- Email: [email protected]
Reverse Logistic Transportation and Packaging Concepts in Automotive Remanufacturing
Available online at www.sciencedirect.com Available online at www.sciencedirect.com
ScienceDirect ScienceDirect Procedia Manufacturing 00 (2018) 000–000 Available online atatwww.sciencedirect.com Available www.sciencedirect.com Procedia online Manufacturing 00 (2018) 000–000
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www.elsevier.com/locate/procedia www.elsevier.com/locate/procedia
Procedia Manufacturing 25 (2018) 154–160 Procedia Manufacturing 00 (2017) 000–000 www.elsevier.com/locate/procedia
8th Swedish Production Symposium, SPS 2018, 16-18 May 2018, Stockholm, Sweden 8th Swedish Production Symposium, SPS 2018, 16-18 May 2018, Stockholm, Sweden
Reverse Logistic Transportation and Packaging Concepts in Reverse Logistic Transportation and Packaging Concepts in Automotive Remanufacturing Manufacturing Engineering Society International Conference 2017, MESIC 2017, 28-30 June Automotive Remanufacturing 2017, Vigo (Pontevedra), Spain Robert Casper and Erik Sundin* Robert Casper and Erik Sundin*
Costing models for capacity optimization Industry 4.0: Linköping, Trade-off Division of Manufacturing Engineering, Department of Management and Engineering,in Linköping University, SE-58183 Sweden Division of Manufacturing Engineering, Department of Management and Engineering, Linköping University, SE-58183 Linköping, Sweden between used capacity and operational efficiency A. Santana , P. Afonso , A. Zanin , R. Wernke Abstract Abstract a University of Minho, 4800-058 Guimarães, Portugal A key process in a closed-loop supply chain b is managing and challenging the transportation and packaging management. Strict Unochapecó, 89809-000 Chapecó, SC, Brazil A key process in a closed-loop supply chain managingofand challenging the transportation and packaging environmental regulations in connection withistransport environmentally hazardous substances (e.g. oil) management. are offering aStrict high environmental regulations in connection transport of environmentally hazardous substances oil)case are orientated offering apaper high cost-saving potential in connection with anwith optimised transportation and packaging concept. The aim(e.g. of this cost-saving potential in connection with an optimised transportation and packaging concept. The aim of this case orientated paper is to provide the framework for the management of reverse flow of materials in automotive industry. The emphasis is placed on is provide the framework for To the obtain management of reverse flow of materials in automotive industry. The emphasis is placed on thetoremanufacturing activities. and verify the necessary information for the above mentioned problems, different Abstract the remanufacturing activities. To applied: obtain and verify theavailable necessary information for the above mentioned problems, methods and techniques have been 1) Relevant, literature in connection with this matter was studied;different 2) Data methods and concept techniques been applied: Relevant, available literature in clustered connection with this matter was studied; 2) were Data and documents was requested directly by 1) relevant market actors; 3) The data analysed and samples Under the ofhave "Industry 4.0", production processes will be pushed to bewas increasingly interconnected, and documents was requested directly by relevant market actors; 3) The clustered data was analysed and samples were highlighted; and 4) The andnecessarily, recommended courses of efficient. action were The results show optimization that the main information based on adata realwas timeevaluated basis and, much more In given. this context, capacity highlighted; and in Thearea dataofwas evaluated and recommended coursesconcepts of actionwhich were do given. The results show that main problems appear the forward and reverse logistics: Packaging not protect the product inand anthe optimal goes beyond the4)traditional aim of capacity maximization, contributing also for organization’s profitability value. problems appear in the logistics). area of forward and reverse logistics: Packaging concepts which doenvironment not protect against the product in annegative optimal way (forward / reverse Moreover, packaging concepts which do not protect the potential Indeed, lean/ reverse management and continuous improvement approaches suggest capacity optimization instead of way (forward Moreover, packaging concepts do not protect the components environmentisagainst potential negative influence of a used partlogistics). (reverse logistics) A best practice for the which transportation of engine given and evaluated: An maximization. The study of capacity optimization and costing models is an important research topic that deserves influence a used part with (reverse logistics) A best practice thePacked transportation of bag. engine components is given and evaluated: An engine in aofmetal frame oil-pan. Securely attached byfor bolts. in plastic contributions from both theoil-pan. practical and theoretical paper engine in a metal frame with Securely attached by perspectives. bolts. Packed inThis plastic bag.presents and discusses a mathematical model based on different costing models (ABC and TDABC). A generic model has been © 2018 for Thecapacity Authors. management Published by Elsevier B.V. © 2018 The Authors. Published by Elsevier B.V. developed and it was used to analyze idle capacity and to design strategies towards the maximization of organization’s © 2018 The Authors. Published by B.V. committee Peer-review responsibility of Elsevier the scientific scientific ofthe the8th 8thSwedish SwedishProduction Production Symposium. Peer-review under under responsibility the committee of Symposium. value. The under trade-off capacityof vs operational efficiency highlighted and it is shown that capacity Peer-review responsibility ofmaximization the scientific committee of the 8th Swedish is Production Symposium. a
a,*
b
b
optimization might hideremanufacturing; operational inefficiency. Keywords: Reverse logistics; closed loop supply chain; transportation systems
Keywords: Reverse logistics; remanufacturing; closed © 2017 The Authors. Published by Elsevier B.V.loop supply chain; transportation systems Peer-review under responsibility of the scientific committee of the Manufacturing Engineering Society International Conference 2017. Keywords: Cost Models; ABC; TDABC; Capacity Management; Idle Capacity; Operational Efficiency
1. Introduction
* Corresponding author. Tel.: +46-13-286601; fax: +46-13-282798. * Corresponding Tel.: +46-13-286601; fax: +46-13-282798. E-mail address:author. [email protected] The cost of idle capacity is a fundamental information for companies and their management of extreme importance E-mail address: [email protected]
