Reduce Train Yard Derailments

Industry : Transportation of Manufactured Goods

Company Type : Paper Products

Project Title : Reduce Derailments

Tools Used : Six Sigma DMAIC Process and Project Coaching; Statistical tools and Process Control

Total Savings : Approximately $500K in Overtime costs, Way maintenance and Railcar damage on a yearly basis.

• Reduction in investigation and meeting costs
• Reduced risk of injury and environmental damage.
• Controls in place to maintain and continually improve reduction of derailments.

Problem Statement

Derailment costs are too high, with the average number of derailments per shift in 2004 in XX Yard at 0.015 and this trend has continued in 2005. Current Sigma level is 2.161

Goal Statement

Reduce XX yard derailments by 30% to .010 derails/shift resulting in $195,000 annualized savings. The resulting Sigma level would be 2.3 with a Spec level of Zero derailments.

Business Case

The majority of our goods are initially transported by rail and they often have to be sent to a switching yard for consolidation with other railcar goods and could also be segmented to be attached to different engines depending upon final destination. Derailments at the yard are a major productivity loss plus a huge safety risk. This also could mean that our customers do not receive their goods on time.

Derailment costs will total $700,000 in 2005 if nothing is done. These costs include extra overtime, additional maintenance to track ways, investigation costs and railcar repair costs.

Project

Root Causes are proven

1. It was discovered that the number of derailments were dependent on the Railyard the goods were delivered to - This allowed the team to focus on one particular railyard.
2. Analysis of the data showed that 72% of the derailments were a result of track defects.
3. Further analysis revealed that 45% of the derailments were the result of some type of switching issue.
4. A detailed analysis of all the different tracks revealed that the majority of derailments happened on 3 separate tracks.

Remedies identified with Controls in Place

1. Maintenance of Way (MOW) equipment was reassigned to the yard and tracks that had the most derailments.
2. Specialized training provided by Railroad staff to XX Yard MOW staff for welding and switch and rail maintenance
3. Track repair staffing was increased and monthly switch inspections were established.
4. A detailed maintenance plan was developed for gauging of track, switch repair or replacement, etc.
5. Track incidents (derailments, defects, and cost) were added to the monthly scorecard as a means to control and sustain the gains

Summary of Results

After 3 months of the remedies being in place, derailments were reduced by 70% from .015 to .004 derailments per shift.

The cost savings for 3 months was $125,000 for an annualized rate of $500K per year. The other key benefits were safety related and customer service.

The Six Sigma methodologies and tools were applied to analyze this difficult problem and alternative solutions were generated. The data moved the team in the right direction and greatly assisted them to identify the true causes so that lasting solutions could be implemented. The important Control Plans were then put in place to insure that all solutions would be maintained.

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