Burlington Northern: The ARES Decision

Transcription

1 Burlington Northern: The ARES Decision CIS Case 1 Spencer Kerber 9/8/2015

2 Contents 1. Executive Summary Business Problem... 2 A. Environmental Analysis..2 B. Problem Analysis.2 3. Critical Stakeholders..2 A. Burlington Northern Company..2 B. Burlington Northern Employees 3 C. Customers.3 4. Role of IT Available Options... 3 A. Purchase ARES and implement it companywide at time of purchase...3 B. Purchase ARES and implement it over time in scheduled iterations..3 C. Do not purchase ARES and continue using existing system Recommended Option Works Cited.4 1

3 1. Executive Summary Is it feasible for the Burlington Northern Railroad company to invest $350 million dollars into logistics system known as ARES. Will the benefits of the system out way the costs of such a large and possibly industry changing technological advancement? Are there alternatives to a companywide technology implementation? 2. Business Problem A. Environmental Analysis Burlington Northern was formed in 1970 by the merger of four different railroads. In addition to a vast rail system, the merged company owned substantial natural resources including extensive land grant holdings containing minerals, timber, and oil and gas. In 1989, up to 800 trains ran on Burlington Northern routes generating revenues of $4,606 million and net income of $242 million. The current logistics system consists of dispatchers using technology developed around B. Problem Analysis The current rail management system creates numerous problems throughout Burlington Northern railroad operations. There are over 5000 junctions which create 25 million possible distinct routes. Meets and passes two trains meeting on a single track with one directed off so the other can pass- are managed by Burlington Northern dispatchers. The number of meets and passes is estimated to be as high as 10,000 per day. These meets and passes greatly slow down the rate at which trains reach their destinations. Conductors communicate with Burlington Northern through despatchers assigned to distinct territories. Communication between conductors and dispatchers was done through radio. 3. Critical Stakeholders A. Burlington Northern Company This includes the members of the board of Trustees. 2

4 B. Burlington Northern Employees This includes all Burlington Northern employees. C. Customers This includes all customers of Burlington Northern. 4. Role of IT The role of IT, for Burlington Northern is the use of the Advanced Railroad Electronics System known as ARES. Ares was originally developed Collins Air Transport Division of Rockwell International for aircraft and is now, with the help of Burlington Northern, being developed in order to optimize the use of rail. The Ares system provides a computer for each locomotive, which allows Burlington Northern Dispatch to track each train via GPS. The system also creates a scheduling program which allows for better management of Meets and Passes. The system also created a locomotive analysis and reporting system known as LARS. LARS would allow Burlington Northern to keep electronic records of train maintenance. 5. Available Options A. Purchase ARES and implement it companywide at time of purchase. This option involves the full use of the ARES system. Burlington Northern would purchase and implement the ARES system, as designed, for $350 million. The ARES system would be implemented in all districts. B. Purchase ARES and implement it over time in scheduled iterations. This option involves the purchase and implementation of the ARES system for $350 million. Burlington Northern would then implement the system over time using 3

5 scheduled iterations. This option would allow Burlington Northern to test the Ares system in certain areas before installing it companywide. C. Do not purchase ARES and continue using existing system. This option involves Burlington Northern not purchasing the ARES system and continuing the use of existing systems. 6. Recommended Option I recommend Burlington Northern purchase the ARES system for $350 million and implement it over time using scheduled iterations. I find this option to be the most ideal in that it is safer than the single companywide implementation of option 1. If Burlington Northern did implement ARES companywide and something went wrong, then the entire system would be affected. Option 2 helps to combat this chance by implementing in on designed districts on a schedule. 7. Works Cited Barker, Management of Information Systems, Burlington Northern Case 4