in modern©production systems. In general, it isB.V. defined as unused capacity or production potential and can be measured 2351-9789 2018 The Authors. Published by Elsevier 2351-9789 2018responsibility The Authors. Published by Elsevier B.V.hours Peer-review of the scientific committee of the 8th Production Symposium. in several©under ways: tons of production, available of Swedish manufacturing, etc. The management of the idle capacity Peer-review under Tel.: responsibility the761; scientific committee the 8th Swedish Production Symposium. * Paulo Afonso. +351 253of 510 fax: +351 253 604of741 E-mail address: [email protected]
2351-9789 © 2017 The Authors. Published by Elsevier B.V. Peer-review under responsibility of the scientific committee of the Manufacturing Engineering Society International Conference 2017. 2351-9789 © 2018 The Authors. Published by Elsevier B.V. Peer-review under responsibility of the scientific committee of the 8th Swedish Production Symposium. 10.1016/j.promfg.2018.06.069
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Robert Casper et al. / Procedia Manufacturing 25 (2018) 154–160 Author name / Procedia Manufacturing 00 (2018) 000–000
155
1. Introduction Efficient logistic processes are not directly improving products but can raise the probability of businesses significantly. Therefore, several studies in the last years were dealing with this matter and were most often focusing on improving logistic networks [1], data exchange [2], legal restrictions, sustainability and efficiency [3]. As a key industry with a complex supply chain the automotive industry has often been an objection of investigation and at the same time been an innovation driver in the field of logistics. [4] Logistic processes are in general defined as the flow of information and materials from the supplier (1st and 2nd Tier) to the car manufacturer and in the end to the car dealer as shown in the figure 1. [5] The range of investigation therefore most often started with the supplier and ended at the car dealer.
Fig. 1. Diagram of Automotive Logistics as a Supply Chain (Suthikarnnarunai [5]).
When the above illustrated forward supply chain processes are expanded by adding reverse supply chain processes a new model is generated: The closed loop supply chain. Östlin et al [6] describes this flow of used physical products from the customer, then acting as a supplier, to the remanufacturer. These material flows can - for example by using remanufacturing - close the supply chain. One major difference between forward and reverse logistic is that the customer frequently acts both as a customer for remanufactured products and as a supplier of cores to the remanufacturing company. [7] Reverse supply chain processes are collection, inspection and disassembly, reprocessing (recycling, remanufacturing or reuse) and re-supply or redistribution to alternative markets [8]. Reverse supply chains can be found in many different industries and the variety of remanufactured goods is wide: There are companies specialised on products from entertainment electronics (e.g. computer, mobile phones, and navigation systems), medical equipment (e.g. CT, MRT and X-Ray) to heavy machinery and office furniture. One important branch of this industry is the automotive industry [9]. This industry, which is in many cases the benchmark for other industries, is focused in the analysis of this paper.
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Zuidwijk [23] identifies three sources of part returns in a closed-loop supply chain: Returns from product recalls (e.g. because of technical or safety issues), commercial returns (e.g. because such an agreement has been made in the contract) and the customer return (e.g. warranty return or end-of-life). There are also, according to Östlin et al [7] seven ways to collect cores from the market for remanufacturing. Usually remanufacturers are using a combination of these strategies to collect enough cores for their remanufacturing processes. To organise these logistic processes in an optimal way is seen as a major challenge of managers to reduce costs considerably and to achieve substantial improvements (e.g. product availability, safety, environmental protection). In addition, it has lately become more crucial to consider the way cores are transported. For example, within the automotive industry it was found by Lind et al [24] that since there are more electrical parts being remanufactured rather than only mechanical parts one must be more careful when transporting the cores to the remanufacturing facility. 1.1. Aim The aim of this case orientated paper is to provide the framework for the management of reverse flow of materials in automotive industry. As there is a gap in the scientific analysis, this paper is analysing transportation and packaging concepts in reverse supply chain processes of the European Automotive industry. This is done by illustrating the state of the art, comparing it to an ideal standard and evaluating the differences. 2. Research methodology To illustrate the state of the art of packaging of service parts in the European automotive industry the most important market actors (here: OEMs, suppliers and logistic companies) have been interviewed in a structured process in order to receive their packaging guidelines and handbooks. The standardised interview was requesting the most essential information to classify their packaging used today. The main categories and main questions of the questionnaire were: • Legislative framework: What is the basis of their today´s logistic process in respect of local, national and European laws and regulations? • Internal regulations and work instructions: What internal regulations do exist and what is their motivation and content? • Remanufacturing compatibility: Are companies providing a return packaging and is this packing designed in an optimal way? • Environmental awareness: Are companies aware of the potential negative influence of a return packaging which is not designed in an optimal way? Moreover, the companies were asked to handover their actual packaging and transportation guidelines as well as examples of their today´s packaging (e.g. by sending pictures of their packaging). In total, 40 market actors were contacted and the standardised interview questionnaire was sent out. The companies contacted were chosen since they were major actors in the European automotive industry and were representing the three different actors in the supply chain. Therefore, Tier-1-companies, logistic companies and OEMs were taking part in this analysis. After sending out the questionnaire with a lead time of two weeks and several follows ups, thirteen complete answers of companies were available. With a return rate of 32,5 % the results can be evaluated as significant. The results were entered into an evolution data sheet and analysed in respect of these two major aspects: The used packaging guidelines (see section 3) and the used packaging itself (see section 4).
