Juha Saranen

Transportation Strategy in International Supply Chains: The Case of Russia

The purpose of the study is to provide knowledge on the transportation strategies employed in international lean oriented supply chains involving developing economies. In this research work we are interested about the situation in Russia. Five enterprises examined represent mostly international Finnish metal industry companies, having significant global presence and operations. According to the literature review, the functionality of transportation systems can in effect limit supply chain management principles available. International supply chains may be particularly vulnerable. In practice international supply chains in Russia need to compromise both in terms of leanness and agility. Currently, road transport seems to be a better choice to serve the requirements of customers in terms of frequency and speed as railways are considered reliable but slow. On railways, there seems to be room for enhancing efficiency by changing communication procedures. On road, custom procedures reduce efficiency, however, special permits needed for oversized loads increase transportation cost and reduce flexibility. In some products (e.g., after sales, spare parts) country level dedicated warehouses are needed to serve customer demands.

Evaluating the competitiveness of railways in timber transports with discrete-event simulation

Railway liberalisation in Europe started with UKs separation of railway operations and infrastructure in the mid-1990s. From the beginning of 2007 freight operations have also been operating under free competition in Finland, where freight volume is dominated by forest industry. New entrants will most probably try to utilise the volume of this largest sub-sector. In this study, we describe and evaluate a railway transportation concept for timber by using simulation. Results suggest that the concept could be successfully applied in the timber transportation market. Not only could it be competitive over current railway transportation distances, but possibly also over shorter distances now serviced solely by road transport.

Evaluating Light Rail as a Short Distance Passenger Transportation Solution in a Midsized Town

European Union regards railways as a safe and environmentally friendly transportation mode. One target of EU transport policy is to shift long-distance road journeys and short-distance air journeys onto railways. In local passenger transportation, rail is currently used only in larger cities. This study evaluates light rail as a local passenger traffic solution for a midsized town. The evaluation is based on investment appraisal methodology. In the case studied, the functionality of alternative routes is explored using discrete event simulation. Based on the results, the infrastructure investment of operating network required plays a pivotal role in determining the profitability of light rail public transportation system. Interestingly, environmental issues cannot justify light rail investments alone, even if significant changes would appear in operating environment.

Multimodal transportation risk in Gulf of Finland Region

Globalisation has resulted in larger volumes of foreign trade, especially in maritime transportation. No studies exist on how the maritime volumes could be handled, if the operational environment changes unexpectedly. The objective of this paper is to identify possible risks in transportation routes that use seaports in the Gulf of Finland and to evaluate the functionality of the transportation system under selected risk scenarios. Four system dynamics simulation experiments reveal that the impact of a spillage depends on concentration of resources and cargo types carried and highlight the importance of international cooperation.

The role of freight transport in railway network investment evaluation

Rarely are volumes of railway freight operations considered through Cost-Benefit Analyses (CBA) of infrastructure investments in European Union – despite the fact that freight volumes and shares in certain countries are high. The objective of this paper is to estimate the effect of specific railway network investment alternatives on the freight operator surplus. The results suggest that goods transportation cost should be included in the analysis, when evaluating railway investments. Not only would they play a pivotal role when choosing from among investment alternatives, but also a larger number of railway investments would be evaluated as socio-economically profitable.

Railway freight operator service and planning profile

Transportation contributes to a share of national income. Furthermore, improvements in transportation efficiency create room for accelerated economic growth. One target of the transport policy of the European Union (EU) is to promote railways as a safe and environmentally friendly mode of transportation. Stimulus for improving the efficiency of railways has been introduced recently, as the EU legislation has opened railway freight for competition from the beginning of year 2007 in all member states. The objective of this study is to explore the service profile and planning techniques used currently by railway operators. This is done by conducting an international survey. Although the number of responses was limited, the research provides new exploratory knowledge in current practices. Based on the results, operators typically rely on spreadsheet-based solutions for operations planning, while only larger operators use more sophisticated methods. In order to further improve the efficiency of railway freight services, we suggest that the cost of using simulation should be reduced.

Stochastic Elements in Transportation System Simulation - Unnecessary?

Abstract Discrete event system simulation is often seen as a genuine tool to investigate the performance of transportation systems. The complexity of real-world systems often prevents us from accurately describing these by a mathematical model that can be evaluated analytically, thus, simulation is often the only realistic alternative. Another advantage of the simulation is the ability to include statistical analysis for different simulation scenarios. Well-known approaches of incorporating uncertainty into models include trace driven simulations and sampling directly from gathered data. Another aspect to be taken into account is the economics of simulation modelling; a more detailed model requires additional building time, and proper treatment of stochastic models requires statistical analysis, which again usually implies several simulation runs. From this outset the following question arises: Should stochastic behaviour be included in transportation simulation models in the first place? We present real case examples including evaluation of the internal logistics of a beverage manufacturer, capacity analysis of an automatic guided vehicle system, cost benefit analysis (CBA) of a railway network investment and evaluation of different multipurpose railway wagons, where stochastic behaviour is dealt with in different ways. Based on the cases we make an initial attempt to formulate framework for deciding how to include stochastic behaviour in the simulation model. For further research topics we suggest formulating explicit guidelines to deal with stochastics to increase the efficiency of model building.

Evaluating Different Railway Wagon Alternatives for Timber Transportation by Discrete Event Simulation

Finland with Sweden is one of the most important pulp producing countries in Europe, and in paper production these two countries are accompanied with Germany and France as being most important countries of production. For the production of pulp, most important parts are (1) the quality and scale of production process as well as (2) cost efficient and high quality raw material. In addition to using its own raw material sources, Finland purchases wood from various different regions, including Russia. In a frequent number of cases raw material transports is completed with rail transports, especially in the case of Russia where distances are relatively long for transports (several thousand kms). Until now Russian timber has had a cost advantage in comparison to Finnish raw material. The availability of a cheaper alternative has also kept the price of domestic raw material at a relatively low level. However, Russia has announced a schedule to increase tariffs for timber exports. As a consequence the exporters of Russian timber need to examine and fine tune their cost structure of timber procurement to correspond to this new demanding environment. In this paper we examine the transportation cost of forest industry raw material using different types of railway wagons. The case network consists of four Russian terminals and two mills located in Finland. The evaluation is based on a discrete event system simulation model concentrating on timber transport within the case network in question. To make this evaluation even more interesting, Russian railway deregulation has its own special feature: Railway customers are allowed to own railway wagons, but nationally owned RZD owns the locomotives and charges for traction. Our research results show that the traction charge of RZD and competing road transport prices are the most influential factors, when determining the most cost efficient wagon type and network structure for timber transportation.Copyright