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Railroads have eyes on the future

By Jeff Berman, Group News Editor
June 04, 2012

In all walks of life, things often get lost in the shuffle. When it comes to the editorial world, it is also no exception to be sure.

That is what got me thinking about content for this blog posting. When I was doing interviews for the May cover story about the railroad and intermodal sectors, I ran into some challenges regarding word count and was forced to omit some copy. That was hard to do, because I had to pick from things that were of interest to our readers that they would not get to see.

That is what made this space a good match for the “missing copy.” What is enclosed below comes from Brooks Bentz, partner in Accenture’s Supply Chain practice. Brooks knows railroading as well as anyone in the country and beyond. Below, please give his take on several rail-related topics, including enterprise asset management and positive train control to name a few:

“Train Control:  All the railroads have large, mainframe, expensive custom systems that are mainly old and in need of varying degrees of help.  To my knowledge, only UP is well on their way to a comprehensive transition off the mainframe onto a new, modular TCS (NetControl) system.  The potential for sharing this technology across the patch is there, once folks get passed the fact that it comes in an Armour Yellow box.  This would go a very long way to getting the industry on a much less costly shared platform that would be much easier to enhance and maintain, with development and maintenance costs being shared.  Taking one additional leap into a cloud environment would potentially go a long way toward reducing the cost of large, costly and redundant data centers.  This is a pipedream now, but something to consider.

Lead-to-Cash: To my knowledge, only CP is presently tackling this, which is a complex rat’s nest for most organizations.  It’s made more complex by the multi-faceted pricing mechanisms employed by virtually every railroad, from public tariffs to contract rates, Rule-11 pricing, through pricing, wholesale and retail, rate divisions, proportional rates and so on!

CRM:  Railroads, despite doing exceedingly well in Wall Street’s eyes are still viewed by their customers as difficult to do business with compared to, say, trucking.  Revamping CRM (Customer Relationship Management) is vital to amping up Next Gen technology and customer service.  The newest technology, including a huge leap forward in mobility and the burgeoning spread of social media will enable a true transformation customer interaction.     

EAM:  Enterprise Asset Management for rolling (locomotives, cars, roadway equipment) and linear (track, bridges, building, C&S) is huge part of the business.  If you look at a railroad’s capital structure and deduct the value of the linear and rolling assets, there’s not much left.  A comprehensive, integrated EAM system built on a common platform doesn’t exist anywhere.  It’s not a very visible omission because railroaders everywhere are adept at making trains run and maintaining the infrastructure. And, most of the carriers have incrementally improved their older systems and added mobile apps to help these systems appear to be more up-to-date.  Most, if not all, still lack integration to financial systems, planning and work-order management systems and the supply chain technology that feeds the beast.  That’s in the future still.

Now is a great time to be diving into these initiatives so that everyone is prepared for when volumes grow past where people thought they’d go.  I’ve heard some senior rail people express the sentiment that “The house isn’t on fire” and things are working pretty well.  Given that all of the Big-4 listed above are large, multi-year initiatives, waiting until you smell the smoke may not be the best strategy.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


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