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3. Analysis of the packaging guidelines In the first stage, the received documents (e.g. internal packaging and transportation guidelines) and the answers related to these documents were analysed. Focus of this analysis was the main research aim (ref. chapter 2) to find out if all companies are aware of the European directive, if they provide an environmental-friendly packaging and if they are respecting the special demands for remanufacturing parts. The four main characteristics of the analysed packaging guidelines and handbooks were as follows: • All guidelines strictly refer to legal regulations. Especially they are referring to the European Packaging and Waste Directive 94/62/EC, • Instructions for the need of reusable, recyclable and stackable transportation systems are not clearly specified throughout all guidelines. For certain transportation tasks they are required, for others not. These regulations are most often linked to certain product groups (e.g. mechanical parts, electronic devices), • All parties refer to regulations for transportation of hazardous goods. Nevertheless, only one forwarder is making strict, clear practical instructions to prevent contamination (e.g. by oil), and • Only one of thirteen guidelines is giving advises to return used goods with the aim to remanufacture them. Several instructions describe the process of returning reusable packaging (e.g. plastic boxes or metal frames) but are limiting this return to the packaging itself. The return of the used part is not regarded. The last mentioned finding (“not referring to return of good”) is of great importance when analysing business models with a closed loop supply chain: Even though the automotive industry is using remanufacturing of goods as one of their business models the elementary important process step of returning the goods is not described in their packaging regulations. Table 1 below describes the characteristics of the packaging from the interviews. Table 1. Table illustrating results from analysing packaging guidelines of OEMs, suppliers and forwarders. 1 = yes; 0,5 = partly; 0 = no.
4. Analysis of the packaging In a second step the received examples of today´s return packaging concepts of companies was analysed. Four different and very representative concepts are described and evaluated in this chapter. Core parts are used parts which are often contaminated with operating fluids, e.g. oil, carbon, diesel and petrol. For this reason they have to be regarded as harmful to the environment and treated, handled, stored and forwarded with special care and regarding special laws and regulations. This is leading to additional requirements on the packaging:
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1. The forward packaging should also be used as the return packaging of the core part, 2. The packaging system having transported the non-contaminated, clean new part should be able to handle contaminated goods without harming the environment, 3. The packaging system should be reusable, and 4. If the packaging has to be disposed it should not be necessary to handle it as hazardous waste (e.g. because it is contaminated with oil. Even though the return packaging is most often not described in the packaging guidelines, as shown in this paper, the automotive industry is using special transportation systems for goods aimed to be remanufactured. To find a best practice, common systems have been analysed according to the four above mentioned requirements. Exemplary the following packaging systems are illustrated and evaluated in Table 2 below. Table 2. Comparison and evaluation of different packaging systems.
Description of packaging system MITSUBISHI SHORT-BLOCK-ENGINE
Requirement fulfilled according to the four requirements 1. 2. 3. 4. Y
N
N
N
Y
Y
N
N
Y
Y
Y
Y
Y
Y
Y
Y
Engine in cardboard box with wooden support. Extra cardboard to prevent displacement. Waxed paper to prevent corrosion on cylinder surface. Packaging is used also for return of core part. No protection from contamination (oil drainage). Single use card board box. Oil contaminated cardboard has to be scraped as hazardous waste. OPEL TRANSFER GEAR BOX Gear box in plastic bag and cardboard box. Extra paper to prevent displacement. Packaging is used also for return of core part. Plastic bag to prevent contamination. Risk of damage or not using plastic bag. Single use card board box. Oil contaminated cardboard has to be scraped as hazardous waste. NISSAN LONG-BLOCK ENGINE Engine in metal frame. Securely attached by bolts. Packed in plastic bag. Packaging is used also for return of core part. Plastic bag to prevent contamination. When the plastic bag is not used for return or it is damaged, there is a high risk of oil contamination. Packaging system for reuse. TOYOTA LONG-BLOCK ENGINE Engine in metal frame with oil-pan. Securely attached by bolts. Packed in plastic bag. Packaging is used also for return of core part. Plastic bag to prevent contamination. When the plastic bag is not used for return or it is damaged, there is a high risk of oil contamination. Packaging system for reuse.
