Application of Information System to Managing the CSX Corporations Business - Case Study Example

number: CSX TRANSPORTATION CORPORATION COMPANY Table of Content 1 Introduction………………………………………………………………………………..2 2.0 Organization and Management of Information Systems…………………………………..4 3.0 Information Technology Environment…………………………………………………….7 4.0 Application of Information System to Managing the CSX Corporation’s Business………9 5.0 Conclusion…………………………………………………………………………………10 6.0 Work Cited…………………………………………………………………………………11 Introduction The CSX Transport Corporation Company was founded in the 1980 by Prime F. Osborn III and Hays T. Watkins Jr. Prime F. Osborn III was the first chairperson and Chief Executive Officer of Seaboard Cost Line Industries while Hays T. Watkins Jr. was the chairperson of Chessie System Company (Pasiuk, 2012). The mergers of the two companies involved merging of the railway roads owned by both companies that eventually constituted the formation of the CSX Transportation Company. The company’s head office is currently located at Jacksonville Florida in the United States (Plunkett, 2013). The company has two website links; http://investors.csx.com and www.csx.com which contain all the company information and the services it offers and the terms of its business transactions. To fully reach out to its clients and customers, the CSX Transportation Company has created a Facebook page with the link http://www.facebook.com/OfficialCSX and is also found on twitter at http://twitter.com/CSX (Pasiuk, 2012). In the past three fiscal years, the Company recorded high financial results contributed to by its efficient management strategies on the current challenges in the coal market and growth opportunities in merchandise and intermodal (Pasiuk, 2012). In 2011, total income earned by the Company in millions was $ 11734. This increased in the financial year 2012 up to $ 11756 million followed by $ 12227 million in the fiscal year 2013. This represented approximately 1% and 4% revenue increase in 2012 and 2013 respectively (Plunkett, 2013). The company’s total assets also increased to $ 30,943 in 2013 from $ 30571 in 2012 and $ 29344 in the fiscal year 2011. Dividend per share has also increased in the past three years from $ 0.45 in 2011 to $ 0.54 in 2012 and $ 0.63 in 2013 (Plunkett, 2013). The company’s earnings per share across the three years increased from $3.64 to $ 3.91 and $4.06 in 2011, 2012 and 2013 respectively. This indicated rise in income per share for the company. Consolidated operating income also increased significantly within the three years. In 2011 the company received $ 2751consolidated income, $ 2280 in 2012 and $ 3071 in 2013. The operating revenue increased from $11255, $ 12156 and $13142 in 2011, 2012 and 2013 respectively (Plunkett, 2013). CSX Corporation has a number of subsidiaries which include; CSX Intermodal terminals, CSX technology, Inc., Transflo-Terminal Services, Inc., CSX Real Property, Inc. and Total Distribution Services, Inc. In the past three years, the company has had increasing number of employees serving in its various subsidiaries. In 2011 the company employees were 31344, 32120 in 2012 and 32970 in 2013 (Plunkett, 2013). Through these subsidiaries, CSX Company supplies rail-based transportation services and intermodal containers and trailers in over twenty-three nations found in at the eastern regions of Mississippi River, Quebec and Ontario regions in Canada and Columbia. It has access to several terminuses; seventy terminus and ports in the Gulf Atlantic Coasts and major lakes, River Mississippi and the St. Lawrence Seaway (Plunkett, 2013). In addition to these, the company has links to about two hundred and forty railroads in the regional and short-line distances to which it provides manufacturing and supply facilities. The company subsidiaries serve different roles; Total Distribution Services, Inc. (TDSI) provides storage and distribution services in the automotive industry; the CSX Intermodal Terminal serves systems of intermodal terminals alongside servicing the drayage services in the eastern United States. CSX Real Property, Inc. manages the Company’s real estates, leasing, sales, and acquisition (Plunkett, 2013). CSX Corporation Company has major competitors in supplying the rail products. The company has, however, has focused on its best so as to offer a steadfast competitive advantages to its users and customers across a vast range of its competitors that provide similar products (Pasiuk, 2012). The company has also put into considerations the government policies on its users and potential customers. The major competitors to the CSX Corporation company include Canadian National Railway; Canadian Pacific Railway, Ltd. These two Companies are toping in the North American railroad companies. CSX Corporation Company is the third in distributing rail products. The Canadian National Railway Company holds 12.42 % market share; Canadian Pacific Railway, Ltd at 17.66 % shares and CSX Corporation holds 15.06 % market share. The rest of the percentage left is held by other railway companies which include; Genesee & Wyoming, Inc, CLA, Kansas City Southern, Norfolk Southern Corporation and the Union Pacific Corporation (Pasiuk, 2012). Organization and Management of Information Systems CSX Transport Corporation has made a vast investment in its information system technology in order to raise the value of and ensure timely access of information through proper storage, access, modification and distribution (Renner, Michael & Gardner, 2010). CSX Corporation, therefore, integrated Optram Railway Infrastructure Management (ORIM) System software, a system developed by the NEC (Amtrak’s Northeast corridor) engineering department. This is a system used to support and maintain railway infrastructure at a top speed at the Northeast Corridor. The Amtrak system, developed by Optram called Applied Maintenance Management (AMM) has railway track chart system, vast-access system and integrates other systems into the operation process of the CSX Company (Renner, Michael & Gardner, 2010). ORIM products supplied by the Optram customized CSX Corporation operation system alongside maintaining its management system. The system has three distinct divisions which included; development of a track chart system, development of a system wide access and integration with the other systems. The track chart system developed