FEATURED ARTICLES Advanced Railway Systems through Digital Technology

Prospects for OS&M Business in ’s Railway Business

Two years aft er presenting the new vision of Hitachi’s railway business in 2018, Hitachi’s Rail Systems Business Unit remains on track to deliver a single, dedicated global OS&M organisation. The re-alignment enables OS&M to respond to the changing needs of the rail market and accelerate the integration of products and services Hitachi provides with digital capabilities and technology. The new OS&M organisation combines global activities and resources in S&M for rolling stock equipment and signalling installations with its O&M business including turnkey, signalling infrastructure, vehicles, buildings, and facilities. OS&M organisation works in close collaboration with regional sales and project units to present one face to customers and strengthen its approach as a full service provider.

Edoardo La Ficara Michele Budetta Piero Marotta Gianluca Giudo

as the organisation adapts to meet the demand for faster, cleaner railways. 1. Introduction

Th e integration of Hitachi’s railway business began in 2015 2. Integrated Global Organisation with the acquisition of Ansaldo Breda S.p.A. and Ansaldo STS S.p.A. With these acquisitions, Hitachi expanded its As a fully integrated unit and profi t center, the new OS&M portfolio of products and services, strengthening its turnkey organisation structure includes global functions for business capability, as well as the capability for signalling and traf- development, bids, sales, programme management, procure- fi c management systems. In 2019, Hitachi’s Rail Systems ment, quality control, and maintenance engineering. Th ese Business Unit (RSBU) began a study into the new organ- functions support a global operations structure to manage isational model and identifi ed signifi cant benefi t in the service delivery in the local markets (see Figure 1). creation of a single operation, service, and maintenance Th e key principles of the new OS&M organisation struc- (OS&M) organisation. Further integration presented an ture include: opportunity for Hitachi to enhance its off ering for custom- (1) Global leadership of “commercial and programme ers, to strengthen its culture and collaboration across regions, management.” and to improve profi tability and align with market leaders (2) Regional leadership for “customer focus” and “execution” and competitors. (3) “End-to-end” interaction between OS&M provider and After touching on the new organisational model, this design and build (D&B) team. article presents some of the key projects the OS&M organ- (4) Delivery responsibility for operation and maintenance isation delivers around the world, along with an insight (O&M) and service and maintenance (S&M) via the proj- into some of its innovation projects and future challenges ect-based organisation.

92. Figure 1 — OS&M Global Organisation Model This figure shows the rebuilt OS&M organisation chart of Hitachi’s railway business.

OS&M COO OS&M Deputy COO

BMO & PMO

OS&M Operations

Business Improvement

France and Middle East N/C/S Europe UK Latin America North America Asia-Pacific North Africa and Africa

Engineering

Procurement

Quality control

Programme management O&M

Sales OS&M and project management S&M

COO: chief operating off icer OS&M: operation, service, and maintenance BMO&PMO: business management off ice and project management off ice N/C/S: North, Central and South O&M: operation and maintenance S&M: service and maintenance

(5) Local O&M and S&M resource management under an bus, metro, tram, commuter systems across the globe. integrated organisation with rolling stock, and signalling (2) Rolling stock and systems providers: delivering main- and turnkey experts. tenance services in addition to rolling stock products and (6) Procurement, supply chain, quality, and engineering contracts. with regional resources under joint global management to (3) Services providers: global or local industrial companies drive effi ciency and integration of standards and processes. focused on delivery of maintenance services. To meet these challenges, Hitachi’s OS&M organisation 2. 1 are strengthening its position in the O&M market around OS&M Market Overview and Perspective two axes: the green-fi eld driverless (grades of automation RSBU continues to deliver major projects across the globe, 4: GoA4) metro project and Hitachi’s traditional signal- demonstrating the breadth of products and geographical ling systems and rolling stock maintenance services. At the areas in which OS&M operates (see Figure 2). Th e key same time, its O&M experiences on Metro challenge for RSBU now is to increase its business share in the Kingdom of Denmark and Riyadh Princess Noura by identifying and pursuing new opportunities in emerging bint Abdulrahman University in the Kingdom of Saudi markets, leveraging expertise gained through acquisition Arabia are being used to develop capability in automated of other companies and the new dedicated and integrated driverless metro systems such as Riyadh Metro Line 3 to OS&M organisation model above. Line 6, Metro de Lima Line 2/Line 4 in the Republic of For the O&M market, unlike the traditional rolling stock Peru, and Honolulu Transit (LRT) projects in and signalling sectors, providing core services; the operation Hawaii, USA. of control centers, fare collection, facilities management, To facilitate further growth, Hitachi’s OS&M organ- infrastructure maintenance, station operation, and customer isation intends to build on its unique position as the only care are more important. Th e breadth of services presents operator able to provide rolling stock, signalling and turn- signifi cant challenges for OS&M and explains the level of key; making key decisions around the maintenance of non- competition in this market. Th e three main categories for Hitachi rolling stock, the operation of high-speed lines competitors are: or monorails and investing in open innovate projects. If (1) Global operators (“O&M pure players”): major opera- successful, these projects present exciting opportunities in tors with international presence; operating and maintaining new markets and regions.

