Total Car Management“TCM”

2008

• TCM is an automatic freight car distribution system – Developed internally, starting in January 2004– Transitioned one car type at a time, starting with

centerbeam flatcars and plain boxcars in 2005– Uses an optimizer engine to solve for a network

solution– Uses a rank and target paradigm in the customer

profiles to allocate equipment during shortages

Total Car ManagementWhat is it?

• TCM flows cars based on ‘known’ demand and applies cars to orders prior to serving yard– Generates demand-based car flows – Groups cars by similar characteristics– Dynamically assigns cars to customer orders– Monitors empty equipment enroute to shippers– Identifies failures and takes corrective action– Provides ‘Alerts’ and Reports for managing fleets

Total Car Management

• TCM is used to manage the market based fleet segmentation and allocation logic for premium equipment– Redefine fleet using market-based product definitions

in GENESIS –our rating system– More generic car type products allow for a greater

supply of suitable equipment– More generic car type products improves utilization

and enhances optimization– Marketing authorizes products for customer orders– Limited special orders prevent customers from “cherry

picking” cars

Total Car Management

Product Catalog Lookup

• Considers empty return costs in determining use of foreign cars to meet demand or be returned home

• Determines expected transit times in moving cars from supply points to demand points

• Reserves loaded cars and future interchanges as possible car supply

• Re-evaluates ETA changes • Receive real time updates on demand, as orders are

created, modified, or cancelled• Receive real time updates on supply, as empty cars

are released and interchanged

Functional Features

Total Car Management

• Cars defined by physical characteristics in GENESIS

• Only specific car characteristics can be included/excluded

• Shippers are ‘authorized’ for specific products

• Customer order patterns based on authorized equipment

• Only authorized equipment will be supplied

• Allows car substitution that supports marketing strategy

• Ranks and weekly allocation Targets (RATS)

Functional Features

Total Car Management

• Backpressure logic (customer)– Linked to Customer Inventory Management System (CIMS)– Prevents congestion by reducing flow to customer locations – Reduces orders when imbalances occur between orders and

loadings• Re-think (network)

– Ability to re-think decisions based on better supply alternatives– Quick Disposition on empty releases that schedules cars to

serving yard• Emergency Re-positioning (geo area)

– Cut off flow to troubled areas – weather, congestion– Audit trail for preventative actions – Restore demand and flow

What’s new?

Total Car Management

• Shippers can create own product definitions

• Shippers capture value & increase UP’s cost’s by customized orders

• No M&S ability to extract value from fleet

• Customer prioritization by “squeaky wheel”

• No allocation planning for shortage - “share the pain”

• Car flows are “pushed” to where we think demand will be.

• Cars are manually matched with orders in specific territories

• No proactive correction of car supply failures

• “Catalog” of standardized products

• Ability to charge for what customers value & offer price/value trade-off’s

• Customers prioritized by value to UP

• Car’s allocated to maximize re-investability

• Demand “pulls” cars• Automatic assignment with lowest

cost solution• System proactively corrects for

failures

Past TCM

Tactical/Transaction Focused Strategic/Value Focused

ANY QUESTIONS???