for CSX Corporation created a corporate vast information system. This operates within an oracle database and comprises of rail; ROW assets information surfacing and timbering. A connection was created that ensures access of information by the existing mainframe. The customers and all the employees get access to the information directly through the web on their various browsers (Renner, Michael & Gardner, 2010). This initial integration of the system comprised of three components; Track Geometry Measurement Data, Track Management Program and Geographical Database. TGMD (Track Geometry Measurement Data) instantly detect trouble spots alongside accessing the trend in track measurement data through the work performed at the same spot. This is through incorporation of measurement and obsolete information analysis using a graphical method along the ROW. TPM (Track Management Program) system monitors track maintenance in three different aspects that include the CI, MI, and WI indexes. CI refers to condition index; MI is the Maintenance index, and WI is the weighted index (Renner, Michael & Gardner, 2010). Each of the index systems operates independently, but put together, evaluates the present situation (CI), rate of ware and tears (MI) and work priority by considering the rail, tonnage and track measurement (WI). The data obtained in consideration with slow orders are applicable in gauging restraint measurement which is necessary for creating the index rating systems. The calculated CI, MI, and WI are used by the TMP system to divide track network based on similar features into segments (Renner, Michael & Gardner, 2010). Lastly the OPTRAM integrated GIS (Geographical Database) system software which manages all the geographical information through interoperability between the company’s real estates and the track chart system. The CSX consists of a series of systems that require and uses geographical data and information. The systems are, therefore, integrated into the track chart system and are accessed by any web browser upon internet link. Any of the resources and signs that appear on the web page provides highly detailed information and any other topic related to the respective search tools and items. All the information is customized and made available alongside any other information that is related to the search topic. All these information is sourced from the ORIM database system. This system has given the CSX Corporation Company a competitive advantage over other competing Companies in America. It has enlarged the company’s information system in train and vehicle tracking, real estate and property management and positive train control. It is less prone to logical changes in business operational changes and readily supports an addition of data and limiting the effects that may arise to the current users (Renner, Michael & Gardner, 2010). It has also built a basis for a wide corporate information system. The system provided a wide access to corridor information through the electronic access. This would provide well-timed information availability to the employees, eliminate the necessity to filter through hardcopy record, lessen the load of railroad personnel from field crews to railroad executives who no longer have to waste time keeping maintenance account. It also ensures universal and consistent access to information by all the company employees at the same time. Lastly makes all the data entry by any individual in the company available to the whole company without the users necessarily seeking the bearer of the information sought. The CSX Company would, therefore, run efficiently and effectively thus gaining a competitive advantage to its competitors. The integration of new computer systems that comprise of the information technology systems in the CSX Corporation Company introduced new policies on how the company employees use the services (internet service). Improper use of the company electronic systems, e-mail and internet, could waste time and the company resources creating unnecessary liabilities to the company (Oakes, 2006). These facilities are of great importance to the company as they are powerful tools of communication. The CSX Corporation, therefore, outlined the ethical DOs and DONTs in handling and working with the new systems. CSX gave its employees a limited but reasonable personal utilization of internet systems. This must adhere to the company’s code of ethics and must not consume much time of the individual as compared to the time spent at work (Oakes, 2006). The e-mail service must also not disclose the companys secretes and must not contain any information that can be used against the company as evidence. The e-mailing system must not be used for any malicious activity and must protect the company’s copyright at all time. The use of this system must not be allowed to persons who are not company employees’. Any defamatory or sexually explicit through the company’s system is also considered unethical. Information Technology Environment CSX Corporation Company in the resent past was prompted to consider the integration of information technology in order to improve its efficiency. This was based on the deliberation by the Company experts who stated that any drop in one mile per hour in average train velocity require between 250-300 rail cars to operate on a seasonal basis (Renner, Michael & Gardner, 2010). Similar analysis also indicated that a possible increase in the average velocity by approximately 30 miles per hour would double the company’s profit (Plunkett, 2012). According to the Company’s director of advanced engineering, this would only be made possible through successful integration of Information Technology in the Company’s operations. The communication system would be installed in all the subsidiaries of the CSX Corporation and to all the service users of the company. The director of engineering for communications designed corporate wireless team for the CSX Corporation which comprise of representatives from all the departments of the company, Information and technology and customer service engineers. The corporate wireless team would concentrate on designing a strategic differentiation system and generate enterprise visualization for wireless communication for the company. This would apply to all the business processes and conveniently serve the company’s customers. The company’s engineering directors teamed