A 4 page overview of the problems facing this company regarding locomotive reliability and the limitations of in-house maintenance. CBN is considering leasing locomotives in a power-by-mile program in which the manufacturers will charge
for maintenance based on actual unit productivity. This paper discusses the feasibility of such a program. Bibliography lists 4 sources.
Name of Research Paper File: AM2_PPtrainC.rtf
Unformatted Sample Text from the Research Paper:
Effective management in the transportation industry requires the ability to incorporate innovative approaches to finding solutions to both new and old problems. Problems are plentiful in
the train industry in particular. Coyle (147) presents, for example, the problems that are confronting CBN Railway Company. In hopes of overcoming reliability problems CBN is considering leasing
135 locomotives and contracting their repair, and the companies existing locomotives (some 469 in all) to equipment sources in an arrangement known as "power-by-mile", an arrangement where CBN would be
charged for repairs based on the actual number of miles that a specific locomotive operates. A savings of $5 million per year is projected.
CBN contends that one of the best solutions available to the company in regard to enhancing internal operations is outsourcing. As is the case with
most management tactics, the proposal being considered by CBN has both plusses and minuses. There are, in fact, many potential benefits to this proposal. In part these include
freeing up management resources, sharing costs with others in the industry, and networking with key players in the industry. This arrangement could allow CBN to build new organization structures,
more effectively train staff, and to interface with other information systems. On the average, the power-by-mile arrangement would occur over a fifteen
year period. Although the manufacturer would be responsible for paying for the repair work, the actual work would be completed by CBN employees. CBN has no provisions in
place for a comprehensive training system for those employees, however, so it is unlikely that their maintenance skills will improve just because the manufacturer is now footing the bill.