2540176200A Research Report Submitted in Partial Fulfillment of the Requirement for the Degree of Master of E-Business Management at the Graduate School of International ManagementInternational University of Japan Title: Green Supply Chain in Automotive By Student No. 2B7204Name MeenakshiSupervisor Li WenkaiApproval Signature ________________________August 2018TABLE OF CONTENTSACKNOWLEDGMENT………………………………………………………………………………… iiABSTRACT………………………………………………………………………………………………… iiiCHAPTER 1: INTRODUCTION………………………………………………………………………1Introduction and research management……………………………………………………………….
1Methodology…………………………………………………………………………………………………………5CHAPTER 2: WHAT IS GREEN SUPPLY CHAIN MANAGEMENT…………………….72.1 What is supply chain management…………………………………………………………………………72.2 What is green supply chain management……………………………………………………………….92.
3 Strategies for Green Supply Chain from the IBM’s Green Supply Chane article………102.4 Case- Han Solar and the Green Supply Chain………………………………………………………….112.5 Case- Mastering Carbon Management (IBM)………………………………………………………….17CHAPTER 3: GKN DRIVELINE (AUTOMOTIVE MANUFACTURING COMPANY) ………………………………………………………………………………………………233.1 GKN Driveline manufacturing company (in Japan) overview……………………………….….
233.2 Supply Chain structure of GKN Driveline…………………………………………………………………313.3 What are the problems of GKN Driveline’s Supply Chain…………………………………………333.4 Suggestions for GKN Driveline company to green up their supply chain………………….
35CHAPTER 4: CONCLUSIONConducting statement………………………………………………………………………………………………….41REFERENCES………………………………………………………………………………………………42ACKNOWLEDGEMENTI am very much delighted to present this report on “Green Supply Chain in Automotive”. This is possible only with the generous support of my supervisor Prof. Li Wenkai. I would like to thank my supervisor Prof. Li Wenkai for his valuable guidance and support.
My sincere thank goes to all faculties of IUJ, who always inspire me for my academic progress. The motivation, enthusiasm and wide knowledge of my professors remains in my memory brief always thankful with them.I am grateful with GKN Driveline company and its employees (Japan) for their kind support. Without information from this company, my study never becomes a complete.It is my great pleasure to express my sincere thanks to my beloved husband Mr. Satish Bhakta for his immerse knowledge and continuous support.
He always helps me not in my academic life but also encourage with a huge love and confidence. I also take this opportunity to express my sincere thanks to my both family members, relatives and friends who always inspire me to do a new academic activity as a result I am able to present this report in this form. I am grateful with my good friend Mr. Naveen Kumar, who keeps on helpful me even in his extremely busy schedule for other important works.At last but not least, I would like to thank my father, mother, for them immerse love towards me that encourage me in all aspect of my life. AbstractThe objective of my research is to find a way and give suggestions for improving greenness in automotive companies of Japan, which are having their business in India. India is a developing country.
Manufacturing sector of India in on growth curve due to implementation of cutting edge Technology with IT application and change in Political scenario. As per the World Bank data, GDP of India is growing above 7% per annum since 2016 and GDP of Japan is under 1%, it is very good chance for companies of Japan to invest in India and expand their business.Japanese Automobile industry is one of the best in class, and it not only produces best vehicles in terms of comfort, fuel efficiency, speed, and safety, but also it produces vehicles which during the production, produces minimum pollution. The application of Toyota Production System (TPS) – JIT and Judoka makes the best usage of Operations management in the industry. The combination of Japanese technology in Indian subcontinent is a mix of different culture and different working atmosphere, In India things are not similar to Japan, and it becomes very much necessary that Japanese companies implement Green Supply Chain in India to be sustainable. It not only helps in reducing the pollution caused by manufacturing industries, but also will help in effectively tackle the unforeseen scenarios during major/minor disruptions (man-made or natural).
