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A faster and more lucrative route to saving costs is through the implementation of technology

Reducing costs is one of the fundamental pillars of success for companies working within every country and industry throughout the world. If they are not actively trying to achieve these reductions, the competition will be, and since the chances of passing on cost savings makes for happier and more loyal customers, the benefits are obvious. In rail, the costs are enormous.

India’s Prime Minister Narendra Modi recently announced that his government would invest US$59 billion to improve India’s infrastructure whilst the Australian Government has allocated A$20 billion in the 2017-18 budget for the maintenance of their rail infrastructure. Even a one-point percentage saving on numbers as astronomical as those, will deliver huge savings. To guide us through this complex but important area, today we bring you a guest post to provide a new approach to costs savings just like Lithuania’s state-owned railway.

 

Way back in 1997 (I am writing for the younger reader) the alliteratively named Wesley W. Wilson, wrote in the Journal of Regulatory Economics that in the USA, ‘railroad deregulation has had tremendous effects on the level of costs and productivity gains’ and that ‘costs being up to 40 percent lower than they would have been under regulation’.

Whilst train operators can and do lobby governments for changes in the regulations that control them, these days a faster and more lucrative route to saving costs is through the implementation of technology. Whilst this is not guaranteed – the media is filled with disastrous stories of large business and public procurement projects gone awry – the options open to rail operators are numerous and wide ranging.

You dont have to look far for evidence of rail operator’s thirst for new technologies that will give them an edge; the annual HackTrain event has become established as the place for start-ups and entrepreneurs to showcase their cutting-edge ideas.

But what if savings can be found from using existing technology but in a different way? The Lithuanian Railway company, AB Lietuvos geležinkeliai certainly understands the importance of saving costs; whilst this state-owned but commercially run organisation makes money from its international freight operations, it makes a loss on the passenger services it is compelled to provide.

One of the largest costs facing any rail operator is the maintenance of the track and the surrounding assets; if either is allowed to fall into disrepair the consequences could be catastrophic. Not an obvious place to save money. But in Lithuania, the company saw an opportunity to apply a well known technology that would make the monitoring of their network, much faster and cheaper than having people out on the ground.

Google first launched Street View in 2007; it was a product that came out of the The Stamford CityBlock Project. The first release had imagery for only a few US cities but today a remarkable amount of the road network of the world has been photographed and placed online for people to explore. The images in a Street View give a snapshot in time of the roads, the location and maintenance level of shop fronts and people’s houses as well as street furniture and a host of other assets. It was this capability to collect so much information, so quickly and over such great areas, that the Balkan rail company saw could be so useful, if the images were created by their trains.

They purchased a number of 360 degree cameras from specialist supplier, Applied Streetview which they then mounted to the front of each train in their fleet. The system was capable of processing 75,000 images a day into Railviews which could then be linked to maps for simple navigation around the tracks.

Rail maintenance, safety and development staff can now explore their entire rail track network, without having to leave their offices. With updates to the imagery available every single day if required, they know that the information they are working with is the very latest available, so not only are the cost saving obvious, the confidence they have in their decision making process has increased too.

Cost savings are key to the life of a business but that doesn’t mean developing new technologies or radically redesigning business processes; using well established solutions from other applications can provide the same benefits in a completely new industry.

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