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July 31, 2015

Inventory Optimization in Utilities through Collaborative Planning - Part II

Demand Planning - Enhancing Forecasting Capabilities
Right material availability at the right time to ensure greater efficiency and good service can be achieved through the use of proper forecasting techniques. This will have a ripple effect throughout the organization as well as for the vendors and business partners. Material demand forecasting should not be limited to the traditional methods of collecting historical usage data and generating a linear regression model of future usage. This process do not leverage the vast amount of data collected and also fail in scenarios such as seasonal demands, a sporadic trend and slow moving items. Data accuracy and use of sophisticated forecasting techniques goes a long way in enhancing the forecasting capabilities.
Accurate demand forecast helps establish the reorder points, the inventory investment required and better co-ordination with suppliers. Forecasts are near perfect when done at a granular level e.g. at SKU level. This can then be utilized for proration to different levels in the hierarchy like item, vendor, classification etc. To achieve the expected outcome the major focus should be on the accuracy of the input data.
With the latest technology at disposal the need of the hour is to develop a powerful time series forecasting technique to forecast normal items and it should be capable of switching automatically for forecasting sporadic and slow moving items. The basis for any such technique would be historical data. A dynamic forecast model will need to have materials classified according to demand pattern, the level in the hierarchy that is optimal for forecasting, a forecast algorithm and ability to prorate the forecasts to all levels in the hierarchy.  Manual intervention should be made possible to focus on the exceptions only in case of unusual or erratic demand pattern and high forecast error by configuring alerts and filter settings. Improved production and purchasing planning from the vendor side leads to lower lead time and reduced material costs is a by-product of the accurate planning and forecasting from the parent organization
Integrating Work Management and Material Management
Utilities look for significant benefits by achieving tasks in an efficient and effective way by coupling work management with material forecasts. Accuracy of the material requirements goes a long way in building advanced forecasting capabilities. Material planners stand benefitted by this collaboration of detailed work management schedule with material requirements as building linkages between job estimation and material planning is greatly enhanced. In utilities where capital projects require extensive design and planning the integration with the materials management provides unprecedented benefits.  In an integrated system, whenever a capital work plan moves through the different levels of designs and approvals to a firm demand, the material planners will always be updated on the status of the demand coming in thereby ensuring the availability of materials at the right time. Based on the proximity of the work location as well as availability of materials, urgent work management issues can be addressed from the entire network of distribution warehouses that a utility houses. The flow of information back and forth enables the designers and planners to have a clear view of the material availability issues, the number of items issued for the work and the number of items returned. This has an added benefit in validating the accuracy of the Compatible Units. A tightly coupled system can provide planners the ability to manage the demand dynamically by providing a clear view of the repair work orders incoming or they can provide inputs on work scheduling based on the material availability. Designers and planners will have a clear view of the material availability allowing them to plan a detailed schedule for work ensuring stability and adherence of the schedule.

Material Segmentation
An approach where the key attributes of an item or material like SKUs, cost, usage, lead time etc. are managed in a consistent way by categories based on a rigorous, structured and analytical replenishment strategy. 
Dynamic Re-order point: A methodology suitable for short lead time and demand predictable materials, taking into consideration the different parameters like safety stock, reorder point and economic order quantity. Combining technology with the planning efforts and integration of work management systems, dynamic recalculation of re-order point and safety stock helps in managing the expectations of service levels and investments required for inventory management. The recalculation should be real time considering the fluctuations in inventory, the demand pattern, forecasts or plan for the material and the SKU replenishment parameters.
Distribution Requirements Planning (DRP) Replenishment: This is a strategy based on the future demand as opposed to the current stock levels. Materials with long lead time or having lumpy demand as well as for spare parts DRP might be best suited. In order to meet the future demand and avoid the lead time constraints of materials having long lead times or sudden usage spikes, a time phased replenishment request is generated as soon as the material balance falls below a pre-defined level. Imagine a project involving a new commercial construction, with work needed to be planned months in advance, an effective DRP replenishment will allow planners to line the material resource in close alignment with the project plan. As utilities work management involves major projects a robust technology framework is essential for consolidating the future supply and demand, generating a time phased replenishment strategy and integrating these requests with purchasing and inventory application. Material lead time, usage pattern, accurate demand forecasts, robust integration with work management and periodical re-establishment of replenishment parameters are all essential for the success of this strategy.

