MBTA: Analysis
The Massachusetts Bay Transit Authority (MBTA) needed a thorough analysis of their spare parts and material warehouse operations to determine the root cause of significant inventory availability problems, despite holding high inventory quantities.
CHALLENGE
Determine the true performance levels and costs to operate the spare parts and material management processes for the MBTA. The MBTA has full ownership and operational responsibility for a fleet composed of over 1000 full sized buses and more than 200 light rail transit cars and the necessary railways and infrastructure. Once true performance levels and root causes could be determined, Optio Tempore was tasked with developing recommendations for quickly improving the performance to industry standard levels. The MBTA had operated in a highly political environment with strong unions for many decades and had never adopted many standard operations best practices. Unfortunately, the MBTA’s data on inventory was widely known to be inaccurate, and most standard performance measures–such as lines per hour productivity and inventory availability—were not being gathered.
SOLUTION
Perform a diagonal slice of interviews across the operations, document the current processes in use, and perform primary source data gathering to determine inventory accuracy, productivity, and delivery performance. Analysis revealed deep systemic problems in the processes, systems, and work disciplines leading to inventory accuracy below 40% for many locations and ~60% system wide. Worker productivity was more than 60% below widely accepted warehousing benchmarks, and replenishment deliveries from the central location to maintenance facilities in a 30 mile radius took over 60 hours. The recommended and accepted solution was to outsource the operation to a qualified 3PL firm, who could quickly implement standard warehousing and logistical best practices and raise the performance to the desired level.
BENEFITS
Performance analysis and comparison to benchmarks demonstrated that inventory accuracy could be improved from 56% to 92% in less than a year. Delivery performance could be improved from 60 hours to 12 hours in less than a month due to process change. Also, inventory turns could be improved from 0.6 to 2.0 turns over a multi-year process. All could be accomplished at lower cost and with higher part availability to the maintenance worker.
