Asset Management Services Document ref: SBPT227 Version 1.0
Asset Management Services Overview Asset Management Services (AMS) is Network Rail s central asset management and engineering function. It exists to set asset policies and provide assurance; to provide essential services to the Routes (information, energy, telecoms); and to support internal and external customers in achieving optimum performance from the rail infrastructure. By providing these services centrally, Network Rail gains economies of scale, as well as being able to allocate scarce, expert resource in the most optimal way for the network. For services that are networks by definition, such as energy and telecoms, Network Rail benefits by running them centrally through being better able to distribute supply and manage perturbation. Vision The vision for AMS is to be respected as the pre-eminent source of railway systems innovation and best practice, both within and outside of the rail industry. Purpose AMS exists to set asset policies and provide assurance; to provide essential services to the Routes (information, energy, telecoms); and to support internal and external customers in achieving optimum performance from the rail infrastructure. History and Transformation for CP5 AMS was created out of the previous Network Rail Directorate Asset Management, in response to the implications and opportunities of Devolution. It went live on 20th August 2012 but only as a high level organisation. This is part of a journey from a large delivery organisation, to a smaller, efficient, expert service provision organisation. That journey began with the devolution of Maintenance to the Routes, and subsequently has seen NDS move to Corporate Services, and the Track and Signalling and Power delivery organisations move to Infrastructure Projects. The transformation into an efficient, customer-focused, service-orientated organisation is being delivered through Programme Olympus. It will be complete by Apr 2013 (though on-going cultural and service improvements will continue beyond that date). The focus of AMS for CP5 is described on the next slide. AMS consists of the following functions, which are laid out in the diagram below: Route Services, Strategic Services, Technical Services, Technical Strategy, Energy Services, Telecoms (NRT), Asset Information and National Certification Body. (See slide 3 vision for each function). Network Rail 1
CP5 Focus: Create and continuously improve asset policies, asset standards and the processes which govern them Conduct assurance activities on behalf of the board and stakeholders Take a long term view of assets and their environment to assure sustainability of the network Provide telecoms and energy services to the Routes and their customers Offer trusted asset-related information management, insight and tools to enable better informed business decisions Guide customers on how to operate, maintain and renew to obtain lowest whole-life cost of assets Identify and share best practice and knowledge across the whole business to drive out costs and improve performance Innovate and research and develop new processes and technologies Industry Impact: We expect the industry impact of AMS to be positive. The development of a Technical Strategy for Network Rail, aligned with the Industry Technical Strategy, will be beneficial for customers and suppliers alike. There are already tactical activities that AMS is involved in that will contribute to an improved railway industry, for example delivering for Rail Delivery Group (RDG) workstreams; international benchmarking activities; and provision of information services to industry. Over time, as AMS proves itself, we have an ambition to be able to sell our expertise to other parts of the railway industry and beyond. Cost & Efficiency: AMS has committed to an overall efficiency of 20% through CP5. The Olympus programme will deliver savings to Network Rail in operation costs, through a more efficient and effective approach to service delivery, and will transform the central AMS organisation into a customer focused service delivery function. The table below highlights the actual and percentage efficiency trajectory for AMS throughout CP5. The key driver of efficiency is better resource utilisation within Technical Services (the bulk of the former Asset Management teams), Asset Information and development of NRT. Asset Management Services costs will total 548.9m (Net) in CP5. AMS Function CP4 Exit Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL AM Directorate 2.8 1.9 1.9 1.9 1.9 1.9 9.7 Energy Services 3.1 2.5 2.5 2.5 2.5 2.5 12.3 NCB ( 0.5) ( 0.8) ( 0.8) ( 0.9) ( 0.9) ( 0.9) ( 4.3) Route Services 0.7 0.7 0.7 0.7 0.7 0.7 3.3 Strategic Services 2.0 0.7 0.9 1.5 2.6 1.8 7.5 Tech Strategy 1.9 1.4 1.4 1.4 1.4 1.4 6.9 Technical Services 23.2 19.2 18.7 18.2 17.6 17.1 90.8 Asset Information 26.7 22.9 22.4 21.9 21.4 20.9 109.4 Telecoms 65.6 73.8 65.6 60.3 58.6 54.9 313.2 TOTAL AMS 125.5 122.3 113.2 107.3 105.8 100.3 548.9 Efficiency 3.2 12.3 18.1 19.7 25.1 Efficiency % 3% 10% 14% 16% 20% Network Rail 2