Hitachi Review Vol. 69, No. 6 804–805 93. Figure 2 — Major OS&M Project Delivery around the World Hitachi’s Railway Systems Business Unit is developing a number of OS&M projects around the world.

ATW Class l800 GWR Class 802 LSER Class 395 ASR Class 385 ATE Class 800/801 TPE/HT Class 802 AEMR AT300 SXR Bi ETR 1000 Sirio Firenze (1, 2, 3) 57 trains – 369 cars 36 trains – 218 cars 29 trains – 174 cars 61 trains – 204 cars 12 trains – 108 cars 24 trains – 120 cars 33 trains – 165 cars 50 trains – 400 cars 46 trains – 230 cars

ETR 700 Genova Honolulu 17 trains – 136 cars 7 trains – 28 cars 20 trains – 80 cars

Honolulu O&M ETR 500 Leonardo 32 km, 21 stations 59 trains 72 trains – 432 cars

Rock - Caravaggio Roma Linea C 300 trains 13 trains – 78 cars

Miami Madrid –Lerida HSL Madrid Copenhagen CR O&M Riyadh O&M CDPTR (DC, TC) TSR (3, 4) 68 trains – 136 cars 500 km, 56 stations 60 trains – 300 cars 24 km, 23 stations 60 trains – 300 cars 17 trains – 68 cars 706 cars 114 cars

ATW: West GWR: Great Western Railway LSER: London and South Eastern Railway Limited ASR: Abellio ScotRail ATE: Agility Trains East TPE: TransPennine Express HT: Hull Trains AEMR: Abellio East Midlands Railway ETR: Elettro Treno Rapido HSL: high-speed line CR: Cityringen CDPTR: Carrozze Doppio Piano Trasporto Regionale DC: distribution center TC: transfer center TSR: Treno Servizio Regionale

2. 2 eff orts with regard to these changes are described below Continually Improve Fleets KPIs (see Figure 3). Changes to the structure of markets such as O&M require 2. 3 RSBU to accelerate its rate of improvement. Under its Reducing Life-cycle Cost: Lumada Applied to Railway new business structure, RSBU intends to re-orientate core Maintenance activities towards the environment in which its customers operate, seeking greater collaboration in areas of perfor- Th e process of digitisation makes it almost impossible mance reporting, governance, and information. OS&M for OS&M to deliver maintenance services without the

Figure 3 — OS&M Approach to Improve Fleet KPIs The figure shows four points on which the Railway Systems Business Unit will work on to improve its response to changes in the O&M market.

Relentless Customer Focus Changing the organisational mindset Operational excellence that exceeds and culture to focus on customer customer expectations needs and quality. 1 Revised KPIs Improved availability, compliance with Expand KPI measures to drive maintenance standards and superior 2 desired behaviors and improvement fleet management

Develop asset management capability 3 Safe operation, compliant engineering Provide global governance and management standards, and reliability growth for the systems to support maintenance, refurbishment, entire life of products reliability improvement, innovation, and change 4 System Integration Reduce maintenance, improve life cycle Integration of digital solutions and processes to costs and support design for maintenance shift from re-active to pro-active and preventative requirements maintenance

KPI: key performance indicator

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Figure 4 — OS&M Roadmap for Predictive Maintenance and Data Maintenance optimisation is achieved by evaluating the usage rate of parts based on the usage history, automating inspection procedures, and providing information on prescriptive maintenance and maintenance activities.

