Case study
Using simulation to improve rail network efficiency
When mining companies aim to increase their annual production, their railroads can often create a bottleneck in the supply chain between mines and ports. By using simulation to identify improvement opportunities in the rail network, companies can make variations to help sustain such growth in capacity.
$100M
Increase in Revenue
2-3%
Accuracy in produced KPI modeling
One of the world’s largest iron ore mining companies wanted to increase its production capacity by 30% over the next three years.
Business problem
One of the world’s largest iron ore mining companies wanted to increase its production capacity by 30% over the next three years, but expected it might cause rail maintenance problems and increased train delays. With trains becoming heavier, it could become unsustainable to maintain tracks, given the current network constraints. Also, with trains running more frequently, the existing signaling system could create extra delays in critical parts of the network. However, by making certain operational and infrastructural improvements, the company realized that it could maintain sustainable track health and reduce delays while achieving this higher capacity. The company hired Optym to identify improvement opportunities that would make its desired capacity increase a realistic goal.
Our approach
We used our network simulation system GeoSym® to perform this study and worked closely with the company’s analytical team to understand its business processes more deeply. Next, we modeled the simulation analysis behind our system to accurately represent the company’s operations. We validated the simulation model in GeoSym® by comparing its key performance indicators (KPIs) with real-world values and found the accuracy of modeling to be within 2%-3%.
Upon validation of the simulation model, we used our system to simulate the rail network for different capacity levels by measuring three variables independently: the number of cars, weight per car and braking system. We also evaluated the benefits of a number of operational and infrastructural improvements, including adding signals, crossovers, maintenance crew members and equipment. In our approach, we ensured that as volume increased in the network, the client could perform sufficient maintenance so track health wouldn’t deteriorate over time.
Key benefits
- GeoSym® determined the most problematic areas that were contributing most to the network’s inefficiency. The system demonstrated that adding a crossover in one of these areas improved rail capacity and increased annual revenue by up to $100 million.
- GeoSym® evaluated five potential locations for new signals and demonstrated that adding a signal at one particular location would further increase rail capacity and boost revenue by up to $100 million.
Results
GeoSym® accomplished even more than open up the dramatic revenue streams cited above. It identified some areas where maintenance could become unsustainable, due to maintenance resource constraints or limited track access. Optym recommended where changes should be made in the network and at what capacity levels, so the client’s investments would yield optimal results.