135.0 125.0 115.0 105.0 95.0 85.0 75.0 AMS (Opex ) CP4 Exit Year 1 Year 2 Year 3 Year 4 Year 5 AMS Functional Vision for CP5: (more details can be found for each function in the supporting narrative documents) Route Services and Strategic Services Two customer facing functions. These functions provide essential account management services to ensure that AMS delivers optimal value by really understanding our customer needs, helping to shape those needs in the future, and sharing best practice across route and strategic customers. Technical Services is one of the largest functions, and together with Telecoms and Asset Information is the bulk of the former Asset Management teams, providing services to support customers achieving optimum performance from the rail infrastructure. The vision for TS is to continually innovate and generate revenue by delivering value adding services, and providing assurance. Energy Services providing essential energy services to the rail industry. The Energy Services vision is to become a leading sustainable energy delivery organisation. Technical Strategy The vision for TS is to be recognised by NR and the wider industry as a preeminent source of feasible, acceptable and suitable strategy to embed a step change in levels of research and innovation that directly contribute to sustainable whole life solutions at maximum value for money to the taxpayer. Network Rail Telecoms providing essential telecoms services to the rail industry and its users. The vision of NRT is to be the rail industry s number one outstanding service provider of choice and to become a significant player in the UK communication market space. Asset Information Services The vision for AI is to provide a trusted asset-related information management, insight and tools to the rail industry. Network Certification Body providing a certification service for new technology infrastructure and rail vehicles to the industry. The vision for NCB is to be the first choice for European rail conformity assessment respected by our people and clients for our industry knowledge and valued for the service we provide. Network Rail 3
Energy Services Overview Energy Services will lead and manage the development of Network Rail s energy & distribution management strategy, this function will be accountable for setting overall asset policies and standards for energy systems & will also be accountable for the purchase of energy for the company. Vision To become a leading sustainable energy delivery organisation. To become a single point of contact for (specialist) services and capabilities that is not viable for the Routes to have in-house. Provide (technical) leadership and guidance in the form of clear strategy and policies for energy and electrification. Provide technical assurance to meet safety and regulatory requirements. Purpose Include energy efficiency in policy. Understand Network Rail s energy usage. Reduce energy costs & CO2 emissions. Flatten the traction energy users profile. Drive non-traction energy usage down. Reduce network losses. History and Transformation for CP5 Network Rail is a large power distributor with three networks (AC,DC and low voltage) yet we can further improve our structure, standards and processes for robust network management. Roles and responsibilities for energy management were split across the company and the coordinated energy and distribution management strategy was less than optimal. Our energy asset knowledge, network losses and capacity management could be improved to meet future requirements. Energy Services was created on the 20th August 2012 to address the long-term electrification strategy issues for electrified Routes, it is clear that a coordinated central network management approach delivers significantly more advantages than a fragmented Route based approach. A centralised energy function such as Energy Services will provide an holistic approach to network strategy, whole life costs, standardisation and network performance. Scope of Energy Services Strategy Policy Assurance Deep technical expertise Utilities trading Network/asset information People capability strategy and planning Network Planning and design Route asset management Schemes Design Maintenance Operations Procurement Strategic supplier management Accountability leads the service area Support Network Rail 4
Network Rail Telecom (NRT) Overview NRT owns and manages the national telecoms assets of Network Rail. Unlike the devolved route assets, telecoms assets are managed nationally as a single coherent network. NRT is tasked with delivering the current and future operational telecoms requirements of the railway, driving efficiencies and delivering additional value from these assets by extending the offerings to rail partners and optionally 3rd parties. Vision Our vision is provide carrier class services to Network Rail and the wider rail industry as data volumes grow and become increasingly mobile. Building on that base we ll extend our CNI capable network externally to become a significant player in the UK communications. Strategy Network Rail s key strength is an extensive telecoms network trusted to run one of the most critical national infrastructures in the UK. NRT will extend this network with FTNx (a next generation network) and high speed mobile data and use these to consolidate the rail industries growing data requirements and remove dependencies on 3rd parties. Once the rail industry is fully served, consideration will be given to external fixed data services, exploiting our resilience and security. Market Segmentation Strategy NRT currently delivers services via Layer 0 in the diagram below Using the existing low capacity FTN network and 3rd party services from BT and Level 3 to run the railway. Layer 1A is the first step in extending the network to support future rail operational needs. FTNx a new high speed network overlaid on FTN will support data hungry services (SCADA, TM, ROCs, Corporate Voice and DATA) and high definition CCTV while allowing NRT to migrate from 3rd party suppliers and bring down provision costs. Using FTNx, layer 1B services will be extended to the rail family along the rail corridor connecting TOC stations, depots and switching centres to more efficiently run the railway. Consideration will be given to full utilise strategic partnerships Layers 2 and 3 will extend FTNx and mobile services beyond the rail corridor to run our rail family corporate functions and have potential to support CNI networks such as the British Transport Police. Finally, Layer 4 services will be considered proving traditional wholesale and enterprise data services and supporting UK PLC through rural broadband initiatives etc. Partnering NRT needs to deliver 4G mobile data services for future train operational needs, ORBIS trackside applications and passenger Wi-fi. Our strategy is to partner with one or more partners, using their spectrum and our physical masts and backhaul assets to build this network at least cost to Network Rail. This in turn will drive value added service provision and help meet strategic themes. Network Rail 5
