Stephen Cowan - Pacific National - Innovating to achieve optimum efficiency in the Hunter Valley Coal Chain


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Stephen Cowan delivered the presentation at the 2014 Heavy Haul Rail Conference.

The 2014 Heavy Haul Rail Conference had a focus on driving efficiency with smarter technology. Australasia’s only heavy haul rail event is the annual meeting place for professionals interested in the latest projects, technologies and innovation in this dynamic sector.

For more information about the event, please visit:

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Stephen Cowan - Pacific National - Innovating to achieve optimum efficiency in the Hunter Valley Coal Chain

  1. 1. Australasian Railway Association Heavy Haul Rail Conference 27 – 28 August 2014 Pacific National “Transformation to Customer Service” Stephen Cowan
  2. 2. Our values 27/08/2014 2 SAFETY We‟re committed to getting our people home safely every day CUSTOMER Supporting our customers to succeed is at the heart of all we do PEOPLE & TEAMWORK Working together in partnership is how we achieve our goals PERFORMANCE Our decisions and actions focus on delivering superior performance
  3. 3. Australia’s Largest National Rail Freight & Ports Operator 27/08/2014 3
  4. 4. Pacific National at a glance 4 Approximately 41% AUSTRALIAN COAL EXPORTS Approximately 70% RAIL FREIGHT ON THE EAST-WEST AND NORTH-SOUTH LONG HAUL RAIL CORRIDORS 3,600 employees 581 locomotives 12,700 wagons 800 train services/week 156mt Coal, 24mt Bulk
  5. 5. Pacific National – NSW/Vic 5 1,860 employees 360 locomotives 5,300 wagons >300 train services/week 125mt Coal & Bulk 39 customers 22 Driver depots 11 Maintenance facilities
  6. 6. Integrated Service Provider 6 Revenue by market group Grain Construction & Infrastructure Short Haul Containers Minerals Coal •Broad span of market groups providing diversification •Ability to direct labour for peak demands •Recognised industry leader •Representation with regulators and industry bodies
  7. 7. Our Customer Environment 27/08/2014 7 •Lower commodity prices •Higher $AU •Increased production costs •Reduced demand •Environmental/Government hurdles •High competition markets Customer Environment •Reduced expenditure (infrastructure) •Focus on low cost operations •Downsizing (contractors, employees, sites) •Commercial pressure applied to Suppliers Impacts •Increased focus on efficiencies •Using multiple service providers (road/rail) •Increased focus on performance of service providers - Pacific National Result
  8. 8. Customer Survey – Customer Comments 27/08/2014 8 Just to improve on the speed of matters would be helpful Have some terrific people at PN Coal The bureaucracy and contractual control and lack of flexibility There are other companies that do it better ...put some energy into translating their words into outcomes They do not take ownership of issues in the coal chain They are trying to address the issues that we have had to raise It‟s always difficult to find relevant information The biggest not being flexible from an end supplier point of view The people I deal with are very good Big and arrogant...They need more innovation, more flexibility, more continuous improvement
  9. 9. Pacific National – Response Adapt, Innovate and Outperform Value for money – competitive market position. Performance and reliability – do what needs to be done Flexibility – adapt and change Innovation – technical and commercial Industry Participation – active engagement Customer Centricity – structure for Customer outcomes Outward looking Customer focus. 27/08/2014 9
  10. 10. Phase 1 – Customer Focus •Customer alignment •Customer engagement •Performance measurement •Operating mode Phase 2 – Performance •Focus on sustained performance •Shift Management Review •Asset Management plan •Industry Influence •Volume Growth Change Management Employee Culture & Engagement “The Transformation Program intends to transform the business into a high performing business that has an embedded safety, customer service, teamwork and performance culture.” Transformation
  11. 11. Customer Centricity 27/08/2014 11 In a customer-centric organisation, the customer is at the core of everything. All processes and company activity are done in support of what the customer is trying to accomplish
  12. 12. Transformation – Working Together 12 Our Objective To Safely Deliver the Customer Service Plan Competitive Advantage Delivery of superior customer outcomes in multi-user, complex supply chains. Differentiation through end- to-end capability, innovation, skills, knowledge, and experience.
  13. 13. Performance Focus Hunter Valley Coal Chain 13 Latent capacity released, cycle time reduced, variance to plan reduced 12% System Throughput Increase 80% Decrease in PN Unplanned Losses
  14. 14. Performance Focus Hunter Valley Coal Chain 14 Efficiencies and change in operating mode result in: • Reduction in cancellations and • Improvement in on time running
  15. 15. Turn Around in 12 Months Customer Comments - Positive 27/08/2014 15 We are Starting to Look Like This!!!
  16. 16. Changing Old habits, Old Culture…. ‣“You have to admit you have a problem before you can actually change or improve.” Breaking down the walls Creating a „One Team‟ culture ‣Working Together, One Team. One Plan, One Best Way ‣Monthly Interface meetings Clear accountabilities Centralised customer touch point – “Who‟s doing what?” Clear communication – internally & externally Honest, Open and Trusting 16 Working Together
  17. 17. Questions 27/08/2014 17