Distribution of Reliability EDITOR - in - CHIEF GRAPHIC DESIGN and DTP Mateusz Żurawik Alicja Gliwa

HARVARD BUSINESS REVIEW POLSKA presents Case study of PKP Energetyka Distribution of reliability EDITOR - IN - CHIEF GRAPHIC DESIGN AND DTP Mateusz Żurawik Alicja Gliwa CONTENT EDITOR PRODUCTION MANAGER Katarzyna Koper Marcin Opoński EDITORIAL ASSISTANT TRANSLATION Urszula Gabryelska Bireta AUTHORS DIRECTOR OF MEDIA Witold Abramowicz & MARKETING SOLUTIONS Iain Begg Ewa Szczesik-Czerwińska Grzegorz Benysek phone 664 933 232 Ryszard Bryła Piotr Dubno Janusz Dyduch Bent Flyvbjerg Zbigniew Hanzelka Paulina Kostro Hubert Malinowski Marek Mazierski Agnieszka Nosal Marek Pawełczyk COVER PHOTOS: Krzysztof Perlicki iSTOCK / GETTY IMAGES, B. BANASZAK John Reiners Robert Ryszkowski Andrzej Sobczak Adam Szeląg Filip Szumowski Andrzej Żurkowski Mateusz Żurawik All rights reserved. The content may not be copied, distributed or archived in any mechanical or electronic form without the consent of the publisher. Quoting parts of the articles or the data presented by any printed or electronic means without the consent of the publisher (ICAN Sp. z o.o. Sp.k.) infringes on the copyright. ICAN Institute PKP Energetyka al. Niepodległości 18 ul. Hoża 63/67 02-653 Warsaw 00-681 Warsaw e-mail: [email protected] [email protected] www.ican.pl www.pkpenergetyka.pl Distribution of reliability 2 Destination: reliability The distribution network is a complex system in which the operation of every component is of key importance. This is why solutions facilitating quick and effective connection rearrangement are so vital. 8 High IQ of the Polish railway power sector Cooperation between research and business goes beyond mere declarations. PKP Energetyka is able to face new technological advancements by drawing on the skills and experience of the Innovation Committee members. 14 A comprehensive overview of the infrastructure 22 Smart effectiveness The company’s transformation process was based on Solutions allowing prompt and effective rearrange- a comprehensive digital mapping of the infrastruc- ment of the connections in real time are fundamental ture managed by PKP Energetyka. It not only allowed to reliability. Each part of the distribution network a more efficient asset management but it also helped is critical for the entire system to perform well. to prepare the company for upcoming projects. 30 How to predict failure The advanced integration of individual systems has greatly improved the management of specific elements comprising the railway infrastructure. Additionally, it has opened up opportunities for the company to carry on with the implementation of innovative IT solutions. 38 Resource management in the digital age One of the vital resources of PKP Energetyka is the time of the personnel servicing the individual elements of infrastructure. Digital transformation has made it possible to use the involvement of the company’s employees more efficiently, thus improving their reliability. 50 Ready for future challenges Railway is the backbone of electromobility. Pre- paring this mode of transport for increased use requires a long-term management strategy to consider the most important trends which are expected to shape the reality in the coming years. The strong team of PKP Energetyka From the left: Leszek Hołda, Robert Ryszkowski, Agnieszka Nosal, Ryszard Bryła, Christopher Biedermann, Wojciech Orzech, Rafał Ciećwierz, Konrad Tyrajski, Beata Górniak, Marek Mazierski. Destination: PHOTO BY: MAREK KOWALCZYK BY: PHOTO reliability Digitialization, decentralization and decarbonization are the key factors for the transformation of the power and railway sectors. PKP Energetyka has been actively involved in this process for four years – following successful digitalization, the company is ready to take the next steps. AS POINTED OUT by McKinsey & formal and informal procedures), of technological solutions were Company in their analysis, the dig strategy (the plans, actions and key to the success of the entire ital revolution is bound to happen forecasts), structure (the formal venture. in the power sector. Renewa relationships between the units ble energy sources or distribut of an organization), management Transformation experience ed cogeneration are trends which style (mutual contacts), staff (re PKP Energetyka – a distributor of are making their presence in the sources of an organization), skills electricity for the Polish railways – sector increasingly stronger. The (qualifications of the employees plays a special role in this ecosys area of energy distribution, also and the organization as a whole) tem. Its task is to ensure the relia for railway companies, is no excep as well as shared values (the code bility and quality of power supply tion either. Development of rail of conduct, the philosophy of the for the entire rail transport sys transport means shorter and more organization). The 7S Framework tem in Poland. To understand the comfortable travel for passengers puts the intellectual values of an difficulty of adapting the compa but also more economic carriage organization above material fac ny’s