Oliver Wyman recently conducted an extensive survey of the Service Design groups at the Class I railroads. Some of the results on similarities and differences between the groups will, I believe, be of interest to our blog readers.
The survey focused on five primary areas: (1) Service Design responsibilities and composition; (2) the planning process; (3) central execution/control systems; (4) planning tools (developed in-house and acquired externally); and, (5) demand management planning.
There are generally 80 to 100 people employed at each of the Class I railroads for planning how the railroad operates. Some of these staff are part of the Service Design group, while others are scattered throughout the company in a specific line of business (intermodal, coal, grain, etc.), in the dispatch center (locomotive planning), in Engineering (maintenance planning), or in operations research/information technology (tool building).
As might be expected, there were several similarities among the Service Design groups. All of the Service Design groups plan road trains, blocking, hazardous material shipments, interline movements, and local service (usually jointly with the field). All of the Service Design groups also develop trip plans for general merchandise and automotive traffic, and they generally measure trip plan compliance as the initial ETA plus 24 hours. An interesting result of the survey was that all of the Service Design groups have a very limited number of staff (typically around 5) with the authority to directly make changes to the production version of the operating plan. This tightly controlled access is necessary due to the complexities of the plan and to the mission critical nature of the information.
There were also several key differences identified between the railroads. Some of the railroads make continual changes to the operating plan, while other railroads make changes on a fixed (typically weekly) schedule. Short-term forecasts are used to develop the plans at some railroads, but the others prefer to use history due to concerns over forecasts accuracy. There were also several differences between the groups in the planning of intermodal and bulk services. While most of the railroads produce trip plans for intermodal flat cars, not all of the railroads produce trip plans for intermodal boxes. Also varying from railroad to railroad was the planning of which bulk traffic moves in unit versus merchandise service, and whether or not bulk traffic moves in blocks. Finally, all of the Service Design groups provide some planning for local service, but the level of detail and the accuracy of these local service plans varied greatly.
Follow this blog in the coming months as we release more detailed information on specific topics from the results of the Oliver Wyman survey of the Class I railroad’s Service Design groups. If you have any questions about service design and our survey, please contact me at david.hunt@oliverwyman.com.
