100%(1)1 out of 1 people found this document helpful
This preview shows page 1 - 2 out of 29 pages.
Putting the“ROAR”Back in CSX PurchasingFran Chinnici, a Penn State University engineering graduate, knows all about the Nit-tany Lion“roar”from his days in State College (a.k.a. Happy Valley). When Chinnici wasnamed vice president of purchasing and materials at CSX Transportation just over threeyears ago, he felt that a major change was needed to get his sourcing team on a new track.Since his appointment to the job, he has put the purchasing function on the global track to21st-century excellence.CSX is one of four Class 1 Railroads in the United States. In 2007 the company had sales ofover $10 billion and earnings of $2.99/share. With a barrel of crude oilﬂuctuating in the$90 to $100 range and fuel prices at close to $3 a gallon, the railroads have become a favor-ite of many shippers. The railroads’low cost-per-ton-mile allows them to compete very favor-ably with other transportation modes.Supporting this business growth and sustaining high levels of service, while controlling mate-rials costs, posed major challenges for the CSX Purchasing and Materials Department. Meet-ing the challenge was compounded by a changing supply base. Chinnici states that“areduction in the number of railroads and the subsequent consolidation of purchases resultedin a downsizing of our domestic supply base.”With the growth in shipments experienced bythe U.S. Class 1 Railroads, the lack of domestic suppliers is a major concern. This is espe-cially true considering that Chinnici and his team are responsible for $4 billion in pur-chases. This money is spent on over 100,000 items necessary to keep 21,000 route miles oftrack, about 100,000 freight cars, and over 4,300 locomotives moving freight to the thou-sands of localities and customers served by CSX.“Based on the demands of our operating en-vironment, the shrinking supply base, and the need to continuously add value to thecompany from a supply perspective, it was a no-brainer that we had to develop a moreglobal perspective,”says Chinnici.His goal was to raise the skill levels of his organization to meet the global as well as otherchallenges required of a 21st-century supply function. Toward that end, he made it a require-ment for all current employees and new hires to further develop their skill sets and attainthe status of Certified Purchasing Manager (C.P.M.). Leading by example, Chinnici attendedC.P.M. training along with his staff members and successfully passed the necessary exams.He proudly displays his C.P.M. certificate in his office overlooking Jacksonville’s growing sky-line.“Attending classes with my people was a way of visibly demonstrating my commitmentto raising our level of professionalism,”he says,“and the C.P.M. is just a start.”After threeyears he is proud to say that over 95% of his supply management professionals are C.P.M.