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Proceedings of 24th International Scientific Conference. Transport Means 2020.
Logistics Potential of the Railway as a Key for Sustainable and Secure
Transport Development
N. Chornopyska1, K. Stasiuk2
1Lviv Polytechnic National University, Bandera street 12, 79013, Lviv, Ukraine, E-mail: chornopyska@ukr.net
2Lviv Polytechnic National University, Bandera street 12, 79013, Lviv, Ukraine, E-mail: kuzyk.katheryna@gmail.com
Abstract
The railway should be considered as a basis for a sustainable and secure society. More than ever, rail proves to promote
economic development, sustainable mobility, environmental protection and international integration. Logistics potential
is one of the defining features of railway transport. Logistics potential is a system of complementary components that
characterize the capabilities of the investigated object and can be used to justify strategic directions for development.
The research goals include justifying and interconnections building for a system of indicators forming enterprise
logistics potential to help with decision making considering sustainable and secure transport. The paper presents a
comprehensive component interconnections system for the logistics potential of railway enterprises. Logistics potential
assessment allows identifying reserves for efficiency and effectiveness improvement for the railway enterprises and the
railway industry as a whole; influences the development prospects for the industry in the light of current trends.
KEY WORDS: sustainable transport, secure transport, railway enterprises, logistics potential of the railway,
Enterprise logistics potential index (IELP)
1. Introduction
The sustainable and secure society development is considered a high priority throughout the world. World-
famous European Horizon 2020 program is one of the tools to ensure a sustainable and secure society [1]. This initiative
supports research and innovation aimed at developing a sustainable and secure society. One of the contemporary
societal challenges highlighted in this program is smart, intelligent, green, secure and integrated transport creation. This,
in turn, will ensure a competitive European transport system creation that will incorporate resource efficiency,
environmentally friendliness, security and integration for the benefit of the economy and society as a whole. The
railways should be considered the heart of the transport system for a sustainable and secure society. In line with the
vision developed in Horizon 2020, rail in a safe and sustainable society has the following basic qualities:
competitive in the price-quality ratio;
eco-friendly (key for environmental issues addressing: greenhouse gas emissions problem, air pollution
reduction, energy security achievement);
primary in other transport types interaction chain;
indispensable for economic growth supporting;
the largest socially responsible employer;
progressive in digitalization area.
Considering the railways importance for a sustainable and secure society ensuring, the question of finding ways
for making strategic, rational decisions is urgent. One of the defining methods is logistic potential assessment. The
logistics potential assessment practice is widely used at the macro level for countries, regions, supply chains and
industries assessment, but it is equally important for the micro level as well, namely for the enterprises evaluation.
Studies demonstrating some issues regarding logistical capacity assessment: country [2, 3], region [4, 5], supply
chains [6, 7], enterprises [8, 9]. However, many problematic provisions have remained out of the researchers’ scope,
and therefore require further research. The available logistical potential magnitude measuring issues and the level of its
usage by enterprises have not been sufficiently developed.
2. Research Methodology
Alternative methods for evaluating logistics potential include expert, rating, index and statistical ones. There is
an international system for evaluating the logistic efficiency index used to evaluate the logistics services market
development level - Logistics Performance Index (LPI) [10]. The expert method was used as a basis for this study. Top
countries in this rating use more sophisticated statistical and dynamic methods for logistics potential assessment locally.
Taking into account the peculiarities of railway enterprises, the authors propose a method of logistics potential
evaluation that incorporates statistical and expert estimations. Logistics potential evaluation method for railway
transport enterprises is proposed and described in detail by the authors in the article [11]. In the study a system approach
was used to represent railway enterprise logistics potential index as a coherent system, and component interrelations for
this index system have been substantiated.
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3. Results
Railway enterprises logistics potential evaluation system is a complex and composite process involving a set of
interrelated and complementary elements including: subject; object; purpose; principles, criteria; indicators; units
(scales) of measurement; methods; evaluation decisions; results.
Schematically, a railway enterprises logistics potential evaluation system is presented in Table.
Table
Railway enterprises logistics potential evaluation system
System components
The issue to address
Characteristics
Subject
Who needs an indicator assessment?
Business owners;
Enterprise Management;
Cross
-industry competitors;
Investors;
Business partners;
Transport industry
participants;
State leadership;
International organizations.
Object
What to evaluate?
Railway enterprises logistics potential
Purpose
What is an evaluation purpose?
Obtaining practical tools for making sound
management decisions.
Information support
What information sources are to be
used
?
Internal (enterprise reporting);
External
(
expert assessments, public reports,
transportation journals)
Principles
What principles are prioritized in the
evaluation process
?
Systematicity;
Objectivity;
Complexity;
Co
nsistency;
Informative unity;
Accessibility;
Simplicity;
Hierarchy;
Integrity;
Specificity;
Effectiveness.
Methods
What methods are to be used?
Formalization;
Analysis;
Synthesis;
Statistical studies;
Expert Surveys.
Indicators
What to use for evaluation?
Quantitative: absolute, relative, complex, statistical;
Qualitative: expert assessments.