The comparison and evaluation of the different transportation systems shows that very different packaging solutions are used. Not all of them are meeting the four illustrated requirements to an ideal return packaging system. Especially solutions using cardboard boxes have the high risk of causing contamination and can only be used once. If contamination has occurred, the packaging has to be disposed as hazardous waste.
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Here packaging systems with metal frames are superior. The part is securely attached to the packaging system with bolts. Moreover, plastic bags and in one case an extra oil-pan prevents contamination. The system is stackable and reusable for several times. It can be moved and lifted by forklifts. These advantages would allow defining this system as “best practice” and brings up the question why it is not used by all parties. 5. Discussion and conclusion It must be analysed in comprehensive papers why this best practice is not used throughout the industry. Possible answers to this question are: • High initial investment for packaging systems, • System not flexible enough (because of attachment with bolts in every specific metal frame for one or only a few product types, • Not space-saving (not foldable when not in use), and • Financial loss when packaging system is not returned. The return packaging analysed in this paper has shown, that the potentials highlighted by Zuidwijk [23] to reduce costs considerably and to achieve substantial improvements can be applied here. An ideal return packaging should be: • Reusable (=> cost efficient), • Safe (=> protect the part and secure product availability), and • Environmental friendly (=> prevent contamination). To conclude this paper, it can be stated, that logistic processes must be optimised to improve businesses. Taking this into account an important finding for companies operating in a closed loop supply chain is that packaging is most often not clearly defined for the important process of reverse logistics. Moreover, used packaging systems are often not optimal and are risking environmental harms causing extra costs. Comprehensive papers analysing ideal solutions respecting technical, economic and environmental requirements in an ideal way are needed. Acknowledgements The authors wish to acknowledge the companies involved in the interview study. References [1] Springer Verlag (Herausgeber), “Ersatzteillogistik im Automobilbau”, Berlin / Heidelberg, 2013. [2] Universität Bayreuth, Chair Manufacturing and Remanufacturing Technology, "Reverse Supply Chains within Automotive Remanufacturing", Bayreuth, 2012. [3] Westermann, Hans-Henrik, Fraunhofer Projektgruppe Prozessinnovation, Researcher, Managing Complexity in Remanufacturing Companies, Bayreuth, 2012. [4] Ströhmer, Marcel, "Verpackungen in der Logistik, Fraunhofer IML, 2009. [5] Suthikarnnarunai, N., "Automotive Suppy Chain and Logistics Management", Hong Kong, 2008. [6] Östlin J., Sundin E. and Björkman M. (2009) Product Life-cycle Implications for Remanufacturing Strategies, Journal of Cleaner Production, Vol. 17, Issue 11, pp 999-1009. [7] Östlin J., Sundin E. and Björkman M. (2008) Importance of Closed-Loop Supply Chain Relationships for Product Remanufacturing, International Journal of Production Economics, Volume 115, Issue 2, pp 336-348. [8] Golinska P., a.o., "Remanufacturing in automotive industry: Challenges and limitations", Poznan, 2011. [9] Falconi V., Sundin E, Colledani M. and Copani G. (2017) Key success factors for implementing Upgrading Remanufacturing, Proceedings of 3rd International Conference on Remanufacturing (ICoR-17), Linköping, Sweden, October 24-26, pp 33-46. [10] BMW AG, "Service Parts Packaging", München, 2013. [11] Continental Automotive, "Packaging Definition, Process, Requirements", Frankfurt, 2014.
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[12] Faurecia, "Supplier Requirements Manual", Paris, 2013. [13] FedEX, "Automotive and Mechanical Parts Packaging Guidelines and Designs", 2008. [14] Hella, "Logistics Guideline for OE Suppliers", 2010. [15] Johns Control Automotive, "Global Supplier Standards Manual", 2016. [16] Magna, "Magna Global Packaging and Shipping Manual", Troy, 2016. [17] Meritor, "Meritor Packaging and Shipping Guide", 2016. [18] Nexteer Automotive, "Nexteer Automotive Global Packaging and Shipping Manual", 2016. [19] Opel, "Marketing Specification Aftersales", Rüsselsheim, 2015. [20] TRW Automotive, "Packaging Guidelines", 2016. [21] VDA, "VDA-Empfehlung 4931 Verpackungsdatenblatt", 1993. [22] ZF, "Verpackungshandbuch", Friedrichshafen, 2016. [23] Zuidwijk, “Enabled Closed Loop Supply Chains”, California Management Review, Berkeley. [24] Lind S., Olsson D and Sundin E. “Exploring inter-organizational relationships in automotive component remanufacturing”, Journal of Remanufacturing, 2014, 4:5. Access: www.journalofremanufacturing.com/4/1/5X .
