Technical Strategy. Scope of Network Rail s draft Technical Strategy which is under development and will be published in June 2013
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1 Technical Strategy Scope of Network Rail s draft Technical Strategy which is under development and will be published in June 2013 Document ref: SBPT208 Final Version
2 Introduction This document sets out the purpose and scope of Network Rail s Technical Strategy to be published in June 2013 and how this relates to the wider industry s Rail Technical Strategy (RTS) and the linkages to the cross industry Technical Strategy Leadership Group (TSLG). It forms the basis for investment in Research & Development (R&D) for CP5 as part of a wider rail industry plan to drive the rail industry forward through innovation. In summary: We have been under-investing in R&D which is a major barrier to achieving a more efficient and effective railway. We expect R&D investment in the railway to offer a benefit to cost ratio of at least 5:1, so there is a strong case to do more. R&D benefits come from the implementation of new products, techniques and tools on the railway. So the Technical Strategy will set out how increased investment in R&D is accompanied by an enhanced means to direct and deliver value from R&D investment. It is crucial that R&D investment is targeted to priority areas and the process of transferring new technical capability into projects and programmes is efficient and well managed. So we are establishing R&D investment priorities through the Technical Strategy. The R&D investment priorities must be connected and aligned with planned enhancement and renewals investment programmes. So we are establishing a delivery plan for CP5 that integrates the Technical Strategy with the Business Strategy, in particular the readiness for implementation of new products. Purpose and strategic fit Network Rail is developing a Technical Strategy (NRTS) which builds on the work of the industry s RTS published in December The purpose of the NRTS is to identify and prioritise: the technical opportunities that will assist in the achievement of corporate objectives; R&D activities that will allow us to realise these opportunities. Technical Strategy strategic fit With this strategy in place, technology will be able to function as a key driver for our business. Version 1 of the NRTS will be published by June Beyond this date, the NRTS will be integrated into the Network Rail CP5 Delivery Plan. From the broad cross-industry approach of the industry RTS, the NRTS will provide greater clarity for Network Rail activities, interfacing with the business planning process, as shown below. A key outcome of the NRTS is expected to be an increase in R&D activity with a fully defined programme. In terms of process, there will be inter-dependency between three business drivers: business strategy, the technical strategy and the product strategies. As such, the R&D programme will be integrated with our supply chain. Network Rail will work with the rest of the industry including through the cross industry TSLG and Rail Delivery Group (RDG) to make sure that its technical strategy and related activities remain aligned with the wider industry strategy. Network Rail will continue to support the development of the industry strategy through TSLG and ownership of this strategy by RDG. Network Rail will also proactively seek input from the industry through these groups in relation to the development of its own strategies and to maintain momentum in this area. Rail Technical Strategy INDUSTRY Network Rail Technical Strategy Technology cycle plan & business case for R&D Technology planning NETWORK RAIL Network Rail Strategic Business Plan Network Rail 2
3 Benefits and Funding Benchmarking and funding We are currently lagging behind benchmarked levels of investment in R&D. Whilst this is now being addressed, even with increases recently, Network Rail is still only investing approximately 1% of turnover in R&D. Across all sectors, the UK invests at 1.7%; the EU target is 3% and the global average is 3.6% (based on the Engineering UK 2012 report). Plans are in place to increase the R&D spend by 300m in CP5, representing an estimated 4% of turnover by the end of CP5. The high level business case for this increase in investment lies in the success to date of the return on investment achieved in CP4 on projects that have run through the new innovation process. The benefits ratio stands at 11:1. As the scale of activity increases and as the portfolio expands to include a broader mix of projects, the expectation is that this ratio will fall but, based on industry benchmarks, a long term ratio of 5:1 is realistic. To date over 200 projects have run through the innovation process and R&D metrics are reported in the corporate scorecard. A detailed business case, based on forecast benefits from a complete R&D programme, will be developed by mid We will provide an interim submission to ORR in April to inform the draft determinations. This will drill down into each line item of R&D activity, and will be derived from the Network Rail Technical Strategy. Leverage Funding for the increased R&D activity will come from a combination of sources, including direct from Network Rail, and other external sources of leveraged funding where Network Rail funding is combined with contributions from other sources to fund R&D in areas of mutual interest between organisations. These sources will be identified in the CP5 delivery plan. Sources are likely to extend beyond exclusively rail to leverage value from the development and application of related technologies across other sectors. Examples include Autonomous Intelligent Systems and the Technology Strategy Board co-funded call for Accelerating Innovation in Rail (A); and include participation and leadership of the Transport Systems Catapult and the UNIFE Shift2Rail Joint Technology Initiative in Europe. EU funded collaborative R&D (examples of leverage) PantoTrain million (EU funding 12million) Improve pantograph interoperability; reduce the costs of homologation of new and modified pantographs. Duration: June 2009 June 2012 DynoTrain million (EU funding 13.2million) Goal is to reduce the costs of vehicle certification through innovation. Duration June 2009 June 2013 AUTOMAIN million (EU funding 2.5million) Develop new processes and technologies that will enable infrastructure maintainers to move towards a 24 hour, 7 day railway Duration: February January 2014 SUSTRAIL 9.5 million ( 6.6 million funding from EC) Research that will facilitate the rail industry s need for the railway infrastructure to accommodate more traffic whilst at the same time reducing costs resulting from the deterioration of track, towards the zero maintenance ideal. Duration: May 2011 April 2015 Accounting for project length average annual spend from these four programmes is 10M, with a Network Rail input of 200k pa Cross-industry governance Network Rail intends to continue to work with the rest of the industry through TSLG to help prioritise its own and other industry investment in R&D. Network Rail 3
