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The railroad is the second oldest mode of transportation still in operation and remains the backbone of supply chains across all continents. It is therefore important to keep the technology used in railway networks up-to-date and continuously introduce innovation into the system.
Speaking of backbones: SAP systems handle 77% of the world’s transaction revenue and connect millions of companies in 190 countries for optimized visibility, collaboration and resilience across the supply chain. SAP, therefore, serves as the backbone of global supply chains.
So, why not connect railway innovation with SAP, combining two backbones into an even stronger one?
SAP offers two different modules focused on railway operations: SAP Transportation Management and SAP Yard Logistics. In this blog, we will explore innovations in planning, managing and monitoring operations at railway hubs – whether for service providers (railroad companies) or shippers (manufacturers or trading companies) – using SAP Yard Logistics.
Most of these hubs are driven by specialized software developed by switch manufacturers or railroad equippers. The software facilitates the seamless coordination of train movements based on schedules, ensuring safety within the hub. Although these systems use real-time data from inbound and outbound rail cars, they are usually isolated and are not capable of sharing data or process information with other systems in the supply chain.
The planning of shunting movements and transitions is based on the destination codes of the rail cars (either the destination railroad station or the unloading/loading point of the rail car), following a simple First-In-First-Out (FIFO) approach. No other data is taken into account for this planning.
This is a low hanging fruit when talking about innovation: Innovative data sharing at railway hubs between operators, shippers and the shunting service providers! A simple example: if the shipper’s SAP S/4HANA system provides information about the loaded cargo, such as product master data, the value of the goods and the estimated time of arrival at the final destination, as input for the yard switching system, the decision-making in the transition planning of the shunting service provider can be enhanced significantly. The simple FIFO principle can be improved to a Highest-In-First-Out (HIFO) approach.
It’s no longer just a question of whether cars from a delayed inbound train can still reach the planned outbound train. It is the question of whether it is necessary to reach the planned outbound train or alternative options exist that avoid excessive operational costs. This approach will significantly enhance the operational efficiency and reduce overall transportation costs.
We can find further innovation when looking into AI-driven optimization, especially in capacity management. Every hub has limited track lengths and designated sections for different operations, such as reception, sidings, loading/unloading tracks. The positioning of train consists and rail cars is key for space utilization within the hub.
For decades, yard workers and operators had limited system guidance on where to position incoming or temporarily parked cars – and this guidance was based on fixed timetables in the system. With the introduction of AI-driven capacity management, optimization can be enhanced by factoring in traffic patterns. This means working not only with scheduled times of arrival and departure but also with predicted arrivals and departures, considering both historic data and the current traffic situation.
This innovation goes beyond the mere positioning of train consists; it introduces flexible hub sections. For instance, an unloading track can be changed over to a holding siding when the traffic pattern suggests such a change.
So what’s the conclusion?
SAP systems bring the innovation needed in railway logistics, which present a significant opportunity to enhance operational efficiency, reduce costs, and improve overall supply chain resilience. By fostering a collaborative environment that leverages real-time data and AI capabilities, railway hubs can transform into dynamic, responsive centers of logistics excellence. This evolution is essential for maintaining the competitiveness and relevance of rail transport in the modern supply chain landscape.
If you are interested in rail innovation using SAP Yard Logistics for your hub, or if you would like additional information on how SAP Yard Logistics can improve your yard’s performance, please contact our experts.
