Asset Management in Network RailTurning theory into practice

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3rd October 2013

Andy KirwanHead of Asset Policy and Whole Life Costing

Turning theory into practice

Outline

• Adopting a systematic approach

• How we’ve applied it to improving our asset management decisions

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management decisions

• How we resourced and organised the work

• A view on whether the benefits justify the investment

Adopting a Adopting a systematic approach

The need for a systematic approach

• Arguably the largest asset management company in the UK

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The need for a systematic approach

• Arguably the largest asset management company in the UK

• Complex and ageing infrastructure: 30,000 km of track, 29,000 bridges, 2,500 stations

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stations

• 35,000 staff (maintenance in-house)

• Devolved organisational structure (10 operating routes)

• Major capacity enhancement programme

• Challenging cost reduction targets

Who and what is involved

• Involves the whole company and external stakeholders

• It is a long term commitment – circa 10 years

• Includes some big individual projects e.g. asset register

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• Most benefits come from a larger number of smaller

incremental improvements and the removal of barriers

between business functions

• To get started we needed a common interpretation of

asset management across the company

Network Rail’s interpretation of AM

Asset management on a page

• All Network Rail’s asset management processes

• Line of sight from strategy to

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• Line of sight from strategy to implementation

• Plan–Do-Review framework

• Independent of organisational structure

• Used to assign responsibilities and accountabilities

What sort of railway do we want and how much are we prepared to pay?

Network Rail’s interpretation of AM

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What is the optimum way of maintaining, renewing and upgrading the

Network Rail’s interpretation of AM

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infrastructure?

Network Rail’s interpretation of AM

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How do we translate the national asset policies into local work plans?

Network Rail’s interpretation of AM

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What is the optimum way of delivering the work?

Network Rail’s interpretation of AM

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What resources do we need to deliver the work safely and efficiently?

How can we be sure we’re doing the right things?

Network Rail’s interpretation of AM

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things?

Are the appropriate supporting mechanisms in place?

Network Rail’s interpretation of AM

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Improving asset management decision management decision making

What is the optimum way of maintaining, renewing and upgrading the

Asset Policies

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infrastructure?

Purpose of the asset policies

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• Customers & funders

– Journey time

– Punctuality

– Capability / Capacity

– Value for money

• Delivering work

– Operating Route plans

– Suppliers

– Scheduling work

– Handback

Optimum Maintenance &

Renewal Strategy

Structure of the asset policies: designed to answer seven questions

What assets do we have?

How are they performing, what are they costing us?

How do we want them to perform in the future?

What assets do we have?

How are they performing, what are they costing us?

How do we want them to perform in the future?

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2

3

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What intervention options are available?

Which regime represents the lowest whole life cost?

What are the associated work volumes, expenditures and outputs?

What are the delivery implications, uncertainties, risks?

What intervention options are available?

Which regime represents the lowest whole life cost?

What are the associated work volumes, expenditures and outputs?

What are the delivery implications, uncertainties, risks?

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5

6

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Asset Policies: a major commitment

• Established a cross-functional team: strategy, engineering,

operations, maintenance, renewals, finance

• Co-located the team for three years

• Approximately 100 person years’ effort

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• Approximately 100 person years’ effort

• Asset Policy documents produced for 11 asset groups

• Also developed models, processes and a large knowledge

repository

• Underpinned £18bn component of business plan for 2014-19

Are the asset policies effective?policies effective?

Three tests of asset policy

1.Robustness test

• Will implementation of the policies deliver the required outputs in the short term (circa 5 years)?

2.Sustainability test

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2.Sustainability test

• Will continued application of the policies maintain the outputs in the long term (circa 30 years)?

3.Efficiency test

• Do the intervention regimes in the policies represent the lowest whole life cost?