The growth of utilities in the future will be based on a defined planning horizon, world class demand planning, tight coupling with work management and material segmentation. All the above factors on a robust technological framework can yield the high performance results the industry had been striving to achieve. While it is interesting to see Utilities across the globe realizing the importance of collaboration inventory planning and marching towards it, it will take a concentrated effort from them both in terms of process and technology, before it gets rooted enough, enough to make it a successful model!

Inventory Optimization in Utilities through Collaborative Planning - Part I

Utilities have been focusing on improving their supply chain management to enhance performance, profitability, productivity and service levels. All this while, an Improved Working capital and lower operational costs were the main benefits that the organizations targeted through proper management of supply chain. However, the folks out there have now started realizing the importance of channelizing the SCM potential for an effective Inventory management within the industry. 
Collaborative planning, a key aspect of SCM has started gaining importance owing to its potential in  bringing the required co-ordination between the stakeholders  for an enhanced information sharing , improved replenishment process and accurate demand forecasts. Issues related to optimal utilization of Inventory had been plaguing the industry for a long time now and collaborative stands out to be a winner here.
Collaborative planning not only strengthens the accuracy of the material forecast but also aligns business processes across function to the organizational goal. Since the materials used in utility companies vary widely in their characteristics/ attributes, consumption pattern, handling, cost, lead time etc. it becomes imperative for companies to focus on the granular level to forecast the need for items and their replenishment strategies. Material forecasting done in isolation will not help realize the benefits that a collaborative planning offers. 
Through this blog we will discuss how inventory optimization can be achieved through some of the key function of collaborative planning such as enhanced demand planning, integration of forecasts with work management and forecasting by segmentation of materials using re-order point and distribution requirements methods.


Fig.1 shows how a collaborative planning effort should be working in a utility.

Inventory Optimization Issues Plaguing the Utility Industry 
Ineffective integration of supply chain management with utilities operations hamper the prospect of realizing huge benefits that are on offer. Increasing material returns, excess inventory of obsolete and non-moving items, rescheduling or abandoning work due to missing materials are the main issues plaguing the utilities. Utilities have invested significantly in enhancing the work scheduling through better use of ERP tools but the issues such improper alignment in supply chain internally within the organization, leads to Vendors/Suppliers bearing the bulk of the loss and  mistrust among suppliers with the partner organization. Utilities have gained significant strides in better crew utilization by improving the planning and scheduling processes, but promised benefits have not materialized due to lack of co-ordination between the materials and the operations department.

In the next part of the blog we will see the collaborative planning efforts and the effect it has on the utilities

July 15, 2015

Automating Predictive Maintenance Using Internet-Connected Sensors in Railway Industry

The railway plays an important role in facilitating sustainable economic growth by connecting people and communities and providing a means of transport for people and goods. It has an advantage over road on the haulage of heavy bulk freight like coal and aggregates. It compares well with road and air on fast, long-distance passenger journeys; and it is competitive with road on the distribution of goods in the intermodal sector.
The business processes for industry, which includes planning, operations, engineering, and maintenance are the major means of asset optimization. All these form a part of asset management depending on the availability of vital data to process and predict the potential future breakdowns.
Industrial railways transport bulk assets like clay or coal to an interchange point, called an exchange siding, with a main line railway, onwards from where it would be transported to its final destination. Industrial Railway, not necessarily, have to carry only industrial equipment's. In some countries, it is also used to carry passengers from industry to working site and vice versa.

Major Problems occurring in today's Railways Industry:
a) Cost containment: Rail manufacturing is a high-risk industry with comparatively low marginal profit. Costs containing and upholding flexibility are essential since economic and operational conditions can change intensely over the extensive lifecycles in rail.
b) Absence of industrywide ideals and interoperability: Each country has its own arrangements for rail transportation and inconsistency among the several information-systems and services between trains, creates an intricate networking environment. Besides, it is challenging to provide reliable services or facilities among various rail systems through several nations.
c) Asset Maintenance & Optimizing Productivity: One of the biggest challenge is to optimize the efficiency in operations which has always been marred with unexpected break-downs and failures.
This is where Predictive Analytics comes into picture as a feasible solution.

