Mobility 4.0 at Deutsche Bahn AG 16 th German-Taiwan Joint Business Council

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1 Mobility 4.0 at Deutsche Bahn AG 16 th German-Taiwan Joint Business Council Niko Warbanoff CEO DB Engineering & Consulting & Head of International Business Relations Deutsche Bahn AG 22 September 2016

2 We are facing the most radical CHANGE since Rail Reform. 2

3 Digitalization The Group's 260 digitalization projects are organized in six 4.0 initiatives Mobility 4.0 This initiative works to design new products with a focus on customer centricity, based on different scenarios for developments on the digital mobility markets. It also works to establish a strong culture of innovation as a foundation. Working Environments 4.0 This initiative centers on overarching topics involved in working, communicating and learning. Potential future scenarios are drawn up for job profiles. Logistics 4.0 Production 4.0 This initiative uses big data and smart assets to develop a product portfolio for the future, digital customer interfaces and web-based production processes. This initiative focuses on the automation and digitalization of rail operations and maintenance. Infrastructure 4.0 This initiative focuses on digitalization in infrastructure: end-to-end connectivity with customers, digital process improvements and the creation of new business models. IT 4.0 This initiative works to develop a smart, agile, effective, efficient and reliable IT landscape for DB. 3

4 Mobility 4.0 DB Navigator is already one of the most popular travel apps in Germany Examples from DB Bahn Online ticket Mobile phone ticket Call a Bike app DB Navigator Flinkster app 4

5 Mobility 4.0 Further examples: WiFi-Services and ICE-Portal 3G/4G 3G/4G 3G/4G WiFi Direct connection Repeater WiFi Immediate reception of mobile signal, depending on rolling stock design Strengthening of outside signal, and passthrough to passengers mobile devices (voice, data) Creation of a WiFi network inside the train, optional free log-in (data only) ICE-Portal Immediate reception of mobile signal, depending on rolling stock design 5

6 Infrastructure 4.0 Building Information Modelling (BIM): build digitally first and then only in reality 6 Renewal of Hanover Main Station; Dr. Katja Maaser

7 Infrastructure 4.0 Our elevators and escalators are connected to a digital remote maintenance system Implies faster elimination of faults because spare parts and the right tools can be directly brought to the site In future DB will be able to monitor all 3000 elevators and escalators Project example: ADAM 7 Renewal of Hanover Main Station ; D Katja Maaser

8 Infrastruktur 4.0 Use of digitalisation to improve infrastructure availability (e.g. with remote diagnosis tool DIANA ) Project example: DIANA Availability of telecoms components Availability of signalboxes overhead line predictions Modular bearer Monitoring of points Monitoring of points Heating elements in points Example diagnostic fields Condition of bridges DIANA diagnosis tool already implemented for monitoring of points. Enables early repair of point failures and thus reduces downtime DIANA diagnosis tool will be extended to all essential assets 8

9 Fully automatic driving on rail DB is pushing for further progress in automating its trains Fully automatic driving on rail Challenges Fully automatic train operations is already used in various subway and airport shuttle lines worldwide Digitalization offers many opportunities to push DB's products ahead technologically and to improve the competitiveness of the railway system DB's goal: To become a technology leader and further develop and actively shape rail operations How we will respond Research in order to reach so-called Grade-of- Automation 4 (fully automated driving without train driver) Three pilot projects: FASSI 4.0 driver assistance system (Erzgebirgsbahn) Fully automated main-line locomotives (DB Cargo) Hump locomotives for shunting operations (DB Cargo) 9

10 New data-driven business models DB is creating structures to successfully implement new data-driven business models New data-driven business models Challenges and Opportunities Other established companies such as Siemens, BASF, Axel Springer and Daimler have responded and have developed new, mostly data-driven business models that complement their core businesses a smart addition to their portfolios DB also has a treasure dove of data How we will respond We need to determine: How DB can use its assets (access to millions of customers, central location and high brand recognition) along with digitalization to develop new business models But his also means we have to see change as an opportunity and change the way we do business 10

11 The Railway Reform Act of 1994 marked the beginning of a new railway era in Germany and the creation of Deutsche Bahn AG Before Rail Reform Today Bureaucratic structures Monopoly structure Heavy government influence High losses personnel expenses exceeded revenues More than EUR 30 bn in debt Rail was losing market share Implemented entrepreneurial structures Rail opened up to competition Responsibility for local rail passenger transport delegated to regional levels Modern and efficient organization Competition is expanding Value-driven decision making Greater profitability Debt is continuously shrinking Rail is enjoying a renaissance 11

12 Since 1994 DB notably increased both its revenues and earnings, thereby easing the Federal Government s budget requirements Revenues in million 40,468 14, % 1994 '95 '96 '97 '98 '99 '00 '01 '02 '03 1 '04 '05 '06 '07 '08 '09 ' EBIT in million 1,759-2,998 HGB IFRS EBIT with refund for legacy costs EBIT As of December 31, 2015; 1 Revenues adjusted for special items from sale of Stinnes 12

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