The railroad won for "Perfecting the Scheduled Railroad: Model-Driven Operating Plan Development" by Phil Ireland, Rod Case, and John Fallis of Canadian Pacific Railway, and Carl Van Dyke, Jason Kuehn, and Marc Meketon of MultiModal Applied Systems, Inc.
UPS Air Group won second place. The other finalists were Bank Hapoalim, Hewlett-Packard, Menlo Worldwide Forwarding, and Texas Children’s Hospital.
North American freight railroads rely heavily on "tonnage-based dispatching," in which trains are only run when enough traffic has accumulated. Although this approach attempts to minimize the total number of trains needed by maximizing their size, in practice it disrupts the efficient utilization of crews, locomotives, and equipment. It also yields inconsistent transit times, making delivery service less reliable at a time when shippers need better service to compete in their own markets.
Canadian Pacific Railway turned to the concept of operating every aspect of the railway on a fixed schedule. The change in railway operating philosophy and practice has reduced Canadian Pacific Railway’s cost base by more than $285 million (Cdn.$500 million), has made service more reliable and has increased profitability.
"We have developed the best scheduled railway model in the industry, and the Edelman Award serves as an important independent validation," Rob Ritchie, President and Chief Executive Officer of CPR, said. "The result has been huge gains in efficiency and productivity and better service for our customers. The job is not over. We are continuously searching for, and finding, new ways to improve."
Working with MultiModal Applied Systems, the railway developed an operating plan that was tightly matched to traffic patterns. This included optimizing the routing and classification plan for each railcar movement and determining which trains to run. They tailored the plan for recurring daily fluctuations in car volumes and developed contingency plans for high- and low-volume days. Shortest path-based algorithms within MultiModal’s unique MultiRail application identified opportunities to reduce equipment miles, train-miles and train-hours, thereby reducing operating cost and transit time and improving service reliability for shippers.
The announcement was made today at an INFORMS conference, "Creating Value in the Extended Enterprise," which is taking place at the Sheraton Wild Horse Pass Resort and Spa in Phoenix.
The Edelman best cases competition recognizes outstanding examples of projects that change organizations and people’s lives. The top finalist receives a $10,000 first prize. This is the 32nd year of the prestigious competition. It is presented by INFORMS and CPMS, the society’s practice section. The finalist papers will be published in the January, 2004 issue of the INFORMS publication Interfaces.
The Institute for Operations Research and the Management Sciences (INFORMS®) is an international scientific society with 10,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications. The INFORMS website is at http://www.informs.org .
CPR’s 14,000-mile rail network serves the principal centers of Canada, from Montreal to Vancouver, and the U.S. Northeast and Midwest regions. CPR feeds directly into the Chicago hub from the East and West coasts. Alliances with other carriers extend CPR’s market reach into the major business centres of Mexico. For more information, visit CPR’s website at www.cpr.ca.
Multimodal Applied Systems’ website is http://www.multimodalinc.com