Railway enterprises logistics potential evaluation system components integrity and coherence is highly important
for the interpretation of the correct results. Logistics potential components reflect permanent significant cause and effect
relationships. All the constituent elements interact and influence each other. The components interconnections system
for the railway enterprises logistics potential is represented schematically (Fig. 1).
Components interconnections detailed explanation for the railway enterprises logistics potential.
К1-К1: The technic- technological component is the basis for enterprise competitiveness ensuring based on the
technical and production potential development. This component implies stable engineering and technical support
operations, which together form up the enterprise material and technical base and provide all the requirements for its
work. State of technical and technological support, in particular the number of rolling stock in operation, the number of
active railway stations and terminals, modern information technologies affect the actual transportation possibilities,
their intensity and the maximum possible transportation distances.
К1-К2: High performance of the technic-component ensures positive results for the economic component.
Sufficient rolling stock and proper operation of railway stations, improvement of equipment performance and quality,
use of advanced materials and processing technology improvement - all these factors make it possible to maximize
demand, affect the profit making process and contribute to investment climate improving.
К1-К3: The rolling stock condition and railway stations have an impact on environmental performance: pollution
and traffic safety. Outdated rolling stock provide negative environmental pollution and traffic accidents high likelihood.
Railways transport is considered to be one of the most environmentally friendly compared to other transport types, but
the technic-technological component state requires modernization to reduce noise, vibration and pollution of air, water
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and soil.
К1-К4: High-tech enterprises require appropriate competencies from employees. Modern rolling stock,
technology upgrades, IT solutions require new competencies for employees to operate, maintain and repair properly.
Fig. 1 The components interconnections system for the railway enterprises logistics potential
К1-К5: The rolling stock condition, its reliability and quantitative support, optimal transportation routes, well-
organized work of stations and technological support of transportation have an impact on the company quality
indicators, namely services provided timely, fully implemented and without errors.
К2-К2: Railway transport development is the basis for country's transport system, is a prerequisite for all sectors
of the economy effective functioning and contributes to economic growth. The economic component prioritizes the
state of the enterprise and reflects the main purpose of any profit-making enterprise. It also determines the pace of
enterprise development, its level of competitiveness, investment climate. Economic indicators determine the future
expansion or production modernization conditions, the creation of industrial, social infrastructure, opportunities for the
personnel competencies development, servicing conditions quality improvement, the enterprise eco-responsibility
promotion.
К2-К1: All technic-technological solutions (updating and modernization for rolling stock, railway stations,
terminals, etc.) require investments attraction and proper development. The greater the investment and profit of the
enterprise, the greater the opportunity to improve the technic-technological component state.
К2-К3: The enterprise high economic results make it possible to invest more in environmental solutions. The
enterprise high economic results indicate large transportation volumes, therefore the harmful impact on the environment
increases. The purpose of the company is to strike a balance between economic and environmental components.
К2-К4: First thing to consider: the company is under the person’s leadership. Performance, enterprise
development influences the employees development, expansion and improvement of their competencies. Businesses
should create working conditions that would ensure a rational work organization, take into account the personnel health
and safety conditions, and enhance the employees’ professional competences. Costs that contribute to improving human
productivity can be considered as investment for the enterprise itself.
К2-К5: An enterprise with positive economic indicators, attracted investments, provides quality services
accordingly.
К3-К3: Innovative technologies in the field of ecology are increasingly taking precedence over the consumer's
attitude to the environment on the railways. The environmental component involves the complete transformation for
enterprise strategies, processes, and supply chain participants structures in accordance with resource-saving, energy-
efficient and environmental technologies. Key guidelines for railway enterprises include providing smart, safe,
sustainable and green transport. Rail transport is in dire need of innovative technologies that would improve
environmental safety, quality and reliability of operation, and traffic safety. Greening is the railway enterprise ability to
ensure rolling stock, infrastructure and resources usage while preserving the natural environment and reducing the
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transportations negative impact on it.
К3-К1: Eco-solutions introduction require enterprises technic-technological component modernization and
updating and introduction of resource-saving and energy-efficient technologies. For example, the atmospheric
emissions reduction from diesel locomotives can be achieved by railway sections electrification (switching from diesel
locomotive traction to electric), noise and vibration reduction through rolling stock and infrastructure upgrades.
К3-К2: Achieving a balance between economic and environmental components is the goal of modern businesses.
Adherence to international environmental standards increases the investment attractiveness of the enterprise.
Environmental focus is a trend today that affects reputation and therefore directly affects economic performance.
К3-К4: One of the most important problems for the environmental component is the lack of qualified specialists
in the area. New trends and eco-solutions introduction require specially trained employees in the field: green logistics,
sustainable and safe transport. It is necessary to improve employee skills in the field of environmental protection and
use of natural resources. In addition, the positive environmental component results imply moral and material incentives
for employees for environmental protection activities.
К3-К5: Environmentally safe services provision.
