Name: Hillary Parker

Title: Director of process and quality, supply department

Company: Union Pacific Railroad, one of the largest railroads in North America, serving 23 states in the western two-thirds of the country.

Educational background: With a bachelor's degree in mechanical engineering from Manhattan College, Parker is now pursuing an MBA at Regis University in Denver to gain a better understanding of business and finance. "For any company to be successful, its employees must have a firm understanding of the financial impact of their decisions," she says. "This especially applies to purchasing where a balance must be struck among quality, safety, and cost to ensure the financial health of suppliers and customers."

Professional background: Parker has been with UP's supply department for four years, taking on her current role as director of process and quality for the supply department in 2001. Prior to that, she worked on developing a departmental safety program and implementation of a facilities engineering program to update and standardize UP's field operations.

Duties: Parker works in a cross-functional position to find ways to improve the policies and procedures in UP's supply organization, including areas such as purchasing and supplier relationships. She uses statistical analysis to evaluate supplier performance based on both quality and price and looks for areas to improve the supply base and gain efficiency and savings in UP's $2.9 billion spend. "We monitor delivery performance and leadtime by our suppliers, trying to find ways to improve performance," she says.

Technology's role: Online technologies are changing the way quality is measured and tracked. UP has developed an in-house tool to evaluate critical suppliers. The tool has developed organically as more users come online and make suggestions. "[The tool] actually started as something rather elementary but our Process, Design and Quality group is developing it into a Web application. Testing of the tool is anticipated in the third quarter with a handful of our critical suppliers. The tool will allow suppliers to access information to see how we are evaluating them and any data discrepancies can be quickly addressed to make sure our information is in synch with our suppliers."

Beyond that, online tools are playing a role throughout the purchasing operations. UP is implementing an e-sourcing tool from Clarus and currently 90% of UP's transactions come via EDI with a goal of 100% by the end the 2002. "Using e-procurement should eliminate some of the more tactical operations and free our employees to work on strategic activities and relationships with our suppliers."

Making old things new again: One of the biggest challenges in developing policies and procedures is making them accessible to all parties involved. Parker says, surprisingly, there are still a lot of hard-copy policy manuals floating around UP.

"We're converting those manuals to electronic documents that are housed in a central location and will use it as a repository so everyone sees the same information at the same time. This process prevents outdated information in the field and utilizes our best practices. Converting to centralized, electronic information is standardizing how we do business, increasing productivity and eliminating errors, which adds to our bottom line. So by putting our documents online we're capturing the best practices of all our operations and putting them in a place for everyone to use as a standard."

Benchmarking: Parker says benchmarking is becoming a more common method of improving quality and procedures in the rail industry. UP recently completed a detailed benchmarking study with the Institute of Supply Management and the Center for Advanced Purchasing Studies.

UP has long been active in the ISM quality initiatives," she says. "These cross-functional opportunities allow the railroads to mutually improve quality processes, customer satisfaction, and lower operating costs. UP is implementing specialized programs for quality initiatives, such as Six Sigma in joint partnership projects with both our suppliers and customers."

The merger mania that has dominated the rail industry has led its survivors to work more closely together to improve operations and develop an efficient national rail network. As part of that cooperation, the rail industry in late 2000 developed the RailmarketPlace, a joint function for purchases on nonrail supplies to get the most benefit for their purchasing power. UP is one of the equity owners of that marketplace.