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Principles of Operations Management
9 May 2017
Class Group Project: Bombardier Supply Chain Issues
Abstract
Bombardier Inc. is a Canadian-based manufacturer of both planes and trains. It operates through four segments: Business Aircraft, Commercial Aircraft, Aero-structures and Engineering Services, and Transportation. Its headquarters is in Montréal, Canada and employs 66,000 people worldwide. Bombardier was founded by Joseph-Armand Bombardier in 1942 originally as a manufacturer of snowmobiles.
The Transportation segment offers a portfolio of products and services in the rail industry, covering the full spectrum of rail solutions, ranging from trains to sub-systems, services, system integration, signaling and e-mobility solutions. This division has 37,000 employees with 60 production and engineering sites in 28 countries. It is a global leader in the rail industry.
2016 was a troubling year for Bombardier Transportation where it had failed to deliver streetcars on time to Toronto. These trains are for a 19-kilometre light rail system that is supposed to be running in 2021. Bombardier Inc. had agreed to deliver the prototype five-segment light rail vehicle for this line at the beginning of 2015. These train cars are manufactured at its Thunder Bay Ontario plant where delays and quality issues are blamed on supply chain issues that include multiple countries and languages. These problems have rippled across six other rapid transit Canada projects.
The current situation of Bombardier Transportation relative to its supply chain issues is defined by quality problems and poor supplier management. We will look into the cause of the problems and what lean activities could be employed to better ensure an on-time and problem free result. This will include looking at Business Process and Supply Chain Management by exploring how elements like Technology, Lean Systems, Global Supply Chain and Facilities Design can improve the final product.
Company Overview
Bombardier Inc. is a Canadian-based manufacturer of both planes and trains. It operates through four segments: Business Aircraft, Commercial Aircraft, Aero-structures and Engineering Services, and Transportation. Its headquarters is in Montréal, Canada and employs 66,000 people worldwide.
The Transportation segment offers a portfolio of products and services in the rail industry, covering the full spectrum of rail solutions, ranging from trains to sub-systems, services, system integration, signaling and e-mobility solutions. This division has 37,000 employees with 60 production and engineering sites in 28 countries. It is a global leader in the rail industry
Company History
Bombardier was founded by Joseph-Armand Bombardier in 1942 originally as a manufacturer of snowmobiles.
Bombardier was founded by Joseph-Armand Bombardier as L'Auto-Neige Bombardier Limitée (loosely translated to "Bombardier Snow Car Limited") on January 29, 1942, at Valcourt in the Eastern Townships, Quebec. Bombardier was a mechanic who dreamed of building a vehicle that could "float on snow," in 1937 Bombardier designed and produced his first snowmobile in a small Valcourt, Quebec repair shop.
After the death of Bombardier in 1965, his sons and sons-in-law reorganized and decentralized the company and adopted modern business tactics.
1986 Bombardier acquired Canadair and then shortly thereafter also acquired de Haviland Canada, Short Brothers and Learjet.
In 1970 Bombardier acquired the Austrian company Lohner-Rotax, a manufacturer of snowmobile engines and tramways, and became involved with rail business
In 2003, Bombardier Inc. sold its Recreational Products Division to a group of investors and is now called Bombardier Recreational Products (BRP). BRP has a long legacy of innovation and has multiple brands: Ski-Doo (snowmobiles), Can-Am motorcycles (ATVs & Spyder Roadsters), Sea-Doo (PWC and SportBoats), Lynx (snowmobile), Evinrude Outboard Motors, and Rotax
Thunder Bay plant started out as the Canadian Car and Foundry in 1902 and produced the 250 streetcars that currently operate in Toronto which Bombardier bout in 1992.
Bombardier bought the Mexican Ciudad Sahagun plant (outside of Mexico City) from the Mexican government in 1991 as a platform to sell more trains and engineering services throughout Latin America.
Company Organization
Business Aircraft
Commercial Aircraft
Transportation
Aerostructures and Engineering Services
Vision Statement
Looking far ahead while delivering today.
Mission Statement
Our mission is to be the world's leading manufacturer of planes and trains. We are committed to providing superior value and service to our customers and sustained profitability to our shareholders by investing in our people and products.
