Sustainability and cost efficiency in Supply Chains

Report, 2013

The project was formed from three basic observations, which together considerably alter the requirements when designing the supply chains. First, the lean production deployment is now ruling the design of the work cells, e.g. the assembly stations. Second, the focus on sustainability and environmental consideration is calling for new models when designing the supply chains, and third, great cost and time reduction potentials are revealed in the supply chains when applying value stream mapping. The purpose of the project was to contribute to the understanding and to the methods of how to design and evaluate sustainable and cost efficient supply chains that supports lean production processes. The project involved all industrial actors of the FFI programme and relied to a large extent on case studies performed in the companies. These cases often combined the development of models and methods with testing and pilot implementations at the companies. Results were disseminated among the actors through workshops and seminars, which further strengthened the results and understanding of applicability. Among the theoretical contributions is the development of the concept of material exposure, as an interface between materials supply and assembly. This interface realizes the product of the material supply system in the form of an available component for the assembly system to assemble, given the requirements of the customer in form of the assembly system. These requirements govern how material exposure is realized and provides a framework for how materials supply systems can be designed. In this way, the principles of lean production in the assembly is supported by the material supply, while allowing the development of a material supply system that itself is lean. One case study investigated systems for repacking of material between packaging types, that may be necessary to meet the requirements of the assembly system at the same time as the transport costs are kept down. From the case study, a classification of compo¬nents that can be handled manually in this type of repacking were derived, and five different types of components were identified. The case study conclusions include the time to pick these components between different packaging types. These results have been put into further work in the case study company, regarding designing systems for repacking of material. A theoretical model was developed to compare how the choice of packaging affect cost and CO_2 emissions for the supply of materials. A case study chose to compare two different packages with fundamentally different characteristics, one of which was a conventional returnable packaging based on plastics and the other a disposable one-way packaging. In this case the disposable packaging turned out to be clearly advantageous from both a cost and an environmental perspective. A new methodology to describe and evaluate the fulfilment of requirements of material flows was developed within the sub-project ‘Materials Flow Mapping’. This methodol¬ogy provides the ability to better, and in more detail, study material flows and its activi¬ties. Such a level of detail in the analysis proved valuable as a basis for improvement work in the materials supply system, where there is a need to be able to describe the often non-value-added activities that occur. One sub-project was carried out with the aim of developing a cost model for estimating the cost of packaging, transport and in-plant logistics in a supply chain from suppliers to assembly, and to implement this in a software. This is an important contribution to the development of a decision tool for the selection of materials supply set up. The model represents a comparatively fast tool for obtaining cost estimates of various configura¬tions of the materials supply system. Finally, one sub-project has treated materials control, to support the research being done on the physical flows. The focus has been on pull-based materials planning with consid-eration to man, technology and organization (MTO), a need that was identified during the project. The result is two-fold, the first part being a model consisting of MTO factors that are important to take into account in the design and implementation phase of a pull-based system. Secondly, research has provided a better understanding of the potential problems during a process of implementing an external pull system and classified these problems based on the MTO dimensions.