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Dwarves’ Forge or High Tech Manufacturer?

Bombardier’s Quality Crisis

 

STUDENT PAPER

By Fei Wang

SKEMA Business School

Paris, France

 



ABSTRACT

The objective of this paper is to resolve the quality control issues at Bombardier™ Inc., recipient of a $1.2 billion contract to manufacture 204 light rail vehicles (LRVs) for the Toronto Transit Commission (TTC). It has identified a major crisis in the municipal transportation system of Canada’s largest city, Toronto, which is also North America’s third largest city. In the ten years since the contract was awarded, Bombardier has missed every single delivery deadline many times over, threatening the operational network of the TTC. The author has referenced and researched news articles and opinion, as well as corporate financial and legal documentation and industry publications to arrive at the conclusions. It was discovered that Bombardier has few problems with timely LRV delivery from its European manufacturing plants, but many from the plants in Ontario, Canada and Mexico. In conclusion, it is recommended that the application of stringent Root Cause Analysis (RCA) methodology be implemented in all of Bombardier’s Transportation division.

Key words: Quality control, Just-in-time (JIT), Bombardier, Toronto, Toronto Transit Commission (TTC), Work breakdown structure (WBS), Pareto, Root Cause Analysis (RCA), define-measure-analyze-improve-control (DMAIC), Six Sigma (6σ), Supply Chain, quality pre-warning mechanism (QPWM),

INTRODUCTION

A Toronto Transit Commission (TTC) engineer characterized the assembly of vehicles in Thunder Bay as being “hand-built.” A factory worker characterized it more bluntly: “They take f–king hammers and they smash the steel into shape, like it’s a f–king dwarves’ forge.”

“Bombardier has been shut out of a $4-billion contract to supply subway cars to New York City because of past delivery delays.”

These statements dramatically demonstrate the quality management crisis facing Bombardier Inc., the largest producer of railcars in the world. In 2009, the TTC inked a contract with Bombardier for a $1.2 Cdn billion order for 204 new low floor “Flexity” light rail vehicles (LRVs) to replace the existing 30-year old dilapidated fleet. Since the commencement of the order, a host of contractual problems have significantly delayed production, so much so that Toronto Mayor John Tory called the repeated delays a “farce” in October 2017.

It was announced in the 1998 Bombardier Annual Report to Shareholders that …” The Six Sigma program will be a key contributor in our aim to reach our new five-year pre-tax target profit margin of 10%. After its successful introduction at Bombardier Aerospace in 1997, the Six Sigma quality and productivity improvement program is now being implemented company-wide.”

It has not worked.

In 2016 the TTC exercised a legal claim against Bombardier for $50 million. The proceeds of the lawsuit are to be used to repair existing surface transit vehicles as well as to commission buses to replace them, resulting in fewer buses for existing routes. The importance is that Toronto requires a reliable and efficient transit system NOW, not years down the road.

How can Bombardier improve quality control and supply chain management to ensure it meets its contractual agreements for future deliveries?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Wang, F. (2018). Dwarves’ Forge or High Tech Manufacturer? Bombardier’s Quality Crisis, PM World Journal, Volume VII, Issue VI – June. Available online at https://pmworldjournal.net/wp-content/uploads/2018/06/pmwj71-Jun2018-Wang-Fei-dwarves-forge-or-high-tech-manufacturer.pdf



About the Author


Fei Wang

Paris, France

 

 

 

Fei Wang is a MSc student in SKEMA Business School, Majoring in Project and Programme Management &Business Development, with nearly 10 years of working experience in business management and International construction projects. He has worked as a project manager assistant, administrator, financial assistant and international business manager in China Railway Design Corporation (CRDC) and “TSDI-APEC-EDON” railway engineering consortium consultancy in different international projects in North America, Russia, Kenya and Tanzania. He has both infrastructure engineering and project management education background and experience. He lives in Paris, France now and can be contacted at [email protected]