CHAPTER 1: INTRODUCTIONIntroduction and research questionIn supply chain management, there are many important parties but oneof the main parties is environment. In the era of global warming, supply chain especially includes sustainability in supply chain with more emphasis onenvironmental effects. Conventionally Supply Chain has several stake holders and one of them is Environment, with globalization connectivity has increased but at same time Environment has affected a lot in negative sense. It is the most important responsibility of links in the supply chain to keep the environment healthy thus, an additional term is required in supply chain which makes supply chain sustainable, and that is “Green”.Green Supply chain is a supply chain in which Environment is considered as one of the most important stake holders, and to reduce the pollution in environment becomes top priority for the suppliers and consumers. Focusing on automotive industry in Japan, this research work will look into the area of environmental hazards and how to minimize it by implementing Green Supply Chain.
In automotive industry, companies are focusing on their product, effectiveness and efficient supply chain network, and how these companies become efficient and responsible to consumers, so that manufacturing becomes environmental friendly. But these companies also need to look upon their supply chain because it will affect the environment positively. In India, companies are rushing to achieve the high rate of manufacturing. These companies are using several strategies to achieve low cost of production to make more profits, such as: – High efficiency machines, new technologies, low cost labor all these steps are not harming the environment, but there are few steps which companies takes to increase productivity but on the cost of environment, such as: – not investing money in company to open Environment Department and allocate money to them, and use several shortcut methods which are in favor of Production but create lot of pollution. Now this small ignorance of industries collectively becomes big trouble overall and increases the Global Warming. So, if they will use some implementations to improve their supply chain to green up. Then it will be good for the company as well as for environment.MethodologyI would like to research in Green Supply Chain in Automotive Industry in India.
It will start with the visit of one manufacturing industry in Japan. I have selected GKN Driveline in Japan.I will visit this company in Tochigi and Nagoya and collect company data from these units.I will see that how material flows from one section of plant to the other section and how this company is working in the direction of Green Supply Chain. CHAPTER 2- WHAT IS GREEN SUPPLY CHAIN MANAGEMENT2.1 What is supply Chain ManagementSupply chain management is a process of flow of information and material from one place to another through several stakeholders in very efficient way such that customer gets maximum satisfaction.There are two terminals in the supply chain, starting point and the ending point, in between there are many channel partners and nodes through which material and information passes. The advantage of supply chain management is that, it saves lot of time and optimizes the effort put in by the stakeholders in between.
Which includes all main parties of a supply chain like manufacturer, distributor, retailer, consumer.Supply Chain is not forward only, it is backward as well as forward flow of materials and information. The manufacturer produces the product based on the requirement from its customers, and its direct customer is Distributor, who is responsible for distributing the manufactured product to retailers, retailers finally supply the material to consumers. The usage of Information Technology is one of the most important application in Supply chain management, the information from Consumers passes through retailers to Distributors to Manufacturers.
There could be more than one manufacturer / Distributor / Retailer to meet the consumer’s requirement. The logistic involved in between plays very important role and without good logistics it is almost impossible to manage the supply chain. 2.2 What is Green Supply Chain ManagementThe application of strategies which saves environment from being polluted during the process of material movement from one place to another, is the new way of Supply Chain Management called Green Supply Chain Management.Traditionally suppliers and vendors compete each other to provide material to its customers in shortest minimum time, and by doing so, they sometimes follow the path which leads to add pollution to the environment.Due to continuous increase in Global warming and Water Pollution, Industries are compelled to take major actions before it becomes too late. Green supply chain not only overlooks logistics of material, but also the way the production takes place. Mitigating the environmental risks help a company to eliminate adverse health impacts, and it will keep the company abreast in the competition from other companies.
Now days most of the manufacturing companies follow the principle of Green Supply Chain Management, and the way it produces the material is beneficial to the society. All stakeholders such as Distributors and Retailers etc. also follow the principal of Green Supply Chain to reduce the environmental impacts. It not only saves the environment, but also it saves them from making more wastes (Muda), and make lesser inventory.2.