Asset Information: The ORBIS programme is a 330m programme of Asset Information data and services capability enhancements that provides a vital enabler for condition-led asset policy implementation, enabling our customers to better manage their asset base for less, and better exploit existing railway system capability. ORBIS funded October 2011 2012-2013 CP4 2013-2014 CP5 H1 2014-2016 CP5 H2 2017-2018 Build the Enablers: Master Data Management, Asset Data Store, Handheld roll-out, Mobile Productivity Apps, Asset Data Improvement Programme, data exploitation pilots What data (master data store and master inventory) Build the Essentials to support predict and prevent policy: Condition data (handheld apps + train-borne data capture) Workbank data (optimisation, paperwork elimination) Where data (maps, GIS asset data, photogrammetry) Information base required for condition-based maintenance Enable Advanced asset decision-support tools: Decision support tools for whole-life cost optimisation Utilisation and Degradation modelling Capability and Performance Modelling Deliver Railway System decision-support tools: Complete Railway System Capability/Capacity Model Real-time infrastructure performance for traffic management New capabilities delivered in the first 12 months: c8,000 ruggedisedphones have been issued to frontline staff. NR App store, security, user training all delivered on time, to budget. GPS Finder app being used to more easily locate track defects requiring remediation to within 5m; previously up to 1mile. The S&C Verification app directly updates our master asset register with information from the field. This app enables the elimination of 4.3m manually processed records per year. The Track View pilot project captures aerial and track-level imagery to help planners to visualise worksites and develop better and safer working plans. The Linear Asset Decision Support (LADS) pilot project provides a multi-layered view of linear asset data. It enables us to predict when faults will occur, and understand the effectiveness of work previously carried out. Where am I? app provides a universal translator for linear mileage / chains / line of route / GPS / OS Grid / Postcodes etc. Network Rail 6
Technical Services Overview Technical Services (TS) is the technical engine room of Asset Management Services. The team includes asset management and asset specific experts to deliver repeat and bespoke services to our internal customers. The services offered are not limited to pure Asset Management. Other broader services include specialist engineering advice, technical assurance, asset performance reporting and analysis. The new organisation has been created from the previous Asset Management team but the operating model and future culture are very different. A more outward looking focus on customer service, service delivery and efficiency reflects a major shift in culture and direction. Vision The vision for TS is to continually innovate and generate revenue by delivering value adding services and providing assurance to our internal and external customers. Purpose To succeed in achieving this vision we must establish an organisation that: Generates a proportion of its income from new ideas Provides staff with development opportunities through challenging and varied work Must be viewed as an efficient and competitive supplier by our customers Must reliably deliver on our commitments to our customers Must be capable of tailoring and integrating our services, and with others across AMS, to achieve the desired customer outcomes Must develop services which our customers want to buy. The majority of the team will sit within one of the technical capability groups. Creating these groups will support greater emphasis on technical and professional development and more generally help get the best from our technical experts. Project teams will be created to deliver against the customer needs, with resources drawn from different capability groups depending upon the service and technical input required. Definition of all services being offered by TS is on-going with 31 detailed services identified to date. These services fall into three broad categories: Assurance Provision of end-to-end assurance and audit support to assets and projects through specialist monitoring, analysis and reporting Policy Development of detailed asset & railway policy, standards, and management strategies that are technically sound and aligned with industry best practice and supported with compliance advice Specialist Technical advice and delivery support at both a strategic and tactical level across the railway network, assets, and NR staff, to ensure WLC, safety, and performance requirements are met. Finance benefits Through the improved alignment of internal resources to demand, and a rationalisation of the gross on cost, the operating model is anticipated to deliver an average saving of 5mp/a (26% exit to exit), this is in addition to the 2m saving anticipated before the end of CP4. Customer Centric Operating Model TS will adopt a matrix operating model illustrated in Figure 1 below. This model is flexible to allow for customers changing needs, provides staff with development opportunities through challenging and varied work, maximises employee utilisation and supports increased focus on service delivery. Programme delivery teams and a small practice office will manage and monitor services to pre-agreed time cost and quality parameters. A dedicated resource management capability will ensure that the right competencies are available at the right time to efficiently deliver future workload. Network Rail 7
