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Global conference: Penske and Novelis close the loop on aluminium

NovelisOne of the most significant shifts in the automotive supply chain over the past few years has been an increase in the use of aluminium in vehicle bodies. In North America, the most significant example has been for the Ford 150 truck, the best selling vehicle in the US at more than 700,000 units per year.

Less known, however, is that the aluminium stamping and production supply chain can be made significantly more efficient thanks in part to logistics. Since the product can be recycled, setting up a transport system that captures the full cycle between aluminium melting, storage, stamping, scrap collection and recycling means that significantly less material and energy is used in the total supply chain.

That is precisely what aluminium supplier and recycler Novelis has achieved for Ford together with logistics provider Penske after implementing a closed loop logistics system, which is now running for 24 hours per day, 365 days per year.

Novelis, the largest supplier globally of rolled aluminium products, was tasked four years ago with supplying the 2015 F-150 in its conversion to aluminium, a lighter weight product than steel that can help vehicles become more fuel efficient. According to José Gonzalez (pictured above), senior manager of regional logistics in North America for Novelis, the company identified an opportunity for significant cost reduction and environmental benefits if it could take more advantage of the ability to recycle aluminium.

“Building a truck with an all aluminium body is a great way to make a vehicle more light weight and therefore reduce emissions,” said Gonzalez, speaking at the Automotive Logistics Global conference. “But, together with Ford, we wanted to do more than that. We wanted to create a way to take back all the manufacturing scrap from the stamping process, re-melt it and put it back into new aluminium sheet, to create a closed loop of recycling.”

In typical stamping operations, around 30-40% of aluminium is leftover and sold as scrap to turn into other aluminium products. “Now, we are capturing all of the manufacturing scrap back from Ford and putting it right back into our process to go right into a new F-150,” said Gonzalez.

The premise is simple in outline: finished coils and ingots are moved from origin or remanufacturing plants to warehouses and on to stamping plants; scraps are then collected from the stamping plant on the same truck that delivered the finished product and brought back to the remanufacturing/re-melting facility, where they are joined by other processed aluminium scraps. From there, the process starts all over again.

The design and execution of the network, however, is highly complex. Novelis’s network covers some 15 different points between re-melt, processing, stamping and warehouse points across New York state, Ohio, Illinoi, Michigan and Canada. And the loop now moves over 28m pounds (12.6m kilos) of finished goods processed each month, and over 20,000 shipments of work-in-progress, finished aluminium or manufacturing scrap every year.

Penske

John Mercer revealed that the closed-loop system requries around 200 drivers

For Penske, the project was its first foray into aluminium supply and has represented a significant commitment and focus on resources, infrastructure and processes. “When we looked at the challenge for Novelis and this closed loop, we knew that we had to get involved,” said John Mercer, vice-president of sales for Penske Logistics.

The project has involved Penske’s logistics arm working closely with its truck leasing business to design and choose the right equipment so that the same truck equipment could be used across the loop. The result is a universal trailer that was designed specifically to haul both finished coils and ingots ready for stamping, as well as shredded scrap on return loads to processing and re-melt locations.

In designing the logistics solution, Penske also had to work carefully with drivers for routing and processes, as the operation requires around 200 drivers. “This is one of the largest product launches for Ford, and we have had to communicate across our organisation and our supply chain partners to make sure that this runs smoothly 24 hours per day, 7 days per week, 365 days per year,” said Mercer.

The network that Penske is managing for Novelis serves Ford production, however the aluminium supplier has a large and growing portfolio of OEM customers for the products, including Cadillac, Hyundai, Volvo, Mercedes-Benz and Jaguar Land Rover.

In the UK and Europe, the company has also established a closed loop-recycling network to recycle scrap from JLR stamping, helping the carmaker to reclaim more than 50,000 tonnes of aluminium scrap back into the production process in the 2015-2016 financial year.

For a full report from Automotive Logistics Global, click here

To see a video presentation of the Penske and Novelis project, click here