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Alexander Proudfoot - Rail Transportation

Alexander Proudfoot
Alexander Proudfoot

The CEO of Rumo, a large railway company in Latin America, sought a partnership with Alexander Proudfoot to help restore profitability after years of low investment weakened infrastructure and led to consecutive losses. An analysis found maintenance staff spent a third of time on scheduling instead of maintenance work. Operations had frequent accidents and little performance tracking. Proudfoot implemented six workstreams over six months to improve maintenance productivity, reduce accidents and costs, and establish performance standards, restoring profitability through $26.5 million in annual benefits and transforming the culture.

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Rail Transport In the wake of a recent merger, the CEO of Rumo was faced with a decades worth of low capex investment that had weakened the companys railroads infrastructure. Reporting consecutive years of negative earnings was enough to convince him that a partnership with Alexander Proudfoot was exactly what the organization needed to return to profitability. Maintenance challenges After a thorough analysis of end-to-end operations, it was evident the maintenance staff was struggling to meet certain goals. Research showed that approximately one-third of their time was finalizing the daily schedule instead of actively maintaining the railroad system. This contributed to spare parts not being readily available which caused significant delays and downtime. Making matters even more challenging was the fact that there were very few work standards in place that would allow the company to benchmark current efficiency levels against an actual plan. Operations challenges Without positive reinforcement of safe practices, there were frequent accidents (an average of three per day) and rising indemnity costs due to damaged goods. There was very little interaction between the train control center and workers in the field, which made the transfer of work- related tasks especially difficult. There was also little management of daily activities to track performance. A culture focused on individual achievement was in need of a new direction. Objective and context The CEO of Rumo, one of Latin Americas largest railway companies, became frustrated after reporting two consecutive years of negative earnings. After almost a decade of low capex investment had weakened its railroad infrastructure, the company sought a partnership with an operations expert that could help them quickly restore profitability through the execution of productivity, cost-saving and safety initiatives. Approach An end-to-end analysis of the clients operations revealed root causes for problems in productivity and maintenance. Better planning, scheduling and maintenance were extremely effective in reducing transit times, as well as diesel fuel and accident indemnification costs. A new organizational structure helped evenly distribute employees to meet projected demands. All levels of leadership learned valuable team management skills and how to sustain the improvements once the project was over. Sustainable results Working closely with the clients workforce transformed a culture focused on quick fixes into one that was committed to doing things right the first time. Optimum staffing levels were achieved by strategically reallocating employees to identified areas of need. Applying best practices in maintenance strengthened the railroads infrastructure which increased the speed and reliability of the trains. Returning to profitability Project impact: Railroad maintenance improvement (accident reduction) $11 million in annualized benefits Third-party contractor costs $6.5 million in annualized benefits Maintenance productivity $3 million in annualized benefits
Workstream approach for quick results and sustainable change The Proudfoot team worked in conjunction with Rumo to initiate six concurrent operational workstreams that would generate results in six short months. Rapid profitability activities The team put daily schedule control measures in place that made it easier to plan as well as quickly adapt to unforeseen circumstances. Daily safety meetings became an outstanding forum to drive awareness and information sharing among the staff. As the level of communication began to improve, so did the transfer of work from one shift to the next. Consistent work standards were established so actual performance could be measured against a specific plan. Maintenance (rail and fleet) Revised planning/scheduling processes and a daily activity model wouldcontributetotheincreasedavailabilityofequipment,spare partsandthereductionofbackloggedworkrequests.Adjustments to freight car sealing and closure processes would require a series ofqualitycontrolchecksbeforethetrainscoulddepart.Proudfoot spent significant time in the trenches, showing supervisors in the field how to actively manage their crews during railroad construction. Execution (yards) Rumo was experiencing significant delays, sometimes 30 minutes or more, due to inefficient charging and discharging of trains in the various yards along its railroad. Proudfoot was able to install a series of standards