Csx Supply Chain Strategy

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This method allows the company to ask itself questions about its supplier base and to determine if it should forge long-term partnerships, change suppliers, and determine which one would make the company more profitable. (Wisner, Tan & Leong, 2012) Using these analytics, CSX can now assess “where it was yesterday, where it stands today, and where it wants to go in the future to meet its strategic purchasing goals.” (Wisner, Tan, & Leong, 2012 p. 94) The Supply Chain Strategy of CSX. “The business strategy should directly guide the supply chain design.” (Seghal, 2010, p. 143) In the unique industry of “railroading” that CSX is in, they have multiple and different supply chains happening at the same time as described briefly earlier in this…show more content…
Ship less air. It 's the credo that drives transportation efficiency, but shipping less air is shifting from a "nice to have" to a "won 't survive if you don 't." (Wrobleski, 2014) In addition to being a pure service industry, CSX has a supply chain and procurement department to coordinate and handle all the materials with regards to track maintenance components, locomotive and rail car parts, material maintenance of buildings and other real estate, and other everyday items. The company to this day still handles almost all of these functions internally without the use of a 3rd party. Doing these processes well has a direct impact on the bottom line. Careful coordination is critical to ensure that material is available when and where it is needed. In this type of industry if the track maintenance department does not have what they need to repair the track the whole rail line could be shut down. This could be something simple like running out of rail spikes or underestimating the amount of ballast (rock) that is needed for a particular project. The same holds true for the locomotive shops. With the surge in the need for rail service it is crucial that as many locomotives remain in service and ready to use at all times. If this doesn’t occur then leased locomotives and older units have to be…show more content…
CSX has been moving in the right direction for several years in regards to efficiency improvements and increasing the operating ratio. How much was this due to changes implemented by the management of CSX? In this writers opinion, very little. Railroads have been a key beneficiary of rising fuel costs coupled with driver shortages in the trucking industry. There is very little competition in this segment of transportation, and the whole concept of being about to move the equivalency of several hundred semi-trailers on one train with just a crew of 2 is staggering. These concepts have helped to increase profitability but in comparison to competitors their operating ratio or the key measurement of profitability is behind most of the other railroads. The good news is there is plenty of room for improvement. There is plenty of benefits to aligning these 2 strategies. The company Unilever is a good example of the vast improvements that can be made. The first recommended change is the thought process. The supply chain can no longer be looked at as just a “cost.” Unilever realized that this field is called upon do to more. (Monahan, Nardone, 2007) In the business that CSX is in it “is” the supply chain for its customers. The focus must be not on just meeting expectations, but exceeding them. Although there may not be many competitors with other railroads there is always the threat of
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