The North American railroad industry is beginning to implement new, advanced train control technologies that will significantly change railroad operations. Collectively, these technologies are referred to as the Advanced Train Control Systems (ATCS). Burlington Northern Railroad's specific version of ATCS is called the Advanced Railroad Electronics System (ARES). In an extensive operations analysis, Burlington Northern found that it could use ARES to greatly reduce costs or improve service, or a little of both. To determine the optimal course of action, the railroad conducted a market study to determine the value of better service. The study results indicated that custo. ners were willing to pay much more for small improvements in service. Burlington Northern's market managers disputed this, believing that better service would not significantly increase prices or market share. Meanwhile, ARES operations analysis indicated that operating improvements could be targeted very precisely using the new technology. Travel time improvements could be allocated at will among various classes of trains. Given these results, Burlington Northern should concentrate its initial implementation of ARES functionality on reducing cycle times for bulk commodity trains. This will result in the need for fewer coal sets to move a given amount of coal. Then, the railroad will receive the certain payoff of reduced assets as opposed to the uncertain payoff of increased revenue. As implementation proceeds, Burlington Northern should use ARES capabilities to test the value of improving service. Then implementation strategies can be adjusted to improve the outcome.

The introduction of new technology into an existing operation often provides the opportunity to improve the processes making up the operation. Advanced Train Control Systems (ATCS) have the potential to improve railroad operations. Through investments in this new technology, railroads have the opportunity to lower costs and improve service simultaneously. This happy state of affairs does not frequently present itself. Usually, providing an improved level of service requires that more resources (more cost) be used in the operation. An existing process can be used to translate input resources into desired outputs. More output, or higher-quality output, requires more input resources.