Company Performance
Brand reputation in jeopardy due to problems
Is it really a cost savings if you are building the parts and we can’t use them? We are stuck with all these parts built on an angle that is not right. We’re highly frustrated. The big fear is that it puts the plant in a bad light when it has nothing to do with us
Toronto Low Floor Streetcars Project called Flexity Light Rail
Largest transit expansion project in Toronto history
Toronto Trans Commission ordered 204 low floor streetcars for $1.2 billion due by 2019 to run on 19 Kilometer light rail track
Total project $5.3 billion
Trains to begin running in 2021
Bombardier was to deliver prototype five-segment light rail vehicle November 2014
60% Canadian content rule
Bombardier is on its seventh project manager in Thunder Bay
Streetcars being built for the Toronto streetcar project have a different wheel gauge and need to navigate tighter curves
Frames, floors, wheel assemblies and wiring harnesses are being built at the Mexican Ciudad Sahagun plant
Problems
Supply chain issues delaying deliveries from Thunder Bay, Ontario plant
Causing issues across country
Enlisting two additional factories to increase the production of the light rail trains
Parts from the Mexico plant did not fit properly when they arrived and they spent a lot of time reworking or waiting for parts which then shuts down the line.
Streetcar bodies and frames made in Bombardier’s plant in Mexico are either built to the wrong sizes or are defective. Laminate that wouldn’t adhere to the parts, and under-frames so badly out of alignment with the walls Bombardier tried to rivet them together: The first vehicles in Toronto’s new $1.2-billion streetcar fleet were so poorly manufactured, the TTC wouldn’t accept them for fear they would break down on bumpy city streets, transit CEO Andy Byford has revealed. Thunder Bay was finding when they went to attach the under-frame to the sidewalls they weren’t square. You either accept that or try riveting it to create that square alignment. We rejected that. We don’t want it riveted. We want it built properly, because rivets pop
Electrical connectors from the Mexico plan were crimped improperly. To correct the crimping issue, Bombardier has to effectively check 20,000 wires per vehicle
Bombardier Transportation’s new president may not have the clout to make significant changes in the way the Sahugan plant prioritizes its customers’ various production schedules. Bombardier is retooling its Mexican operation and the production line in Thunder Bay is getting new quality-assurance processes that catch problems before they get to Toronto
Translating into two languages and going across two borders
A lot of design revisions due to uniqueness of streetcars
Bombardier subway trains build the modules all in Thunder Bay and doesn’t have problems, but the streetcars are sourced globally:
Gear box and motor from Germany
Brake systems from US and France
Structure modules from Mexico
Thunder Bay workers stuff it, splice it, glue it, bond it and test it
Such a global supply chain poses challenges when pieces don’t come, come late, or do not fit. The line is not working in the most efficient manner.
Managing inventory of parts
2010 – New York based company that was supposed manufacturing the sliding doors went bankrupt
Delivery Quality Problems
Thirty new streetcars on the road in Toronto are experiencing mechanical problems more often than expected, says a staff report to be presented to the Toronto Transit Commission board this week
Mechanical problems include doors that didn't open properly, brake issues of some kind, and intercom systems that didn't work.
The problems are plotted in a graph entitled, "Mean Distance Between Failures," which means the distance travelled before a mechanical problem occurs and is fixed.
Design
Toronto’s unique streetcar track gauge needed to navigate tighter curves.
Problems in designing the ramp to load disabled passengers
The European design for the streetcar parts simply wasn’t translating to the Mexican manufacturing facility that is supplying parts to the Thunder Bay assembly plant
Building the “Flexity” light rail vehicles for Toronto’s new line has proved far more challenging. These trams — which Bombardier has built for Belgium, Sweden, Norway and Germany, but is only now bringing to North America — are complex machines: they are low-floor (with mechanical systems on their roofs), air-conditioned and come loaded with electronics: Bombardier even replaced the bell on the old streetcar with an electronic sound that simulates a bell.
Business Process Management
Supply Chain Management
5 Elements
Supplier Management
Technology
Design for Manufacturing, Assembly (Robot), Supply Chain, Robustness, Ease of Repair, Ergo and Safety, Support, Test, Value
Innovation
Virtual Manufacturing
Factory Processes
Facilities Design
Manufacturing Plan=
Scheduling
SCM Design
Global Supply Chain
Inventory Management
Factory Layout and Workflow
Procurement
Environment and Safety
Additive Manufacturing
IPTs
Lean Systems
Process Optimization
Product Optimization
