1 The “Consortium” and Integrated Supply Chain Management for the Acquisition of Buses Canadian Forum on Public Procurement CPPC Presented by Guylaine St-Louis, MBA Société de transport de Montréal

2 Topics 1.Project overview 2.“Consortium” 3.Contract management 4.Group synergies Project Administration

3 1 – Project Overview Objectives: Future financial planning required by the “consortium” partners and the MTQ; A common vision coupled with the combined negotiating power and technical expertise of the transit authorities; Cooperation and simplified supplier management through standardization; Improved product quality and reduced total lifecycle costs.

4 1 – Project Overview Evolution: Beginning in 1989, a common tender was issued by the partners for a duration of 2 to 3 years; During the 1990s, gradual consolidation resulted in a unified approach; From 1997 on, the STM was mandated to perform quality assurance at the supplier; In 2002, the “consortium” issued a 5-year contract (with options for extension) for the purchase of 40’ buses. A permanent cross-functional group has been mandated to administer this contract; In 2005, a new division of the consortium was mandated to handle the tender for articulated buses; In 2007, 1 st step of contract for articulated buses undertaken; In 2007, extension options (40’ buses) were confirmed.

5 1 – Project Overview Advantages for public transit authorities Rapid communication of information and sharing of best practices, enabling system-wide continuous improvement; Synergy among stakeholders regarding the design, reliability, maintenance, comfort and safety of the product; Establishment of common specifications for basic buses plus options; Centralized negotiations and prioritization of technical issues resulting in rapid implementation of new initiatives; Development of new bus models.

6 1 – Project Overview Advantages for the supplier Critical mass of similar orders and improved efficiency for production planning; Cooperation, synergy and knowledge; Improved centralized communication; Improved product development that could result in additional markets.

7 2 -Fleet composition of “Consortium” partners (Jan. 2007)

8 2 -Demand overview The contract included 527 buses; The contract will likely include 813 buses; With a ‘’2008+’’ options for a max of 777 buses;

9 2 – “Consortium” A cross-functional team dedicated to the 40’ buses : 2 Quality technicians Process Engineer Project Industrial engineering & Quality Coordinator Contract & Project Director Warranty & Negotiation support Includes support from the STM (Legal, etc.) + A decision-making process by joint committees

Contract management Contract Administration Uniform procurement contract administration and approval process of Nova LFS bus + Administration of previous ATUQ contracts (warranty) + Participation in Project Administration Team

Contract management GUAA = Unified administration of bus acquisition The GUAA is responsible for : 1.On-time delivery to contracted specifications; 2.Quality assurance coordination; 3.Coordination of teams for product compliance and improvement; 4.Warranty administration; 5.Communication and knowledge management between the partners; 6.Budget administration.

12 4 – Structure & synergy ATUQ – all transits General Directors Partnership Supplier-ATUQ Quebec Government MTQ-MDEIR CAA GUAA Permanent Team Technical Dev. ATUQ (CTA) Improvement team (CAPS) ATUQ-Supplier Supplier (CTAN) + Termporary Projet Team for requirements STM For legal & adm support Develobus STM For legal & adm support Hybrids Representatives from the transits Procurement Maintenance & Eng. Others

13 4 – Group synergies CAA : Bus acquisition committee CTA : Technical/Development committee of ATUQ CTAN : Technical/Development committee of ATUQ- Supplier CAPS : Product in-service improvement committee Other ad-hoc committees Develobus Temp. Project Administration Team

14 5 – New challenges: Implementation of changes on 40’ buses; Continued testing on two articulated buses; Delivery and introduction of eight new hybrid buses; Organization of a new team for a new tender for 40’-foot buses Project Administration : New strategic planning; New committee structure; Re-organisation of the teams to prepare and manage 40’ & articulated buses contracts.

15 Questions