with the Cisco Systems in analyzing mobile IP platform as a possibility (Kraynak, 2008). Business process mapping that would consider functionality of the various wireless enabled section was considered a possible option. A spreadsheet that would be the basis of the company wireless vision was also designed from the process. A CMU (Communication Management Unit) was designed out of the corporate and deliberate considerations by the team and the Cisco Systems engineers. The CMU would be authenticated by the Cisco Mobile Access Router. This was followed by a number of primary tests on the mobile IP-based CMU (Renner, Michael & Gardner, 2010). Through the integration of this information technology, CSX Corporation rolled out the first successful wireless mobile IP, the OBRS (Onboard Work Order Reporting System). The system keeps up to 200 rail conductors in continuous and consistent contact with work progress notifications, freight scheduling updates, eliminating the reworking and managing of manual records (Kraynak, 2008). This would improve output on the workforce ensuring uniformity in job reporting and records consistency. Communication-Based Train Management System (CBTM) would also be introduced to ensure improved safety in train operation systems. An analysis on the progress of CSX Corporation information technology and then integrated systems that include CBTM and CMU indicated a return of approximately 30 %. The CSX Corporation Company would also introduce (EHMS) Equipment Health Monitor System which manages the information and give notifications on the health of trains that are nearly 30 miles away from CSX’s right of way. This is made possible by the system through checking of the of the train inform of journals on mobile and freight cars, looking for hot bearings and monitoring high impacts on the railway path by the flat spots on the wheels and the load shifts (Kraynak, 2008). It ensures decisions are correctly made in consideration with the statistics within real time information. The overall effect of the information technology effect is improved reliability and safety of railroad cargo and personnel (Kraynak, 2008). The corporation also plans to introduce a more flexible digital radio system that would allow the use of voice data frequency. This would also ensure the wireless IP network infrastructure reach the portable device of the CSX Corporation Company. The process of adding routers to the base station controllers had also commenced, and the next phase would be introducing radio systems with reliable frequency to replace the existing base stations. Application of Information System to Managing the CSX Corporation’s Business An efficient operation of an integrated supply chain depends on the consistent flow of information. The top management of CSX Corporation Company deliberated and settled on a conclusion that optimizes the product and service flow through implementation of a process approach to the business operations that involve the major supply chain process. The major supply chain process considered by the Corporation included; customer relationship and service management, demand management, production flow management, order fulfillment, procurement, product development and marketing and returns (Oakes, 2006). The companys customers section identifies and liars with the customers in eliminating possible sources of demand variability. This has been made possible through the efficient information technology integrated by the company. The computer and internet system provides ground for direct interaction with the customers. The department also provides information to the customers on product and service availability and scheduled dates. The demand management balances the corporation capabilities and the customers’ needs. It considers the customers data and points of sale. The customer’s data are made available by the OPTRAM system. Production flow management and service delivery process in the CSX Corporation Company has integrated the IT system hence is very flexible and reliable as it accommodates mass customization. The Corporation procurement system has created a win-win relationship with its chief supplies since the coordination between the various segments is easier since the integration of the IT system (Oakes, 2006). Through an integrated system and information technology by a company, suppliers and customers have been involved in the improvement of the company products. The launching of these new products developed improves the company’s competitive advantage. Sustainable competitive advantage is also achieved by proper management of the return process. All the information is available in the system database hence calculating the percentage changes are not ambiguous (Renner, Michael & Gardner, 2010). Conclusion The system integrated by the CSX Corporation Company is a highly advanced that avails system-wide electronic access to railroad information. The system that is accessed by the customers on their different browsers applies simple and a faster availability, streamlined allotment, well-timed availability, widespread and regular access of information. The interface gives a wider access to much information that is detailed about the item the browser is seeking for. The system allows the entire railroad employees to optimize efficiency and consistency in the company. Information Technology affects chain supply process of the company. Adequate and reliable interaction with Company’s esteemed customers and the suppliers improve the companys services and products. It is, therefore, fundamental for any company that has a vision of being the best in the market to consider upgrading of its company information systems. Work Cited Kraynak, Joe. Ques Official Internet Yellow Pages, 2006 Edition. Indianapolis, IN: Que Pub, 2008. Internet resource. Pasiuk, Laurie. Vault Guide to the Top Transportation Industry Employers. New York, N.Y.: Vault, 2012. Plunkett, Jack W. The Almanac of American Employers 2012: The Only Guide to Americas Hottest, Fastest Growing Major Corporations. Houston, Tex: Plunkett Research Ltd, 2013. Print. Oakes, Elizabeth H. Ferguson Career Resource Guide to Apprenticeship Programs: (2-volume Set). New York: Infobase Pub, 2006. Internet resource. Renner, Michael, and G Gardner. Global Competitiveness in the Rail and Transit Industry. Washington, D.C: Worldwatch Institute, 2010. Print. Read More