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Improving Railroad Classification Terminal Performance UsingConcepts of Lean Railroading
Jeremiah R. Dirnberger, Canadian Pacific RailwayChristopher P.L. Barkan, University of Illinois Urbana-Champaign
INFORMS RASIG Roundtable II - November 5, 2006
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Problem Statement
Inadequate terminal capacity is abarrier to improved service
reliability and network efficiency
Building new terminals and/or
expanding existing terminals arethe most costly alternatives
New methods are needed toharness as much capacity fromthe existing infrastructure
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Presentation Outline
1) The Terminal as a Production
System2) Lean Railroading
3) Factory Physics The Science
of Lean
4) Implementation Steps
5) Conclusions
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1) The Terminal as a Production System
[The Union Pacific] is a 33,000 mile factory with no roof.
Dick Davidson, 2003
Chairman and former CEO
This situation is analogous to a manager of an automobile
assembly plant . . . In the railroad industry, the terminalsuperintendent is the plant manager and his function is toassemble inbound trains or parts of trains into completed
outbound trains.Ferguson, 1980AAR No. R-412
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The Terminal as a Production System
Inbound trains
Methods/
procedures
Information
People
Weather
Infrastructure
Equipment
Outbound trains
Services
Information
Paperwork
Enables use of proven production management techniques inthe form of Lean Railroading
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2) What is Lean Railroading?
The adaptation of proven production management methodsto the railroad environment
- Lean
- Theory of Constraints (TOC)
- Statistical Process Control (SPC or six sigma)
- Scheduled railroading is key
Define value for the ultimate customer
- The ideal product for my customer is . . .
Then eliminate waste (any activity that does not add value)
- Direct waste (bad railroading)
- Variability (the root of all waste!)
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The Building Blocks
Factory Physics(the science of manufacturing)
Lean
Statistical
Process Control
Theory of
Constraints
Variability reductionEliminate
direct waste
Bottleneckimportance
Increased terminal capacity
Increased service
reliability and value
Previous railroad reliability studies(FRA, AAR, MIT)
Improved networkefficiency
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Waste on the Railroad
We seldom reduce any single type of waste . . .
without increasing another.
Reducing waste often results in tradeoffs:
Run shorter, more frequent trains
Increase locomotives and crews
Reduce mainline capacity
Decrease terminal dwell
Purchase or lease additional
railcars (safety stock)
Increase capital and
maintenance costs
Reduce lost sales, emptydelivery lead time
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3) Factory Physics Science of Manufacturing
Variability Buffering Variability in a production
system will be buffered by some combination of:- Inventory
- Capacity- Time
Variability is the root of all waste and takes two
forms: internal and external- Internal: outages, variable process times, rework,
sorting, etc.- External: arrival times, weather, traffic volume
and flow, yield management, etc.
Provides the Theory behind Lean
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4) Implementing Lean Railroading in the Yard
0. Eliminate direct waste: Take a fresh look at
the terminal system, try to eliminate obvioussources of waste (Value Stream Mapping)- Rework, car damage, unnecessary
motion, yard engine failure, long setups,
unnecessary information collection, etc.
1. Swap buffers: Decrease the time buffer by
reducing idle time (continuous flow), increasethe capacity buffer by improving bottleneckperformance
Implementation steps:
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Implementing Lean Railroading in the Yard
2. Reduce variability:a. Address problems in sorting, rework, car damage,
down time and setups (apply SPC/six sigma)
b. Implement standardized work plansc. Work with network management to increase on-time arrival of inbound trains
d. Level the production schedule in the yard and set
the network operating plan
3. Continuous improvement:Once variability is significantly reduced, we can
reduce the capacity buffer while continuing to identifyand eliminate variability. Only at this point do webegin to make real gains in productivity.
Spearman (2002) Factory Physics White Paper SeriesPart II
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5) Conclusions
Lean Railroading is just beginning
CPR Yard Operations Performance Group
GE Yard Solutions Group
UP VP Continuous Improvement
BNSF Value Engineering Group
The CN Philosophy
GE estimates dwell time reduction could resultin 15-30% terminal capacity improvement
Combining scheduled railroading with lean,CPR has reduced average terminal dwell
Many railroad applications beyond terminals
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Railroad Support while at Illinois
Research Fellowship
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