Technical Strategy Overview We are currently lagging behind benchmarked levels of investment in R&D. Whilst this is now being addressed, NR 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). TS is addressing this by developing the Network Rail Technical Strategy (NRTS) to provide a framework and governance to achieve maximum cost benefit at significant factors of leverage within the industry delivering maximum value for money for the tax payer. Vision The vision for TS is to be recognised by NR and the wider industry as a preeminent source of feasible, acceptable and suitable strategy to embed a step change in levels of research and innovation that directly contribute to sustainable whole life solutions at maximum value for money to the taxpayer. Purpose The purpose of the Network Rail Technical Strategy (NRTS) is to identify the technical barriers that prevent us from achieving our corporate objectives and to identify R&D activities that will allow us to overcome these. With this Strategy in place, technology will be able to function as a key driver for our business. The NRTS ensures industry wide rail strategy is embedded in both the technical cycle plan and business case for R&D, that are crystallized in the NR Strategic Business Planning process. Role TS has a role to be the custodian of NR technical strategy and to ensure the plan is discharged in a manner that provides maximum long term benefit. Future Investment Plans are in place to increase the R&D spend such that by end of CP5 the exit expenditure increases by 150m pa. 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 2013. This will drill down into each line item of R&D activity, and will be derived from the Network Rail Technical Strategy. Funding 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. These sources will be identified in the CP5 delivery plan. Network Rail has had success to date in achieving leverage on Strategic, long term R&D, although this has mainly been via rail industry initiatives. Even as the scale of activity increases, it is realistic to assume that leverage opportunities will still be available to Network Rail for Strategic, long term R&D. Proposed NR R&D Spend Annual Expenditure () 160 140 120 100 80 60 40 20 0 Incremental R&D 2014/15 2015/16 2016/17 2017/18 2018/19 Incremental R&D HLOS Industry Development Cumulative Total Key 2019 outcome(s) Improved real time communication with customers and other stakeholders. Commencement of the implementation of European-compliant railway control systems including: GWML, ECML(S), Thameslink core. Network Rail s technical strategy leading the railway system. Key 2024 outcome(s) Passengers interface with the railway in real time through multiple channels. 400 350 300 250 200 150 100 50 0 Cumulative Expenditure () Network Rail 8
European-compliant railway control system in place on 20% of the network, including: GWML, ECML(S), MML, Thameslink core. Network Rail s technical strategy transforming the railway system. Network Rail 9
Route Services, Strategic Services & NCB Route Services: Route Services provide essential account management services to ensure that AMS delivers optimal value by understanding customer needs, helping to shape those needs in the future, and sharing best practice across routes. The key objectives are: To build strong relationships with the Routes and central Network Operations To understand the short and longer term asset management challenges that their customers face and market the service catalogue To develop a long term, prioritised work plan & ensure customer expectations are met To provide clear direction & priorities to Technical Services, based on customer need To provide customer feedback to Technical Services on the effectiveness of the services provided and longer term changes in the services required Strategic Services: Strategic Services provides a key assurance role across the routes and the network, which enables important monitoring of asset policies, asset sustainability, safety standards and an optimised asset view. Strategic Services works in partnership with the Planning & Regulation team to discuss asset management with the regulator (ORR). The key objectives are: To provide technical advice and support To ensure whole life costing methodologies are used To support professional and competency development Interpret, evaluate and raise potential risks Report relevant information (Cost, Volumes, Unit Rates, Safety Performance, Sustainability etc) to internal and external customers NCB: The Network Certification Body is a subsidiary company of Network Rail Infrastructure Limited, providing Rail Vehicle and Infrastructure certification services to UK and European railway projects. The Network Certification Body provides 3 main services to NRIL and third party UK Rail industry customers: Infrastructure Safety Certification services including Notified Body, Designated Body, Assessment Body and Competent Independent Person (CIP) accredited services. Rail Vehicle (including Plant) Safety Certification services including Notified Body, Designated Body, Assessment Body and Competent Independent Person (also referred to as Vehicle Acceptance Body, or VAB ) accredited services. Specialist Rail Vehicle Technical Services including; Management of the Private Wagon Registration Agreement, Load Unit certification assurance certification, possession only plant engineering certification. Network Rail 10