Supportability :
The Difference between Profit and
Loss in the Rail Industry
Keith Jordan – Hitachi Rail Europe
September 2011
Agenda
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Introduction to Hitachi Rail
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The UK rail industry – how does it work?

Where does your ticket money go?

The Intercity Express Programme
 Providing a service linked to passenger requirements
 Supportability – so what?

Summary
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Hitachi
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Hitachi Group
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Hitachi Rail
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350,000 employees worldwide
$90B Turnover
1500 employees Japan
40 employees London (4 supportability)
110 employees Ashford Kent
Hitachi Rail UK Track Record
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First contract win 2005 (£500M)
Invested £60M in new maintenance depot 2005 2007
First train delivered to UK 2007
Delivered first UK high speed service to Kent in
2009
Selected as preferred bidder for the Intercity
Express Programme in 2009
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
How does the UK
rail industry work?
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Who runs the railways
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Where does your
ticket money go?
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
The Railway money go round
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
The Intercity
Express
Programme
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
What does the customer want?
East Coast
50+ services
Daily
GWML - 56 services daily
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Good value or Compensation culture?
Business Driver
Incentive
People buy tickets to travel
Paid daily payment per train
(one charge includes lease (65%)
and maintenance (35%)
More people take the train if it is
punctual
Penalty for technical delay
Ticket price refund for major delay
Major penalty for train breakdown
Customer satisfaction is high when
all facilities working (eg Toilets)
Penalty for functional failure
Revenue is enhanced through
catering/shop
Bonus payable on average KPI
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Obsessively well engineered trains
Excellent quality product
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Evolution of existing proven technology
Minimise maintenance cost
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Designers fully briefed on maintenance
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6 month design window
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Cost based design trade off
Design guarantee to Maintenance
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Manufacturer pays 50% of penalties until
MDBF target met
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September 11
Bonus paid by maintenance for achievement
Supportability: The Difference between Profit and Loss in the Rail Industry
Who cares about toilets?
“We have already spent
10,000 hours on the toilet”
September 11
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Boeing 777 ‘Evac’ system
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100% compliance with regulations
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Vandal proof
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Communication system
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Customers
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Maintainers
Supportability: The Difference between Profit and Loss in the Rail Industry
We have rehearsed 30 years of maintenance
Train by train
Proven operational robustness
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Supportability so what?
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Brake pads
32 per coach x 1000 coaches = 32,000 pads
32,000 pads x £50 x 10 replacements per year
= £1.6M / /year (£56M over the life)
Electric brake down to 5mph - £15M investment
32,000 pads x £50 x 2 replacements / year = £0.3M / year
(£11M over the life)
Total saving £56M – (£15M + £11M) = £30M
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Minimise spend on maintenance
Major equipment change in 1 hr
Stock control fully
automated
1 hr equipment exchange
Wheel life extended by
6months
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Using technology to save money
• Train
‘health data’ sent via wifi upon
Auto inspection
incident
trigger measured daily
– key systems
– Remote
access
of train management
 Brake
systems
system
to diagnose
 Power
systems
– Automatic spares
allocation
maintenance
instruction sent
shift manager.
– to
Automatic
maintenance instruction sent
to shift manager.
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
Information supports decision making on performance
Staff and
Attendance
Train management
System Data
Inventory
Control
Automatic
Inspection
Dashboard
Reporting
September 11
Electronic Job
cards
Supportability: The Difference between Profit and Loss in the Rail Industry
Summary
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry
The UK rail market is commercially very complex
Our customers will not accept poor performance
Our income is linked to our performance
We are striving to eliminate maintenance cost
Cost effective, through life support is the
difference between profit and loss
September 11
Supportability: The Difference between Profit and Loss in the Rail Industry