What is Predictive Analytics?
Predictive maintenance is business intelligence technology, which helps organizations to predict the future trends based on the historical analysis for effective decision-making and to improve business and help regulate the situation of operating assets with the aim to foresee when maintenance should be performed. Developing a real time predictive analytics can ensure peak asset performance and reduced downtime. Asset optimization could be achieved by deploying sensors that offer the active and condition and position of all important assets.

Purpose of Predictive Maintenance in the given scenario:
The main purpose is to agree towards appropriate planning of predictive and corrective maintenance and to prevent sudden asset failures. Using this, it can be decided which equipment requires maintenance and repairs can be better scheduled and have various other probable benefits which comprise increased asset-lifespan, better plant safety and less mishaps without harmful effect on environment and improved spare-parts management.
Automating predictive maintenance using internet-connected sensors is the way to transform how businesses operate. By means of internet-connected sensors (IOS) embedded into the machines is entirely altering machine maintenance practices. They are used to predict future asset breakdowns and thereby increasing asset efficiency and minimizing losses. It benefits all asset owners and creates new chances for service providers and manufacturers.

What is Internet of Sensor (IOS)?
Sensors enable the physical world to interact with computers, providing a much richer assortment of data than is available via manual input. Sensors are used in a various set of applications like mobiles, automotive systems, industrial control, health-care industry, lubricant assessment and type of weather monitoring.  IOS is where sensors support all types of equipment and machines to coordinate and communicate with each other through the information network.
It creates the ability to collect data from a broad range of devices and that data can be accessed through cloud, analyzed using big data techniques, using RCM, CCTV, CLOUD, MOBILE sensors etc.

The main know-hows behind IOS centered predictive maintenance which gathers data from various sensors and accomplishes proximate real-time analysis is to define when equipment is at possibility of failure. The platform is adept in simultaneously meting out the operational characteristics of several machines, individually prepared with its own sensor group. This method of predictive maintenance makes it probable to avoid preventable maintenance and greatly reduces maintenance cycle times and also minimizes the risks of premature break-downs which means industries which operates machine-intensive methods which provide more value to their investments.

Now, let's take an example to understand the use of Internet sensors in Railroad Industry.
A critical safety issue is correct timing for crossing gates at railroad highway grade crossings. If the warning signals and crossing gates are activated too soon, impatient people/motorists may try to cross in spite of the signal which may result in a train-car collision. If the system is activated too late, again a serious accident may occur.
Consequently, the timing of grade crossing warning activation is critical. On rail lines with a mix of traffic speeds such as slow cargo trains and fast passenger sleeper trains and the need for train-speed dependent warning systems is particularly important. So, here the Fiber-optic sensors are used where train presence and speed detection can also be performed by measuring how the light signal passing through the rail-bonded fiber sensor is affected by a train passing over the rail. The light transmission through a fiber sensor is monitored while a train periodically passes over a section of fiber-bonded Rail. By novel fiber sensors and laser detection systems, there are several methods by which train presence and speed detection could be performed and safety can be guaranteed.

Benefits of Sensors:
a) Sensors will provide details about how goods are affected during transport. This information will help companies reduce damage and shrinkage.
b) Sensors will continue to become more advanced. No longer limited to just location, sensors can measure humidity, temperature, angle of inclination, and much more. The more types of metrics that sensors can collect, the greater the impact on the industry.
c) Sensors will alert them of actual conditions and connectivity will allow to communicate those situations and conditions instantaneously with the help of Internet.

IOS extends the effectiveness of Internet of things (IOT) by providing better connectivity between assets and systems using ever evolving Internet technology and smart network. It makes the remote condition monitoring effortless and makes the decision making much more efficient. Thus we can say that exploring the horizons of IOS for asset maintenance can truly transform the face of the industry.

July 14, 2015

Rail Road Maintenance: Indian Rail Perspective - Part 1

Indian Railways form an integral part of our lives, but little do we know as to how this gigantic system works. Being the 3rd biggest railway network in the world, it operates more than 19000 trains daily with more than 63000 kms of track running throughout India. With such huge infrastructure under its canopy, how do they carry on the maintenance and repair of the rail tracks, which is one of the most significant linear asset?

