Why the rail industry needs a supply chain management ‘revolution’

Bolstering supply chain management could help improve service punctuality, reduce costs and increase whole-system productivity, a report has said. 

Issues of punctuality and reliability in the rail sector could be mitigated with procurement and supply chain “revolution”, according to a whitepaper from logistics provider TVS Supply Chain Solutions.

The report said: “Supply chain management, supplier performance and logistics have a sizeable impact on rail industry outcomes, including the customer experience, punctuality, affordability, productivity and achieving net zero carbon emissions. Supply chain resilience is now, more than ever, a strategic issue.”

An overhaul of supply management for these areas could ensure availability of parts and tools for when upgrades are needed, assure quality of materials, and match stock levels to demand to minimise both downtime and over-buying.

“The transformation need not wait,” the report said. “The value creation, efficiencies and savings made possible by a revolution in supply chain management and integration can be transformational, making a punctual, affordable, resilient, and green railway a day-to-day reality.”

Supply chain management and logistics are “critical enablers” for productivity and safety, the report emphasised, and said having the right tools, parts, materials and PPE at the right time is a responsibility of the procurement team. Reducing delays and availability issues for necessary maintenance and upgrades on-site is key to increasing productivity.

Product identification, tracing and tagging assets as well as asset record management are all part of “disciplined logistics”, the report said, and using them to support workers can help “transform on-site performance, raise expectations, and trigger positive culture change”.

This “culture change” means an overall shift from “just-in-time” supply chains to “just right” supply chains. Instead of relying on a small number of specialised suppliers for products which have gone unchanged for decades, procurement teams need to tailor the supply chain to the unique needs of their specific segment.

Greater transparency, digital twin environments, stronger demand forecasting and whole-supply chain collaboration are needed for these tailor-made supply chains.

Moreover, the default position of cost-reduction and efficiency in the industry is detrimental to value creation, the report added. Increased digitalisation, such as open data sharing between operators, a supply chain management platform, data-led supplier selection and pre-procurement consultations can help balance value and efficiency in the sector.

Taking these changes together can already translate into a greener rail industry, the report continued. Greater efficiency, productivity and affordability means less carbon emissions, simply by virtue of less transportation of materials. Further decarbonisation is achievable as well with “cradle to grave to cradle” logistics, the report added.

What previously was simply waste and scrap material can now, with innovation in recycling and reuse of components, be used to manufacture new products, establishing circular economy methods into the industry.

The UK’s rail services have come under repeated criticism for delays and quality of service.

Earlier this month, it was announced that the UK government would be taking temporary control of the TransPennine Express after months of disruptions and cancellations. It follows the previous nationalisation of London North Eastern Railway in 2018, Northern in 2020, and Southeastern in 2021. 

☛ Want to stay up to date with the news? Sign up to our daily bulletin.

CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates