Comité des services de transport en commun
and Council / et au Conseil
10
February 2009 / le 10 février 2009
Submitted
by/Soumis par : Nancy
Schepers, Deputy City Manager/Directrice municipale adjointe,
Infrastructure Services and Community Sustainability/Services
d’infrastructure et Viabilité des collectivités
Contact Person/Personne ressource : Alain Mercier, General
Manager/Directeur général, Transit Services/Services du transport en commun
(613) 842-3636 ext.
2271, alain.mercier@ottawa.ca
SUBJECT:
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OBJET :
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Examen des normes et des processus d’entretien dU PARC D’AUTOBUS |
That
Transit Committee recommend that Council:
1. Redirect $4.0
million in available capital funds from existing project 900292 Bus Equipment
Replacement to a new project to initiate the necessary changes to improve fleet
availability towards a target of 90 per cent;
2. Delegate
authority to the General Manager, Transit Services to negotiate, approve and
sign a management support contract to restructure operational practices of bus
maintenance and report to Transit Committee on bus availability and specific
progress on the investment project as part of the annual planning cycle; and,
3. Direct Financial Services staff to work with Transit Services staff to establish a specific policy within the limits of the Purchasing By-law related to the procurement of bus vehicles that mandates supplier targets for availability, maintainability, reliability, and safety.
Que le Comité du transport en commun recommande au Conseil municipal :
1. de transférer des
crédits d’immobilisation de 4 millions de dollars du projet 900292 –
Remplacement d’équipement d’autobus, à un nouveau projet visant à entreprendre
les changements nécessaires pour améliorer la disponibilité du parc d’autobus
en vue d’atteindre un objectif de 90 pour cent;
2. de déléguer au directeur
général des Services de transport en commun le pouvoir de négocier, d’approuver
et de signer un contrat de soutien de la gestion en vue de la restructuration
des méthodes d’entretien des autobus, et de lui demander de faire rapport au
Comité du transport en commun sur la disponibilité des autobus et l’avancement
du projet d’investissement dans le cadre du cycle de planification annuel; et,
3. de donner instruction au
personnel des Services financiers de travailler avec le personnel des Services
de transport en commun en vue d’établir, dans le cadre des limites du Règlement
municipal sur les achats, une politique particulière relativement à
l’acquisition d’autobus visant à exiger les cibles des fournisseurs en matière
de disponibilité, de stabilité, de fiabilité et de sécurité.
In the late 1990s, the need to reduce the age of the bus fleet, the need for an accessible design and the integration of OC Transpo into the City of Ottawa municipal services brought several key challenges together in a period where expectations for increased performance were high. Following the 1997 report on the direction of OC Transpo by KPMG, significant changes were identified to improve the process to manage the fleet, the maintenance infrastructure and modify business practice. These demands coincided with changes in bus manufacturing including the use of electronics, the globalization of suppliers and revolution in design to achieve an accessible low-floor design.
The City's significant investment in its bus fleet has resulted in lowering the bus fleet age from 14.7 years to almost seven years in the span of 10 years. Low-floor designs now comprise over 75 per cent of the bus fleet and should be a universal service for the public by 2017 as per Council policy. Emissions have been reduced drastically as new compliant engines have been introduced.
The rapid renewal of the fleet has brought some unintended consequences arising from more complex design involving changes to steering and drive axles to achieve a low-floor design and additional systems such as ramps, HVAC in a closed ventilation environment, and a rapid expansion in software driven systems and safety elements. This has resulted in significant increases in weight, reduced access to components, and lower fuel efficiency to control emissions such as nitrous oxides and particulate matter. The result has been an increase in cost per km for fuel and maintenance from $1.04 in 2001 to $1.56 in 2007.
The increase in fleet size and complexity of new designs to meet market needs has created a variety of unintended effects which have resulted in significantly lower fleet availability for service than would have been expected from a young transit fleet. The purpose of this report is to propose a series of concrete actions that will improve peak capacity availability from the current 81 per cent to 90 per cent. At the present fleet size of 1,025 buses, this would translate to approximately 70 more buses available for peak daily service (on a base of 846 buses deployed), translating into a total saving in capital employed of approximately $50M.
STEPS TO CREATE A SUCCESSFUL MAINTENANCE SYSTEM
There are four key objectives to be achieved by the Transit Maintenance group to increase the availability of the fleet to best practice levels of 90 per cent. Some of these were identified as part of the Fleet Services Branch Process Review (BPR) completed in 2008. These objectives will improve the resource efficiency (labour, materials, tools, facilities), lower cost and increase the reliability and quality of the bus fleet so that it may be available for service and improve the customer experience.
1. Planning
There is a need to develop a comprehensive planning and industrial engineering skill base to manage resources. At this time, planning is performed for inspections locally over four garages on each shift and there are no resources to integrate and administer a progressive maintenance plan. The Transit Maintenance division is being redesigned to create a centralized planning group to better integrate maintenance and bus allocations with operations. This reorganization will take approximately 12-18 months due to the recruiting of new skill sets and retraining of the entire maintenance support and management staff. It is being undertaken with the assistance of outside consulting resources.
2. Integrated Materials Management
Notwithstanding a corporate goal to reduce inventories, it is anticipated that transit fleet inventories will increase in 2009 on account of the need to stock maintenance spares and parts related to the introduction of two new bus designs (Hybrid and Double Decker), as well as continuing to supply parts to our 10 other bus designs.
With the reorganization of Transit Services in July 2008 to achieve greater accountability, the fleet inventory function of the Financial Services Branch was transferred to Transit. This organization has been merged within the Transit Maintenance division however material planning and optimization is not yet possible until 2010 due to lack of integration of inventory and maintenance in two different systems (M5/SAP) and the current absence of a planning function.
The use of a central stores distribution model is a significant barrier to effective management of material and is an important financial burden on the organization. At present, it is estimated that the cost of acquisition, securing, issuance, transport and distribution of parts exceeds 25 per cent of the cost of the part, which is twice the industry standard.
To optimize bus availability, a re-design of Materials Management needs to be undertaken, and will require:
· investment to revamp the stores model;
· the development of a new procurement models for strategic parts and low cost distribution strategies for low value materials, and;
· a temporary increase in inventories to increase bus availability will be required while a parts mapping process is implemented in 2009.
3. Manage Design Deficiencies of the Articulated and Invero Buses
The Articulated and Invero fleets purchased in the last seven years have design deficiencies that have seriously impacted bus availability. In the case of the Articulated Fleet, the average availability is below 75 per cent most of the year. The reliability issues are well known and were addressed in the recent procurement of the 48 New Flyer orders of 60-foot buses but are not yet proven.
Transit
Services will assess the investment plan to correct for the most pressing
design deficiencies, examine the impact of a more aggressive maintenance to
improve availability and evaluate alternative replacement strategies for the
future.
4. Bus Procurement Strategies
As indicated above, the City of Ottawa as a client has borne the risk of new designs impacting the reliability of service and cost to the taxpayer. Transit vehicles today are not hardened designs (as automotive and commercial designs are) due to lack of standardization in the industry, low volumes and rapidly changing market conditions (emissions, low floor and computerization). Builders today are integrators of supplier designs and are not integrated manufacturers. It is recommended that due to the significant investment in assets, new rules of qualification and procurement by Transit Services be required to ensure financial and operational value is obtained through risk sharing by the supplier industry. As well, it is proposed that suppliers be obligated to meet targets of reliability, availability, maintainability and safety, a practice required in other major North American cities including Chicago and New York.
The diversity of bus models is significantly taxing maintenance capacity and efficiency with over 12 distinct designs expected to be in the fleet by end of 2009. Transit Services has no capacity to acquire a new bus design until 2012 given the organizational limits, capacity to modify and acquire garage/tooling and the serious backlog in existing design changes on the current fleet. Transit Services will look towards reducing three to four models by 2011 through anticipated sales to reduce inventory, training and improve quality of maintenance.
Conclusion
To undertake the four priority actions to increase bus fleet availability, Transit Services is requesting authority to redirect $4.0 million of existing capital authority from available funds to implement immediately a broad change to fleet maintenance practices through:
1. The assistance of a qualified firm to
design, implement plans and train personnel on best practice techniques to
achieve higher availability
2. Implementing changes to the material
management business practices to achieve productivity savings
3. Implementing a pilot project with
existing Smartbus technology and M5 to acquire on-board data versus in-shop
inspections and evaluate gains in productivity/availability
4. Planning and implementing garage
infrastructure changes to accommodate decentralized distribution
Specialized organizations exist in the market with expertise in production planning, quality management and development of operational procedures to achieve high asset productivity (garage and fleet). The selected firm will enter the organization for up to 24 months to overlay new operational practices; coach management and supervisors to ensure operational controls are utilized.
As this report addressed proposal for the internal reorganization of procedures within the City’s Transit Services branch, consultation is not required.
LEGAL/RISK MANAGEMENT IMPLICATIONS
There are no legal/risk management impediments to implementing the recommendations in this report.
Funds of $4.0M are available in capital project 900292 Garage Equipment Replacement previously authorized and not yet spent.
Supply Management would be required to plan, develop and modify vendor relationships, PO structures and review roles and responsibilities with Transit Services to ensure value is captured by the City of Ottawa without reducing commitments on existing prices, best-price strategies and inventory investments/turnover rates identified in previous plans and audit recommendations.
Strategies to reduce fleet types, concentrate fleet assignments by garage, improve turn rates on parts and improved visibility from annual planning of parts should reduce inventory levels over time from the current value of $13M in accordance with audit guidelines but would be difficult to achieve in the short term as the focus is on parts availability.
N/A
Upon Council approval of this report,
redirect $4.0 million in available capital funds from existing project 900292
Bus Equipment Replacement to initiate the necessary changes to improve fleet
availability towards a target of 90 per cent.
The General Manager, Transit Services will negotiate, approve and sign a
management support contract to restructure operational practices of bus
maintenance and report to Transit Committee on bus availability and specific
progress on the investment project as part of the annual planning cycle.
Staff from Financial Services will work with Transit Services staff to establish a specific policy within the Purchasing By-law related to the procurement of bus vehicles that mandates supplier targets for availability, maintainability, reliability, and safety.