Happy Rails! How SAP® Railcar Management Has Provided the Visibility Its Customers Need

The rail infrastructure today presents new challenges. Feeling the pain of unanticipated transportation delays, rising competition, strict regulatory standards, and increasing customer demands, companies across many industries are anxious to have more visibility into their rail operations. As a result, many have turned to the SAP® Railcar Management application and enjoyed increased efficiency and cost savings in railcar operations, planning, leasing, and maintenance.

Keeping track of thousands of railcars moving many different products annually to hundreds of customers all over North America can be a daunting task. Where is each individual rail car? Is it on time delivering goods to customers? When will it be available to carry another shipment?

Agrium: Reducing One of the Largest Expenses
Agrium – one of the world’s foremost suppliers of agricultural nutrients – implemented SAP Railcar Management to answer these questions and to manage its fleet of railcars throughout North America. This fleet grows from 3,000 to 6,000 railcars every spring to handle the demands of on-time fertilizer delivery to the farm community.

The ability to know where every railcar is at any given time and to respond quickly to transportation delays has enabled Agrium to increase its fleet utilization by at least 10%. Since rail transport represents one of their largest expenses, this optimization has resulted in significant cost savings. Agrium transitioned management of its rail operations in only six weeks without disrupting any of its ongoing rail operations.

In considering its adoption of SAP Railcar Management, Agrium wanted to take full advantage of the benefits of an integrated solution. For the last decade, Agrium had been running its business using highly integrated SAP solutions, from its implementation of SAP R/3® software (now the SAP ERP application) in 1996 to its implementation of the SAP Business Information Warehouse component (now included in the SAP NetWeaver® Business Intelligence component) and the SAP Customer Relationship Management application in 2004.

By implementing the integrated SAP Railcar Management and SAP Event Management applications – part of the SAP Supply Chain Management application enabling Agrium’s employees to track railcars – the company realized cost savings on support and user training. But the greatest benefit of all was that, for the first time, railcar management became an application visible to and usable by all Agrium users of SAP software.

Olin Corporation: Additional Enhancements for Greater Profit
Another company using SAP Railcar Management to decrease transportation costs is the Chlor-Alkali products division of Olin Corporation, one of the largest manufacturers of basic materials and ammunition. This division relies on a 3,000-railcar fleet – supplemented by trucks and barges – to deliver materials to customers in the eastern United States. With 26,000 routes, railcar tracking is a significant challenge.

Like Agrium, Olin uses SAP Railcar Management to keep track of where these railcars are, what products they are carrying, and when they can be expected to arrive at their destinations – either customer sites or Olin’s production facilities. In addition, Olin implemented the integrated freight-costing functionality included in SAP Railcar Management – which improves the company’s ability to track freight costs, such as consignment freight costs, stock transfer costs, and fuel/accessorial expenses of specific shipments. Because SAP Railcar Management is integrated with Olin’s SAP ERP application, it enables freight-costing data to be easily linked with the division’s overall financial information.

Again, the implementation of SAP Railcar Management featured a rapid and seamless transition from the legacy system to the new railcar management solution. An SAP customer since 1995, Olin chose to perform most of the implementation with its own personnel, supported by railcar experts from the SAP Custom Development organization. Working together, this team implemented the SAP Railcar Management application’s base functionality as well as its freight cost and railcar extensions.

SAP Railcar Management Is Gaining Traction
Agrium and Olin are not unique in realizing the benefits of SAP Railcar Management. More than 40 companies in North America and Europe are licensed – several of them in the chemical, oil and gas, mill products, and mining/resource industries. Thus, SAP Railcar Management is gaining momentum as an add-on for supply chain management that provides a good return on investment.

Learn about our SAP Railcar Management customer successes at Agrium and Olin Corporation. Read the SAP Rail Car Management Solution in Detail Efficient Management of Rail Operations.

In addition to the SAP customer success stories, please view the June 12, 2007 Web Conference on SAP Railcar Management. 

Or, to find out more, you can visit us on the Web at www.sap.com/services/customdev, call SAP Services and SAP Custom Development at +1 866-609-1124, or click here.