Owing to such huge dependency on Rail Transportation (both commercial and non-commercial), it is inevitable for Indian Railways to keep their assets in operating condition at all times and reduce the asset downtime. To achieve this, a good asset maintenance plan is essential. In Railways during the last 40 years Track maintenance has undergone massive change, transitioning from a manual labor intensive process to a completely mechanized one. This transformation became necessary to suit the requirements of recent track layouts.  Before the Rail road (also known as Permanent Way) maintenance begins, there is a lot of planning required with respect to the Maintenance/Inspection Planning and Scheduling, Manpower estimation, Computation of material and tools, Assigning duties and responsibilities to the employees, establishing reporting hierarchy etc. This aspect of Railroad Maintenance brings concerns relating to the railroad to the forefront. In this blog, we will touch upon such finer aspects of railroad work and asset management function.Before we dive deep into the technological transformations railways has undergone till date, we will first look into as to how the core rail road maintenance process works. Let's start with understanding the existing hierarchy and roles and responsibilities assigned to the employees for maintaining the permanent way.

Manpower is determined regionally based on the area of rail lines inspection to be covered. Employees are provincially (City/District) allotted their specific area of control for the rail tracks as per their respective designations. For example, Senior Section Engineer will handle 80 track kms, Assistant Divisional Engineer will handle 160 track kms so on and so forth. There are some planned set of workforce required at each level of rail maintenance hierarchy to manage the complete process of Rail Inspections. Like there will be only 2 junior engineers under a Permanent Way Supervisor, 10 Track men reporting to a Junior Engineer and likewise. Here is the chart displaying the reporting hierarchy for rail employees in the process of track maintenance, at a very high level. However this hierarchy is flexible as to the number of people required depending upon the area under inspection.

                                     RAILROAD HIERARCHY.png

Rail Line Inspector or Permanent way inspector (PWI) is assigned a division for which he is accountable to monitor the rail road under his dominion. The Rail line Inspector and his crew undertake discrete regular inspection visits for the same rail lines. Every PWI is bound to prepare inspection plan one month in advance and ensures that provision is made for required manpower and tools/machinery as he seems necessary.

Rail Track maintenance is basically done by Gangs which comprises of Gang man, led by a Gang mate. A Gangman/Trackman is the one who is assigned with the duty of positioning the rail tracks and maintaining the same. The strength of Gang members for a particular area is calculated by Senior Engineer based on a mathematical formula. The duty of the gang is to inspect track and perform normal routine maintenance for the section of track assigned to them. Alongside there is a Patrolman who is deputed to perform visual inspections by walking all along the assigned length of the track.

Divisional Engineer prepares a Patrol Chart/Gang Chart which lists down the sections of rail track which needs monitoring and the scheduled time when the inspection needs to be carried out. Both Patrolmen and Gangs carry Patrol Books with them in which they need to record the status of inspection and maintenance carried on the sections of the tracks assigned to them. The gangs are well equipped and efficient to deal with minor problems on tracks but if a major problem is discovered during the inspection process which cannot be readily fixed, the details of the same are reported directly to the Station master of the nearest railway station. Till the time the issue is fixed, either the passage is blocked or the trains passing through are issued a caution order by station at either end of the track. The repair work is carried on with appropriate tools, equipment and machinery required and the concerned passage is blocked for the time being and the train traffic is diverted to other rail routes.

Caution orders to Train drivers are also issued when one of the Patrolmen/Gang misses their routine patrolling for some reason. This caution advises drivers to be alert and restrict the train speed to 40 kms per hour (Clear visibility/Day) or 15 kms per hour (Poor Visibility/Night).At the end of every week, Inspector carries out the assessment of the work performed and records it in Gang diary which is held by all the Gang members. After every six months, the Patrol/Gang charts are collected by the Inspector and is maintained as a historical record for reference.

 This mechanized system of maintenance of Rail Tracks which we just went through has been carried on by Indian Railways for some decades now. Indian Railways has been upgraded to technologically more advanced Maintenance system with reduced asset downtime and quicker response to contingencies, real time monitoring of the assets and increased employee safety and security. We will talk on the benefits we derive from the new system in our next blog and foresee how the road map of Indian Rail Road maintenance would look like.

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