Generic railway strategies TOCs
train operator strategies
a research-oriented knowledge base for train operating companies (TOCs)
a research-oriented knowledge base for train operating companies (TOCs)
1.2 Industry value system
Primary value creating activity of the railway value system is with the provision of rail infrastructure. The provided rail infrastructure can be clustered in three major areas: Stations, tracks and specificities such as freight depots or bridges. The infrastructure manager is responsible for establishment and maintenance of the railways as well as for infrastructure capacity allocation (Arduin, 2011, p. 15).
Value chain step number two is the manufacturing of rolling stock. It can be clustered into passenger train and freight wagon fabrication. Because of its historic importance in the railway industry, numerous rolling stock manufacturers are present in Europe. An average life cycle time of a European passenger train is estimated to reach 30 years for high speed trains and 40 years for other rolling stock with several general overhauls in between. On other continents life cycles of trains are shorter. In Japan for example, high speed trains are estimated to run 15 to 20 years (UIC & Yanase, 2010, p. 11).
With continuous market liberalization new business opportunities arose aside traditional ones. Rolling stock financing and leasing concepts were added to the product portfolios of financial service companies and rolling stock original equipment manufacturers (OEM). Especially new entrants are often in the early days of their business establishment not able to afford high capital intensive rolling stock. With help of modern value system activities they are offered broader opportunities (Oxera Consultancies et al., 2011, p. 3).
Value chain step number four is the operation of trains by the train operating company (TOC). Train operations can be clustered into operations of freight wagons and passenger trains. Each operating company is required to be licensed, according to applicable legislation in the particular EU member states it is operating in (Arduin, 2011, p. 15).
Last last primary value creating activity of rolling stock maintenance is provided by OEMs and/or the TOCs themselves. The setup depends here on the historic development of the rail industry in the specific countries and the competences created at the OEM and TOC side.
Finally, the three necessary supporting functions of the rail value system can be named: The creation of industry standards, industry regulation as well as security and train homologation management.
Numerous players are involved when it comes to the creation of railway transportation services. Basically the purpose of railway transport can be differentiated between two major transportation motives: Shipments of goods and journeys of passengers (Seabright et al., 2003, p. 10). For both modes of transportation the underlying value system is quite similar. The designed value system contains primary and support activities and focuses on passenger transportation and helping to design generic railway strategies.
Primary value creating activity of the railway value system is with the provision of rail infrastructure. The provided rail infrastructure can be clustered in three major areas: Stations, tracks and specificities such as freight depots or bridges. The infrastructure manager is responsible for establishment and maintenance of the railways as well as for infrastructure capacity allocation (Arduin, 2011, p. 15).
Value chain step number two is the manufacturing of rolling stock. It can be clustered into passenger train and freight wagon fabrication. Because of its historic importance in the railway industry, numerous rolling stock manufacturers are present in Europe. An average life cycle time of a European passenger train is estimated to reach 30 years for high speed trains and 40 years for other rolling stock with several general overhauls in between. On other continents life cycles of trains are shorter. In Japan for example, high speed trains are estimated to run 15 to 20 years (UIC & Yanase, 2010, p. 11).
With continuous market liberalization new business opportunities arose aside traditional ones. Rolling stock financing and leasing concepts were added to the product portfolios of financial service companies and rolling stock original equipment manufacturers (OEM). Especially new entrants are often in the early days of their business establishment not able to afford high capital intensive rolling stock. With help of modern value system activities they are offered broader opportunities (Oxera Consultancies et al., 2011, p. 3).
Value chain step number four is the operation of trains by the train operating company (TOC). Train operations can be clustered into operations of freight wagons and passenger trains. Each operating company is required to be licensed, according to applicable legislation in the particular EU member states it is operating in (Arduin, 2011, p. 15).
Last last primary value creating activity of rolling stock maintenance is provided by OEMs and/or the TOCs themselves. The setup depends here on the historic development of the rail industry in the specific countries and the competences created at the OEM and TOC side.
Finally, the three necessary supporting functions of the rail value system can be named: The creation of industry standards, industry regulation as well as security and train homologation management.