RESEARCH ON THE PATTERN OF TECHNICAL SERVICE
INNOVATION OF RAIL TRANSIT INDUSTRY BASED
ON INDUSTRY CHAIN VIEWPOINT
Yingsi Zhao and Yanping Liu
Public Transportation Management and Decision, Beijing Jiaotong University, Haidian District, Beijing, P.R. China
Keywords: Rail Transit, Industry Chain, Technical Service, Innovation Pattern.
Abstract: The complete industrial chain and unique technical service characteristics have formed in the rail transit
industry in China. In this paper, we study the existing technical service pattern of this industry from the
viewpoint of industrial chain. We also discuss the pattern of technical service innovation from up, mid and
down-stream of industrial chain respectively and analyse its evolution trends. Analysis demonstrates that
industry alliance and collaboration innovation will be the important developmental direction of the pattern of
technical service innovation, which should be helpful for continuous innovation of rail transit technical
service providers.
1 INTRODUCTION
With the development of society and economy, one
important trend of the world is urbanization. During
this process, cities with different scales and in
different development stages produce different
traffic demands, and they need relevant traffic
technique level and transportation tools to satisfy
themselves. Among them, rail transit with its big
ridership, fast speed, security, punctuality,
environmental protection and saving resource and
land, has become a necessary part of city traffic
structure.
As a service-oriented industry, urban rail transit
offers the service products with 4 characters:
Intangibility, Inseparability between production and
consumption, Non-storage, Knowledge and
Technology intensive. The demands for rail transit
service industry mainly consist of two parts. One is
the service and industry toward the public, which
offers passengers with whole journey total service
rather than single-route transportation service
products. They include service and information
service like rail-station, riding service and One Card
solution ticket service, etc. The other is the service
enterprise industry toward rail transit enterprises,
meaning service offered by industrial clusters
surrounding the rail value chain. They offer the
operation service of facility and equipment rather
than products themselves. Just as shown in Fig. 1,
the two grey round circles will become the key
points of rail transit service industry. Their main
targets are service enterprises which offer user-
centric, integrated service toward relatively to
passengers and rail transit enterprises.
2 PRESENT CONDITION
2.1 Rail Transit Industry Chain
Urban rail transit is a large-scale industry. It has its
own integral industry structure and characters with
long industry chain, wide scope and self-industry
system.
If we use industry chain concept based on
industry view to define and analyse rail transit
industry chain, we can see the main business of rail
transit is offer various transportation services for
passengers’ convenient journey. The added activities
formed by underground entity like the decision-
making, investment and fund-raising, early stage
planning and design, construction, operation of rail
transit projects and the added activities for business
meeting the need of its major business form the key
value chain for rail transit. Rail transit industry also
has some intrinsic resources. They are interactive
relations and business group formed by resource
241
Zhao Y. and Liu Y..
RESEARCH ON THE PATTERN OF TECHNICAL SERVICE INNOVATION OF RAIL TRANSIT INDUSTRY BASED ON INDUSTRY CHAIN VIEWPOINT.
DOI: 10.5220/0003420802410246
In Proceedings of the 13th International Conference on Enterprise Information Systems (ICEIS-2011), pages 241-246
ISBN: 978-989-8425-54-6
Copyright
c
 2011 SCITEPRESS (Science and Technology Publications, Lda.)

development created by underground construction
and operation, and are stretch and expansion of
underground key value chains.
Figure 1: The sketch map of rail transit industrial
structure.
As known, the effectively integration of the
critical value chain and derived value chain has
formed the whole industry chain of urban rail transit.
For more detailed information of the Rail transit
industry chain, please refer to Fig. 2
Figure 2: Analysis chart of rail transit industry chain.
The key value industry chain of rail transit can
be divided into 3 parts: Upstream mainly refers to
decision-making investment and fund-raising, design
and construction stage. Mid-stream mainly refers to
operation stage, while maintenance belongs to the
downstream of industry chain. Certain part of each
stage can be further classified into their own up, mid
and down-stream. For example, the construction part
of upstream can also be divided into stages such as
raw material offer, produce, logistics and
installation, etc.
2.2 Rail Transit Technical Service
Rail transit is a classic service industry, and is also
an equipment-intensive industry. Its main business is
supported by the operation of relative technique
equipment. Surrounding by the value chain of
industry, technology supported system is formed.
Traditional rail transit fields form relative industrial
clusters based on the technology supported system.
Various equipment enterprises offer various
equipment technique information and installation
during the Planning and Construction period of rail
transit, and offer maintenance, support and update of
the equipment during the Operation period of rail
transit. On the other hand, surrounding by service
like public riding and connection and centred on rail
transit station, they offer relative transportation
products for passengers.
