Train Operations: Opportunities to Reduce the Cost of Rebuilding and Manufacturing Components at Maintenance Facilities

Our audit objectives were (1) to assess opportunities for the Mechanical department to reduce costs by right-sizing its component workforce, and (2) to identify potential cost-savings associated with opening its component rebuild workload to competition. Our work indicated that two of three maintenance facilities have excess component rebuild employees and that the company has not fully considered the extent to which it could achieve additional savings by competitively bidding some of its in-house component rebuild workload. As a result, we recommended the company align the maintenance facility’s component workforce with their current and projected workloads. We also recommended that the company assess the cost-effectiveness of continuing to perform any of the component rebuild work in-house, and determine which types of components, if any, should be competitively bid as part of the ongoing company effort to achieve greater maintenance facility efficiencies.