3 Strategies for Green Supply Chain from the IBM’s Green Supply Chain articleIn the direction of Green Supply Chain, in 2004 IBM launched its own IBM Supplier Conduct Principles and IBM influenced the EICC (Electronics Industry Code of Conduct) for suppliers in Electronics Industry (2004). IBM asked four things from its suppliers as below: -Suppliers should define and deploy an Environmental Management System (EMS)Suppliers must measure the existing environmental impacts and establish goals to improve performanceSuppliers must disclose their metrics and results in public domainCascade these requirements to any suppliers that provide material to IBM’s product.Having EMS is very essential to suppliers and most of the IBM suppliers adopted this requirement. Displaying the company data on public domain was little bit challenging for Suppliers, but they finally agreed to follow the IBM’s requirement. Transparency benefited every customer of these suppliers. Cascading helped moving businesses step closer to the achievements in the field of Environmental Protection. By knowing the impact of product on the environment, large amount of cost and time on Life Cycle Analysis can be saved.Value chain impacts of the products across the supply chain is necessary to identify the environmental effects at every step.
2.4 Case- Han Solar and the Green Supply ChainSection 2.4 is a summary of the case.
Procedure: -Identify the Problem locationStudy production processBrainstorming to find ways to handle the problematic areas and fix themSupply Chain Sustainability is the management of environmental, social, and economic impacts, and the encouragement of good governance practices throughout the Life Cycles of goods and services.This sustainability starts with the thinking of “Life Cycle Thinking” or considering the impacts of actions before they are taken.Example:Garett Green and his team studied Life Cycle of the Solar Panels of (Han Solar) which included Raw material extraction methodology, manufacturing, distribution, usage, maintenance, finally disposal or recycling.
In this study Inputs and Outputs were measured. The inputs were inventory of relevant energy and material in the Life Cycle of Solar Panels, the outputs were environmental releases. The effect on the environment were evaluated. After identifying the source of pollution, company can modify its Production process, Distribution channel, maintenance, and disposal recycle to more eco-friendly way.As per ISO 14040 and 14044 standards, LCA (Life Cycle Analysis) includes following: -1.
Goal and Scope identification2. Analysis of Inventory3. Impact Assessment4. Interpretation of ResultIn this study, Green and his team identified, that major impact to environment is due to improper manufacturing process of Solar panels (It is the First Step – Goal and Scope identification).
The Manufacturing process starts with Extraction of Silica and ends with panel assemblyOperation of Manufacturing is spread into 9 processes as below: -1. Silica Extraction and Refining2. Silica to Silicon transformation3. Metallurgical grade Silicon transformation to Solar Grade Silicon4. Casting and Wafer production5. Chemical Attack to remove Boron and Phosphorous etc.
6. Silicon-nitride Film Formation7. Application of electric contacts8. Passivation and ARC (Anti Reflecting Coating)9. Panel AssemblyGreen and team performed estimations of energy requirements for each major process as Below table 2.4.1: -Table2.
4.1Process Energy Requirement (Mega joules / Panel)1. Silica Extraction and Refining 0.712.
Silica to Silicon transformation 93.783. Metallurgical grade Silicon transformation to Solar Grade Silicon 280.
544. Casting and Wafer production 83.625. Chemical Attack to remove Boron and Phosphorous etc. 12.
226. Silicon-nitride Film Formation 48.417. Application of electric contacts 48.
418. Passivation and ARC (Anti Reflecting Coating) 12.239.
Panel Assembly 62.66Total Energy 642.58 / panelNote: This data includes the fuel needed for transport in each individual process. It is assumed that panel parts are all made in the same location and that transportation only occurs in the final assembly stage.
Green and his team tried to relocate the high energy intensive operations to low carbon countries such as Germany or Norway. Before relocation, the emission of Green House Gases (GHG) was determined based on transport (Distance Traveled) for their panels from manufacturing site to suppliers.Company considered four routes: -1. Mexico (Mx, Northwest border) to California (CA)2. China (CH) to California3. China to Mexico and Mexico to California4. Germany (GE) to New Jersey (NJ) and New Jersey to CaliforniaThere were four modes of transport – Air, Ship, Rail and Truck.Table – 2.
