The first railway in Germany was built in 1835, going hand in hand with the first industrial revolution. It is quite remarkable that 182 years later—in the era of so-called “Industry 4.0”, characterized by increasing automation and the rise of artificial intelligence—taking the train still feels like a largely analog experience.
The long-term vision for the future of rail, however, is one of a fully digitized experience: trains will be “intelligent” and fully connected with the infrastructure, using sensor technology to monitor themselves and the track; they will be fully automated, maximizing the railroad’s capacity in real time, while maintaining highest security standards. Intelligent breaking systems and preventive maintenance will increase energy efficiency and asset lifetime. Information flow will be highly digitized: data will be shared with passengers in real time, and freight location and condition can be tracked at all times.
Granted, this vision is still far from being realized, due to ongoing technological development, costly new infrastructure as well as regulatory challenges, especially in Europe where cross-national standardization has to be taken into consideration. Nevertheless, many railway companies have made digitalization one of their top strategic priorities—including Deutsche Bahn (DB), the largest railway and infrastructure operator in Europe. In 2015, as part of “DB 4.0”, the company launched six initiatives—Mobility 4.0, Logistics 4.0, Infrastructure 4.0, Production 4.0, IT 4.0, and Work 4.0—to foster digitalization along its entire supply chain. It committed to pursuing more than 150 individual digitalization projects, investing €1 billion in digitalization by 2018. In past years, DB has faced increasingly competitive pressure—due to liberalization of distance coach travel, low fuel prices and tolls benefiting the trucking industry, and various sharing models on the rise. This has augmented the urgency of digitalization, promising to decrease cost and increase efficiency as well as capacity, at maximum safety.
Especially in the area of asset and infrastructure maintenance DB has been an industry innovator, introducing both the usage of 3D-printed spare parts as well as preventive maintenance. With over 40 partners, including Siemens, DB launched the initiative “Mobility goes Additive.” Between the end of 2015 and mid-2017, DB had already 3D-printed 1000 spare parts, aiming to double this number by the end of 2017 and to increase it up to 15,000 by the end of 2018. 3D printing is faster and cheaper than traditional procurement, thus shortening the supply chain and rendering it more cost-effective. Furthermore, 3D-printing offers the opportunity of on-demand delivery, rendering large warehouses and spare parts inventory obsolete, while shortening lead times and thus decreasing downtimes of trains. Finally, 3D-printing allows to continuously innovate and adapt part designs, decreasing material waste and product weight, which in turn reduces the attrition of rail infrastructure, leading to further cost savings.
Moreover, DB partnered in 2016 with Siemens (passenger transport) and GE (freight transport) to increasingly rely on preventive maintenance technology.Using smart sensor technology and intelligent algorithms, potential problems can be recognized and fixed before they occur, reducing the fault rate of parts. This decreases the need of spare parts supplied as well as downtime, realizing further cost savings along the supply chain.
Looking ahead, I believe it is critical that the entire supply chain and procurement process be digitized. While technologically innovative initiatives like 3D-printing and preventive maintenance can improve the supply chain, full cost-saving potential will likely only be realized if they are embedded into a company-wide shift towards automatizing and digitizing procurement processes, including ordering, bill passing, and payments.
Finally, while DB has recognized the urgency and potential of digitalization, I worry that it has neglected investing in the necessary cultural shift within the organization. For months, DB has tried to fill the new position of a Chief Digital Officer. Although a highly qualified candidate has been identified, she still has not been officially tapped—due to politics and internal quarrels. I believe the organization is currently lacking the necessary prioritization of those 150+ identified digitalization projects and alignment across its business, leading, for instance, to installing separate preventive maintenance systems from Siemens and GE instead of standardizing them across business units. I believe this will be critical in actually realizing the expected gains from digitalization.
While DB’s passenger transport service increased slightly, by 1.1%, in 2016, DB lost 3.8% in freight transport over the same period of time. Will DB be able to reverse the industry trend, specifically in freight transport thanks to increased digitalization and cost reduction? Are 3D printing and preventative maintenance actually scalable across the entire business and will produce sufficient cost savings? How should DB prioritize further digitalization needs on the path to DB 4.0?
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 Joris d’Incà, Tom Reinhold, and Tobias Sitte, “Taking Rail Virtual through Digital Industry,” Transport & Logistics, Oliver Wyman (2016): 4-6.
 “Sechs Initiativen treiben Digitalisierung voran,” Deutsche Bahn, accessed November 15, 2017, http://ib2015.deutschebahn.com/ib2015-de/konzern-lagebericht/trends-und-strategie/strategie-db2020/sechs-initiativen-treiben-digitalisierung-voran.html.
 Manuel Gerres, “Seizing the opportunities of digitalization,” Global Railway Review, May 10, 2017, https://www.globalrailwayreview.com/article/34008/seizing-opportunities-digitalisation/.
 Nye Longman, “Deutsche Bahn AG,” Supply Chain Digital, Feb 23, 2016, http://www.supplychaindigital.com/company/deutsche-bahn-ag.
 “DB in 3D: Bahn revolutioniert die Instandhaltung,“ Deutsche Bahn, May 15, 2017, http://www.deutschebahn.com/de/presse/pressestart_zentrales_uebersicht/14123352/h20170515.html.
 “A Print-on-demand Manufacturing Plant,” Siemens, August 19, 2016, https://www.siemens.com/innovation/en/home/pictures-of-the-future/industry-and-automation/additive-manufacturing-spare-parts-for-the-rail-industry.html.
 Linda Gondorf, “Chaos bei der Deutschen Bahn: Warum es immer noch keinen Digital-Vorstand gibt,“ Absatzwirtschaft, November 1, 2017, http://www.absatzwirtschaft.de/warum-es-immer-noch-keinen-digital-vorstand-gibt-117061/.
 “Wettbewerbskennzahlen 2016,“ Deutsche Bahn, May 2017. https://www.deutschebahn.com/file/de/11877804/tKnxZUc-BRbHdgq6BgklSOhMoIA/14625258/data/Wettbewerbskennzahlen.pdf.