As mentioned above, the two parts of demands
for rail transit service industry are respectively
assumed by rail transit enterprises and relative
enterprises. Therefore, the development center of
rail transit still concentrates on transportation
products, produce of facility and equipment and
product service. The enterprises of rail transit
technical service industry can be the expansion of
service aspects of present rail transit relative
enterprises, and can be some emerging service
industry as well. They will integrate service of
present relative enterprises just as Fig. 3 shows:
In this figure, service integration platform is the
core of concept and management of rail transit
technical service industry. Through information
platform and logistic platform, and on logics and
physics, service integration providers integrate
service branch system of each company into service
conformity platform. According to dynamic
customer demands, they offer dynamic service
conformity solution (Li Qiang, 2009). The most
outstanding feature is serve demand side with
choosing suitable service components and service
process module in terms of service outsourcing.
Passengers
Rail Transit
Operating
Enterprises
Government
Rail
Transportat
ion-related
Enterprises
Support Services
Enter
p
rises
Consulting
Suppliers
Construction
Enterprises
Institution of Science
Government
Others
Equipment
Suppliers
Decision-
Making
Investment
&
Fund-raising
Planning
&
Design
Construction
Operation
Service
Maintaining
Education &
Training
Travelling
Advertising
Real Estate
Development
Others
Critical
Value
Chain
Derived
Value
chain
Industry
Chain
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For a long time, with the booming construction
and operation of rail transit, emergence of new
techniques and products, present industry
development pattern has produced some important
problems:
(1) The contradiction between explosion for
technical service demand and deprivation on talents
in booming construction and operation of rail transit
(2) The contradiction between aggravation on
complexity of technique-related internet and
traditional technique labour division refinement
(3) The contradiction between attentions paid on
technical products like equipment and facility and
deficiency on integral application pattern
Figure 3: The sketch map of integration development of
technical services.
3 INNOVATION PATTERN OF
TECHNICAL SERVICE IN RAIL
TRANSIT INDUSTRY CHAIN
Innovation is a complex systemic project, and this
process refers to many elements. The difference on
element formation, disposition mode and structure
create innovative different patterns.
In the rail transit industry, the innovative pattern
of technical services can be recognized as innovative
direction, drive and creative formats. The muster of
various analytic dimensions such as key innovative
elements expresses the total characteristics of rail
transit industry. There are many angles of analysis
on the key value industry chain of rail transit. We
can analyse from the angles like innovative types,
innovative connation, innovative body, collaboration
innovation pattern, innovative drive and intellectual
property protection, etc.
According to the analysis to the upstream,
midstream and downstream of key value industry
chain for rail transit from various angles, we can get
these results as the integral innovative features and
pattern of key value industry chain technical service
of rail transit. They are as follows:
Table 1: Innovative pattern of technical service in each
stage of rail transit industry.
The
Innovation
Phase
Details
Innovation
Objects
Major
Innovation
Elements
Construction
Phase
Investment &
Fund-raising;
Planning &
Design;
Building;
Government;
Operating
Companies;
The Financial
Institutions;
Institutions
of Planning
and Design;
Equipment
Suppliers &
Purchases &
Servicers and
etc.
Investment
Mode
Innovation;
Concept
Innovation;
Technology
Innovation;
Business
Pattern
Innovation;
Organization
al
Innovation;
Management
Innovation
Operation
Phase
Core-business;
non-core business
Rail Transit
Operating
Companies;
Rail Transit
subsidiary
and etc.
Management
Innovation;
Organization
al
Innovation;
Business
Pattern
Innovation
Maintenance
Phase
Self-
Maintenance;
ally maintenance;
total external
contractor
maintenance
Rail Transit
Operating
Companies;
Rail Transit
subsidiary;
Equipment
Suppliers &
Servicers
Organizational
Innovation;
Technology
Innovation;
Business
Pattern
Innovation
(1) From the view of innovative body: Although
there are various technical service providers in each
stage of rail transit industry and their structures are
different from each other. Constrained by the
complexity of industry technical service and
industry entry barrier, the body is mainly those large
and medium-size enterprises and large and medium-
size research institutes association.
(2) From the view of innovative elements: The
technical innovation is the core and it is throughout
the whole industry. The innovation of organization
pattern, management pattern and business pattern
offer powerful basis and support for technical
innovation. Through in-depth analysis, we know that
Customer
Customer Demand
Service
Foreground
Service
Integration
Suppliers/
Service
Integration
Platform
Enterprise 1
Enterprise 2
Enterprise 3
Service Components
and the Enterprises
Service
Background
RESEARCH ON THE PATTERN OF TECHNICAL SERVICE INNOVATION OF RAIL TRANSIT INDUSTRY BASED
ON INDUSTRY CHAIN VIEWPOINT
243

the produce of technical service depends on new
techniques. While during the process of industry
development, the infiltration of service makes
technique merges with service thus produces
powerful vitality. This, to a great extent, promotes
the development of rail transit technical industry,
improves technical products’ added value, and is
helpful for promoting adjustment of industrial
structure, and further pushes rail transit to upgrade to
high increment industry.