4.2 the distance of Routes (km)Route Air Ship Rail TruckMX to CA – – – 200CH to CA 12000 – – -CH to CA – 12200 – -CH to MX 12150 – – -CH to MX – 12500 – -GE to CA 8500 – – -GE to NJ – 6300 – -NJ to CA – – 3860 -NJ to CA – – – 3750 Cost of transportation is function of type of transport, distance travelled, and weight.The Green team calculated the cost as in below tableTable -2.4.3 the cost of Routes (USD)Route Air Ship Rail TruckMX to CA – – – 500CH to CA 11000 – – -CH to CA – 900 – -CH to MX 12650 – – -CH to MX – 1100 – -GE to CA 11150 – – -GE to NJ – 750 – -NJ to CA – – 1330 -NJ to CA – – – 3500The Green team calculated the Lead Time of Routes as in below tableTable – 2.4.
4 The Lead time of Routes (Days)Route Air Ship Rail TruckMX to CA – – – 4CH to CA 6 – – -CH to CA – 21 – -CH to MX 6 – – -CH to MX – 22 – -GE to CA 11 – – -GE to NJ – 20 – -NJ to CA – – 8 -NJ to CA – – – 6Green team calculated the Greenhouse gases emitted from each mode of transport on the route mentioned in tables aboveTable-2.4.5 Transport GHG factors (mg-CO2 eq/km.kg)6Ship Transoceanic Freight Air Cargo Intercontinental Truck, Lorry 3.5 to 16 ton Train Diesel, US11 1068 334 50Green team also analyzed GHG emissions related to transport and distributionTable-2.4.6 Electricity GHG factors (g-CO2eq/kWh)7China Germany Mexico- Average Mexico North West Grid8 Norway USA- Average788 349 515 298 6 573The above table shows few things as below: – Mexico North West Grid 8 produces lesser GHG, and the reason was large share of its electricity is coming from geothermal resourcesChina emits the largest amount of GHG per unit of energy.
China’s energy mix includes large share of coal and other fuel sources.Germany energy source is wind and water; thus, it has lower GHG emissions than China.Norway GHG emissions is least among other countries mentioned in the above table.
2.5 Case- Mastering carbon management (IBM)Section 2.5 is the summary of a caseWith the globalization and cost cutting measures, most of the businesses across the world are very well connected. IBM has done study on managing the carbon which arises due to the business growth.Optimizing supply chain, so that Product, Processes, Information and flow of cash always keep balance among- Quality, Cost, Service and Carbon emissions.
Options to reduce Carbon emissions includes following:Design Change: Change the design of products, such that whole process of production emits lesser carbon. It involves material selection, energy efficient ways, durability of products such that it has longer life, product can be upgraded so that it can embrace the future, dissemble should be easy, recyclability, disposability.Packaging: Size of box, material of packaging also can be altered to reduce the carbon emission.
Processes: By changing processes, carbon emission can be reduced drastically. Change in manufacturing process, quality control, organizational management and supply/demand planning.Components: Substitute the components which are ecofriendly.Energy: Using source of energy which are less harmful to the environment such as Wind, geothermal, and solar in-spite of Coal, Diesel etc.
Inventory policy: to avoid last minute rush a firm should have safety stock so that unconventional method of transport can be avoided, replenishment programs are needed to be taken care of.Transportation: It is one of the most important feature to control carbon emission, shipment frequency, load consolidation and new routes to be checked so that pollution could be avoided.In the Global Supply Chain, Transportation plays very important role, it is very important to put balance of transportation, processes, and inventory policies to check Carbon emission.
Trade-offs: Logistics and DistributionShipment Consolidation: There are two ways to adjust carbon emission.Higher frequency of ship movements with lesser weights to carry, to follow just in time philosophy.Reduce: Vehicle shipment size, Inventory cost, Carbon in warehouseIncrease: Transportation cost, Carbon emission during transportation Lower frequency of ship movement with more weight to carry, to save amount of transportation, but increase inventory cost.Reduce: FIGURE 2. Carbon’s impact on shipment scenarios.Source: IBM Research.