that would allow the management team to measure daily performance. The standards would also prevent lost time on maneuvers for incoming/outgoing freight cars. In order to minimize transit times, port employees learned how to optimize the amount of freight cars per trip. The installation of new procedure would help aging trains safely navigate around railroad construction. Organizational design Proudfoot worked closely with Rumo to analyze job descriptions, consolidate roles and responsibilities, and eliminate unnecessary layers within the corporate structure. Then, they adjusted the span of control to give supervisors direct access to the coordinators and vice versa. Both parties also worked together to develop a work activity to eliminate non-value added tasks from the workflow. Training and development Implemented a training and development program on three different levels of the organization: solution-based coaching for managers, a coordinator development program and supervisor development program. Sustainability Proudfoot worked closely with Rumos internal resource team to design a continuous process improvement model that would sustain the new framework of operations. The transformation project is the first step toward a standard of excellence in our operations. Proudfoots methodology combined with the complete change of behavior by our leaders and grass roots practitioners were the main catalysts for the rapid results achieved during the project. I was particularly surprised that our team faced fewer obstacles than I initially expected. Certainly the disciplined execution of the changes managed to quickly engage a large number of people. This was instrumental in the process. I now realize that the team clearly sees the improvement as the point of no return. One of the legacies we created over the course of the last 30 weeks is a culture that revolves around efficiency and productivity gains. This is critical to the sustainability of initiatives already implemented, which are a solid foundation for our next steps. Darlan Fabio de David VP Operations South The joint Proudfoot-Rumo team collaborated on site to facilitate change and secure buy in from all employees.
Benefits achieved Within six months, the collaboration between Rumo and Proudfoot achieved substantial results that spread throughout the entire organization. Tangible results Maintenance productivity $3 million in annualized benefits Execution productivity $1.5 million in annualized benefits Railroad maintenance improvement $11 million in annualized benefits through accident reduction Railcar maintenance improvement $3 million in annualized benefits through less indemnification costs Overtime reduction $1 million in annualized benefits Third-party contractor costs $6.5 million in annualized benefits Diesel fuel consumption $3 million in annualized benefits Culture Working side-by-side with three different levels of the organization helped mold the corporate culture into one that was committed to doing things right the first time. Employees became much more safety conscious as a result of the daily meetings and bought in to the idea of doing what was best for the company instead of focusing on personal gain. Better communication throughout the maintenance department was attributed to the seamless transition of work between shifts. Business capabilities Both Rumo and Proudfoot were able to define a set of consistent work standards that would allow management to measure actual performance against a specific plan. Revising the scheduling and planning process improved the availability of equipment and parts, transit times and the quality of work being performed on the railroad and freight cars. The end results were a 55% reduction of indemnification costs and 30% fewer accidents. Organizational alignment After several organizational design sessions, Rumo was able to make informed decisions regarding headcount reduction. Once this was done, productivity increased as existing coordinators and supervisors were evenly balanced in strategic areas along the railroad. This played a major role in reducing the amount of overtime needed to meet daily requirements. Detailed on-the-ground findings helped structure a comprehensive approach Off-site execution and follow up Close team collaboration Engaging all employees
Copyright 息 Alexander Proudfoot. All rights reserved. US 30767 www.alexanderproudfoot.com About us Alexander Proudfoot helps companies accelerate the execution of their plans and strategies to deliver substantial improvements in performance and profitability. We specialize in the rapid installation of performance improvement programs aimed at revenue growth, expense reduction and asset productivity. For other insights blog.alexanderproudfoot.com It was a job well done by the entire team. The transformation project lived up to its name by transforming the lives of everyone involved. It created new career paths for professionals, provided clarity of responsibilities for leaders and redefined the way we operate. Our goal is to build on this momentum and sustain it going forward. The next step is to replicate the results in all areas of our operations. Eduardo Pellegrina Filho VP Human Resources What I found to be interesting was our ability to combine focus, discipline and work processes with methodology to facilitate change. It was amazing to see the level of engagement among the teams and how we adapted to the different processes. I believe we are well on our way to success; we have made excellent progress in 26 weeks and there is potential to do so much more. Candido Frias Planning Director