Tab. 1 shows the detailed innovative patterns of
each stage of technical service in the rail transit
industry. Its detailed explanation is as follows:
3.1 At Industry Chain Upstream
So far, except for the decision-making stage of
preparation parts, the construction period of rail
transit industry in China, meaning the upstream of
industry chain, can be divided into 3 stages: ①
Investment and Fund-raising stage, ② Planning and
Design stage, ③ Construction stage.
3.1.1 Innovation Pattern of Investment,
Fund-raising and Programming Stage
At present, 15 cities in China have begun the
construction of rail transit. Generally speaking, city
rail transit in China is still in the early stages of
development. Considered supporting facilities are
still not perfect, marketing methods are still
deficient, and development mechanism is still not
robust. The initial stage of investment and fund-
raising is mainly government capital investment.
And dominated by government investment,
marketing methods are tried to solve financing gap
problem of rail transit development (Wei Hua,
2009). In the maturity stage of investment and fund-
raising, each big city actively explores to use various
patterns such as BOT, PPP Projects, stocks and
bonds, credits, leasing and affiance to make
innovation of financing model. For some cities, part
routines and zones begin to have some features of
maturity stage.
The innovative pattern for planning and design
mainly depends on concept innovation. In the
programming of rail construction we should fully
absorb the advanced concept of many international
famous programming units, express several
principles such as the planning ideology of rail
transit coordinated development with land, people
oriented and public transportation first, value
decorative design, embody humanization design,
improve transfer environment, explore new methods
and thoughts for programming connecting rail transit
station and surrounding land, and create people-
oriented, safe, convenient, comfortable and efficient
public traffic conditions.
3.1.2 Innovation Pattern of Construction
Stage
The building stage of rail transit contains many
links. Its structure is complex, and it is the priority
among priorities of construction stage. In detail, the
building stage can be divided into two types:
construction and equipment purchase, in which the
purchase and installation of equipment can be
refined and classified into several parts according to
their function: power supply system, vehicle
description system, communication system, signal
system, environmental control system, air-
conditioning and ventilation system and other
systems, etc.
The technical service providers of this stage are
mainly equipment producers, equipment buyers,
equipment service providers and construction
organizations. Under many conditions, the role
design of equipment producers, buyers and service
providers has some germination.
The service patterns of technical service
providers at present building stage are mainly:
(1) Develop and sell single product or dip into
single field and gradually penetrate. Switch from
research and produce of single product and simple
service to a full set of technical service solutions:
For example, GRG Banking Group which has sold
products in many rail transit lines like Guangzhou
Subway, Beijing Subway, Nanjing Subway and
Beijing—Tianjin Inner-City High-Speed Railway
pays attention to AFC System, and suggests the all-
in-one solution of single product of self-
development, self-research, self-produce, self-sale
and self after-sale (Li Yushan, 2009). Companies
such as OMRON in Japan are also the same.
(2) Diversification strategy: Motorola Company
which offers TETRA System for underground and
purchases wireless internet programming and
management software company Wireless Valley
offers wireless dispatch business, making efforts to
expand business levels and realize horizontal
diversification operation strategy.
(3) The growing up of demand-push service: in
the technical service industry of rail transit, many
technical service providers have realized that serving
for users’ demands is the primary task of industry,
and technical service is a more interactive process
with customers. Value is commonly created through
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service delivery and time-continuing process with
customers. In rail transit industry we should contact
with customers, know the fact that under many
conditions, it is not a ready-made product or just a
core technique but a full set of technical service that
can meet the needs of customers. Before seeing and
using products, users cannot predict their needs, so
demand-push research and development service
pattern offers users with ordered products and
service. According to different user conditions, it
first offers basic prototype working and system,
which is just like setting up a target for customers,
and then users suggest some opinions and further
demands according to this prototype, and then revise
again and again until it meets the need of users.
After the products and system put into operation,
they need further optimization with the development
of time and environmental conditions. Custom-
technical service will continuously offer service
according to the demands of users. For example,
Beijing Rail Transit Running Controlling System
State Engineering Research Centre Company, Ltd
set up a demand-push technical service pattern. Its
characteristics are expressed like: custom-technical
products and service, personnel penetration and
talent cultivation.
Generally speaking, technical service providers
of construction stage of rail transit pay the core
attention to company products and the development
trend of product solutions. The purpose is to
improve the sales of company products and make
more profits for the company. Therefore, technical
service innovation of this stage stands out the
innovative patterns which rely mainly on technical
innovation and are supplemented by organization
innovation and management innovation.
