How Big Data, Predictive Analytics And Machine Learning Changed The Railway Industry
The ancient Silk Road, once the longest overland trade route, ran over 4,000 miles long. Today nestled in Eurasia’s heart along the Silk Road is the national railway company – Kazakhsthan Temir Zholy (KTZ). Though traversing across this historic pathway sounds rather cool, the complex geography and harsh weather conditions propose serious challenges in operating cargo and passenger transportation.
KTZ is a crucial part of Kazakhstan – the world’s ninth-largest country – and its economy. This railway company knew the importance of having a seamless operating model in order to maintain its current operations, both on and off the track.
Redesigning existing processes
To underscore how important KTZ is to Kazakhstan, it is the country’s largest employer with 115,000 employees and operating a rolling stock of 1,700 locomotives and a wagon fleet of 140,000+, transporting over 400 million tons a year. Looking to the future, KTZ saw it needed to reinvent inefficient manual processes that currently required months to complete and involved dozens of cross-functional departments.
KTZ required a system that would enhance planning processes at all stages – from accurately determining demand and production planning to setting realistic financial and strategic indicators that affect companywide performance. For this, KTZ leveraged SAP Innovative Business Solutions to create a single platform capable of processing vast volumes of cargo and freight data.
A railway system that not only looks at “Where To”, but also “What If”
The Integrated Planning System provided KTZ with “what-if’” scenario comparisons, an optimization model for wagon traffic routing, and managed revenue forecasting and KPI’s using a bottom-up approach.
“The Integrated Planning System brings KTZ’s planning to a whole new level with the introduction of innovative SAP technologies in the field of big data, predictive analytics, and machine learning,” said Dair Kusherov, Chief Financial Officer from KTZ. “SAP HANA allows KTZ to quickly process large amounts of data and perform complex calculations in real-time – something that seemed impossible until recently. The new system also serves as a powerful tool for making managerial decisions, timely responses to ongoing changes and factors affecting KTZ’s activities, and the industry overall.”
Full steam ahead
The creation of a single platform brought the following benefits:
- 15% increase in traffic flows with the potential for optimization leading to variable cost savings worth $7 million
- 40x faster annual and midterm planning, optimizing human resources, and allowing for prompt reactions to market changes
- 100% transparency throughout all end-to-end planning phases
With the creation of this single platform, KTZ now has the transparency needed across systems, allowing for continued improvements in operational and financial efficiency.
This article originally appeared on forbes.com To read the full article and see the images, click here.
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