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Alexander Proudfoot - Rail Transportation

  • 1. Rail Transport In the wake of a recent merger, the CEO of Rumo was faced with a decades worth of low capex investment that had weakened the companys railroads infrastructure. Reporting consecutive years of negative earnings was enough to convince him that a partnership with Alexander Proudfoot was exactly what the organization needed to return to profitability. Maintenance challenges After a thorough analysis of end-to-end operations, it was evident the maintenance staff was struggling to meet certain goals. Research showed that approximately one-third of their time was finalizing the daily schedule instead of actively maintaining the railroad system. This contributed to spare parts not being readily available which caused significant delays and downtime. Making matters even more challenging was the fact that there were very few work standards in place that would allow the company to benchmark current efficiency levels against an actual plan. Operations challenges Without positive reinforcement of safe practices, there were frequent accidents (an average of three per day) and rising indemnity costs due to damaged goods. There was very little interaction between the train control center and workers in the field, which made the transfer of work- related tasks especially difficult. There was also little management of daily activities to track performance. A culture focused on individual achievement was in need of a new direction. Objective and context The CEO of Rumo, one of Latin Americas largest railway companies, became frustrated after reporting two consecutive years of negative earnings. After almost a decade of low capex investment had weakened its railroad infrastructure, the company sought a partnership with an operations expert that could help them quickly restore profitability through the execution of productivity, cost-saving and safety initiatives. Approach An end-to-end analysis of the clients operations revealed root causes for problems in productivity and maintenance. Better planning, scheduling and maintenance were extremely effective in reducing transit times, as well as diesel fuel and accident indemnification costs. A new organizational structure helped evenly distribute employees to meet projected demands. All levels of leadership learned valuable team management skills and how to sustain the improvements once the project was over. Sustainable results Working closely with the clients workforce transformed a culture focused on quick fixes into one that was committed to doing things right the first time. Optimum staffing levels were achieved by strategically reallocating employees to identified areas of need. Applying best practices in maintenance strengthened the railroads infrastructure which increased the speed and reliability of the trains. Returning to profitability Project impact: Railroad maintenance improvement (accident reduction) $11 million in annualized benefits Third-party contractor costs $6.5 million in annualized benefits Maintenance productivity $3 million in annualized benefits
  • 2. Workstream approach for quick results and sustainable change The Proudfoot team worked in conjunction with Rumo to initiate six concurrent operational workstreams that would generate results in six short months. Rapid profitability activities The team put daily schedule control measures in place that made it easier to plan as well as quickly adapt to unforeseen circumstances. Daily safety meetings became an outstanding forum to drive awareness and information sharing among the staff. As the level of communication began to improve, so did the transfer of work from one shift to the next. Consistent work standards were established so actual performance could be measured against a specific plan. Maintenance (rail and fleet) Revised planning/scheduling processes and a daily activity model wouldcontributetotheincreasedavailabilityofequipment,spare partsandthereductionofbackloggedworkrequests.Adjustments to freight car sealing and closure processes would require a series ofqualitycontrolchecksbeforethetrainscoulddepart.Proudfoot spent significant time in the trenches, showing supervisors in the field how to actively manage their crews during railroad construction. Execution (yards) Rumo was experiencing significant delays, sometimes 30 minutes or more, due to inefficient charging and discharging of trains in the various yards along its railroad. Proudfoot was able to install a series of standards that would allow the management team to measure daily performance. The standards would also prevent lost time on maneuvers for incoming/outgoing freight cars. In order to minimize transit times, port employees learned how to optimize the amount of freight cars per trip. The installation of new procedure would help aging trains safely navigate around railroad