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Creating Railroad Capacity to Cut Your Inventory Carrying Costs

Creating Railroad Capacity to Cut Your Inventory Carrying Costs. How railroad customers are lowering inventory exposure by making the railroads key links in their supply chains Railway Age Capacity Conference, Chicago, March 2009 Roy Blanchard, The Blanchard Company

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Creating Railroad Capacity to Cut Your Inventory Carrying Costs

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  1. Creating Railroad Capacity to Cut Your Inventory Carrying Costs How railroad customers are lowering inventory exposure by making the railroads key links in their supply chains Railway Age Capacity Conference, Chicago, March 2009 Roy Blanchard, The Blanchard Company Railway Age Contributing Editor

  2. Conference TopicsScreening the Industry for Solutions • Operations • Safety First • Applying resources against volume • Making the railroad a supply-chain partner • Engineering • Industry track design and configuration • The cost benefit of maintaining to FRA standards • Communications and Signals • Reporting events • Automating the process • Mechanical • 286 or not 286? • Unit trains or singles? www.rblanchard.com

  3. Operations: Safety First • Stop, look,listen • Step over the rail, not on it • Clear the areas of tripping hazards • Don’t release a handbrake and expect the stop the car with the handbrake • Don’t use a front-end loader to shove cars or open car doors Staged accident, NC, 1996 www.rblanchard.com

  4. Operations: Applying Resources Against Volumes • Right car, right move • Open gate, closed gate • Load to weigh out before cubing out • Unit trains, singles or blocks? • Avoid constructive placement UP, Gibbon, NE, 2005 www.rblanchard.com

  5. Operations: Making the railroad your supply chain partner • Integrate the railroad into your supply chain design • Order no more cars than you can load/unload in a day • Use railroad transit times to control inventory flow • Queueing theory: matching wait time to process time Chicago, 1943 (Delano) www.rblanchard.com

  6. Engineering: Industry Track Design and Configuration • Use higher-speed turnouts for faster throughput • Build loop tracks for unit trains • Provide space to unload center-beams from both sides • Maintain industry track to FRA class 1 or better Maine 2-foot gauge, 2008 Maine two-foot gauge www.rblanchard.com

  7. Engineering: The Cost-Benefit of Maintaining to FRA Standards • Preventing personal injuries, derailments, equipment damage • Removing a major cause of lading L&D • Bad track looks bad to your customers, your community and your co-workers • Effect on liability insurance rates? Short line, Virginia, 2006 www.rblanchard.com

  8. C&S: Event Reporting • Release cars as made empty or loaded via the internet • Fax or phone delays movement • Manage information, not carloads • Focus on goods movement data, not carloads • Maintain goods movement data warehouse N&W, Waverly, VA, late 1950s www.rblanchard.com

  9. C&S: Automating the Process • UP car release generates trip plan • KCS uses AEI readers to generate real-time reports: shipper apps? • Eliminate paper docs and copying mistakes www.rblanchard.com

  10. Mechanical: 286 or not 286? • Nobody’s making 263 stuff any more; what’s around is pretty beat • More payload per car • Fewer switch moves per ton shipped; less L&D • Shorter inventory cycle time • But…IANR uses small cube covered hoppers for local grain moves RJ Corman, Pennsylvania www.rblanchard.com

  11. Mechanical: Unit Trains or Singles? • Fixed-Unit trains (All Class Is): Max 24 hours to load/unload, power stays with train. • Solid Trains (CP Model): point-to-point, distributed power, balanced corridor flows, loop track load/unload • Variable (CSX Model): Max per permissible cycle time a function of load/unload history at origin and destination. • No unit trains (CN Model): Fills all trains by weight/ length, keeps power and cars moving. DM&E, South Dakota www.rblanchard.com

  12. Rule 99 in Effect. Hope you enjoyed the ride. NYC, Briarcliff Manor, NY July, 1954 www.rblanchard.com

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