The success of Ahaus Alstätter Eisenbahn (AAE) began in 1992 with 6 employees and 3,000 freight cars. Today, 100 employees put 23,000 cars in motion – the largest fleet of standard freight cars in Europe – to transport all sorts of goods to their destinations. AAE got on the right track at the right time: the development and rental of standard freight cars to European railroad companies and logistics firms.
Before the liberalization of the railroad markets at the beginning of the 1990s, the business was hardly dynamic – long-term contracts set the price for renting railroad cars. Today, prices are market-oriented, and there is strong competition in the manufacturing and rental sectors. AAE got into the business early, which gave it a valuable competitive advantage. Almost all European railroads that transport goods on railroad tracks now use cars from AAE. The company’s customers include Railon Deutschland, SBB Cargo, Trenitalia, BASF, HUPAK, and Kühne & Nagel.
“Because only a few suppliers were interested in renting freight cars at the beginning of the 1990s, AAE was able to achieve a market share of almost 20 percent. Construction of freight cars has since become much more expensive. That makes it difficult for new companies to create a large fleet at competitive prices,” says Dirk Goyvaerts, who is responsible for strategic projects at AAE. Even with new equipment, AAE has a market share of 15–20 percent and can handle increasing demand.
The market moves extremely fast. Suppliers of freight cars must react on short notice and get the right car to the right place at the right time – either to a customer or to a repair facility. At the same time, all maintenance work, including cleaning, repairs, overhauls, and refurbishing, must occur quickly and as simultaneously as possible to keep control of prices and limit downtime. AAE uses professional services to achieve a fleet utilization rate of more than 97 percent.
Taking IT off the siding
In some ways, the IT department threatened to push the company onto a siding. IT consisted of a heterogeneous software landscape, and each department had its own programs. The insular solutions were not integrated, so employees in different departments frequently captured the same information. Inconsistent data, misunderstandings, and delays were unavoidable. AAE could map its important business processes only with tremendous effort.
It was impossible to see in real time which cars were available for rental. If a customer changed a return date, employees had to adjust the follow-up reservations and contracts, which demanded a lot of effort. Even the development of freight cars was isolated from other processes. It was almost impossible for rental agents to consider the availability of new cars or to trigger the required maintenance work on returned cars. Because maintenance was based on various Microsoft Excel files, reconciliation demanded a great deal of work. Order management had no transparency because each order – a new or extended rental, a return, maintenance, and repair – was handled separately. The lack of synergies led to lost time and unnecessarily long downtime.
Innovation gets on board
AAE had enough reason to get its IT onto the right track with new enterprise software. After a lengthy selection process, AAE decided on SAP ERP. “Ultimately, the standard application already supported the majority of our business processes. We needed supplemental development only for scheduling freight cars. When compared to other solutions, that approach minimized the project’s risk,” says Goyvaerts. Step-by-step implementation of the software in accounting, fleet management, maintenance, and materials management went seamlessly. As of July 2007, the entire company works with a completely integrated application.
During the project, AAE worked closely with Swiss IT service providers SAP Stäfa and emineo. Based on the specialists’ recommendation, AAE also implemented SAP NetWeaver. Originally implemented as the technical foundation of Web-based applications for fleet management and car scheduling, SAP NetWeaver now functions as the integration platform for reporting. In the future, it will support maintenance facilities to call and process maintenance orders over a portal.
Signals set for growth
Setting a new direction for IT has been worth it. Because SAP ERP integrates all data, processes, and departments, integrated and efficient work is now possible. For example, the fleet manager can now see at a glance what cars are needed when and can create a preliminary plan months in advance. Changes triggered by rental contracts then flow into the plan automatically. The overview improves availability of the cars, and AAE earns more revenue and achieves better customer satisfaction.
AAE can also plan long-term maintenance ahead of time, which means that it can perform related tasks at the same time. AAE thereby avoids downtime, cuts costs, and increases profit. Integrated materials management lets users know exactly which spare part was used in a specific repair order and for which car. Almost 100 percent of costs can be assigned to a specific order. The advantage is obvious. “AAE can exactly analyze where specific costs arise, and consider the results in the strategic direction of the company,” emphasizes Goyvaerts.
The company is already planning a follow-up project to improve the most important processes even further. And AAE is also considering implementation of the SAP NetWeaver Exchange Infrastructure component. In the future, external business partners will be integrated and important tasks automated, including distribution of maintenance orders, ordering spare parts, and activity billing.