magnus larsson, alstom presenation at spare parts 2014

Train Life Services Train Life Services Train Life Services Train Life Services

A Supply Chain ChallengeA Supply Chain ChallengeA Supply Chain ChallengeA Supply Chain Challenge

Train Life Services

> 3 areas of expertize dedicated to performance:

• Maintenance services: Maintenance services: Maintenance services: Maintenance services: fleet maintenance and train performance optimization

• Parts supply services:Parts supply services:Parts supply services:Parts supply services: day to day support for operators in parts management, repairs and

technical assistance

• Modernization solutionsModernization solutionsModernization solutionsModernization solutions: life time extension, improvement of performances, energy

consumption and comfort

To address specific needs, Alstom can provide a full range of engineering services supported by new

design and innovations.

6,000EMPLOYEES

IN 30 COUNTRIES

90SITES

1B€ANNUAL

TURNOVER

ALSTOM TLS Footprint

6,000EMPLOYEES

30NATIONALITIES

25%OF OUR STAFF

FROM OUR CUSTOMERS

TRANSFERRED

URBAN

TRAINS

INTERCITY/

MAINLINE

HS/VHS

TRAINS

FREIGHT

LOCO

PARTS HUB REPAIR

CENTERS

MOD.

PROJECTS

MOD.

CENTERS

MAINTENANCE PARTS SUPPLY MODERNIZATION

Key figures 2010/2011

AT sales 5.8 b€

* including Signalling & Systems

TLS16%

Rolling Stock& Other*

Parts31%

Modern14%

Maintenance55%%%%

Parts

31%

Main Line 26%

Mass Transit 28%

Freight 11%

Regional 6%

APAC 9%

France 7%

NAM 8%

LAM 12%

South Europe 22%

North Europe 41%

April 2010 to March 11: 900 M€ Sales

ALSTOM

Rolling Stock 20%

ALSTOM Rolling Stock 80%

> Breakdown of 2010-2011

AT and TLS Sales (%)

> Breakdown of 2010-2011 TLS Sales

per type of Rolling Stock & Region

Why reengineer a global SC Why reengineer a global SC Why reengineer a global SC Why reengineer a global SC model ?model ?model ?model ?

Services to Rolling Stock

A growing market…..A growing market…..A growing market…..A growing market…..

• Expected 3.3 % growth year on year

• Maintenance outsourcing trends

• Diversification of stakeholders

MaintainersMaintainersMaintainersMaintainers

Maintenance costs

Parts availability

Obsolescence

OperatorsOperatorsOperatorsOperators

Fleet Availability

Operational Costs

Increase Revenues

Fleet OwnersFleet OwnersFleet OwnersFleet Owners

Fleet Administration

Fleet Residual Value

Recycling

… in a competitive environment

• Low product captivity

• Some protected markets

Variation in Customer needs.

ModernizationModernizationModernizationModernization

Train Life Extension

Performance increase

New Regulations

Fleet Administration

Configuration

ECM

Entity in Charge of Maintenance

Recycling

MaintainersMaintainersMaintainersMaintainersOperatorsOperatorsOperatorsOperatorsFleet OwnersFleet OwnersFleet OwnersFleet Owners

MaintenanceMaintenanceMaintenanceMaintenance

Franchise

Technical Full Services

Energy Management

Passenger Care

Accident and Vandalism

Parts & RepairsParts & RepairsParts & RepairsParts & Repairs

Material availability

lead time

Train Health Management

Maintenance plan

optimization

Obsolescence

management

The 5 Key constraints for our service footprint

1. Contractual commitment to Customer on Rolling Stock and/or Material

availability

2. Technical know-how on world-wide installed fleet and access to legacy

technical files on OEM sites

3. Supplier base and captivity

4. Supply Chain costs & lead time

5. Tax & Customs duties

TLS Supply Chain ModelS

• Parts & Repairs on Quote

− Sales administration and distribution logistics

• Material Availability Service Contracts

− Inventory management and service exchange for repairs

• Maintenance / Full Material Management long term contracts

− Trains/Material availability on a price/mileage basis

− Customized Supply Chain on Customer depots

− Fleet and material planning for preventive, corrective, on condition

• Modernization

− Project driven re-engineering and modernized trainset or kit delivery

The Big Question?

� synergies?

� lead time reduction ?

� anticipation of business growth ?

“Which Supply chain model to best execute ALSTOM Train Life Services current after-

sales activities and support business growth successfully in green field zones?

The SCORE ProjectThe SCORE ProjectThe SCORE ProjectThe SCORE Project

SCORE Project

SCORE SCORE SCORE SCORE : SSSSupply CCCChain OOOOrganization for REREREREactivity

• Dedicated team : 1 Supply Chain developer + External assistance

• 1 year project including extensive data crunching, interviews and self assessment questionnaire over 60

sites, workshops

SCORE Project challenges

• 100 facilities to be considered 100 facilities to be considered 100 facilities to be considered 100 facilities to be considered : : : : from very small to very large, with complex flows between entities and high

diversity of contractual commitments.

