S upply Chain & M aintenance Standards

1. Supply Chain & Maintenance Standards

2. Big Hairy Audacious Goals - BHAG Maintenance Standards • Reduce the percentage of RED graded inspections cumulatively by 20% in the first year, 10% in the second year and 5% in the third year. Supply Chain • Reduce selected E-Billed conventional bus parts costs by 25% while increasing service levels and efficiency.

3. Session Goals • Identify key challenges that keep us from achieving our goals • Develop a key idea that overcome a key challenge identified by the group Focus group energy on two topics: • Achievement of Maintenance Standards • Finding efficiency in Supply Chain

4. Ground Rules • Novelty and wild ideas • Delay judgment • Don’t ‘own’ ideas • Respect • Fun

5. Some background to get the afternoon GOING !!!!

6. Fleet Inspection Trends Number of reports of each grading

7. W SWOT – Maintenance Stds Internal - Strengths • Staff and operating companies that are dedicated to corporate objectives • Team is diverse with varied skill sets • Staff and operating companies who are willing to explore new ideas – technology and processes Internal - Weaknesses • Information systems • Technical changes outpacing technical knowledge • Resources to support the all needs • High dependence on ensuring all are working within the program • Large province – varied operating conditions • Work loads External - Opportunities • New and clearer RFP standards for maintenance • Enterprise Improvement Initiative – information systems • New technologies • Proactive preventive maintenance program with standards External - Threats • Flight risk of professional and technical staff – skilled trades • Unknown new initiatives • Costs and resource requirements of new technology • Operating funding approval processes • Budget pressure S T O

8. What does it take to have the “right” part on hand at the “right” time at the “right” cost ? • Parts Demand Planning • Parts identification and catalogue maintenance • Forecast the need with enough time to order and receive • Contact vendors to request quotes on price and availability • Choose the vendor with stock on hand and the best price • Issue a PO and place it with the vendor • Expedite the part when its late • Receive the part and deal with discrepancies or breakage • Pay the parts invoice and freight bill • Store the part till you use it • Perform inventory reconciliation • Deal with obsolete or surplus parts

9. Potential Supply Chain Savings • E-Billing costs from Sept 2010 through August 2011 revealed a potential savings of $12,400 on $41,000 worth of bus parts purchased by one operator. (Not batteries, MRO supplies, brakes, tires or bulk fluids.) • Estimated savings on 25% on identifiable conventional bus parts, from BC Transit • Each place is different

10. W SWOT – Supply Chain • Supply - Internal - Strengths • Supply Services Staff are knowledgeable and dedicated. • Good internal Information Systems software and support. • All parts requirements are tendered out on a weekly basis to many vendors. • Always open to looking at new vendors who supply OEM parts. • BCT Victoria is saving on average 25% on selected parts vs some of our operating Co.s. • Supply - Internal - Weaknesses • Growing demands and complexity of parts requirements overtaking the available time in all areas of Supply Services. (Order desk, on-going parts planning-setup-analysis, administration, cataloguing, website development.) • Ability to support the RTS operators is diminishing. • Warehouse storage space for parts is almost to capacity. • Supply - External - Opportunities • Decision point – Redefine BCT Supply Services mandate for supporting RTS operators. • Enterprise Improvement Initiative – information systems • Increasing planned maintenance with associated parts requirements. • Already shipping near daily to each property • Supply - External - Threats • New and changing vehicle types on the horizon, • Unknown + changing demand pool – operating companies buy parts anywhere they choose. • Vendors stocking fewer parts, more back orders. • On-going expectation of high service level in all systems. • Our operating companies ability to warehouse parts is comparatively low. • Budget pressure and approvals. S T O

11. Launching into it Maintenance Standards: In what ways might BC Transit improve the fleet preventive maintenance program to ensure maintenance is performed to our standards?

12. Launching into it Supply Chain: In what ways might BC Transit reduce costs for bus parts while increasing efficiency and service level?

13. Choose Your Table Supply Chain Maintenance Standards

14. Key Challenges (Web) Eg. Because it will make our buses more reliable. In what ways can we change the PM to reduce our downtime? Why In what ways might BC Transit improve the fleet preventive maintenance program to ensure maintenance is performed to our standards? What is stopping us? Eg. We have a hard time finding good mechanics In what ways might we initiate more people to look to skilled trades as a career ?

15. Key Challenges • Discuss the challenges and converge to top 3

16. Key Challenges • Members make a vote for their best idea

17. Key Ideas • Each member works quietly alone and submits 3 ideas in each segment of the process. • One idea must be ‘out of the box’

18. Key Ideas • Discuss the ideas and converge to top 3

19. Key Ideas • Rate the idea against the criteria

20. Evaluation Criteria • Discuss and rate out of 1-5: • Will it accomplish the goal by the end of fiscal year 13/14? • Can it be done without straining our human resources? • Does it require a significant amount of funding? • Is the solution practical and/or feasible? Tie breaker: Is the solution novel?

21. Big Hairy Audacious Goals - BHAG Maintenance Standards • Reduce the percentage of RED graded inspections cumulatively by 20% in the first year, 10% in the second year and 5% in the third year. Supply Chain • Reduce selected E-Billed conventional bus parts costs by 25% while increasing service levels and efficiency.