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www.elsevier.com/locate/procedia www.elsevier.com/locate/procedia
Procedia Manufacturing 25 (2018) 154–160 Procedia Manufacturing 00 (2017) 000–000 www.elsevier.com/locate/procedia
8th Swedish Production Symposium, SPS 2018, 16-18 May 2018, Stockholm, Sweden 8th Swedish Production Symposium, SPS 2018, 16-18 May 2018, Stockholm, Sweden
Reverse Logistic Transportation and Packaging Concepts in Reverse Logistic Transportation and Packaging Concepts in Automotive Remanufacturing Manufacturing Engineering Society International Conference 2017, MESIC 2017, 28-30 June Automotive Remanufacturing 2017, Vigo (Pontevedra), Spain Robert Casper and Erik Sundin* Robert Casper and Erik Sundin*
Costing models for capacity optimization Industry 4.0: Linköping, Trade-off Division of Manufacturing Engineering, Department of Management and Engineering,in Linköping University, SE-58183 Sweden Division of Manufacturing Engineering, Department of Management and Engineering, Linköping University, SE-58183 Linköping, Sweden between used capacity and operational efficiency A. Santana , P. Afonso , A. Zanin , R. Wernke Abstract Abstract a University of Minho, 4800-058 Guimarães, Portugal A key process in a closed-loop supply chain b is managing and challenging the transportation and packaging management. Strict Unochapecó, 89809-000 Chapecó, SC, Brazil A key process in a closed-loop supply chain managingofand challenging the transportation and packaging environmental regulations in connection withistransport environmentally hazardous substances (e.g. oil) management. are offering aStrict high environmental regulations in connection transport of environmentally hazardous substances oil)case are orientated offering apaper high cost-saving potential in connection with anwith optimised transportation and packaging concept. The aim(e.g. of this cost-saving potential in connection with an optimised transportation and packaging concept. The aim of this case orientated paper is to provide the framework for the management of reverse flow of materials in automotive industry. The emphasis is placed on is provide the framework for To the obtain management of reverse flow of materials in automotive industry. The emphasis is placed on thetoremanufacturing activities. and verify the necessary information for the above mentioned problems, different Abstract the remanufacturing activities. To applied: obtain and verify theavailable necessary information for the above mentioned problems, methods and techniques have been 1) Relevant, literature in connection with this matter was studied;different 2) Data methods and concept techniques been applied: Relevant, available literature in clustered connection with this matter was studied; 2) were Data and documents was requested directly by 1) relevant market actors; 3) The data analysed and samples Under the ofhave "Industry 4.0", production processes will be pushed to bewas increasingly interconnected, and documents was requested directly by relevant market actors; 3) The clustered data was analysed and samples were highlighted; and 4) The andnecessarily, recommended courses of efficient. action were The results show optimization that the main information based on adata realwas timeevaluated basis and, much more In given. this context, capacity highlighted; and in Thearea dataofwas evaluated and recommended coursesconcepts of actionwhich were do given. The results show that main problems appear the forward and reverse logistics: Packaging not protect the product inand anthe optimal goes beyond the4)traditional aim of capacity maximization, contributing also for organization’s profitability value. problems appear in the logistics). area of forward and reverse logistics: Packaging concepts which doenvironment not protect against the product in annegative optimal way (forward / reverse Moreover, packaging concepts which do not protect the potential Indeed, lean/ reverse management and continuous improvement approaches suggest capacity optimization instead of way (forward Moreover, packaging concepts do not protect the components environmentisagainst potential negative influence of a used partlogistics). (reverse logistics) A best practice for the which transportation of engine given and evaluated: An maximization. The study of capacity optimization and costing models is an important research topic that deserves influence a used part with (reverse logistics) A best practice thePacked transportation of bag. engine components is given and evaluated: An engine in aofmetal frame oil-pan. Securely attached byfor bolts. in plastic contributions from both theoil-pan. practical and theoretical paper engine in a metal frame with Securely attached by perspectives. bolts. Packed inThis plastic bag.presents and discusses a mathematical model based on different costing models (ABC and TDABC). A generic model has been © 2018 for Thecapacity Authors. management Published by Elsevier B.V. © 2018 The Authors. Published by Elsevier B.V. developed and it was used to analyze idle capacity and to design strategies towards the maximization of organization’s © 2018 The Authors. Published by B.V. committee Peer-review responsibility of Elsevier the scientific scientific ofthe the8th 8thSwedish SwedishProduction Production Symposium. Peer-review under under responsibility the committee of Symposium. value. The under trade-off capacityof vs operational efficiency highlighted and it is shown that capacity Peer-review responsibility ofmaximization the scientific committee of the 8th Swedish is Production Symposium. a
a,*
b
b
optimization might hideremanufacturing; operational inefficiency. Keywords: Reverse logistics; closed loop supply chain; transportation systems
Keywords: Reverse logistics; remanufacturing; closed © 2017 The Authors. Published by Elsevier B.V.loop supply chain; transportation systems Peer-review under responsibility of the scientific committee of the Manufacturing Engineering Society International Conference 2017. Keywords: Cost Models; ABC; TDABC; Capacity Management; Idle Capacity; Operational Efficiency
1. Introduction
* Corresponding author. Tel.: +46-13-286601; fax: +46-13-282798. * Corresponding Tel.: +46-13-286601; fax: +46-13-282798. E-mail address:author. [email protected] The cost of idle capacity is a fundamental information for companies and their management of extreme importance E-mail address: [email protected]