Vehicle/ shipment sizeInventory costTransportation Cost Carbon in warehousingScenario 1 High shipment frequencyScenario 2 Low shipment frequencyShipment size Decreased cost/carbon Increased cost/ carbon Figure-2 Carbon’s impact on shipment scenarios.4730115173355Carbon in warehousing00Carbon in warehousing4215765297180Carbon00Carbon3415665135255Transportation cost00Transportation cost2767965125730Inventory cost00Inventory cost1929765106680Vehicle/Shipment size00Vehicle/Shipment size253365268605Scenario1 High shipment frequency00Scenario1 High shipment frequency5002530110490043967401104900372046511049002996565110490023202891200150129540135255 1043940124460008058151257300057721511493500348615965200013906510541000127254012446000 405765147320Scenario2 Low shipment frequency00Scenario2 Low shipment frequency 12954061595005034915152400232028934290029965643429003729990152400446341557150139065140335001139190140335008153401403350048196512128500 37242748890001485906985001771650889000 Shipment size Decreased cost/carbon Increased cost/carbonSourcing Locations:To account carbon emissions due to distance of suppliers is also part of selection of supplier and companies need to think in that aspect as well. Previously the strategy for procurement was only to find out landed cost – the actual cost of importing an item (expenses from vendor, transportation charges, taxes, duties etc.
) adding to that logistics costs (storage, acquisition, movement, and disposition of goods). Nowadays there is need of adding one more factor into account and that is Environmental factor, it will definitely affect the global sourcing strategy, and it’s a tradeoff between local and global supplier selection.Transportation Modes:There are four modes of transport – Rail, Air, Ship and Truck. All of these have different carbon trade-offs between cost, service and carbon emissions. Businesses must take a deeper look at the efficiency of vehicle with better fuel economy vs. emissions which it produces.
Firms must optimize truck and container size, driving pattern, weight and speed limitations, vehicle maintenance and driver training to reduce the carbon impact on environment. It’s a tradeoff between cost on improving transportation pattern and carbon emission.Network Optimization:Revised Network optimization strategies can address Carbon emissions due to facility placement, manufacturing, transportation and distribution network. It’s a tradeoff between carbon emission and cost involved in optimizing such channels which already have certain level of inventory and service.For Example: For a defined service level, an American bath and kitchen products manufacturer was able to reduce the carbon emissions by 34 percent by relocating its warehouses. While optimizing for emissions alone could have achieved up to 40 percent of carbon reduction, that decision would have resulted in a disproportionately higher relocation cost.
There are majorly four factors- Transport modes, Warehouse and Supplier locations, Shipment frequency, and routing. These factors must be re-analyzed against the cost of carbon to determine optimal trade-off point.Five steps to mastering carbon in the supply chain: -Diagnosis and assessment: – Understand holistically carbon impact of each component in the entire supply chain. Based on impacts of each component, a company can begin to define its own maturity level, identify gaps and set target levels. Priority areas for taking action are determined by combining the results of the assessment, maturity level, the ease of taking action and the strategic positioning. The higher the strategic importance of an activity and the bigger its performance gap, the more important it is to take action.Carbon asset management: – In supply chain, the assets such as: Warehouses, Machines, Fleets of Vehicles, and Data centers consume huge amount of energy.
Thinking of making all these Green can save lot of carbon emissions, such as Buildings called as Green Buildings, Vehicles mostly running on CNG, Machines which are running on high efficiency and less polluting. Functional Optimization: – Each supply chain function can make a specific contribution to help reduce Green House Gases (GHGs). For example: Outsourcing Manufacturing process can be a better functional decision for a company which has not efficient manufacturing process or which has no better Carbon management than the outsourced company.Internal Horizontal integration: – Firms usually have “deign for manufacturability” or “design for serviceability” concepts, similarly it is time to have “design for environment” also.
This will keep check on carbon emission through sourcing, manufacturing and distribution. For example: Friesland Coberco Dairy Foods produces, packs, ships, and maintains inventory for baby food- all from different locations. Company makes standard variants of basic products and add specific ingredients at a later stage in the supply chain. In this way company cut the needed inventory and reduced transportation as well which is saving of 127,000 miles which in turn saves carbon emission.Collaborative, end-to-end optimization: – Unless all players in the supply chain collaborate on end-to-end optimization, it would be difficult to reduce carbon emission efficiently from the supply chain.
