CTA Targets Waste at Warehouse

February 20, 2012
Reforms in supply-chain system will save millions of dollars
CTA President Forrest Claypool today exposed millions in waste at CTA supply warehouses, while unveiling a host of improvements to agency’s system for managing parts and materials—each designed to reduce costs, increase oversight and improve operations.
Appearing at the CTA’s central warehouse on Goose Island, Claypool spotlighted tens of millions of dollars’ worth of old parts and supplies that have sat unused for years, and laid out plans to more effectively manage the purchase of thousands of items needed to maintain and repair CTA buses, trains and facilities.
The new initiatives include more stringent reviews of large or non-routine orders, and steps to implement an electronic bar-coding system to better track items.
CTA will also seek qualified companies that can provide market expertise and industry best practices related to supply-chain functions.
“These steps will improve operations, reduce costs, avoid building up new obsolete inventories, and increase our ability to plan and forecast future needs,” Claypool said. “This is one of many reforms we’re making to modernize and reform the CTA.”
The CTA will also hire an auction firm to sell off unused inventory, which the agency hopes will salvage millions of dollars to put back into some of the agency’s many pressing infrastructure needs.
Of the more than $70 million in current CTA parts and materials, about 47 percent has not been used or moved in the last 24 months, Claypool said. 
About one-third of the 330,000-square-foot main warehouse is devoted to obsolete and unused inventory, including parts ordered for bus and rail equipment that subsequently went out of service, as well as orders of larger-than-needed quantities. These items, ranging from 120 spools of copper and communications wire to customized hand carts, have a value of nearly $6 million.
Among the examples Claypool highlighted were a large supply of window films designed to protect vandalism of rail car windows. The CTA ordered them over three years ago, and currently has a stock of 1,500 pieces worth over $100,000. At current use rates, the supply will last another 25 years.
“The men and women who work in this building do the best job they can under difficult circumstances,” Claypool said. “But for many years they have lacked the proper tools or sufficient direction, leadership and support from CTA management to make the right decisions that yielded the most efficient and cost-effective results.”
This initiative is the CTA’s latest effort, under Mayor Rahm Emanuel’s leadership, to target cost-savings and increased efficiency. 
“This is another example of our commitment to re-directing resources from bureaucracy to front-line improvements and customer service,” Claypool said.
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