in modern©production systems. In general, it isB.V. defined as unused capacity or production potential and can be measured 2351-9789 2018 The Authors. Published by Elsevier 2351-9789 2018responsibility The Authors. Published by Elsevier B.V.hours Peer-review of the scientific committee of the 8th Production Symposium. in several©under ways: tons of production, available of Swedish manufacturing, etc. The management of the idle capacity Peer-review under Tel.: responsibility the761; scientific committee the 8th Swedish Production Symposium. * Paulo Afonso. +351 253of 510 fax: +351 253 604of741 E-mail address: [email protected]
2351-9789 © 2017 The Authors. Published by Elsevier B.V. Peer-review under responsibility of the scientific committee of the Manufacturing Engineering Society International Conference 2017. 2351-9789 © 2018 The Authors. Published by Elsevier B.V. Peer-review under responsibility of the scientific committee of the 8th Swedish Production Symposium. 10.1016/j.promfg.2018.06.069
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Robert Casper et al. / Procedia Manufacturing 25 (2018) 154–160 Author name / Procedia Manufacturing 00 (2018) 000–000
155
1. Introduction Efficient logistic processes are not directly improving products but can raise the probability of businesses significantly. Therefore, several studies in the last years were dealing with this matter and were most often focusing on improving logistic networks [1], data exchange [2], legal restrictions, sustainability and efficiency [3]. As a key industry with a complex supply chain the automotive industry has often been an objection of investigation and at the same time been an innovation driver in the field of logistics. [4] Logistic processes are in general defined as the flow of information and materials from the supplier (1st and 2nd Tier) to the car manufacturer and in the end to the car dealer as shown in the figure 1. [5] The range of investigation therefore most often started with the supplier and ended at the car dealer.
Fig. 1. Diagram of Automotive Logistics as a Supply Chain (Suthikarnnarunai [5]).
When the above illustrated forward supply chain processes are expanded by adding reverse supply chain processes a new model is generated: The closed loop supply chain. Östlin et al [6] describes this flow of used physical products from the customer, then acting as a supplier, to the remanufacturer. These material flows can - for example by using remanufacturing - close the supply chain. One major difference between forward and reverse logistic is that the customer frequently acts both as a customer for remanufactured products and as a supplier of cores to the remanufacturing company. [7] Reverse supply chain processes are collection, inspection and disassembly, reprocessing (recycling, remanufacturing or reuse) and re-supply or redistribution to alternative markets [8]. Reverse supply chains can be found in many different industries and the variety of remanufactured goods is wide: There are companies specialised on products from entertainment electronics (e.g. computer, mobile phones, and navigation systems), medical equipment (e.g. CT, MRT and X-Ray) to heavy machinery and office furniture. One important branch of this industry is the automotive industry [9]. This industry, which is in many cases the benchmark for other industries, is focused in the analysis of this paper.
156
Robert Casper et al. / Procedia Manufacturing 25 (2018) 154–160 Author name / Procedia Manufacturing 00 (2018) 000–000
3
Zuidwijk [23] identifies three sources of part returns in a closed-loop supply chain: Returns from product recalls (e.g. because of technical or safety issues), commercial returns (e.g. because such an agreement has been made in the contract) and the customer return (e.g. warranty return or end-of-life). There are also, according to Östlin et al [7] seven ways to collect cores from the market for remanufacturing. Usually remanufacturers are using a combination of these strategies to collect enough cores for their remanufacturing processes. To organise these logistic processes in an optimal way is seen as a major challenge of managers to reduce costs considerably and to achieve substantial improvements (e.g. product availability, safety, environmental protection). In addition, it has lately become more crucial to consider the way cores are transported. For example, within the automotive industry it was found by Lind et al [24] that since there are more electrical parts being remanufactured rather than only mechanical parts one must be more careful when transporting the cores to the remanufacturing facility. 1.1. Aim The aim of this case orientated paper is to provide the framework for the management of reverse flow of materials in automotive industry. As there is a gap in the scientific analysis, this paper is analysing transportation and packaging concepts in reverse supply chain processes of the European Automotive industry. This is done by illustrating the state of the art, comparing it to an ideal standard and evaluating the differences. 2. Research methodology To illustrate the state of the art of packaging of service parts in the European automotive industry the most important market actors (here: OEMs, suppliers and logistic companies) have been interviewed in a structured process in order to receive their packaging guidelines and handbooks. The standardised interview was requesting the most essential information to classify their packaging used today. The main categories and main questions of the questionnaire were: • Legislative framework: What is the basis of their today´s logistic process in respect of local, national and European laws and regulations? • Internal regulations and work instructions: What internal regulations do exist and what is their motivation and content? • Remanufacturing compatibility: Are companies providing a return packaging and is this packing designed in an optimal way? • Environmental awareness: Are companies aware of the potential negative influence of a return packaging which is not designed in an optimal way? Moreover, the companies were asked to handover their actual packaging and transportation guidelines as well as examples of their today´s packaging (e.g. by sending pictures of their packaging). In total, 40 market actors were contacted and the standardised interview questionnaire was sent out. The companies contacted were chosen since they were major actors in the European automotive industry and were representing the three different actors in the supply chain. Therefore, Tier-1-companies, logistic companies and OEMs were taking part in this analysis. After sending out the questionnaire with a lead time of two weeks and several follows ups, thirteen complete answers of companies were available. With a return rate of 32,5 % the results can be evaluated as significant. The results were entered into an evolution data sheet and analysed in respect of these two major aspects: The used packaging guidelines (see section 3) and the used packaging itself (see section 4).