Prescriptive Analytics Predictive analytics

Descriptive analytics

• Big data analytics to understand the Data reporting influence of other factors on asset usage, failure and breakdowns • Automated and semi-automated • Business intelligence reports, decision making for asset planning, dashboard, and KPIs for asset • Algorithms to predict future maintenance, and service scheduling usage trends demand and maintenance • Asset usage forecasting, asset • Alerting to highlight breakdowns • Sophisticated reporting to support control planning, and optimisation • Data collection or loss of operation future management decision • Reporting based on making and long-term planning historical events

Optimisation of assets based on historical usage Proactive optimisation based on future expectations

2. 4 support of the Internet of Th ings (IoT), conditions based Increase Control over Supply Chain maintenance (CBM), predictive maintenance and data sci- ence(1), (3). In 2019, the integration of rail business depart- Against the backdrop of challenging markets, the OS&M ments allowed the OS&M organisation to reorganise its organisation is focusing on the optimisation of its supply S&M technology area, merging system domain compe- chain operations – utilising Hitachi operations globally and tences with data science and IT technologies expertise. promoting local procurement or local production to best To help it on this journey, the OS&M organisation support geographical areas. As a fully integrated unit and developed a roadmap for data and diagnostic rules allowing profi t centre, the supply chain model needs to be intelligent Hitachi to optimise maintenance by measuring component and agile enough to compensate for the short-term demands usage, automate inspection procedures, and inform pre- of corrective maintenance, whilst leveraging longer-term scriptive maintenance and servicing activity (see Figure 4). activity such as overhaul, modifi cation programmes, and Leading to savings in lifecycle costs and enhancing col- warehousing operations to ensure value for money. laboration with its customers and suppliers. In the recent To enable this, OS&M and rolling stock reorganised analysis across UK, IT fl eets predicts signifi cant reduction itself in February 2019 to form a dedicated OS&M pro- in the maintenance of pantographs, heating ventilation, and curement unit responsible for purchasing, contracting, and air conditioners (HVACs) and generator units fi tted to bi- order handling. At the same time, it retained a close rela- mode multiple unit trains. tionship with global procurement to focus on collaboration Along with a variety of wider individual technologies and standard working practices going forward. With re- such as Lumada, big data, and global product lifecycle structuring complete, the OS&M procurement and supply management (GPLM), the OS&M organisation is also chain focus is now on utilising advancements in digital developing a common monitoring platform under Project capability to inform inventory management and to identify Phoenix. Launched in 2019, Project Phoenix will see potential insourcing opportunities. OS&M supply chains OS&M merge key asset monitoring capability formerly will transform over time and use data to identify issues in developed for the UK and Italian markets to optimise CBM re-ordering and the management of warehouse operations capability on new fl eets between 2021 and 2022. solutions. Reducing waste and optimising inventory costs will also inform future sales and bids.

Hitachi Review Vol. 69, No. 6 806–807 95. OS&M has a number of initiatives already underway Authors concerning whether to manufacture the parts necessary for Edoardo La Ficara Current work and research: repairs in-house or to use purchased products, ranging from Hitachi Rail STS S.p.A. Oversees OS&M department as COO. promoting local production to shorten repair time, to full- scale maintenance projects – particularly in regions with underdeveloped markets. OS&M continues to work closely with global procurement, particularly around full mainte- nance projects such as the Intercity Express Programme Michele Budetta Hitachi Rail S.p.A. Current work and research: (IEP) contract in the UK. It is imperative that the organisa- Oversees procurement, quality control, and tion develops human resources long term and work with maintenance engineering as Deputy COO. strategic suppliers to strike a balance between “insourcing” and “outsourcing.”

Piero Marotta 3. Conclusions Hitachi Rail STS S.p.A. Current work and research: Oversight of O&M projects.

Global transformation of OS&M and Hitachi’s railway business began with the reorganisation into a fully inte- grated unit and profi t center. To make a success of this, Gianluca Guido OS&M now intends to consolidate its unique position as a Hitachi Rail STS S.p.A. Current work and research: full service provider by utilising its operational background Supervision of sales, project management, bidding, in mass transit systems to access transit systems S&M mar- and business development. kets, through opportunities in operator markets, and by developing digital capability to become a market leader in asset management.

References 1) J. Levitt, “Complete Guide to Predictive and Preventive Maintenance,” Industrial Press, Inc., Connecticut, USA (Jun. 2011). 2) V. J. Hodge et al. “Wireless Sensors Networks for Condition Monitoring in the Railway Industry: A Survey,” IEEE Transactions on Intelligent Transportation Systems, Vol. 16, No. 3 pp. 1088–1106 (Jun. 2015). 3) J. Hurwitz et al., “Essential Elements of an IoT Core Platform” (Nov. 2016), https://www.slideshare.net/IngridFernandezPhD/ hurwitzwhitepaperessentialelementsofiotcoreplatform-67990199 4) N. Nuttall, “Trenitalia Drives Cost Savings Using IoT on Train Operation,” Gartner, ID.: G00318187 (Dec. 2016).

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