Ideally, a lifecycle carbon assessment serves to determine a good approach to reduce carbon emission along the supply chain. Coordinating inventory/ transport / Storage can reduce the Carbon emission from the supply chain. In the automotive sector, an example of Collaborative and end-to -end optimization in supply chain is -returnable packaging (unlike disposable packaging), it increases the repeated use and significantly reduce the impact of packaging-related carbon. CHAPTER 3: GKN DRIVELINE (AUTOMOTIVE MANUFACTURING COMPANY)The author visited GKN Driveline website and company. All information of chapter 3 are collected from there.3.1 GKN Driveline manufacturing Company (in Japan) overviewGKN Driveline ( e-Powertrain) is a automotive components manufacturer in driveline technologies. GKN has employees around 26,000 people at 56 locations across 23 countries.
In Below- The detail of GKN Driveline company’s plants, offices and employees.Figure 3 is adapted from GKN company’s website.In JAPAN, GKN Driveline company has 3 main offices – Tochigi, Tokyo and Nagoya. GKN Driveline is the world’s largest producer of CV Joint, which it pioneered for use in automobiles. It also manufacture products like side shafts, prop shafts, power transfer units, , disconnects, electric rear axles, electric drive transmissions differentials and AWD couplingsFigure 4- All major product of GKN Driveline company.Figure 4 and all information about GKN Driveline company’s product are adapted from GKN website. It is more about all major product line of GKN Driveline company. Example: -1.
CVJ Systems CVJ used in automotive industry to transfer power from the engine to the wheels, allowing articulation and movement from steering and suspension. The three major parts are: Inboard Constant Velocity Joints (CVJ) including lubrication and sealing systems, Interconnecting shafts and Outboard Constant Velocity Joint (CVJ) including lubrication and sealing system. The Inboard Joint is a plunging joint that allows the effective length of the side shaft to adjust due to suspension movement.
2. AWD Systems – AWD stand for all wheel drive. GKN driveline manufacture different range of AWD parts at different location.
It provides advance innovative technology and depth of understanding in AWD Systems, GKN Driveline is a important partner for the world’s vehicle manufacturers. Within AWD Systems, GKN Driveline offers one, two or three-piece high-speed prop shafts made from steel, aluminum or composite tubes. 3.Trans Axle SolutionsThis portfolio cover an extensive range of, Limited Slip , Open Differentials and Locking Differentials, and advanced products like electronic torque vectoring system . The wide range of differentials available is used in passenger cars, Sports car (SUVs) and Light truck.
Limited Slip differential and Locking Differentials are designed to improve vehicle traction and handling performance on all surfaces and under all driving conditions. They ensure driving and braking power is effectively distributed across the axle to the wheels, therefore providing unsurpassed levels of stability, handling, traction and overall vehicle control.4.
eDrive …Systems are the solutions from powertrain, which consistvery advanced technology centered on continuous improvement and high innovation in the application of alternative power and sustainable energy in systems that deliver performance. Major successes are the developing families of eAxles and eTransmissions across multiple customer programmed up to 290 kW of power, they are available with ratios up to 14 and can be matched with E-motors from various suppliers to allow flexible application.GKN Driveline Japan purchase semi-finished parts from supplier and do final processing at their manufacturing sites. The manufacturing process of GKN Drive line.
Forging Induction hardening Heat treatmentAssemblyInspection Below is the major process, which is used for final finishing. Major process at GKN1.CNC Machining CNC stand for Computer numerical control.
CNC Machining is a manufacturing process used in the production sector that involves the use of computers to control machine tools. Tools that can be controlled in this manner include mills, lathes routers and grinders. Wastage at this process: Chips as shown in figure 5. This wastage is all over world where machining process is available.Figure 5- Wastage at CNC machining process.How to Stop this wastage: By Using Additive manufacturing concept.Figure 6- A figure is additive manufacturing concept.
Benefits of AM:Reduction in LT (Lead time ) Speed prototyping and demonstrators, design process flexibility and efficiency, quick tailored tooling, fast obsolescent part replacement.Reduce Waste Production: AM concept make less waste compared to other manufacturing process. This can save material cost up to 89%. Environment saving: If the waste is less , the process is more efficient and more environment friendly and finally reduce inventory and transportation.Energy Saving: Compared to other manufacturing process, AM may reduce energy usage of less material and removing unwanted step in production process.2.