Robustness test

Rail breaks

600

700

800

900

1000

Nu

mb

er o

f bre

aks

in r

epo

rtin

g y

ear

22

0

100

200

300

400

50019

96-9

7

1998

-99

2000

-01

2002

-03

2004

-05

2006

-07

2008

-09

2010

-11

Nu

mb

er o

f bre

aks

in r

epo

rtin

g y

ear

Reduction in broken rails

Sustainability test: current position

Plain line installation profile at end 2011

12%

14%

16%

18%

Per

cen

tag

e in

stal

led

in p

erio

d

Installation dates: rail, sleepers, ballast

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0%

2%

4%

6%

8%

10%

12%

<1922 1922-1926

1927-1931

1932-1936

1937-1941

1942-1946

1947-1951

1952-1956

1957-1961

1962-1966

1967-1971

1972-1976

1977-1981

1982-1986

1987-1991

1992-1996

1997-2001

2002-2006

2007-2011

Per

cen

tag

e in

stal

led

in p

erio

d

Ballast Sleeper Rail

Sustainability test: looking ahead

Rail used life fraction %

50%

55%

60%

All

Rail used life fraction %

50%

55%

60%

Criticality band 2All

Rail used life fraction %

50%

55%

60%Criticality band 2Criticality Band 4All

Rail

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30%

35%

40%

45%

50%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

30%

35%

40%

45%

50%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

30%

35%

40%

45%

50%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Rail used life fraction (%)

Efficiency test

100 year NPV costs

200,000

250,000

300,000

Renewal/ Refurbishment

• Chart shows the whole life cost of five methods for managing a track section

• Options range from ‘only maintain’ to ‘full renewal’

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0

50,000

100,000

150,000

Maintenance only Re-padding only Heavyrefurbishment

Heavy refurb +renewal

Renewal

Renewal/ RefurbishmentMaintenanceDefect RepairService Delay FinesSafety Risk Costs

Service target

• Costs include maintenance, renewal, safety and train performance

• The lowest NPV does not always represent the optimum choice

Option selected

Changing the regulator’s perception

“Network Rail has significantly reworked its policies, in line

with best practice. They show a step-change in quality and

coverage. The tools - to support its development of minimum

whole life cost asset policy - are considered to be

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whole life cost asset policy - are considered to be

comparable to or at the frontier of best practice.”

Office of Rail Regulation

Draft determination of Network Rail's outputs and funding for 2014-19

June 2013

Contributing to wider business wider business improvements

Last 10 Years: Passenger safety risk

Passenger Risk in Train Accidents

60

70

80

90

100

PIM

Inde

x pe

r m

illio

n tr

ain

km

Passenger Harm in Other Accidents

50

60

28

0

10

20

30

40

50

60

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

PIM

Inde

x pe

r m

illio

n tr

ain

km

0

10

20

30

40

50

2001/

0220

02/03

2003/

0420

04/05

2005/

06200

6/07

2007/

08200

8/09

2009/

10201

0/11

2011/1

2

FWI/b

illio

n pa

ss jo

urne

ys

Train delay minutes

NR caused delay minutes each year

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14

16

18

20

Mill

ion

tra

in d

elay

min

ute

s

Takeback / unexplainedTimetable planningOperationsOther external FactorsWeatherAdhesionOther infrastructureOther Non-TrackSignalling + power supplyTrain detectionPointsTrack Defects

All train delay minutesU

nexp

lain

ed

Train

Infrastructure

29

0

2

4

6

8

10

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

200

9/10

2010

/11

2011

/12

Mill

ion

tra

in d

elay

min

ute

s

Track DefectsTSR's COT/GCC

Train operators

Pla

nned

External + Weather

Operations

Still a long way to go….

Priorities

• Management of ageing bridges

• Risk based

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• Risk based maintenance

• Improvements in asset information (implementation phase)

See Andrew Sharp presentation

Conclusions

• We have had a long association with asset management

• It has been technically and organisationally complex to implement

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implement

• It took a long time to gain acceptance across the company

• It is difficult to isolate the benefits directly attributable to AM but the contribution is significant and is recognised across the business

Thank youThank you