2540176200 from the IBM’s Green Supply Chane article………10

A Research Report Submitted in Partial Fulfillment
of the Requirement for the Degree of
Master of E-Business Management
at the
Graduate School of International Management
International University of Japan

Green Supply Chain in Automotive

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Student No. 2B7204
Name Meenakshi
Supervisor Li Wenkai
Approval Signature ________________________
August 2018
ACKNOWLEDGMENT………………………………………………………………………………… ii
ABSTRACT………………………………………………………………………………………………… iii
CHAPTER 1: INTRODUCTION………………………………………………………………………1
Introduction and research management……………………………………………………………….1
2.1 What is supply chain management…………………………………………………………………………7
2.2 What is green supply chain management……………………………………………………………….9
2.3 Strategies for Green Supply Chain from the IBM’s Green Supply Chane article………10
2.4 Case- Han Solar and the Green Supply Chain………………………………………………………….11
2.5 Case- Mastering Carbon Management (IBM)………………………………………………………….17
COMPANY) ………………………………………………………………………………………………23
3.1 GKN Driveline manufacturing company (in Japan) overview……………………………….….23
3.2 Supply Chain structure of GKN Driveline…………………………………………………………………31
3.3 What are the problems of GKN Driveline’s Supply Chain…………………………………………33
3.4 Suggestions for GKN Driveline company to green up their supply chain………………….35
Conducting statement………………………………………………………………………………………………….41
I 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.
The 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).

Introduction and research question
In supply chain management, there are many important parties but one
of the main parties is environment. In the era of global warming, supply
chain especially includes sustainability in supply chain with more emphasis on
environmental 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

I 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

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.

2.1 What is supply Chain Management
Supply 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.
Without supply chain management, it would be very difficult to track the material and
almost impossible to relocate the material which is misplaced in the path of
Many big companies such as Amazon, Walmart, and Toyota etc. are highly dependent on
proper and efficient Supply Chain Management. There are majorly two spectrums in a
Supply chain management is dependent: –
According to the text book “Supply Chain Management” (Author- Sunil Chopra)-
Cost Efficiency
Responsiveness is the speed by which a supplier is responding to its customer, whereas
Cost efficiency is methodology which a supplier has adopted to reduce the operating cost
and Cost of Goods sold, else it would be difficult to retain the market share.

Figure1. A typical Supply Chain structure (By author)

Figure.1 is the structure of a typical supply chain. 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 Management
The 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 article
In 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 performance
Suppliers must disclose their metrics and results in public domain
Cascade these requirements to any suppliers that provide material to IBM’s

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 Chain
Section 2.4 is a summary of the case.

Procedure: –
Identify the Problem location
Study production process
Brainstorming to find ways to handle the problematic areas and fix them
Supply 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.

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 identification
2. Analysis of Inventory
3. Impact Assessment
4. Interpretation of Result
In 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
The Manufacturing process starts with Extraction of Silica and ends with panel assembly
Operation of Manufacturing is spread into 9 processes as below: –
1. Silica Extraction and Refining
2. Silica to Silicon transformation
3. Metallurgical grade Silicon transformation to Solar Grade Silicon
4. Casting and Wafer production
5. Chemical Attack to remove Boron and Phosphorous etc.

6. Silicon-nitride Film Formation
7. Application of electric contacts
8. Passivation and ARC (Anti Reflecting Coating)
9. Panel Assembly
Green and team performed estimations of energy requirements for each major process as
Below table 2.4.1: –
Process Energy Requirement (Mega joules / Panel)
1. Silica Extraction and Refining
2. Silica to Silicon transformation
3. Metallurgical grade Silicon transformation to Solar Grade Silicon
4. Casting and Wafer production
5. Chemical Attack to remove Boron and Phosphorous etc.

6. Silicon-nitride Film Formation
7. Application of electric contacts
8. Passivation and ARC (Anti Reflecting Coating)
9. Panel Assembly 62.66
Total Energy 642.58 / panel
Note: 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 California
3. China to Mexico and Mexico to California
4. Germany (GE) to New Jersey (NJ) and New Jersey to California
There were four modes of transport – Air, Ship, Rail and Truck.