К4-К4: In the context of railway reforming, the competencies of logistics and Supply Chain Management
specialists are extremely important; they can take rail to a new level. The basic standards of professional competence
are described in the European Qualification Standards for Logistics Professionals, developed by the European Logistics
Association (ELA) and recognized worldwide [12]. ELA standards are updated regularly to meet new market trends.
When competence component is analyzed, the basic principles of ELAQF Qualification Standards for logistics
competence were used.
Investments in human capital development are actions that enhance workers professional skills and productive
abilities and thus affect labor productivity. In the long term, employees receive greater income and greater job
opportunities from upgrading their skills. Concerning the enterprise benefits, they include competitive employees,
introduction of new technological, environmental solutions, improvement of economic results and services quality.
К4-К1: The components relationship is characterized by the principle understand the impact of technological
innovation on supply chain design. investment in human capital is a qualitatively new workforce creation with a high
level of qualification, knowledge of modern technologies and ability to perform work of greater complexity. Specially
trained employees easily master and implement new technic-technological solutions.
К4-К2: A potential attention is given to the principle understand leading and lagging Key Performance
Indicators (KPIs). The human capital improvement and development is a key for enterprises economic situation
improvement. Railway workers who are highly skilled, flexible, ready to develop their lifelong competencies and able
to adapt to different production conditions are a necessary element for economic goals achieving both for railways and
the country as a whole. Costs for human capital development should be considered as investments because such
expanses will result in increasing future revenue.
К4-К3: The primary principle is Implements sustainable transportation management programs and understand
how sustainability might impact on the supply chain. Highly qualified ecology workers introduce modern eco-solutions,
adapt world eco-practices to national rail transport. Ecological control over production processes and industrial zone
conditions is carries out in each subdivision.
К4-К5: The principles of customer service are followed, in particular understand use social media in customer
service processes. The current quality management system has significantly changed the educational requirements and
employee competencies. Employees who do not cease to develop and improve their professional competencies
implement modern effective solutions in the company, timely and clearly carry out their direct responsibilities, help to
improve general level of stuff effectiveness.
К5-К5: The rail transportations quality is considered as a combination of entities and objects of rail
transportation throughout the transport chain to meet the needs of consumers.
К5-К1: Meeting the international and domestic service quality standards requires an appropriate level of
technical and technological support. Rail transportations quality is determined by the compatibility of infrastructure,
rolling stock and information technology.
К5-К2: Quality services ensure high economic results in the enterprise.
К5-К3: Modern quality services are not only technologically clear and effective, but also those that meet
environmental standards and requirements.
К5-К4: The highest quality requirements for employees: understand customer service procedures; Use Key
Performance Indicators (KPIs) to measure customer service; understand multichannel communication with the client;
understand the basic functions of customer relationship management (CRM).
К1-IELP: Technical and technological provision as a whole ensures all the enterprise operation.
К2-IELP: Ensuring the economic situation of the industry and the market as a whole.
К3-IELP: Environmental safety prioritizing and adherence to environmental norms and standards in transport,
promotion of energy-saving technologies.
К4-IELP: Personnel potential is an indispensable component in achieving positive performance.
К5-IELP: The qualitative indicators system characterizes the efficiency level of the logistics system.
IELP –К1: Opportunities for upgrading / updating technic-technological components.
IELP–К2: Impact on enterprise economic performance, investments attraction, usage of transport resources in
accordance with market demands.
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IELP –К3: Adoption and implementation of international environmental standards.
IELP –К4: Perspective of the entire industry and, accordingly, the growing weight of the professional
competencies in logistics and Supply Chain Management.
IELP –К5: Meeting the demand for providing quality of logistics activities.
The logistics potential evaluation system interconnections for railway enterprises have been fully identified and
described.
4. Conclusions
Among all the components of the railway enterprises logistics potential Secure&environment component (K3)
should be considered a key one for sustainable and secure transport development. However, the pairwise
interconnections for all the components identified in the study testify to the coherence and integrity of the railway
enterprises logistic potential system. In the economy, such connections generate synergy - the various components and
metrics so greatly affect each other that they can achieve more in a complex than their individual usage with the same
purpose. The synergism presence and the ability to manage these effects creates a specific competitive advantage that is
implemented at the enterprise or industry level as a whole. Such a compatible impact must be taken into account in the
enterprise management system and adjusted to the enterprise’s strategic goals, so research plays an important role in
building an effective enterprise management system.
Considering the fact that a combination of elements and components is used for railway enterprises logistics
potential evaluation, the synergistic effect is of strategic importance here.
Therefore, the manifestation of a synergistic effect in logistics potential evaluation for railway undertakings
means that the level of logistics potential (IELP) is provided by:
opportunities realization for new technologies implementation;
long-term economic results;
sustainable and secure transport development;
demanded professional competencies in logistics and Supply Chain Management;
continuous improvements affecting services quality - the key to success in competition.
When railway enterprise logistics potential is evaluated, a properly organized system approach is of great
importance: some set of components that are focused on achieving one common goal is to be identified, connections are
to be evaluated, a system is to be build, for which a principle of synergy is applicable and result in a qualitative increase
in logistics potential.
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