MBTA eyes outsourcing to fix 'broken' inventory system
Describing a dysfunctional inventory system that does not meet industry standards, MBTA officials and a consultant made the case Monday to outsource the operations, while workers argued keeping the current staff would be key to improving performance.
"We have a completely broken system," MBTA Chief Procurement Officer Gerard Polcari told reporters Monday ahead of an MBTA Fiscal and Management Control Board meeting. He said the problems were "decades" in the making and outsourcing would be a "game-changer."
The MBTA takes about 82 hours to respond and deliver requested parts while the industry standard is 12 hours, according to the T. While the industry standard is 95 percent accuracy of items, the MBTA weighted average of its accuracy is 56 percent.
"I've never seen numbers like these," said Ernest Miller, managing partner at Optio Tempore, who was brought in to look at the T's system. Photos of jumbled boxes in the T's low-ceilinged warehouse were contrasted with towering - and seemingly well organized - shelves in a more modern facility.
"Obviously Amazon is like the gold standard," said Polcari, who said the plan would be to select a new warehouse and logistics vendor by August.
On the hook are the jobs of about 34 workers as well as a handful of managers now led by James Rae, director of warehousing and logistics.
Workers represented by the Boston Carmen's Union argued the warehouse operations had been ignored and underfunded despite concerns raised by its workers.
"We are incredibly understaffed and we have asked for improvements," said Jeanne Breare, who said both she and her husband work for the stockroom - he in South Boston and she in Quincy. She said, "Management has neglected the stockroom for many, many years. We've had no formal training. It's been mismanaged from the top down."
Both management and the union agree that the problem rests with management. While workers urged the T to seek improvements with the current staff, T officials said bringing the facilities, operations, vehicles and employee-hours to those needed would be cost-prohibitive.
"It's very much a management failure. There's a lack of oversight of what the workers are doing," Miller told reporters.
"First and foremost it falls on management," Polcari concurred.
John Hoffman, who said he worked 15 years at the Everett stock room and has never showed up late to work, said the personnel in Everett varies from two to 10 people most days, helping repair shops meet the needs of more than 3,000 vehicles, buildings in 150 locations and "hundreds of miles of track." Given the complexity of the task, Hoffman said, there is "no way that a private company can step into this job tomorrow."
Officials said the warehouse needs to operate for longer hours than the eight-a-day, five-day-per-week schedule, and should have its own vehicles to deliver parts, potentially when roads are free at night. Polcari said the warehouse piggybacks on other T vehicles as engines are delivered from the Everett repair shop to work yards.
Currently, according to Miller, hours pass between efforts to find the requested spare parts, prepare them for delivery and then send them to the repair facility.
"This is their number one problem. This is what they complain about," Polcari said, of T mechanics.
Democratic members of the House and Senate made the case that the MBTA offers good middle-class jobs and encouraged the control board to take a dim view of privatization.
"We're not going to have healthy, sustainable communities," warned Quincy Democrat Sen. John Keenan.
Michael Gaffney, vice chairman of the Worcester City Council, said his city owns a golf course and there are certain services that should not be performed by government.
"It's not a business we should be in," Gaffney said.
At central stores in Everett and Charlestown, the T has about $38 million in known serialized inventory, additional non-serialized parts in Medford, $14 million in inventory at eight rail car houses and $10.7 million at 10 bus garages. Polcari said the Everett facility was built as a repair shop, not a warehouse.
The current system costs $4.2 million in operating expenses and there is about $22.7 million in excess inventory, according to the T.
Improving the current warehouse system internally would involve about $14 million in capital expenses, and according to Polcari, "our operating costs would grow exponentially" as hours expand and the warehouse operation takes on its own vehicles.
According to the T's presentation, major companies such as Ford, Honda, Caterpillar and General Electric outsource warehouse operations.
"We need to focus our energy on running the transit system safely and reliably," said MBTA Chief Administrator Brian Shortsleeve. Speaking about inventory management, Shortsleeve said, "We'll never be the best in the world at it but there are companies that are."
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