Table – 2.4.2 the distance of Routes (km)
Route Air Ship Rail Truck
MX to CA – – – 200
CH 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 table
Table -2.4.3 the cost of Routes (USD)
Route Air Ship Rail Truck
MX to CA – – – 500
CH 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 – – – 3500
The Green team calculated the Lead Time of Routes as in below table
Table – 2.4.4 The Lead time of Routes (Days)
Route Air Ship Rail Truck
MX to CA – – – 4
CH 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 – – – 6
Green team calculated the Greenhouse gases emitted from each mode of transport on
the route mentioned in tables above
Table-2.4.5 Transport GHG factors (mg-CO2 eq/km.kg)6
Ship Transoceanic Freight Air Cargo Intercontinental Truck, Lorry 3.5 to 16 ton Train Diesel, US
11 1068 334 50
Green team also analyzed GHG emissions related to transport and distribution
Table-2.4.6 Electricity GHG factors (g-CO2eq/kWh)7
China Germany Mexico- Average Mexico North West Grid8 Norway USA- Average
788 349 515 298 6 573
The 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 resources
China 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

Norway GHG emissions is least among other countries mentioned in the above

2.5 Case- Mastering carbon management (IBM)
Section 2.5 is the summary of a case
With 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,

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 Distribution
Shipment 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 warehouse
Increase: 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 size
Inventory cost
Transportation Cost
Carbon in warehousing
Scenario 1 High shipment frequency
Scenario 2 Low shipment frequency
Shipment size Decreased cost/carbon Increased cost/ carbon
Figure-2 Carbon’s impact on shipment scenarios.

4730115173355Carbon in warehousing
00Carbon in warehousing
3415665135255Transportation cost
00Transportation cost
2767965125730Inventory cost
00Inventory cost
Shipment size
Shipment size

253365268605Scenario1 High shipment frequency
00Scenario1 High shipment frequency


Low shipment frequency
Low shipment frequency


37242748890001485906985001771650889000 Shipment size Decreased cost/carbon Increased cost/carbon
Sourcing 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

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.

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) overview
GKN 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 couplings
Figure 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 Solutions
This 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.


Induction hardening
Heat treatment
Below is the major process, which is used for final finishing.
Major process at GKN
1.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 Hardening
Induction 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
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

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 purchase 4.7 components from suppliers every year. 70% of cost is driven by

Supplier performance is Key for GKN success.

Figure 6- Purchasing components ratio from GKN’s supplier

Figure 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

3.2 Supply Chain structure of GKN Driveline
Figure 8- The simplified structure of GKN Driveline Supply Chain.


(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
00GKN Japan
426720024257000309181621209000-89535173990 Tier 2
00 Tier 2
329184095250Toyota ; other companies (Buyer)
00Toyota ; other companies (Buyer)

4981575565150042824402051050031013401955800020726402336800013106402146300051054052070001463040183515GKN Company Overseas
00GKN Company Overseas
3291840202565GKN Company Overseas
00GKN Company Overseas

Figure 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 2019/2020

What are the problems of GKN Drive line’s supply chain
Packaging: 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

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 chain
Based on above all problems in GKN Driveline company Author suggests some

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.

Figure 12- Packaging standardized globally
Solution 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 4.0
Solution 4: Returnable packaging by using 3rd party supplier for managing
High quality standardized equipment
Domestic and International flows
Pay for use only
Fully outsourced container management solution

Flexible pricing model
Issue Fee: upon 3rd party delivery of empty containers to supplier
Return Fee: upon 3rd party collection of empty containers from GKN
Daily 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 suppliers
Improve cost and excess handling associated with
Repack from one-way expendables
Transportation and warehouse stacking limitations
Waste disposal
Container management operations
Conducting Statement
According 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

Lindsay, 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.

/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.


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