Supply Chain World - Fall 2017 - 138

solutions genesee & wyoming inc.

G&W subsidiaries move 3.4
million carloads of freight
a year to serve more than
3,000 customers.

subsidiaries move 3.4 million
carloads of freight a year to serve
more than 3,000 customers. And
all of those railroads had their own
purchasing departments.
To take on this massive task,
Storm adhered to a simple idea.
"We really take the approach of
the 80/20 rule," Storm says, referring to the fact that 80 percent of
the company's spending was the
group's primary focus. "We slowly
started looking at capital expenditures and seeing where we can
save money."
One of the first things Storm did
was to develop a set of specifications and standards for the company. And though that task sounds
complex, Storm notes, "What's
really unique about the railroad
industry is that the supplier base
is not that large. It's really a small,
niche industry."
Although the size of G&W's
suppliers varies, Storm takes pride
in the fact that all suppliers are
treated the same. "I take pride in
my approach that I'm definitely
not putting my eggs in one basket,"
Storm says. "When an emergency
comes up such as track or bridge
repair, we need everyone to pitch in
so we can get up and running again."
For G&W, the company's purchasing expenditures are essentially broken into two sections.
The first is the mechanical portion,
which focuses on locomotives and
freight cars. The second section is
the engineering portion. This portion covers everything from 13,800
track miles in the United States
to 45 million wood ties to 7,000
bridges to 9,200 grade crossings.
Given the vast purchasing network she oversaw, Storm realized
138

Supply Chain World FALL 2017

"Safety is our No. 1 priority. Currently our safety
record within the industry
is unparalleled and that
doesn't just happen."
_________
she had to keep the process of
standardizing purchasing fairly
simple. Fortunately, she had a lot
of industry experience in benchmarking suppliers. "I have 15 years
of experience in dealing with
railroad suppliers, so benchmarking turned out to be a very good
thing," Storm says. "One thing we
didn't want to do was recreate the
wheel, so we focused on getting
some protocol in place."
Storm had to overcome some
internal resistance in the initial
stage, given that many formerly
autonomous, smaller railroads
were now being overseen by a corporate presence. "Without a doubt
the main challenge was some

initial pushback," Storm recalls.
But once she showed how costs
could come down and efficiencies
improve, there was buy-in across
the board. "Once they saw the
strategic and administrative piece
and how we could save money, it
all came together."
Storm views purchasing as a
team-based function of the company. "My approach to purchasing
is that at the end of the day, it's a
team decision," Storm notes. "My
job is to facilitate the process and
give assessments of bidders. We
include the operations team on
major purchasing decisions because we want their approval and
support as well."

Culture Fits
One benefit of its formalized
purchasing practices is that G&W
is positioned well as it moves
forward. A key component of its
business model is the continued
acquisition of smaller railroads in
the United States as well as Aus-



Table of Contents for the Digital Edition of Supply Chain World - Fall 2017

Contents
Supply Chain World - Fall 2017 - Cover1
Supply Chain World - Fall 2017 - Cover2
Supply Chain World - Fall 2017 - 1
Supply Chain World - Fall 2017 - Contents
Supply Chain World - Fall 2017 - 3
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