3.2 At Industry Chain Midstream
Based on the special national conditions of rail
transit, the lines of rail transit in many big cities in
China are mostly mastered by state-owned
enterprises, meaning major underground operating
companies taking charge of city fast rail transit
system construction, operation and management.
Facing present development trend, underground
operating companies all realize innovation is their
historical mission and requirement of times, is also
inevitable demand of forward development of
company, and even necessary condition for realizing
successful enterprise mode of the public service.
There are core business and non-core business in
present underground operating companies (Nie
Lingyi, 2008), in which core business means the
basic duty of underground operating companies,
including taking charge of operation business of
underground, bearing operation management rights
issued by the government and financing
responsibility, maintaining underground equipment,
offering excellent and high-efficiency underground
operation service, meanwhile developing the
construction business of new-line, efficiently
organizing project construction duty, actively
implementing the reform of project management
system, ensuring to finish underground new-line
well, economically and timely.
While non- core business mainly refers to duties
within the scope of government authority:
developing various resources related to
underground, creating best overall economic
efficiency, comprehensively researching the
interactive promotion function between resource
development and underground passenger flow,
ameliorating the out environment of underground
resource development, enhancing the ability of
operating and generating profits. Therefore, the
innovation pattern of the midstream of industry
chain is mainly the innovation upon business
pattern--diversification strategy.
3.3 At Industry Chain Downstream
The technical service of maintenance part in rail
transit industry mainly refers to daily maintenance,
timing overhaul and fault treatment aiming at
vehicle description, power-supply system,
electromechanical device, communication device,
official duty device, etc.
There are mainly 3 maintenance patterns at
present rail transit industry in China: total external
contractor maintenance, ally maintenance, and self-
maintenance. (Zhou Hang, 2008)
Excellent and high-efficiency hardware
equipment and software environment are the pre-
conditions to ensure the normal operation of rail
transit industry. While the maintenance of
equipment and software is the important step, which
directly links to systemic service quality offered to
operator and influences the profits of underground.
Therefore, the best maintenance pattern for rail
transit is realizing optimization of overall efficiency
with smallest resource devotion and best
configuration mode.
Our investigations about maintenance pattern of
each rail transit line indicate that, at present, the
domestic line depends on self-maintenance and ally
maintenance. Based on the double consideration of
economic benefits and social benefits, each subway
RESEARCH ON THE PATTERN OF TECHNICAL SERVICE INNOVATION OF RAIL TRANSIT INDUSTRY BASED
ON INDUSTRY CHAIN VIEWPOINT
245

running company all tends to have a special place on
maintenance stage.
Meeting this situation, each maintenance
technical service provider actively pursues
development, realizes innovation of business pattern,
create optimized, reasonable and simple
management mechanism, strengthens information
exchange about different maintenance bodies,
reduces the operation companies’ apprehension of
external contractor maintenance to the greatest
extent, and makes efforts to change subway
operation company from maintenance provider to
maintenance supervisor. The most representative
measure is to cooperate with each government and
subway running company and set up external
contractor maintenance basis. CSR Corporation
Limited, which is one of the two biggest vehicle
produce groups respectively, cooperates with
Zhejiang Province Government and Guangdong
province Government to set up Hangzhou rail transit
maintenance and installation basis and CSR rail
transit vehicle maintenance basis. While another
group, CNR Corporation Limited cooperates with
Yunnan Province Government to set up Southwest
China rail transit equipment maintenance and
installation basis.
4 CONCLUSIONS
At present, in the industry of rail transit, domestic
service normally rests on pure-technical service,
which is superficial level service. Whether with the
innovation of management pattern or technical
application, rail transit business is still in active
exploration stage, which needs adventurous
innovation to promote common development.
However, real deep-rooted level service is all-
dimensional service, including production
management service and process engineering
service. And this demands technical service
providers to have enough innovation capability. It
produces some requirements about the ability at
innovation consciousness, innovation culture,
innovation organizational forms and applied new
techniques. The present condition and dilemma of
the technical service of rail transit industry, to some
extent, hastens industry alliance. As a new-type
industry format, industry alliance is likely to play an
important role in promoting the formation of
innovation cluster of rail transit industry. It offers
new mechanism for communication and collision of
innovative body and innovative elements, and is
helpful for promoting internal innovation to go out
for collaboration innovation and supporting the
efficiency of industry development. To hasten
industry alliance, we should aim at technical
innovation, focus on market, rely on enterprises, and
surround special industry. Advantageous enterprises
take the lead to set up alliance to promote the
cooperation and exchange enhancement among
enterprises (He Dong, 2009); research institutes
associations and alliances, and form innovative
internet and innovative cluster.
ACKNOWLEDGEMENTS
This work was supported by the Beijing Science and
Technology Project (No. Z101108002110053).
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