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3. Analysis of the packaging guidelines In the first stage, the received documents (e.g. internal packaging and transportation guidelines) and the answers related to these documents were analysed. Focus of this analysis was the main research aim (ref. chapter 2) to find out if all companies are aware of the European directive, if they provide an environmental-friendly packaging and if they are respecting the special demands for remanufacturing parts. The four main characteristics of the analysed packaging guidelines and handbooks were as follows: • All guidelines strictly refer to legal regulations. Especially they are referring to the European Packaging and Waste Directive 94/62/EC, • Instructions for the need of reusable, recyclable and stackable transportation systems are not clearly specified throughout all guidelines. For certain transportation tasks they are required, for others not. These regulations are most often linked to certain product groups (e.g. mechanical parts, electronic devices), • All parties refer to regulations for transportation of hazardous goods. Nevertheless, only one forwarder is making strict, clear practical instructions to prevent contamination (e.g. by oil), and • Only one of thirteen guidelines is giving advises to return used goods with the aim to remanufacture them. Several instructions describe the process of returning reusable packaging (e.g. plastic boxes or metal frames) but are limiting this return to the packaging itself. The return of the used part is not regarded. The last mentioned finding (“not referring to return of good”) is of great importance when analysing business models with a closed loop supply chain: Even though the automotive industry is using remanufacturing of goods as one of their business models the elementary important process step of returning the goods is not described in their packaging regulations. Table 1 below describes the characteristics of the packaging from the interviews. Table 1. Table illustrating results from analysing packaging guidelines of OEMs, suppliers and forwarders. 1 = yes; 0,5 = partly; 0 = no.
4. Analysis of the packaging In a second step the received examples of today´s return packaging concepts of companies was analysed. Four different and very representative concepts are described and evaluated in this chapter. Core parts are used parts which are often contaminated with operating fluids, e.g. oil, carbon, diesel and petrol. For this reason they have to be regarded as harmful to the environment and treated, handled, stored and forwarded with special care and regarding special laws and regulations. This is leading to additional requirements on the packaging:
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1. The forward packaging should also be used as the return packaging of the core part, 2. The packaging system having transported the non-contaminated, clean new part should be able to handle contaminated goods without harming the environment, 3. The packaging system should be reusable, and 4. If the packaging has to be disposed it should not be necessary to handle it as hazardous waste (e.g. because it is contaminated with oil. Even though the return packaging is most often not described in the packaging guidelines, as shown in this paper, the automotive industry is using special transportation systems for goods aimed to be remanufactured. To find a best practice, common systems have been analysed according to the four above mentioned requirements. Exemplary the following packaging systems are illustrated and evaluated in Table 2 below. Table 2. Comparison and evaluation of different packaging systems.
Description of packaging system MITSUBISHI SHORT-BLOCK-ENGINE
Requirement fulfilled according to the four requirements 1. 2. 3. 4. Y
N
N
N
Y
Y
N
N
Y
Y
Y
Y
Y
Y
Y
Y
Engine in cardboard box with wooden support. Extra cardboard to prevent displacement. Waxed paper to prevent corrosion on cylinder surface. Packaging is used also for return of core part. No protection from contamination (oil drainage). Single use card board box. Oil contaminated cardboard has to be scraped as hazardous waste. OPEL TRANSFER GEAR BOX Gear box in plastic bag and cardboard box. Extra paper to prevent displacement. Packaging is used also for return of core part. Plastic bag to prevent contamination. Risk of damage or not using plastic bag. Single use card board box. Oil contaminated cardboard has to be scraped as hazardous waste. NISSAN LONG-BLOCK ENGINE Engine in metal frame. Securely attached by bolts. Packed in plastic bag. Packaging is used also for return of core part. Plastic bag to prevent contamination. When the plastic bag is not used for return or it is damaged, there is a high risk of oil contamination. Packaging system for reuse. TOYOTA LONG-BLOCK ENGINE Engine in metal frame with oil-pan. Securely attached by bolts. Packed in plastic bag. Packaging is used also for return of core part. Plastic bag to prevent contamination. When the plastic bag is not used for return or it is damaged, there is a high risk of oil contamination. Packaging system for reuse.
