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Vandalism Voices from a Transportation Team
Montreal, Canada
July, 2016
Marco Anaya –Damage Prevention and Claims ManagerFCA Mexico Logistics and Customs
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Index
■ FCA –Vandalism facts and impact Incidence impact from 2014 Repair time impact Operation example
■ Countermeasures What can an OEM do? What can the Railroad do?
■ Conclusions
Agenda
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FCA – Vandalism Facts and Impact
Incidence● Increased dramatically during 2015 and 2016, impact in customer satisfaction, losing
sales, affecting quality, not selling units as new, among others● Complex recovery processes and quantity of damaged units exceed the repair
facilities capacity
Incidence increased2014 – 2015: 505 %
Incidence increased
2015 – 2016 : 171 %
% of units Vandalized
2014: 0.05 %2015 (1st half): 0.21 %2015 (2nd half): 0.29 %2016 (1st half): 0.39 %
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FCA – Vandalism Facts and Impact
Repair time● It has become more violent throughout the time; damaged bumpers, doors, fenders,
missing batteries (cut cables), antennas, wheels and tires, headlamps and radios.● Many units have been total loss or loss of sale● Financial impact of keeping inventory (not selling)
Damaged units over 30 days (monthly result impact)
2015 (12 units) $ 0.48 M USD2016 (25 units) $ 1.00 M USD
Direct impact in monthlysales result
Total Impact in USD (average per month)
2015 (48 units) $ 1.92 M USD2016 (82 units) $ 3.28 M USD
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FCA – Vandalism Facts and Impact
Recovery at ports for Major Damages
3 - 30• Cancel / withdrawal of export operation
with customs authorities
1 • Transport to repair facility
1-3 • Unit condition evaluation and quote
1 • Repair order confirmation
1-15 • Place order and wait for part arrival
1-5 • Repair and labor program
1 • Vehicle test after repair
1-3 • Port entry request to custom authorities
1 • Transport to port
2-15 • Dwell for next vessel with available space
15 – 70 days
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Countermeasures - What can an OEM do?
Understanding where, when, what and how?● Evaluation and diagnosis of the source of each issue
KEYS 42%TIRE 34%
TOOL BOX 13%BATTERY 7%
RADIO / OTHERS 4%100%
75
9790
21
84
121
January February March April May June
42%
34%
13%
7%
4%
KEYS
TIRE
TOOL BOX
BATTERY
RADIO / OTHERS
DAMAGE
UNIT / MONTH UNIT / ROUTEMODEL
DAMAGE %DAMAGE %
FXE
FX
FXEKCSM
KCM
FXEFXE
2015 Average: 48
407
22 19 16 12 12
RAM WRANGLER PATRIOT GRANDCHEROKEE
JOURNEY OTHERS
274
66 51 46 419 1
SALTILLO -VERACRUZ
PIEDRASNEGRAS -
CHICALOTE
SALTILLO -PIEDRASNEGRAS
SALTILLO -EL PASO
TOLUCA -LAREDO
SALTILLO -LAREDO
TOLUCA -LAZAROCARD.
506426
15679 64
KEYS TIRE TOOL BOX BATERIES RADIO /OTHERS
42%
34%
13%
7%4%
KEYS TIRE TOOL BOX BATTERY RADIO /OTHERS
FXE KCSMFXE FXEFXEKCSM KCSM
KCSM2014 Average: 9.5
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Countermeasures - What can an OEM do?
Clean your house first• Eliminate any different source of vandalism – Armour your yard
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Valet Sim
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!
Valet Sim
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Valet Sim
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Valet Sim
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!
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!
VIN ID
Row
Position
Zone
Valet Sim
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VIN ID
Row
Position
Zone
!
Valet Sim
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K
H
M
S
L
O
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VIN ID
Row
Position
Zone
Valet Sim
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001112131415 1016
!
VIN ID
Row
Position
Zone
Valet Sim
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Leader becomes liable for the Group’s keys.
Any discrepancy must be notified immediately to supervisor.
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Leader delivers keys to supervisor, responsibility now turns over to key supervisor.
Any discrepancy must be notified immediately.
Valet Sim
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Load Process (1)
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ID Inspector: Checks and keeps record of key count / validates discrepancies found.
Load Process (1)
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Security Guard: Must review that no one outside the operation is around the area.
Any stranger found around the operation must be reported immediately to supervisor.
Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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ID Inspector: Records the key count “Check List / Buy-off document ”
Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (1)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Chock adjustment
Load Process (3)
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TAKT Time?Chock adjustment
Load Process (3)
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Cycle Time?
Load Process (3)
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End Operation
Load Process (3)
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Leader of the loading Team
Load Process (3)
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Leader of the loading Team
Load Process (3)
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Leader of the loading Team
Load Process (3)
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Leader of the loading Team
Load Process (3)
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Leader of the loading Team
Load Process (3)
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Leader of the loading Team
Load Process (3)
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Leader of the loading Team
Load Process (3)
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Leader: Last person of getting off the platform.Responsible to check all the keys are in CUPHOLDERMust keep record of any discrepancy and notify
Load Process (3)
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Gets off the platform checking for discrepancies
Load Process (3)
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Gets off the platform checking for discrepancies
Load Process (3)
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Gets off the platform checking for discrepancies
Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Load Process (3)
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Countermeasures - What can an OEM do?
120
QC WEEK #Before QWEEK 1 8
WEEK 2 43WEEK 3 46WEEK 4 16WEEK 5 12WEEK 6 17WEEK 7 17WEEK 8 37WEEK 9 31WEEK 10 39WEEK 11 24WEEK 12 57WEEK 13 23WEEK 14 25WEEK 15 1WEEK 16 1WEEK 17 1WEEK 18 5WEEK 19 0WEEK 20 0WEEK 21 0WEEK 22 0WEEK 23 0WEEK 24 0WEEK 25 0WEEK 26 0WEEK 27 0
403 TOTAL
Key Theft Metric (Railcar Load - QC Project)
8
4346
16
12
17 17
37
31
39
24
57
23
25
1 1 1
5
0 0 0 0 0 0 0 0 0
WEEK1
WEEK2
WEEK3
WEEK4
WEEK5
WEEK6
WEEK7
WEEK8
WEEK9
WEEK10
WEEK11
WEEK12
WEEK13
WEEK14
WEEK15
WEEK16
WEEK17
WEEK18
WEEK19
WEEK20
WEEK21
WEEK22
WEEK23
WEEK24
WEEK25
WEEK26
WEEK27
Before QC
Avarage 15
Clean your house first• Be certain units are shipped without any discrepancy• Liability must be addressed to rail
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Countermeasures - What can an OEM do?
Re design your network● Take away volume from the railroad to use different type of transportation (truck
– vessel)
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Countermeasures - What can an OEM do?
122
Risk management – Proactive approach● Keeping inventory in repair facilities of parts needed (“demand planning” /
“knowing what the customer wants”)● Develop repair facilities and increase capacity● Forecast services needed (transport, Customs formalities, fiscal depots, etc)
15.93 16.39 16.12
13.56
7.576.83
5.00
7.00
9.00
11.00
13.00
15.00
17.00
January February March April May June
Repair Time (Days)
2015 Average 13
● Increased repair capacity
● Development of a more reliable forecast to keep inventory
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Countermeasures - What can an OEM do?
Addressing issues with local / federal authorities● Take advantage of industry strength in local / country economies● Join forces with all OEM’s and railroad to become louder● Government affairs department in each OEM should be placing this issue in their
agendas as an important decision topic for local investment● Work with AMIA in addressing this issue as an industry issue to authorities
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Countermeasures - What can an OEM do?
Collaboration between OEMs● Sharing routes and rail space to avoid interchanges and / or delays in yards● Share initiatives and best practices● Develop logistic alternatives, ports, new routes (take advantage of the industry
volume)
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Countermeasures - What can the Railroad do?
Investment (vandalism impact may justify)● Equipment used in Mexico, use only safe equipment for Mexico service● Specialized Security ● Infrastructure, develop safe routes to avoid reducing speed, hot spots, etc.
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Countermeasures - What can the Railroad do?
Legislation● Work with government authorities in laws and regulations that will ensure safe
transit and law enforcement.
Network design - logistic● Optimize current network to seek for alternate routes to avoid hot spots
OEM’s are willing to cooperate / participate in any Railroad initiative!
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Conclusions
Vandalism has increased to become a major concern for the industry causing constraints in the supply chain and financial impact
Railroad companies must take actions immediately and consider this as a serious problem (might become cost-effective to use a different source of transport)
OEM’s need to play an active roll seeking for possible solutions and initiatives
Understand that this issue is related to the socio-economical situation of the country
Understand that this is not a competitive advantage / disadvantage for any OEM, we should collaborate, join efforts and use the industry strength to support the rail companies to fight this issue