Transnet Freight Rail is the largest Operating Division of Transnet. The division's primary business is to provide rail transport of commodities for the export, regional and domestic markets. Transnet Freight Rail operates the world-class heavy haul coal and iron ore export lines and is developing the manganese export corridor to heavy haul standards.

Transnet Freight Rail also transports a broad range of bulk general freight commodities and containerised freight. The division maintains a complex rail network of approximately 31 000 track kilometres (20 900 route kilometres) over which commodities are railed.

The diverse rail network comprises 1 500 kilometres heavy haul lines, and also includes 3 928 kilometres of branch lines that serve as feeders to main lines. The rail network service provides strategic links between ports, terminals and production hubs providing connectivity with Southern African railways to support regional integration. Infrastructure connectivity, coupled with close co-operation with other Operating Divisions and collaboration with key customers, enables the delivery of freight volumes across value chains.

Transnet Freight Rail is in transition from the Business Units (BU)/ Channel model to an Operating Corridor model. This new strategy will incorporate initiatives for improved operating models, geographic expansion, and market and customer development.

The Corridors operate across geographical operating channels in an integrated network to improve train plan execution and service delivery to customers across the value chain. Transnet Freight Rail also provides the network for long distance passenger rail services as well as haulage capacity for other private passenger services. TFR continues to operate the prestigious Blue Train.

Freight Business

TFR introduced a new operating model that will decentralise key responsibilities to ensure a more responsive rail freight network that is better equipped to service the South African economy. TFR operates a vertically integrated, and commercially separated, railway and operationally integrates with Transnet Ports, Port Terminals, Pipelines and Rail Engineering facilities. TFR comprises a system of complementary sub-systems - integrated and connected Operating Corridors working safely & optimally. Operating Corridors are logical units of accountability that together produce results not obtainable by the elements alone the whole being greater than the sum of its parts. The boundaries for Operating Corridors are defined by a set of key operating principles.

QUESTION: TFR is in the distribution business and applies the SCM to support the business of distribution from source to customer. Thus, some logistics elements (e.g., warehousing and distribution) would be both elements and core functionalities to be supported. Consider the current TFR processes of SCM application (governed by National treasury and the PFMA principles of procurement and asset management). Analyse the status of the TFR and consider the application of the current SCM. From your analysis determine if a new direction involving a re-designed or new approach to the SCM, would be appropriate or, whether the existing structure could be improved through modification to the existing logistics functions in the INBOUND/OPERATIONS/OUTBOUND and sales and marketing of the SCM (as per Porters model). Take note that OPERATIONS is also has all the logistics elements inherent in its business and is not to be neglected!