INDUSTRY

Public and disability transportation

ENVIRONMENT

STM operates nearly 1,600 buses and 759 metro cars. It operates parts manufacturing facilities and performs all maintenance activities in-house including the major maintenance. STM also performs the maintenance of its metro stations and the many buildings of its network. It stores over 250,000 items with its network of more than 30 stores.

MANDATE TYPE AND DESCRIPTION

Inventory management process improvements.

INITIAL PROBLEM STATEMENT

Over the years STM has experience a continuous increased of its inventory. The company did not have the necessary tools to properly optimize its inventory and its human resources were inadequate in number and lacking expertise to manage it.

SOLUTIONS

Since 2007, the STM has invested great efforts and means to improve its processes, tools and resources for the management of its inventory. STM had added skilled resources with university degrees in addition to offering several training programs to its internal resources.

In 2008, after a comprehensive study of its alternative and following a public tender, STM had selected the inventory optimization software IMAFS.

RESULTS

Overall, parts availability has increased from 76.4% to 94% between June 2008 and January 2011, while inventory levels remained stable at $ 34,750 million. Such an improvement in parts availability with a stable inventory is remarkable in itself.

This increase in parts availability had a significant impact on the number of unavailable vehicles which fell more than 25% between 2008 and 2010.

The stability of inventory levels is indeed remarkable since it had always experienced a steady growth. From January 2003 to June 2008, STM’s store inventory rose from $ 15 to $ 35 million. The increase was partly due to major projects, changes in the valuation of items, and the introduction of new equipment. Inventory levels have now stabilized despite STM continuing to pursue new projects and the increased the numbers of stocked parts.

Since 2008, this achievement has been accomplished even though over 31,700 new parts-stores were created during this period, an increase of more than 15% of its number or value. There have been investments of over $ 5.27 million in new parts and decreases of less than $ 250,000 for obsolete items. The number of lines purchased has also decreased by 14% and transfer order lines by 6% for store items, which resulted in lower costs of operations.

The operational improvement was also completed through an efficient change management process of the new roles and responsibilities and the culture to adopt more scientific approaches.

If we isolate only the parts that existed before the implantation of IMAFS and have not been declared obsolete, the total inventory levels decreased from $ 33.65 million in June 2008 to 29.24 million in January 2011, or down 13.1% while the overall service levels for these items increased from 76.4% to 94%.

The results are certainly due, to some extent, to the implementation of IMAFS, but also to the efforts of the team, to the process business improvements including as well as to the improved availability of parts machined and manufactured by STM.

Executives from STM are pleased to observe that there is still potential for further improvement of inventory management using IMAFS and with the sustained involvement of internal resources.