New approach to asset management for rail operators

Imagine a rail network where physical assets—rolling stock, fixed infrastructure, and workforce—are optimally leveraged and deployed. Network planning, maintenance, and operations are all similarly streamlined. Rail operators have complete visibility, end to end. And every passenger travels safely, securely, and sustainably. Dream on, most rail operators would likely say.

The industry’s piecemeal approach to digital transformation has obscured the 360° view that could make this future scenario a reality. While some have taken steps to enhance the utilization of specific assets—condition-based maintenance and failure forecasting for trains and locomotives, for instance—holistic improvement has remained elusive. Until now.

Thanks to developments in the aviation sector, where advanced digital technologies are being harnessed to power a whole lifecycle approach to asset management, rail operators reeling from the impact of the pandemic finally have an opportunity to put their assets on track to peak performance.

Ageing assets, soaring expectations

COVID-19 has severely damaged the financial health of a mature industry whose assets are ageing rapidly.

With patronage plummeting and revenues slumping, Europe’s rail sector has lost an unprecedented €26 billion in value since the onset of the pandemic2. For weaker players in particular, such heavy losses pose an existential threat.

Private railways commonly reinvest close to 20% of their operating revenues in infrastructure; freight operators’ revenues cover both operating costs and capital investment. Asset maintenance can eat up as much as 15% of operational costs4. And as older rolling stock is retired, the order backlog just gets bigger. Germany’s alone now amounts to €44.5 billion5.

€26B

Europe’s rail sector has lost an unprecedented €26 billion in value since the onset of the pandemic.

15%

Asset maintenance can eat up as much as 15% of operational costs.

There is, in short, a compelling need for longer lasting asset availability—particularly as post-pandemic expectations rise.

Global demand for locomotives is set for compound annual growth of more than 10% between now and 20276, while by 2025 the world’s rolling stock market will grow by more than US$12 billion (a CAGR of 4.4%)7. In the EU, the Commission aims to double high-speed rail by 2030 and to boost rail freight by 50% in the same timeframe8.

Meanwhile—partly because of the pandemic, but also due to growing environmental awareness—rail travel that’s significantly safer and more sustainable, as well as affordable, convenient, and reliable is top of mind for passengers.

Learning from aviation

Like rail, aviation has taken a huge financial hit from the pandemic. Global air passenger traffic dropped by 60% in 2020, leading to losses of US$370 billion9; a staggering sum.

Airlines, however, are already learning from the crisis. Aviation executives have recognized that synchronizing the management of each individual aircraft’s lifecycle across traditional organizational siloes is key to optimization. And maximizing ROI means creating, managing, and monitoring the profit & loss and balance sheet over its entire lifecycle.

At leading airlines, a central unit takes full responsibility for the transversal processes involved, managing costs and revenue generation over the entire lifecycle of the fleet, and optimizing asset availability and utilization.

Digital technologies are leveraged across a wide range of maintenance and supply chain processes: monitoring and challenging maintenance interventions; maximizing the yields of routine repair and inspection cycles; leveraging modification business cases for maximum value creation; and ensuring that the right aircraft type is operated on the right routes.

The tools to transform

Recent digital advances offer the tools rail operators need to follow aviation’s example.

Technologies including digital twin, Artificial Intelligence (AI), 3D printing/additive manufacturing, robotics, Extended Reality (XR), and the Internet of Things (IoT) can help standardize, streamline, and accelerate transformation.

The right combinations of these technologies, integrated with existing initiatives, and a workforce with the skills to use and manage them, could help rail operators achieve optimal, E2E, asset lifecycle management.

1. Combine technologies & synchronize initiatives

The right combinations of technologies are key. Combining predictive maintenance with 3D printing/additive manufacturing, for example, can boost overall asset health, as well as improving the stock of essential spare parts. Similarly, combining IoT devices with video gates and AI will deliver more accurate insights than by using IoT devices alone. It’s also critical, however, to ensure synchronization with initiatives already underway. Several rail operators are applying advanced technologies to specific situations and challenges—but few are grouping them under one umbrella.

2. Align technologies with business processes

Alignment of technologies with the relevant business process is essential. Predictive maintenance should be aligned with procurement for example, because procurement has insight into demand and thus is key to defining asset availability. To fully optimize asset availability, however, operators need to build an ecosystem around the asset. Collaborating transparently with OEMs, IT platform providers, parts manufacturers, IoT partners and others will give all parties the insights they need to optimize collectively, while building trust in data by focusing on IT/OT security.

3. Retrain workforce and redefine roles

Managing a fleet according to sustainability targets on a corporate scale requires full visibility into an entirely new set of criteria—and that knowledge needs to be embedded into both processes and mindsets. Upskilling the workforce for the digital age will help break down siloes and siloed thinking and support smooth and effective change management, as well as the successful redefinition of roles. Embedding XR technology into training programs for engineers will help accelerate progress across a wider range of challenges, for instance. And a workforce trained to deal confidently with big data can be better prepared to recognize the relevant insights it yields and reject distractions.

Getting started

The track to peak performance should be carefully laid. Before undertaking the journey, ask yourself:

  • Have you already undertaken digital optimization initiatives? Is your organization currently too siloed to synchronize them at scale?
  • Could your business processes align easily with digital initiatives? Are your engineers prepared to work with technical reps from a broader ecosystem?
  • How data savvy is your workforce? Will you need to retrain, upskill, or redefine established roles?

The aviation sector is showing a way forward. Now is the time for rail to take flight.



Marcus Fromm

Managing Director – Mobility, Travel and Logistics, Switzerland


Frank F. Martin

Managing Director, Aviation Maintenance, Global Lead


Mario Mikuschek

Senior Manager, Industry X, Rail & Transit

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