Norfolk Southern Service and
Operations in 'TOP' Form

Norfolk Southern strengthened service reliability and consistency during 2001, reducing transit times for customer's freight by realigning the operating plan for merchandise traffic.The Thoroughbred Operating Plan, or TOP, was a combined effort of Marketing, Transportation, Strategic Planning and field operations employees.

This was a team effort from the beginning, said Mark Manion, vice president transportation services and mechanical. The clear objective was to provide more reliable transportation to customers, while realizing improvements in asset utilization.

NS Employees Continue To Be the Rail Industry's Safest

"We started from the premise that reducing the number of times a car is handled and the distance it travels will reduce both costs and variability, with improved shipment velocity," said Tony Ingram, vice president transportation operations.

"These added efficiencies, coupled with consistency, help boost customer confidence and drive new business opportunities," said Don Seale, senior vice president merchandise marketing.

The process began with a study of waybills, which provided an accurate database of traffic variation. From that, the team developed optimum schedules based on traffic volume and created terminal plans.

The team built car blocks, streamlined routes and tested them using modeling software. The team also developed consistent metrics to monitor performance.

"Being able to use software to test our ideas to minimize car handling and improve transit times gave us a tremendous advantage," said Ingram. "We could analyze our routes and make improvements in the plan without having to test in the field. It saved time and resources and gave us a plan to help achieve our goals."

Transit Comparisons

The redesigned network of 245 trains was phased in to prevent service disruptions and to give the team opportunity to fine-tune its work.

"Incremental implementation of TOP made it seamless to our customers," said Manion.Performance monitoring takes place in a command center in Atlanta. There, team members who developed and implemented the plan keep close watch on train movements.

Performance is measured by on-time departures at origins, point-to-point transit times and on-time arrival at destinations. The team has the flexibility to make changes to the plan as conditions change to ensure consistency. At year end, terminal plans were in place at all yards.

"This team and all those who have responsibility for moving trains are committed to excellence," said Dale Schaub, team leader and senior director service design and transportation planning. "We had significant early successes in reducing transit times on a number of lanes."

For example, between Birmingham, Ala., and Allentown, Pa., a major north-south route, transit time was reduced from 96.1 hours to 57.4 hours. Also, between Linwood, N.C., and Elkhart, Ind., NS reduced transit time from 82.1 hours to 51.9 hours westbound and from 90.6 hours to 46 hours eastbound.

"Our goal is to run our trains according to the planned schedule every time," said Schaub. "When we do that, we provide consistent, reliable service to our customers, and that is how NS will grow business and bring a greater return for shareholders."

Measurements Confirm Success

The redesigned merchandise network was one of the factors contributing to dramatic improvements in Norfolk Southern's operating performance in 2001.

"Our operations reflect the success of our network redesign and the work of all our employees to improve customer service and reduce costs," said Steve Tobias, vice chairman and chief operating officer.

The NS system achieved record improvements in the key measurements of cars on line, terminal dwell time and system average train speed.

The number of cars on line — a count of rail cars on the NS system — was reduced 8.1 percent in 2001 because of better operating performance, a rail car fleet reduction and declining traffic attributed to a soft economy.

Terminal dwell time — a measurement of time cars spend in rail yards — improved by 5.3 percent to 24.6 hours. Average system train speed improved by 9.7 percent, rising to more than 22 miles per hour. Both of these measurements of operating efficiency are better than pre-Conrail levels.

Overall on-time train performance increased 33.9 percent as compared with 2000.

Performance Improvement

These graphs show sustained three-year improvement in key operating performance measurements. A downward trend shows improvement for cars on line and system average terminal dwell. For system average train speed, higher is better

Quality Processes Enhanced

In addition to strengthening operating performance, NS raised the bar in the Thoroughbred Quality process in 2001 by introducing Six Sigma problem-solving methodology.

"Six Sigma is the beginning of a new era in our quality process," said Jeff G. Yates, assistant vice president quality management. "Striving for Six Sigma quality can lead to best-in-class operations."

Six Sigma is a fact-based methodology to study problems that cause variation in the quality of service. By adopting Six Sigma methods, NS demonstrates commitment to continuous quality improvement, a requirement to comply with the new ISO 9001:2000 standard. ISO 9001 is an internationally recognized quality standard developed by the International Organization for Standardization in Geneva, Switzerland, and adopted by more than 90 countries. The company's transportation operations, major mechanical shops and a number of other areas already are certified to ISO 9002:1994 standards. They will be reregistered to reflect more recent ISO 9001:2000 standards, which require reflecting the voice of the customer in addition to a continuous improvement process. Six Sigma is that process.

More than 100 NS employees received Six Sigma training in the past year and a half. Using Six Sigma methods, NS reduced end-of-train device battery failures, which resulted in fewer train delays, and improved the locomotive overhaul process, which resulted in fewer in-service locomotive delays. Other projects are expected to result in improved customer service and cost savings.

"Six Sigma builds on what we've accomplished," said Yates. "One day it will simply be 'the way we work."

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