CIS410-01 Management of Information Devices
Case 1-1 Burlington Upper
Tuesday, January 27, 2015
Burlington Northern: The ARES Decision
BN mission declaration is to provide transportation services to it is customers by offering a more reliable and more quickly service while reducing cost and increasing revenues by improving the utilization of its assets to remain ahead since the top organization in the Railroads industry. The Problem:
Burlington North Railroad can be facing the question on whether or not the implementation with the ARES task will be helpful and justifiable given its high cost. The ARES project is supposed to cost $350 million, which includes three significant cost categories, $80 million for the Control Centre, another $80 million to get the Data printer ink communication, and $200 mil for the On-Board Equipment. ARES which usually stands for Computerized Railroad Electronic devices System is an automatic railroad control system that will aid and change significantly how existing operations happen to be planned and controlled in departments like dispatching, mechanical, maintenance-of-way, control systems and communications, shipping car management, and information system solutions. The ARES's project thought aroused with the purpose to solve BN current problems. These challenges included an important amount of resource waste materials and insufficient coordination amongst departments. For example, dispatchers who were responsible for over twenty trains in their assigned place most of the in the past it was able to only focus on 5-7 trains, treating the rest of the train locomotives with fewer attention. Additionally , dispatchers were on their own and there was zero cooperation most notable since they could only find information about their territory and not others. Intended for dispatchers, there was no way to find the whole photo of the current situation, and so poor decisions about planned maintenance-of-way (MOW) crews ended uphad been made. Communications with trains and MOW vehicles was poor, current information about train operations had been difficult to obtain and sometimes the info was wrong. Certainly, ARES will improve functions in BN but the top rated management specifically the CEO of BN and best management is usually not completely convinced to handle the task. ARES is definitely a large and costly project and they have to be sure that the huge benefits are reasonable. Moreover, they need to make sure that BN will have a return following investing $350 million within the project and also there is the query on if the investment may turn out to be more. Another issue is related with the organizational structure in respect with the chief operating police officer the new technology alone is not going to benefit the organization but the reorganization, rearrangement, reshuffling of the complete company and a lot of operations as well (Cash, s. 25). For all those reasons they would like to consider different cheaper alternatives before making this kind of important decision. Industry Competitive Analysis вЂ“ Porter's Five forces
Treat of recent Entrants: Considering that the train industry needs a heavy first investment the treat of new entrants can be low. Yet , effects of deregulation on the trucking and railroad industries were changing the competitive environment in transportation (Cash, p. 62). Trucking businesses needed a reduced initial expenditure to enter and they were gaining advantage over railroad companies since they had been providing door-to-door delivery service which was being preferred by simply customers to be able to meet the just-in-time production. Treat of Substitutes products: To get BN the largest method to obtain revenue was coal (Cash, p. 62), and its significant competitor was the Union Pacific (UP), which has been another train company that had lately invested in a new technology. Weighty commodities just like coal and grain might normally be transported simply by train which in turn put BN in a position exactly where it was hard for buyer to switch nevertheless it comes to transfer light items trucks were moving forward by providing quicker service that customers had been...
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