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Short-term funding cycles and lack of continuity holding back rail innovation

The lack of a long-term vision, short-term funding cycles and the one-off nature of rail projects are major barriers that must be overcome to encourage innovation in the rail sector, a panel of industry leaders said.

During the supply chain engagement platform at Infrarail, Martin Buck, transition and strategy director at Crossrail, stated that there is no doubt rail is light years behind other industries, such as aerospace.

“Some of that, particularly on the project side, is that a lot of our relationships between clients and contractors are transactional and are one-offs,” he said.

“One thing that innovation is and needs is continuity and the ability for organisations making investments to see their returns coming forward. We need to try and create some continuity by creating longer term business-to -business relationships between clients and contractors.”

Nick Elliott, managing director, National Supply Chain at Network Rail, added that the lack of a long-term vision has held rail back. Additionally, he said there has been a disconnect between the infrastructure and rolling stock parts of the industry, something which he says must change as the country moves towards a Digital Railway.

He added that the Rail Supply Group’s (RSG’s) strategy is a good starting point for helping to deliver change in the future.

Iain Roche, head of innovation at HS2 Ltd, who was previously head of innovation at Rolls-Royce, said he was happy to see that the RSG strategy is trying to remove a lot of “unnecessary barriers” to fostering innovation.

“Short-term funding cycles drive a certain set of behaviours which are, guess what, near term focused,” he said. “Having a strategy for the longer-term view and aligning funding, and the clients getting behind that vision are critical. That is where HS2 are in a strong position because we’ve got longevity.”

Having only been in his position at HS2 for six months, Roche added that in comparison to other industries the rail sector is “mind-numbingly complicated” for companies trying to innovate and bring new products to the market.

“I'm pleased with the RSG strategy, which is trying to remove a lot of barriers and create some of the enablers that make it much easier for us to collaborate together,” he said.

Roy Freeland, RSG council member and SME Lead, told the audience that there are a number of challenges to overcome in the future, but it takes time for change to happen.

“There are payment issues, and the small business commissioner has been promised by the government to help that,” he said. “There are funding issues and the RSG is trying to tackle that with the Finance Birmingham funding initiative to help SMEs get into the industry.

“There are hurdles, it takes time, there are complexities, there are regulations and standards. There are UK standards and EU standards and all of these are a much bigger challenge for smaller companies than they are for larger businesses.”

Full coverage of the supply chain engagement panel discussion, and the latest RSG announcements, will be in the April/May 2016 edition of RTM.


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