June 1997 • Volume 24 • Number 3

SNCF on the Right Track with Edelman Honors

The Societe Nationale des Chemins de Fer Francais (SNCF), the French national railroad, was confronted with a problem it had never faced before: competition.

"The deregulation of passenger transportation in the European community has created an atmosphere of intense competition among transportation providers that never existed before," SNCF director Cécile Queille said.

"There is no choice for us but to reduce our cost through a better utilization of our resources and to enhance our revenues by attracting more passengers. Given the complexity of the decision at hand, we came very quickly to the conclusion that decision support systems based on operations research techniques were a must to support our agressive business initiatives."

In 1987, six years after the introduction of the first high-speed rail technology and a dramatic increase in traffic, SNCF began searching for a larger system with greater functionality that could offer better inventory management.

SNCF's search eventually led to Sabre Decision Technologies, the information technology arm of AMR Corporation (parent of American Airlines), headquartered at Dallas-Fort Worth Airport. A recognized world leader in transportation decision systems, SDT teamed up with SNCF to build state-of-the-art scheduling tools aimed at optimizing the schedule from conception to operation.

The joint work not only made a substantial positive impact on SNCF's bottom line, it was recognized by the College on the Practice of Management Science (CPMS), the Practice Section of INFORMS, as this year's winner of the coveted Franz Edelman Award for Achievement in the Management Sciences and Operations Research. Stephen Strauss, chair of the Edelman competition committee, presented the award to SNCF at the recent INFORMS meeting in San Diego.

The Edelman competition, generally considered to be the "Olympics of OR/MS," is a year-long process that begins with nominations and culminates with a day-long series of presentations at the spring national meeting of INFORMS. This year marked the 26th annual competition, which includes a $10,000 first-place prize.

Along with Queille, co-authors of the winning entry included Nejib Ben-Khedher, Josephine Kintanar and William Stripling of Sabre Decision Technologies.

The partnership between SNCF and Sabre led to the development of two decision support systems — RailCap and RailPlus.

RailCap enables SNCF to make quick, efficient capacity adjustment decisions in its daily Train Grand Vitesse (TGV) service; with RailPlus, the organization can generate more profitable schedules in only one season. Redesigning schedules used to take as long as two to three years when done manually.

SNCF has reported benefits such as increased revenue and profit, better customer service, a reduction in manpower schedule development time and more effective utilization of its resources.

Queille said receiving the award was both professionally and personally rewarding. "I want to thank the Edelman Committee for distinguishing SBCF and our SDT partner," she told the audience in San Diego. "The recognition that we are receiving today is an affirmation of our decision to make operations research a strategic activity at SNCF. This is also an honor for me personally because I started the operations research department at SNCF before I assumed my present position."

This is the second time in six years that Sabre has helped a client earn Edelman accolades. In 1991, Sabre, then known as American Airlines Decision Technologies, developed a yield management system for American Airlines that won the award.

In San Diego for the presentation, Sabre President Thomas Cook described the award-winning work on behalf of SNCF as a "team effort." Cook credited the management team at SNCF for having "a vision that high-speed trains needed the same kind of decision support, yield management schedule and operational decision support that a major airline uses."

Cook praised the users within SNCF who cooperated with the development of the model and systems so that "they could use it, maintain it and make it their own." Cook also acknowledged the "talented" people from Sabre, specifically Ben-Khedher, Kintanar and Stripling, who "put it all together."

Other Edelman finalists included Hewlett Packard, Nortel, Pacific Gas & Electric, Taco Bell Corporation and the U.S. Department of Energy.

"This year produced some of the best presentations that I can remember," said Strauss. "Technology and creativity has brought the work to a new level. The judges had a very challenging time selecting the best."

The judges included Howard Finkelberg, Newton Garber, Yoshiro Ikura, Bob Love, Michael Rothkopf, Amir Sadrian and Thomas Spencer.

INFORMS President Art Geoffrion commended the finalists for their work and for inspiring others. "All of the finalists' papers supply a tremendous inspiration to members of the profession — not just to the ones that are practitioners on a full-time basis,but also those who are in academia trying to educate perhaps future practitioners," he said. "There is also a great value in the credit that is reflected on the profession. This really is the proof that we are as good as we go around telling people that we are."

The award honors Dr. Franz Edelman, a pioneer of management science at RCA and a man generally considered to be the "quintessential practitioner."

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