The development of efficient railways calls for the use of advanced methods to fully understand the influence of the cost contributors to the Life Cycle Cost (LCC) of the total operation. The development of a LCC approach can assist the introduction of harmonised rules that ensure economic and safe maintenance of rolling stock outside the home network.
CRMA aimed to contribute to the development of a LCC methodology where the information required to perform calculations, i.e. availability and reliability details, operational requirement specifications and cost contributors, is clearly identified in a way acceptable to all parts of the railway business.
Experiences in railway and other industries have shown that the motivation for introducing LCC techniques is commercial and mainly due to increasing competitive pressure to reduce costs.
Results from the railway industry show that there is limited application of LCC techniques. These are generally used to ensure that equipment meets the reliability, availability, maintainability, safety (RAMS) and cost performance requirements agreed by the contract, as well as to develop maintenance plans in order to minimise the total cost of operation.
Results from non-railway industries show that the application of LCC procedures is a lengthy and costly process. Strong mutual links between supplier and user especially with regard to data exchange, the need for cultural change within the company, strong and skilful top management involvement and the measurement of progress are cited as key requirements for success.
The initial uses of LCC techniques in the railway sector identified some problems relating to the RAMS terminology and the financial analysis of the results. A test on a freight braking system carried out in CRMA has shown the need to take a total system approach as well as the links between vehicle costs, operational issues, safety, infrastructure costs and environmental issues.
Good assessment of costs is part of an overall strategy to put interoperability as a standard for working and to improve the return on investment of the European railway network. Regulations that govern the international interoperability of vehicles need to be reviewed to ensure that they provide for the lowest cost of maintenance of vehicles and greater utilisation.
Together with a need for harmonising definitions and methodology used for LCC calculations, using the same terminology, definitions and financial assessment criteria, it would be beneficial to introduce a standard LCC method to give consistency in a similar way to that achieved by quality assurance programmes.
The terminology definition is being addressed by the development of CEN standards, though care is to be taken to ensure consistency between the various working groups. The limits of the services and responsibility of each actor should be clearly stated to ensure and guarantee good relationships between them.
Further use of LCC techniques needs to take a system view so that major items of equipment are not sub-optimised to the detriment of the system overall. The UIC intends to apply LCC techniques on a wide spectrum of activities in order to achieve reduced costs, greater efficiency and larger market share.