract boundaries between Signaling, Telecom and Posts Failsafe technique Operation s EBP Sub Post EBP Contract boudary Glass fiber Copper cable TEL. Main Post Copper cable signaling EBP EBS- gate None Failsafe technique Relais Case VPI Process Contract A B-relay Relais Case Process Contract B Process Contract C EBS Sub Post Relais Case

6. 6 Specify Measure Audit Evaluate & Improve Planning of work Preparation of work Execution of work Inspections Evaluate & Improve Report Outsourcing; allocation of tasks Check Proces OutputInput Measure Check ProRail Contractor Legenda: Outsource © ProRail. All rights reserved

7. 7 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 © ProRail. All rights reserved OPC = Output Process Contract

8. 8 FOCUS Customer TOCs Punctuality & Capacity Top requirement for public rail transport RAMS(HE) Specifications RIB business targets per (contract) area Board Integrated Quality Indicators Time-related quality figures for infrastructure systems Managers Performance is specified and managed at four (related) levels Railinfra mngt. Objects Systems Area Activities Inspection & maintenance actions Contractor 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

9. 9 Measuring and reporting on Quality is outsourced. It is a highly skilled business. Standard quality measurements (according to contract) Non-standard quality measurements/ inspections ProRail Non-standard quality measurements/ inspections Contractor OUTSOURCED: measures and reports on quality Defects © Railinfrabeheer

10. 10 Four types of quality measurements/inspections Types of inspection:Characterisation:Ordering method: Operational inspection Quality inspection Technical inspection 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 partly process contract partly project order 100% project order

11. 11 1.Failure and punctuality recording 2.Measuring trains (track, US, catenary, ATC,..) 3.Inspections: *“schouw” (frequent inspection of lines on foot ) *functionality *quality *technical 4.Telemonitoring systems 5.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

12. 12 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

13. 13 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

14. 14 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.

15. 15 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

16. 16 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.

17. 17 Advice 1.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

18. Maintenance management; how to manage the relation cost-performamce Introduction and developments

19. 19 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

20. 20 To manage performance (RAMS) dedicated instruments and quality assurance are needed. RAMS specs Safety case Risk Analysis Maintenance Concept Work plan RAMS specs in a contract Consequence: full process control & dedicated instruments See EN 50126 RAMS specs Maintenance Engineering Reliability- centred Maintenance RAMS specs © ProRail. All rights reserved

21. 21 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

22. 22 Maintenance Concept is the tool to relate costs and performance Part Failure form Object Failure Modes Failure cause Condition of the fault Chances & Effects Failure duration Life Time Effect on: RAMS Costs M&R strat. ActivityCosts/ activity Sequel action failure Costs/ action M&R activitiesSpecs Minimum technical specs SAO TAO GAO SAO = Failure dependent maintenance TAO = Condition dependent maintenance GAO = use dependent maintenance Maintenance, Renewal, Inspections Risk Analysis Maintenance Concept From failure registration

23. 23 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

24. 24 Risk Analysis & Maintenance Concepts Data & knowledge will be (re)organised “Object tree” FMECA library Modeling installations (Optimizer+) Comparing Concepts © ProRail. All rights reserved

25. Life Cycle Management (= LCM) Implemented process and skills Example: LCC analysis of a switch 1:9 and LCM optimized renewal plan track & switches

26. 26  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?

27. 27 Lowest LCC Economical Life Technische life Loss of Function Controled Loss of quality (Growing) loss of Quality Principals of Life Cycle Cost Management LCC = Life Cycle Costs

28. 28 High Life Cycle Cost reduction potential in an early phase of a project Strategy Design Building proces % Cost reduction potential Build In operation Maintain & Renew

29. 29 (Life Cycle) Cost reduction potentials in the Value Chain StrategyDesignBuild “Value Chain” “Efficiency Chain” and examples of cost reduction solutions Maintain & Renew Functional specifications instead of technical solutions. Operational demands 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

30. 30 LCC Management has introduced in 2000  LCC calculation programme  LCC training with course material  Infranet  Helpdesk

31. 31 LCM-step-by-step method ProRail M&R  Define project  Generate variants  Determine preference variant  Report findings M&R = Maintenance & Renewal

32. 32 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

33. Dashbord / kpi’s Kpi = key performance indiactor

34. 34 Dashboard Board of Directors

35. 35 Dashbord M&R Director Activities Upkeep specifications SKI KPI (RAMS) * Utilisation of maintenance schedule and Train Free Periods RA M S 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 crossings LEVEL CROSSINGS: SAFETY: * ATC incidents

36. 36 Main developments within ProRail M&R 1.Growing income from user charge (15-20%) 2.Performance contracts with train operators and government 3.Transformation from a task- into a process-orientated organisation 4.Introduction of RAMS/Maintenance management techniques 5.Introduction of dashboard with key performance indicators 6.RAMS specifications in Maintenance, Design and Build contracts 7.Improved cost and quality management and their interrelationships 8.Alliance contract for relationship with maintenance contractors 9.Combined database with maintenance contractors 10.Introduction of Decision Support Systems to improve foundations and prioritising of projects in production plan 11.Long term renewal plans (25 years) 12.ProRail database with cost norms, cost calculations and LCC cases 13.Innovation in: contracts, quality measurement, telemonitoring, management information systems and modelling & forecasting

37. 37 Our ambition: the best rail inframanager of Europa

38. 38 Thank you for your attention Any questions?