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Rather than swinging toward either extreme, the pendulum seems to have settled somewhere in between.
One of the great debates in the railroad industry has been over whether management should be highly centralized or decentralized. Over the years, both concepts have been in vogue. More recently, technology allowed railroads to build huge centralized dispatching centers that looked more suited to managing World War III than something as mundane as a railroad. These military-style centers were the heart and soul of the railroads that had them. In addition to dispatching, they handled power distribution, crew management, maintenance scheduling, and everything else involved in operating the railroad.
Decentralization is back in vogue as carriers strive to generate new business and to adapt to changing market conditions. Those that have them are not scrapping the investment in centralized dispatch centers, but they are blending more decentralized management with centralized planning.
Norfolk Southern Senior Vice President-Operations Planning and Support John Samuels points out that "customers want consistent service and service is no more consistent than the execution of the operating plan." Execution, he points out, is a function of local and regional management.
Some of the efforts to centralize railroads were a result of years of shrinkage. The industry went through multiple rounds of buyouts and has a shortage of trained, experienced management. Technology allowed fewer people to manage more.
But technology also took managers farther and farther from customers and from the field people who had to deal with the myriad things that can disrupt a railroad plan: grade crossing incidents, derailments, washouts, mud slides, etc.
Burlington Northern and Santa Fe President and Chief Operating Officer Matt Rose says, "We get the question a lot: Do you believe in centralization or decentralization? We've been both ways." BNSF was one of the carriers that has a huge multi-story operating center at its Fort Worth, Tex., campus. It has a blended style. "We looked at the functions themselves," Rose says. "Certainly we are a network business requiring centralization in planning and central coordination. We let the pendulum swing too much in one way, and in our case it was centralization. We lost sight of having execution in decentralization."
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