SPONSORED INTERVIEW
Efficient and productive inventory management
The rail industry has fallen behind other sectors on inventory planning and the optimisation of stock control – but a solution exists that could revolutionise that. RTM spoke to Tony Abouzolof, one of the co-founders of Syncron, whose work to improve inventory and parts management at Deutsche Bahn and other companies has attracted wide attention.
M
ost rail companies often struggle with having the right parts at the right time. To avoid this risk, they over-compensate, and carry far too much inventory, ‘just in case’. This is both hugely expensive and hugely wasteful.
As Tony Abouzolof of Syncron told RTM: “Having the right inventory balance is important when running an effi cient railway operation – you need to have parts available when needed, but it is a risk to have too much. Writing off wasted products can have its own disposal costs, too.
“Having too many parts and products in inventory is expensive – interest rates are low at the moment, but this will not be the case forever – and obsolescence is also an issue. Technology moves on, and the product may no longer be suitable in fi ve or ten years’ time.”
Too many rail companies think they face unique stock management challenges, Abouzolof said, and so they ignore vital lessons from other industries. But the advances made in rival sectors – especially automotive, aerospace and retail – really should not be ignored.
“There is this perception that the rail industry is unique and has to do things in its own way – but this is not 100% true. Every industry has got unique factors, but that’s no reason not to move on and use modern tools,” he said.
Improving spare parts planning and stock control
Abouzolof’s message is clear: “Overall, the planning of spare parts and stock control in the rail industry is not really where it should be.”
The factors behind this are complex, from ageing IT infrastructure to the ownership and structure of some railway companies, which sometimes lack the push they need to switch to more advanced ways of planning and optimising inventory management. Workforce perceptions are important too, as is the availability of accurate data.
Poor inventory planning is often the result of 62 | rail technology magazine Aug/Sep 14
trying to avoid having out- of-stock parts – which can be catastrophic for an integrated, timetabled, precision industry like the railways, where having units unexpectedly out of service causes big knock-on delays for passengers, dents revenue, and causes problems for other parts of the operation.
Abouzolof said that when the maintainer – often not the same company as the operator – suddenly realises that a spare part is missing from the depot, the consequences are drastic. “You can imagine, when a multi-million pound train is sitting in a maintenance depot, with all the tools, cranes, manpower and resources to do the maintenance, the huge cost of having to fi nd that part. It may be in a diff erent part of the world – which creates its own import costs – and in many cases there will be penalty clauses between the maintenance company and the operator if something is not ready in time.
“There are huge costs associated with trains being out of service while they wait for missing parts. This can create havoc with timetabling. Out of stock parts can be a huge problem.”
But modern forecasting and optimisation systems, such as Syncron’s ‘Global Inventory Management’ solution, can change all that, using advanced predictive and analysis technology, modern inventory planning techniques like virtual warehousing, redistribution suggestions and demand patterning, and a user-friendly interface.
Virtual warehousing
Virtual warehousing, for example, has created major effi ciencies at Deutsche Bahn (DB), which selected Syncron to improve its inventory performance across more than 100 depots and
Syncron’s work with DB helps to ensure that the largest railway operator and infrastructure owner in Europe has an optimally balanced inventory, by automatically evaluating the best sourcing options when replenishing
facilities.
Virtual warehousing is a way of managing very expensive spare parts across a large number of stock locations. Rather than being held at every location or depot, a part is held in just a few geographically effi cient locations, from where it can be moved quickly if required.
Abouzolof explained: “The concept allows the sharing of slow-moving stock between diff erent locations – or sometimes even diff erent companies. Then, rather than holding inventory in lots of places, it can be shared. It was a technique fi rst developed by the military; NATO member countries using similar systems decided to stop holding so much stock for large weapon systems or radars or planes and share it instead, from the 1960s and 1970s. That technique is now used in many industries.”
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