• 600 000600 000600 000600 000 references and service specific typology to be taken into account :

− Demand pattern

− Commercial : show stopper, passenger comfort..

− Maturity : In serial production, after sales, legacy, captivity

− Valuation

• Existing beliefs:Existing beliefs:Existing beliefs:Existing beliefs:

− Centralization is cost efficient

− Synergies are limited to stock

TLS TLS TLS TLS worldwide Supply Chain visionworldwide Supply Chain visionworldwide Supply Chain visionworldwide Supply Chain vision

3 Steps towards TLS New SC model

1/ Definition per business type per business type per business type per business type (Maintenance, Parts, Modernization) of :

− Standard processes Standard processes Standard processes Standard processes (Demand and Supply management, Planning, Logistics)

− Standard sites typology Standard sites typology Standard sites typology Standard sites typology

− Standard key functions Standard key functions Standard key functions Standard key functions (mission, local/global, skills)

2/ Definition of standard « Service Network OrganizationsService Network OrganizationsService Network OrganizationsService Network Organizations » for a given contract or new geographic zone.

3/ Validation of golden rules golden rules golden rules golden rules by senior management to give

− Simple and shared guidelines for addressing new businessguidelines for addressing new businessguidelines for addressing new businessguidelines for addressing new business.

− Standard roles and responsibilitiesroles and responsibilitiesroles and responsibilitiesroles and responsibilities

− InteractionsInteractionsInteractionsInteractions between entities.

Mapping of the key network actors

SITES TYPOLOGY

SITES TYPOLOGY

SITES TYPOLOGY

SITES TYPOLOGY

3 Site Typologies

Fleet approach for Business growthFleet approach for Business growthFleet approach for Business growthFleet approach for Business growth

Master Data Master Data Master Data Master Data

Maintenance Bill of MaterialMaintenance Bill of MaterialMaintenance Bill of MaterialMaintenance Bill of Material

Installed Base Installed Base Installed Base Installed Base

ManagementManagementManagementManagement

Installed Fleet knowInstalled Fleet knowInstalled Fleet knowInstalled Fleet know----how how how how

Maintenance Maintenance Maintenance Maintenance

Engineering, Engineering, Engineering, Engineering,

Obsolescence, SafetyObsolescence, SafetyObsolescence, SafetyObsolescence, Safety

Technical Data ManagementTechnical Data ManagementTechnical Data ManagementTechnical Data Management

Global SourcingGlobal SourcingGlobal SourcingGlobal Sourcing

& Inventory& Inventory& Inventory& Inventory

Management for Management for Management for Management for

common/critical Partscommon/critical Partscommon/critical Partscommon/critical Parts

Business Development Business Development Business Development Business Development

PlanPlanPlanPlan

Service Network Organization Modeling tool

FUNCTIONSFUNCTIONSFUNCTIONSFUNCTIONS

ASSETSASSETSASSETSASSETS

SITE TYPOLOGIESSITE TYPOLOGIESSITE TYPOLOGIESSITE TYPOLOGIES

ROLESROLESROLESROLES

Design and implementation of the standard

SSSService NNNNetwork OOOOrganization to best serve a

given new service contract or emerging geographic

zone

Trading

Unit

Leading

Unit

Participative

Unit

Site 1Site 1Site 1Site 1

ParticipativeUnit

Site 2Site 2Site 2Site 2

LeadingUnit

Material

Planner

Repair Loop

Controller

Custom Clearance

Maintenance

Engineers

Fleet Planner

Tender Team

Transport

Procurement

Sourcing

Parts Technicians

Demand

Planner

Maintenance

Engineers

Warehousing/

Preparation

Line

replenishment

Operation

planning

DepotDepotDepotDepot

FCoEFCoEFCoEFCoE

RegionalRegionalRegionalRegional

HubHubHubHub

Local RepairLocal RepairLocal RepairLocal Repair

CenterCenterCenterCenter

CustomerCustomerCustomerCustomer

HubHubHubHub

Stand aloneStand aloneStand aloneStand alone

depotdepotdepotdepot

Local Local Local Local

StorageStorageStorageStorage

Material

Planner

Maintenance

EngineersTender Team

Procurement

Parts

Technicians

Demand

Planner

Parts Bid

Team

Sales force

Sourcing

FCoEFCoEFCoEFCoE

FCoEFCoEFCoEFCoE Reg. HubReg. HubReg. HubReg. Hub

C

U

S

T

O

M

E

R

Benefits

Benefits of using ALSTOM TLS “Service Network Modeling Tool Service Network Modeling Tool Service Network Modeling Tool Service Network Modeling Tool “

• Demonstrate dedicated Service Network capabilities to prospects

• Validate tender phase targeted Service Network

• Align all functions on a clear road map

ERP set-up and deployment, skills and staffing needs, stock allocation, freight request for quotations, depot hand over

campaign, interfaces with maintenance operation, Sourcing, Engineering)

• Maximize global management synergies while securing daily performance commitment

Thanks for your attention…

magnus larsson, alstom presenation at spare parts 2014

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