The comparison and evaluation of the different transportation systems shows that very different packaging solutions are used. Not all of them are meeting the four illustrated requirements to an ideal return packaging system. Especially solutions using cardboard boxes have the high risk of causing contamination and can only be used once. If contamination has occurred, the packaging has to be disposed as hazardous waste.
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Here packaging systems with metal frames are superior. The part is securely attached to the packaging system with bolts. Moreover, plastic bags and in one case an extra oil-pan prevents contamination. The system is stackable and reusable for several times. It can be moved and lifted by forklifts. These advantages would allow defining this system as “best practice” and brings up the question why it is not used by all parties. 5. Discussion and conclusion It must be analysed in comprehensive papers why this best practice is not used throughout the industry. Possible answers to this question are: • High initial investment for packaging systems, • System not flexible enough (because of attachment with bolts in every specific metal frame for one or only a few product types, • Not space-saving (not foldable when not in use), and • Financial loss when packaging system is not returned. The return packaging analysed in this paper has shown, that the potentials highlighted by Zuidwijk [23] to reduce costs considerably and to achieve substantial improvements can be applied here. An ideal return packaging should be: • Reusable (=> cost efficient), • Safe (=> protect the part and secure product availability), and • Environmental friendly (=> prevent contamination). To conclude this paper, it can be stated, that logistic processes must be optimised to improve businesses. Taking this into account an important finding for companies operating in a closed loop supply chain is that packaging is most often not clearly defined for the important process of reverse logistics. Moreover, used packaging systems are often not optimal and are risking environmental harms causing extra costs. Comprehensive papers analysing ideal solutions respecting technical, economic and environmental requirements in an ideal way are needed. Acknowledgements The authors wish to acknowledge the companies involved in the interview study. References [1] Springer Verlag (Herausgeber), “Ersatzteillogistik im Automobilbau”, Berlin / Heidelberg, 2013. [2] Universität Bayreuth, Chair Manufacturing and Remanufacturing Technology, "Reverse Supply Chains within Automotive Remanufacturing", Bayreuth, 2012. [3] Westermann, Hans-Henrik, Fraunhofer Projektgruppe Prozessinnovation, Researcher, Managing Complexity in Remanufacturing Companies, Bayreuth, 2012. [4] Ströhmer, Marcel, "Verpackungen in der Logistik, Fraunhofer IML, 2009. [5] Suthikarnnarunai, N., "Automotive Suppy Chain and Logistics Management", Hong Kong, 2008. [6] Östlin J., Sundin E. and Björkman M. (2009) Product Life-cycle Implications for Remanufacturing Strategies, Journal of Cleaner Production, Vol. 17, Issue 11, pp 999-1009. [7] Östlin J., Sundin E. and Björkman M. (2008) Importance of Closed-Loop Supply Chain Relationships for Product Remanufacturing, International Journal of Production Economics, Volume 115, Issue 2, pp 336-348. [8] Golinska P., a.o., "Remanufacturing in automotive industry: Challenges and limitations", Poznan, 2011. [9] Falconi V., Sundin E, Colledani M. and Copani G. (2017) Key success factors for implementing Upgrading Remanufacturing, Proceedings of 3rd International Conference on Remanufacturing (ICoR-17), Linköping, Sweden, October 24-26, pp 33-46. [10] BMW AG, "Service Parts Packaging", München, 2013. [11] Continental Automotive, "Packaging Definition, Process, Requirements", Frankfurt, 2014.
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[12] Faurecia, "Supplier Requirements Manual", Paris, 2013. [13] FedEX, "Automotive and Mechanical Parts Packaging Guidelines and Designs", 2008. [14] Hella, "Logistics Guideline for OE Suppliers", 2010. [15] Johns Control Automotive, "Global Supplier Standards Manual", 2016. [16] Magna, "Magna Global Packaging and Shipping Manual", Troy, 2016. [17] Meritor, "Meritor Packaging and Shipping Guide", 2016. [18] Nexteer Automotive, "Nexteer Automotive Global Packaging and Shipping Manual", 2016. [19] Opel, "Marketing Specification Aftersales", Rüsselsheim, 2015. [20] TRW Automotive, "Packaging Guidelines", 2016. [21] VDA, "VDA-Empfehlung 4931 Verpackungsdatenblatt", 1993. [22] ZF, "Verpackungshandbuch", Friedrichshafen, 2016. [23] Zuidwijk, “Enabled Closed Loop Supply Chains”, California Management Review, Berkeley. [24] Lind S., Olsson D and Sundin E. “Exploring inter-organizational relationships in automotive component remanufacturing”, Journal of Remanufacturing, 2014, 4:5. Access: www.journalofremanufacturing.com/4/1/5X .