construction. Organizational design Proudfoot worked closely with Rumo to analyze job descriptions, consolidate roles and responsibilities, and eliminate unnecessary layers within the corporate structure. Then, they adjusted the span of control to give supervisors direct access to the coordinators and vice versa. Both parties also worked together to develop a work activity to eliminate non-value added tasks from the workflow. Training and development Implemented a training and development program on three different levels of the organization: solution-based coaching for managers, a coordinator development program and supervisor development program. Sustainability Proudfoot worked closely with Rumos internal resource team to design a continuous process improvement model that would sustain the new framework of operations. The transformation project is the first step toward a standard of excellence in our operations. Proudfoots methodology combined with the complete change of behavior by our leaders and grass roots practitioners were the main catalysts for the rapid results achieved during the project. I was particularly surprised that our team faced fewer obstacles than I initially expected. Certainly the disciplined execution of the changes managed to quickly engage a large number of people. This was instrumental in the process. I now realize that the team clearly sees the improvement as the point of no return. One of the legacies we created over the course of the last 30 weeks is a culture that revolves around efficiency and productivity gains. This is critical to the sustainability of initiatives already implemented, which are a solid foundation for our next steps. Darlan Fabio de David VP Operations South The joint Proudfoot-Rumo team collaborated on site to facilitate change and secure buy in from all employees.
  • 3. Benefits achieved Within six months, the collaboration between Rumo and Proudfoot achieved substantial results that spread throughout the entire organization. Tangible results Maintenance productivity $3 million in annualized benefits Execution productivity $1.5 million in annualized benefits Railroad maintenance improvement $11 million in annualized benefits through accident reduction Railcar maintenance improvement $3 million in annualized benefits through less indemnification costs Overtime reduction $1 million in annualized benefits Third-party contractor costs $6.5 million in annualized benefits Diesel fuel consumption $3 million in annualized benefits Culture Working side-by-side with three different levels of the organization helped mold the corporate culture into one that was committed to doing things right the first time. Employees became much more safety conscious as a result of the daily meetings and bought in to the idea of doing what was best for the company instead of focusing on personal gain. Better communication throughout the maintenance department was attributed to the seamless transition of work between shifts. Business capabilities Both Rumo and Proudfoot were able to define a set of consistent work standards that would allow management to measure actual performance against a specific plan. Revising the scheduling and planning process improved the availability of equipment and parts, transit times and the quality of work being performed on the railroad and freight cars. The end results were a 55% reduction of indemnification costs and 30% fewer accidents. Organizational alignment After several organizational design sessions, Rumo was able to make informed decisions regarding headcount reduction. Once this was done, productivity increased as existing coordinators and supervisors were evenly balanced in strategic areas along the railroad. This played a major role in reducing the amount of overtime needed to meet daily requirements. Detailed on-the-ground findings helped structure a comprehensive approach Off-site execution and follow up Close team collaboration Engaging all employees
  • 4. Copyright 息 Alexander Proudfoot. All rights reserved. US 30767 www.alexanderproudfoot.com About us Alexander Proudfoot helps companies accelerate the execution of their plans and strategies to deliver substantial improvements in performance and profitability. We specialize in the rapid installation of performance improvement programs aimed at revenue growth, expense reduction and asset productivity. For other insights blog.alexanderproudfoot.com It was a job well done by the entire team. The transformation project lived up to its name by transforming the lives of everyone involved. It created new career paths for professionals, provided clarity of responsibilities for leaders and redefined the way we operate. Our goal is to build on this momentum and sustain it going forward. The next step is to replicate the results in all areas of our operations. Eduardo Pellegrina Filho VP Human Resources What I found to be interesting was our ability to combine focus, discipline and work processes with methodology to facilitate change. It was amazing to see the level of engagement among the teams and how we adapted to the different processes. I believe we are well on our way to success; we have made excellent progress in 26 weeks and there is potential to do so much more. Candido Frias Planning Director