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Rail boom: how to maximise supply chain efficiency

Aurizon coal train

Rail is becoming bigger, longer, faster and more costly as complex mining provinces are developed in remote locations. Mike Foley spoke to Aurecon’s Ken Devencorn who said supply chain integration and automation are key to facilitating development.

Aurecon’s rail leader, Devencorn said integrated control centres are at the forefront of the push to deliver increased efficiencies in rail network supply chains. Four centres have been established to service significant supply chains here in Australia.

Two of these centres service multi-user rail networks, the others proprietary networks. Mackay’s Integrated Logistics Centre (ILC) services the Goonyella rail network and its two coal ports, Hay Point and Dalrymple Bay Coal Terminal.

The Hunter Valley Coal Chain Coordinator (HVCCC) coordinates throughput from NSW Western and Hunter Valley coalfields into Newcastle’s coal ports.

Both Rio Tinto and BHP Billiton utilise coordinated control centres for their vast Pilbara rail networks.

Devencorn said control centres avert misalignments being carried through supply chains and prevent poor communication across an organisation, a situation that leads to silo thinking.

“One issue is that different elements can have their own efficiency, but it doesn’t necessarily integrate across the supply chain; there is a knock on effect that goes through the system,” he said.

As an example, Devencorn detailed the plight of mine managers who are charged with improving capacity that is often lost because of other parts of the supply chain.

“There are lots of good mine managers that work hard to squeeze more cents per tonne from the operation. What they do is stack their product neatly at the front gate and wait for the train to come. And in many cases, the train doesn’t come when it is supposed to.

“We see it all the time. You talk to a logistics manager of a railway, for example, and they say ‘we operate at 90 per cent efficiency’, meaning 90 per cent of the time they are running and operating. Then you talk to the miner and they say ‘we are running at 90 per cent efficiency’ and the port says the same thing.

“When you look at the entire supply chain, you realise the supply chain is operating at 50 per cent efficiency, because if you add up the 10 per cent gaps in efficiency, you realise they are each a different 10 per cent.”

However, Devencorn is keen to stress that solving such problems is not as simple as inserting additional infrastructure to increase a supply chain’s capacity.

“We take the view that the supply chain should be optimised before you go to the big expense of buying more infrastructure. Most engineering firms take the view that ‘we will build something for you to get more out the front door’.

“If you try to pump more down a system that is clogged, congested or has systematic problems all you end up doing is wasting more money.

“Simply buying more trains and shoving them down a system will result in more congestion and that is what usually happens when companies go to an engineering consulting firm and say they want to increase exports from say 60mtpa to 80mtpa.

“We take the view that you should first and foremost look at the operation and see if it inherently has more capacity to squeeze out of it before you build more infrastructure.

“The best way to imagine it is a car running really raggedly, the motor hasn’t been tuned and it is running on four cylinders instead of six. If you put racing tyres on it you won’t get any more efficiency out of it. It won’t become a racing car.”

Devencorn said there are myriad automation technologies used in rail. He highlighted automated technology for ore cars that allows the railway operator to monitor track conditions, health of infrastructure such as bridges and “the general health of the system as the trains are trundling over it.”

These technologies, such as ground penetrating radar, can be incorporated into locomotives “so it can act as a smart loco and can give an indication of what the vegetation is like, what the bridge is like and so on.

“The old days of the track inspection with the manager going out and walking the track can be done by a piece of tech on a wagon as the train goes along.

“If there is a particular trend forming or a spot is getting soft or subsidence or a crack might be opening up, a trend can be seen, a red light goes off and the crew goes out and can locate the spot by GPS to fix it.”

Automated monitoring of rail networks also works for miners that want to check their consignments’ progress in real time, Devencorn said. Automation also “works for the port operator who wants to know when it will arrive.”

“Real time monitoring enables a port to say to a rail operator ‘we have got a bit of a problem with our stackers. Why don’t you take a bit longer to come down the hill, rather than busting your hump to get here? Slow it down a bit, use a bit less fuel and arrive an hour later and we will be in a better position to receive the consignment.’

“I don’t think this is science fiction. I think all the tools we need to make this happen exist today. In that regard, what is missing is the motivation and innovation to combine all the different elements to produce an outcome which is in excess of the sum of the parts.”

This article first appeared in Australian Journal Of Mining, September | October 2012.

Ken Devencorn is Aurecon’s rail leader and has a long history in rail operations planning, project development, project delivery, and railway investment. He has considerable experience in the development and operational, improvement of railways and logistics supply chains across Australia, Asia, and South Africa.

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