Induction HardeningInduction hardening is process used in manufacturing sector where metal surface is heated by induction heating and then quenched. After this process the Quenched metal parts undergoes a martensitic transformational change and increase the brittleness and hardness of the part. Induction hardening is used to selectively harden areas of a part or assembly without affecting the properties of the part .3.Heat treatment Heat treating (or heat treatment) is used in various industries now days .
specially in in automotive industry this process is used to change the physical and sometime chemical properties of material. This Heat treatment involves the use chilling or heating , normally to high temperature to achieve required specification such as hardening or softening ,tempering, normalizing and quenching. Above is example of flow diagram of heat treatment process 4.Forging Forging is a manufacturing process in which part is heated , deforming and finishing of metal as per requirement, Forging parts are made by forcing material into different required shape.
involving the shaping of metal using localized compressive forces. The blows are delivered with a hammer (often a power hammer) or a die. Forging is often classified according to the temperature at which it is performed: The transportation network of GKN Drive line.
GKN Japan has diverse portfolio of global suppliers and local supplier and use different transportation system like air, sea, land.Global suppliers Local suppliers GKN SUPPLIERS.GKN purchase 4.7 components from suppliers every year.
70% of cost is driven by material.Supplier performance is Key for GKN success.Figure 6- Purchasing components ratio from GKN’s supplierFigure 6 is adapted from GKN Driveline website which is giving information that GKN is purchased 4.
7 billion components from their suppliers every year.As Figure 7 shows all major suppliers of GKN. Major suppliers of GKN are ASCO, BEARING CW, JGBR, EMAG, Delmon Group, KUKA, Samsung Industrial Co. Ltd.
, HAUCK, STL, NACHi, MLM, BOSCH, DMG MORI, Nidec, MAPAL, Geoyang metal Co. Ltd., KURIMOTO, arteca, BECHEM, CIE Automotive, Saarstal, SeAH, Vardhman Special Steels Ltd., etc.Figure 7- All major suppliers of GKN Driveline (Figure adapted from company’s website) 3.2 Supply Chain structure of GKN DrivelineFigure 8- The simplified structure of GKN Driveline Supply Chain.
188595051435TIER-100TIER-126289052070TIER-200TIER-2(By author)GKN Japan purchase components from Japan as wells from overseas countries like China, South Korea, India, France, UK, USA, Mexico etc. But due to cost reduction target and to improve supply chain – GKN Japan is trying to purchase components from Asian supplier but to shift supplier from Europe to Asia is big challenge to develop Asian suppliers in short time.Figure 9- The supply chain structure of GKN Driveline. (By author)1301115231140002244090161925GKN Japan(Manufacturer)00GKN Japan(Manufacturer)6257925173990Customer00Customer426720024257000309181621209000-89535173990 Tier 2(Supplier)00 Tier 2(Supplier)691515171450Tier1(Supplier)00Tier1(Supplier)4453890171450Retailer00Retailer329184095250Toyota ; other companies (Buyer)00Toyota ; other companies (Buyer)4981575565150042824402051050031013401955800020726402336800013106402146300051054052070001463040183515GKN Company Overseas00GKN Company Overseas3291840202565GKN Company Overseas00GKN Company OverseasFigure 9 is a typical supply chain structure of GKN Driveline which has all important parties includes in it.Figure 10- GKN AW;E Drive Supply Chain in numbers Figure 11- INVENTORY Vision, Strategy and Roadmap 2019/2020What are the problems of GKN Drive line’s supply chainPackaging: Many parts, Due to different commodity parts like casting, aluminum, forging and size, weight – Different manufacturing method need different suppliers at geographical location and due to this it is difficult to standardize the shipping method, packaging specification, WIP, Raw and with finished good. It’s difficult to uniquely to handle each parts and components separately in different ways in cost efficient manner.Logistic: Material handling between manufacturing lines is currently a manual process using trolley and rack, which is not efficient.Production Planning system: Historically GKN Japan use push type of manufacturing planning method.