infrastructure to the new re of goods over a long distance. The tors. That is why the guidelines re quirements, one should consider railway will, therefore, require sulting from the company’s strat the scale of the undertaking. PKP a reliable and stable distribution egy and the choice of systems it Energetyka operates in three key network. On the other hand, the uses are based on employees capa business areas: the supply and sale growing demand for the supply of ble of demonstrating the essential of electricity through its own dis electricity to increasingly techno skills. This approach also provided tribution network and the pro logically advanced passenger and the grounds for transformation in vision of power system services freight trains stimulates invest PKP Energetyka, which relied on focusing mainly on maintenance ments in an infrastructure that the experience of the staff mem of the catenary system. As many will be ready to face future chal bers. Their commitment and in as 600,000 different facilities lenges. Hence, it will have to en volvement in the implementation and system components are used sure the supply of electricity with as few and as short interruptions as possible, and at the same time, it will have to meet environmental 7S FRAMEWORK standards that are becoming even more stringent. The railway is thus expected to be based on a sta ble and environmentally friendly STRUCTURE distribution network which, in practical terms, forms a vast and complex ecosystem built of inter related and technically advanced STRATEGY SYSTEMS secondtier systems. When an alyzing the company’s transfor mation towards digital maturity, one can notice a similarity of the SHARED actual transformation process to VALUES one of the most popular mana gement models – the McKinsey 7S Framework. It provides a line STYLE of reference for the complexity SKILLS of the transformation conditions. Tom Peters and Robert Waterman – the authors of the 7S Framework – have listed seven key factors which STAFF may facilitate or obstruct an effec tive transformation process with in a company: the systems (the 4 Case study of PKP Energetyka throughout Poland to power the overhead catenary system, in cluding 21,500 km of power lines Such a broad scope of the prospective supplying electricity to the indi transformation required multiple vidual pieces of equipment and ultimately to trains. PKP Ener processes to be run simultaneously. getyka is, therefore, one of the The whole project was completed by largest power companies in Poland. Its customers are mostly business taking a comprehensive approach consumers, mainly including rail and by using a set of required data. way companies such as PKP Inter city and Polregio (passenger trans port), PKP Cargo and Lotos Kolej employees through partnership on the modernization of the utility (freight transport). The entire and by creating a better workplace. assets. The result was not only to complex network managed by PKP This was also true in the case renew the individual facilities un Energetyka has undergone a four of investment in PKP Energety dergoing natural aging and wear year transformation process aimed ka. The fund focused on the imple processes but also to gradually re at making the company ready for mentation of a longterm devel place them with increasingly effi the upcoming restrictions – both opment strategy for the company. cient and less failureprone equip technological and related to cli It mainly assumes moderniza ment, which would have a direct mate changes – which Poland will tion of the company to meet glob effect on reducing the SAIDI in face in the near future. al standards, both in terms of op dex. Replacing older infrastruc A farreaching transforma erations and management. One of ture with more innovative solu tion process is nothing new for the elements of this strategy was tions was also expected to reduce PKP Energetyka. Formally, it has to create a stateoftheart and in its negative impact on the natu existed for less than two decades tegrated electricity distribution ral environment in the long run. In as a separate company. It was es ecosystem for the railway, which 20162018, almost PLN 800 million tablished in 2001 during a division would ensure high quality for the was allocated for this purpose. of the enormous stateowned com company’s customers and security The environmental aspect is pany, which PKP (the Polish State of supplies in the coming decades. the third of the priority issues Railways) had been so far, into identified at the beginning of the several specialized companies. Key challenges transformation process. The am PKP Energetyka was separat The most important reliability in bition of the company’s manage ed from the previous Directo dex in the power sector is SAIDI ment has been to increase the at rate of the Railway Power Sys (System Average Interruption tractiveness of the railway and to tems and continued to operate as Duration Index) defining the av encourage passengers to choose a stateowned company for almost erage duration of an interruption this form of transport.

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