MTM requirements and

expectations from their

Supply Chain. The 4th Annual Rail Suppliers Forum 4th July 2013

Metro Trains Melbourne

Metro Trains Melbourne (MTM)

MTM operates Melbourne Metro under a Franchise

Agreement for Public Transport Victoria.

MTM are responsible for the operation of the metro

service and the maintenance and renewal of the network.

MTM has 3 shareholders MTR, John Holland and UGL

who all have a long established pedigree in the Rail

Industry.

Presentation Overview

The 4th Annual Rail Suppliers Forum has asked MTM to

present it’s requirements and expectations from it’s

current supply chain.

The presentation conveys the challenges that MTM is

facing and the implications to suppliers to the Rail

Industry. The themes which come through the

presentation are not just specific to MTM but reflect the

changing needs of goods and service suppliers to the Rail

Industry in Australia.

I am hoping that it reflects my enthusiasm and inspires

Suppliers to embrace the challenges to serve the Rail

Industry long into the future.

Opportunities in the short term.

• Grade Separations – Vic Roads led Projects with PTV involvement and

executed under an Alliance Model where MTM is a

partner and plays key role in rail material sourcing.

• Bayside Rail Improvement Project (BRIP) – A $100m Project for upgrades on the Frankston

Line. The scope of work currently under

development will include elements of signalling and

infrastructure upgrades.

Opportunities in the short term

continued.

• High Capacity Signalling – Market solutions are currently under investigation

although limited funding in the 2013/14 budget.

• Calder Park - Stabling yard extension to cater for MTM’s 8 new

Xtrapolis units.

• Joint Delivery Models - MTM are currently developing joint delivery models with

the Supply Chain to efficiently and effectively deliver

Annual Works Plan activities.

Opportunities in the medium term

Public Transport Victoria has completed a detailed

examination of how Melbourne’s train system needs to

evolve to meet the needs of the city and of train

passengers in the short, medium and long term. The

Network Development Plan - Metropolitan Rail can be

found on PTV’s website.

•To Facilitate increased network capacity there are a

number of Projects under consideration:

– High Capacity Signalling.

– High Capacity Trains.

The Supply Chain are a significant element of the MTM

extended family. We are keen for lean, efficient and

effective Suppliers to grow with us in Australia and further a

field.

In order to achieve this there are a number of areas where

the Supply Chain can improve its goods and services

profile:

• Greater focus on an accredited Safety Management

Systems.

• Ensure that your Sub-contractors Safety Management

Systems are robust.

• Invest in lean manufacturing and efficiency

improvements.

Areas for Improvement

MTM are driving continuous improvements initiatives hard

internally and we expect the same intensity to be applied by

the Supply Chain:

• Cost effective solutions.

– Competitive Rates, Efficient and Effective.

– Solutions that provide the Right balance between

Capital Investment and Man hours.

– Stronger supplier supply chain, Industry Capability

Network (ICN) are there to help and support.

– Standard solutions where possible.

– Overseas sourcing where appropriate.

Areas for Improvement

MTM need a competitive Supply Chain to meet customer

expectations what was good enough for today will not be

good enough for tomorrow:

• Greater Transparency in all areas.

– Understanding cost drivers.

– Knowledge sharing.

– Continuous improvement initiatives.

– Delivering on commitments.

– Greater focus on Collaborative working.

Areas for Improvement

We are all part of an extended Supply Chain to the Rail

Industry and MTM has its own areas for improvement:

• MTM to obtain a balance between short (yearly) or

longer contracting arrangements (+3 years). We are in a

position to do this if we can jointly demonstrate an

improved value proposition.

• MTM are investing in Contract Management to ensure

compliance and greater professionalism in the execution

phase.

• Improvements in the planning process will provide

benefits to MTM and the Supply Chain. Allowing greater

time to formulate solutions and consolidate scopes.

Areas for Improvement

MTM is well aware that it is as only as good as it’s People

and it’s Supply Chain. This requires time and investment to

build a more robust Supply Chain. In order to achieve this

MTM is working on the following initiatives :

•Rationalisation of the Supplier Data Base. The current

number of Suppliers makes it difficult to develop a tight and

lean supply chain.

•Supplier Continuous Improvement Programme in-

conjunction with Enterprise Connect.

•Develop a performance review process with our Tier 1

Suppliers.

Areas for Improvement

MTM are looking for the above initiatives to provide the

following benefits:

• Ability to consolidate requirements and achieve

economies of scale for all parties.

• Greater opportunity to spend time to work with the

Supply Chain to develop solutions.

• Reduce cost and inefficiencies for the greater good of

MTM and the Australian Rail Industry.

Benefits to MTM

We have an opportunity to grow together and our approach

will provide benefits to Lean Suppliers:

•Greater visibility of MTM’s requirements.

•More time in the tendering process to develop cost

effective solutions.

•Enable the Supply Chain to plan work loads more

effectively.

•Provides greater opportunity to consolidate goods and

services.

•Encourage the joint development of continuous

improvement initiatives.

Benefits to the Supply Chain

MTM understands the barriers to entry associated with the

Rail approvals process. It is MTM’s intention through its

Network Asset Management team (NAM) and the Chief

Engineer to streamline the type approval process. Through

the following initiatives:

•Sharing approval costs with other Train Operators to allow

investments to go further.

•Sharing approval costs with Suppliers.

•Business case based assessments to weed out marginal

product approval projects.

Focusing on Infrastructure

MTM have a committed Annual Works Plan associated with

the Maintenance and Renewals of the rail network. The

Annual Works Plan commences in July and ends the

following June.

MTM has unit cost challenges associated with elements of

the Annual Works Plan. This has encouraged MTM and the

Supply Chain to develop new delivery solutions and

processes.

This has led to MTM exploring In house, Sub-Contract,

Early Contractor Involvement, Tier 1 and Turn Key

Solutions. While aligning commercial and risk profiles for

MTM and the Supply Chain.

Focusing on Infrastructure

Thank You

The 4th Annual Rail Suppliers Forum 4th July 2013