Profit Magazine - JD Edwards Special Edition 2011

that development around light rail has created an economic development boom for housing because people really want to live near an effective public transportation system.

Deakin believes that
growing support for public
transportation is due to chang-
ing attitudes, especially from
young people who are inter-
ested in sustainability. “It’s a
lifestyle thing,” says Deakin.
“People are particularly inter-
ested in trying to live in a
way that doesn’t require them
to use a car for everything.
Recent research suggests that
the creative class is much more
interested in public transit,
which is a good thing, because
Another huge contributing factor to growing interest in
public transportation is government investment. In 2010,
the Department of Transportation and the Federal Transit
Administration announced US$290 million in funding for 53
new transit projects for streetcars, buses, and transit facilities to
improve quality of life in communities across the U.S. as part
of President Obama’s Livability Initiative. States are also getting
involved—which in some ways is even more important, Deakin
says. “Here in California, we have bills encouraging metropoli-
tan regions and local governments to go toward more mixed-
use development to create the kinds of places where transit will
actually work well,” she explains.

And while federal and state governments are certainly spending on projects for buses, research by the American Public Transportation Association (APTA) reveals that streetcars and light rail are gaining attention for the important reason that when conditions are equal, rail transit attracts from 34 percent to 43 percent more riders than the equivalent bus service.

Light rail also provides an alternative to existing forms of mass transit, according to Ralph Menzano, industry director of transportation at Oracle and the former CIO of the Southeastern Pennsylvania Transportation Authority. “There are probably few people who are happy to have to take the bus every day,” says Menzano, who believes that streetcars have a different allure than more-utilitarian forms of mass transit. Streetcar manufacturers must take this into account. “For riders, streetcars and trains are certainly a cut above buses in terms of enjoyment,” he says.

Indeed, industry studies cited by APTA point to the fact
that light rail and streetcars have routes that are clearly iden-
tifiable and more stable than bus routes. They also use vehi-
cles that are often more comfortable and don’t expose riders

Chandra Brown, president of United Streetcar, is committed to establishing a U.S.-based supply chain that sources at least 60 percent of manufacturing materials from domestic suppliers.

“It’s obvious to me that people would rather take a streetcar than a bus, but streetcars right now largely have fanatical advocates,” Menzano says. “The question is, how do you make streetcars more mainstream?”

This is the question USC’s management team is focusing on as it builds the business from the ground up—no easy task as a brand-new company in an industry with no other U.S. company to use as a model. To make matters more complicated, USC is building the first streetcars in the U.S. in more than 50 years.

“One of the bigger challenges we have had is setting up a
new supply chain in the United States,” says Brown. “We want
to meet the [U.S. government’s] Buy America requirements
that stipulate that at least 60 percent of your vehicle needs to
be built and sourced from the United States. We’ve had to find
companies that have maybe never built a part or a piece for a
streetcar because most streetcars are built in Europe.”
According to Don Hutchison, director of finance at USC, this
was complicated by the fact that USC’s manufacturing processes
would differ from those well known to workers at its parent
company, OIW. “OIW has been and is extremely successful,
but it is really a job shop,” says Hutchison. “If a bridge or dam
has trouble, we go and fix it pretty easily. We don’t have 100 of
them, and don’t have to worry about which one it is and how to
get parts. The streetcar is more of a production environment.”
USC executives realized they needed to implement an enter-
prise resource planning (ERP) system to manage the manufac-
turing and supply chain processes as an engineer-to-order shop,
where base items would be similar but builds would be unique.
It needed help to evolve into a manufacturing company.

To help with the project, Hutchison and his staff connected with Jibe Consulting, a management and technology consulting company and Oracle partner based in Portland. Jibe specializes in helping small startup companies implement systems to effectively manage future growth. This made the Oracle partner a perfect fit for USC’s requirements. “Jibe was local and invested in being a long-term partner with us. Most other ERP experts we spoke to were used to converting customers from an existing system to a bigger system. We needed a partner who could sit with us and understand what we were doing, and then recommend best practices as we move forward,” says Hutchison.