However, from cost efficiency point of view, the binding capital informs of stock between processes. Which take space and set limitation to inhouse logistic supply chain. Which can be overloaded which ultimately tales more time to fix issue. Lead time: Overseas suppliers: Overseas supplier transportation is by sea which result in long lead time (2month) and inflexibility of variation. Which finally result in no flexibility in supply chain. Suggestions for GKN Driveline company to green up their supply chainBased on above all problems in GKN Driveline company Author suggests some solution.
Solution 1: There for GKN can work standardization of handling of material Globally.It is also very important Design for Supply chain at new product development stage.Explanation- Figure 12- Packaging standardized globally right1079500Solution 2: GKN can work on Smart strategic layout with automated material flow within and between line in manufacturing process. GKN should work on Smart supply chain industry 4.
0. one of the solution are AGV (Automated guided vehicle) for material handling and transportation in different process overall.Figure 13. AGV- machine that automate warehouse logistic like robot filing orders, prepping shipment make business more efficient.Solution 3: GKN can work on Pull System, Introduction of E-Kanban integrated system.
This is also one of industry 4.0 tool.What is industry 4.0 Industry 4.0 is the fourth industrial revolution and is totally based on coming together of existing industrial infrastructure with elements such as Internet of Things and cloud computing, creating cyber physical systems. By connecting machines, work piece and systems, businesses are creating intelligent networks along the entire value and production chain that can control each other autonomously, leading to the manufacturing systems of tomorrow.
Figure 14. Industry 4.0Solution 4: Returnable packaging by using 3rd party supplier for managing Benefits High quality standardized equipment Domestic and International flowsPay for use onlyFully outsourced container management solution Flexible pricing model Issue Fee: upon 3rd party delivery of empty containers to supplierReturn Fee: upon 3rd party collection of empty containers from GKNDaily Rent: each day container is under supplier and GKN control Propose to use 3rd party for one returnable packaging which will help to Replace (non specialized) supplier inbound packaging with 3rd party way returnable containers Can be used for International and domestic suppliersImprove cost and excess handling associated with Repack from one-way expendablesTransportation and warehouse stacking limitationsWaste disposal Container management operationsStandardization CHAPTER 4: CONCLUSION Conducting StatementAccording to all suggestion GKN Driveline company can establish green supply chain management.Two cases and one article mentioned in chapter 2 showcase the successful example of green supply chain management.
GKN company should……In chapter 3, GKN Driveline (automotive company), which support the central argument of this research report that GKN company should go for green supply chain. REFERENCESLindsay, Omar Romero-HernandezTony KingsburySergio RomeroCeleste. “Han Solar and the Green Supply Chain.” Harvard Business Review. Accessed July 25, 2018. https://hbr.
org/product/han-solar-and-the-green-supply-chain/B5723-PDF-ENG.”GKN Driveline | Our Division| GKN Group.” GKN in Americas | Locations | About GKN | GKN Group. Accessed July 25, 2018. https://www.gkn.com/en/our-divisions/gkn-driveline/. “GKN.
” Wikipedia. July 23, 2018. Accessed July 25, 2018. https://en.wikipedia.org/wiki/GKN./author/zawzaw/.
“Test.” JAPAN’S POLITICAL LEADERSHIP. March 15, 2015. Accessed August 04, 2018. http://www.iuj.
ac.jp/mlic/theses/thesis_details.cfm?ID=2B3036.Winston, Andrew. “IBM’s Green Supply Chain.” Harvard Business Review.
July 23, 2014. Accessed July 24, 2018. https://hbr.org/2010/07/ibms-green-supply-chain.Chopra, Sunil. Supply Chain Management: Global Edition. 2014.”Measuring Carbon, Managing Carbon – Www-935.
ibm.com.” Accessed August 3, 2018. http://www.bing.com/cr?IG=B6A23779FA4847ECB061CBC6D43821B8&CID=156B7439D97E646A39617879D88365B9&rd=1&h=wphD6wyfYNKFZLp-IjVcn0G0xv_XK07V8h9CMToMI6g&v=1&r=http://www-935.ibm.com/services/uk/bcs/pdf/measuring_carbon_managing_carbon.pdf&p=DevEx.LB.1,5066.1.