4 Bringing technologies into use Technology Readiness and Governance for Railway Investment Projects The NRTS introduces and applies the universal concept of Technology Readiness Levels (TRLs) to assess the state of technology maturity. It also considers other factors that determine readiness for implementation on the railway network including the readiness for new technologies to be brought together with existing technologies as a system and the readiness for the technologies to be commercialised into products. Progression of technology will have two distinct gateways with clearly defined criteria: Concept Ready (). Concept ready enables the triggering of investment to take the technology towards an implementation ready state. Implementation Ready (). Implementation ready is the state at which the technology can be deployed. Technical development (TRL) and project delivery (GRIP) are separated. TRL 1 Gateways Concept Ready Two gateways with pre-defined acceptance criteria are established. GRIP 1 The NRTS will highlight the separation of process between TRLs and the project delivery process of Governance for Railway Investment Projects (GRIP). Technologies must meet the criteria to pass through the gateway, including evidence to support the delivery of benefits and mitigation of risks, before being made available for implementation in projects. The implementation of new technologies in projects will be undertaken as part of the GRIP process as shown above. Technical strategy fit with GRIP As TRL maturity progresses, technologies can be introduced to GRIP projects assessed by risk and benefits. Technology Readiness Level (TRL) Risks / Benefits GRIP stage No go area 9 Implementation Ready Technologies transfer to GRIP projects 8 The point at which technologies shift from development of their readiness into railway network implementation through GRIP will be determined by the relative risk of the technology (low risk may mean transfer to GRIP earlier), and benefits (higher benefits may lead to an earlier transition into GRIP). The key is to develop a clear set of criteria for both concept ready and implementation ready gateways, which can accommodate these variables. Network Rail 4
5 R&D investment choices and priorities The Technical Strategy will provide a framework that drives R&D investment choices working closely with the rest of the industry including through TSLG. Those choices, pulled by business need, will be a sophisticated mix of opportunities from available and emerging technologies, many of which we expect to come from outside the rail sector. In addition to developing rail specific technologies, we expect a major part of R&D investment to be in understanding the opportunities to apply existing technologies and preparing those to function at a system level to make them Implementation Ready (). The forecasting of technologies that are expected to progress beyond the stage, and the timing of their readiness, will be presented in a Technology Cycle Plan. This will enable the business to plan for the utilisation of forthcoming technologies and their benefits, and for these to be hard-wired into the Network Rail Business Plan. Alongside our product strategy, the Technology Cycle Plan will also build confidence and competiveness with suppliers, giving a clearer picture of market opportunity for new products. Challenge driven R&D programme NRTS RTS R&D activities Costs ( ), Timing ( ) and Benefits ($$) are estimated for each R&D activity. $$ As knowledge develops, the Technology Cycle Plan will be updated and refreshed, feeding the timing of readiness of key technologies back into the technology planning process, as business priorities change. This enables the availability of technology to be fully factored into business planning and thereby becomes a key driver for the business. Refreshed regularly as R&D knowledge matures. Technology cycle plan Σ Σ $$ Σ NR Business Plan Network Rail 5
6 Nurturing innovation The Technical Strategy will set out the approach to nurture innovation and the framework for applying these approaches. This will build on Network Rail s current approach to nurturing innovation which primarily focuses on: improving the safety of the infrastructure system; increasing the performance of the asset; increasing the sustainability of the infrastructure system. Challenge driven innovation framework We consider three levels of innovation: Incremental innovation; Step change innovation; Game changers; High return, high risk investments delivering long term benefits. Through the use of extensive benchmarking, Network Rail has developed a challenge driven innovation framework to identify priority innovation challenges. This will be supported by projects that respond to the challenges and will be reported at portfolio level. A range of mechanisms have already been put in place to support the success of innovation projects in this portfolio. These mechanisms have been benchmarked against best practice from other sectors and include: a seedcorn fund allocated in < 50K investments to support the early exploration and testing of an idea to either support early failure or business case creation; an external supplier portal found on the Network Rail website to post capability to respond to our innovation challenges; consultancy to support idea generation; an innovation broker service to identify capability from other sectors to solve our challenges; online tools to post and rate ideas to solve a challenge. Clarifiers Inventors Developers Champions Network Rail 6
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