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Transport & Logistics

Is Lean manufacturing the answer for Australian rail?

5 Dec 2013, by Informa Insights

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Lean methodologies have existed in one form or another since the turn of the 19th century, but were popularised by the development of the Toyota Production System (TPS) in the decades after the Second World War.

The term ‘Lean’ itself started being used in the 1990s, with the system encompassing a range of techniques employed by enterprises to streamline their operations, with particular success shown in the manufacturing sector.

Advocates say that Lean manufacturing can revolutionise Australia’s passenger and freight rail engineering and maintenance, bringing much-needed efficiency to the industry.

Lindsay Tanner, chairman of the Australasian Railway Association, has already highlighted the importance of rail development in the coming years.

Last week (November 27), he said: “Decision-makers must recognise the value rail offers to the Australian community, and convince them of the benefits arising from developing infrastructure that will serve our nation for decades to come.”

So what exactly are Lean principles and how can they be applied to the country’s railways?

What is Lean?

A Lean system is one that concentrates solely on value creation, judging activities that use resources for any other purpose to be wasteful and thus a candidate for elimination.

In other words, any internal process, structure, framework or policy that fails to show tangible evidence of providing additional value to the end customer should be addressed in companies that are going Lean.

Rail Industry FundamentalsThere are many different methodologies within a Lean system, but the 5S principle remains one of the most popular cornerstones for streamlining businesses.

The 5Ss are a workplace organisational structure that is based on five Japanese words, although rough transliterations are commonly used in English to express the same processes.

Seiri (sorting) – elimination of all unnecessary tools, equipment and materials. Keep only essential items in easy-to-access locations.
Seiton (streamlining) – re-arrange employees, equipment and instructions so as to best represent natural workflow, thus cutting out wastage.
Seiso (systematic cleaning) – maintenance of a clean workspace, ensuring everything is tidied and restored to its original place after use.
Seiketsu (standardising) – standardise all work processes and setups to maximise interchangeability.
Shitsuke (sustaining) – implement performance reviews to ensure previous steps are adhered to. This prevents backsliding into bad habits.

Lean manufacturing and Australian railway engineering

As with most industries, Lean principles can be applied to railway engineering and maintenance projects in Australia.

The railway engineering industry generates revenues of around $4.2 billion in the country, but with an increasing focus on efficiency more firms may turn to cost-cutting procedures to maximise returns.

Research released in 2011 by the University of Illinois estimated that a single rail terminal could make savings of US$1.8 million a year by using Lean systems.

In fact, a number of organisations have already had success streamlining their processes by implementing a Lean system, including Downer Rail, a leading provider of freight and passenger maintenance services.

Ross Spicer, CEO, Downer Rail
Ross Spicer, CEO, Downer Rail

After partnering with consultancy KM&T, the organisation began employing Lean methods at its Cardiff facility, such as implementing digitised access to schematics and engineering documents, a focus on production metrics and balanced build plans.

Ross Sterland, KM&T’s managing director of the Asia Pacific region, said: “This agreement is further recognition of the value of implementing Lean into Australian businesses to increase the value they are able to create for their customers under increasingly challenging economic conditions.”

Earlier this month, Downer Rail announced at its annual general meeting that the organisation has experienced an “extraordinary improvement” in its balance sheet compared with a couple of years ago.

CEO Ross Spicer recently re-emphasised the importance of Lean processes in helping to achieve enhanced performance throughout the organisation.

“The introduction of Lean at Downer Rail’s Cardiff facility has revolutionised our approach to both passenger and freight manufacturing and maintenance,” he stated.


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