Grantee Research Project Results
Final Report: Pollution Prevention Assistance in Automotive Supply Chain
EPA Grant Number: R824746Title: Pollution Prevention Assistance in Automotive Supply Chain
Investigators: Boyd, Lawrence , Whitehead, Amy , Eskamani, Gus
Institution: NIST Great Lakes Manufacturing Technology Center; CAMP, Inc.
EPA Project Officer: Chung, Serena
Project Period: October 1, 1995 through September 30, 1997
Project Amount: $245,000
RFA: Incentives and Impediments to Pollution Prevention (1995) RFA Text | Recipients Lists
Research Category: Sustainable and Healthy Communities , Pollution Prevention/Sustainable Development
Objective:
The Cleveland Advanced Manufacturing Program (CAMP, Inc.) has completed a pilot program that develops and demonstrates the methods and techniques necessary to successfully provide pollution prevention assistance to small and mid-size companies within a complex automotive supplier network. This project was performed by the CAMP/NIST Great Lakes Manufacturing Technology Center (GLMTC), a division of CAMP, and focuses on Northern Ohio automotive suppliers in SIC Codes 34 and 35. The techniques and procedures used to engage the automotive supply chain in northern Ohio can serve as a model for members of the NIST Manufacturing Extension Partnerships (MEPs) and other technical assistance providers to work with additional portions of the automotive supply chain or to engage other chains. Similarly, this pilot program might serve as a model for the Big Three automakers or major first-tier auto suppliers to engage their supply chains directly in a comparable program.The basic premise of this effort is that providing assistance to a network of companies within a supply chain is significantly different from assisting unrelated businesses. Many well-documented pollution prevention incentives that motivate independent companies may be muted or absent in supply chain situations. The company seeking assistance may have little input into product specifications. It may have little ability or authority to modify processes. The fruits of these efforts may accrue to companies at the upper level of the chain. As a result, the "traditional" motivations, methods and techniques may not function effectively in supply chain situations. Different methods and techniques must be developed to effectively assist these companies.
CAMP is aware of several efforts that have been initiated at the regional and national levels that include pollution prevention needs of supply chains as part of a broader program. Two of these efforts are the Great Printers Project and the Automotive Pollution Prevention Project (the "Auto Project"). Neither of these projects focuses on developing the methods needed to actually deliver assistance to small companies within supply chains.
The CAMP program engages small company participants in the supply chain in a comprehensive program of continuous improvement (kaizen) focused on reducing waste generated by the manufacturing process. It is being implemented in three distinct phases; Targeting, Outreach and Supplier Chain Analysis. Technical support and implementation assistance will be provided to small companies within the supply chain as part of the Supply Chain Analysis phase of the project. These activities will develop concrete examples of the benefits gained by engaging the supply chain as a whole instead of engaging the companies as entirely separate entities.
Targeting ? In order to reduce the universe of companies that might be involved in the pilot effort, the program?s first objective was to identify supply chains. Working with the automakers and first-tier suppliers, the program team identified one assembly for each of the three domestic automakers that required the participation of four to six companies in the supply chain. Preference would be given to first-tier supplier located or headquartered in the Greater Cleveland area and supply chains with many, if not all, companies located in Northern Ohio. The supply chains selected might be headed by a small first-tier supplier (all small companies within the chain) or by a major first-tier supplier (small companies in the lower tiers of the chain).
The overall goal was to involve approximately fifteen companies, in total, in the project. More than three assembled component candidates were to be identified. This was to insure against the likelihood that companies within the initial supply chains might resist participation in the project. In that event, an alternate supply chain could be approached.
Outreach - The objective of the outreach project task is to engage member companies to secure participation in the program. The effectiveness of techniques used to engage these companies will be evaluated. The primary deliverables of this task are a list of companies agreeing to participate in the Supply Chain Analysis task and a summary of engagement techniques used to secure their voluntary participation.
The supplier chain analysis project task includes performing manufacturing efficiency (waste reduction) assessments for voluntary participants and identifying points of leverage within supply chains where opportunities identified in the assessments can be initiated. The assessments being performed consider the entire production operation, addressing material usage (Water, Air, Solid/Hazardous Waste) and the use of Time and Energy. CAMP is using a modified Energy, Environment and Manufacturing (EEM) methodology as its primary assessment "tool".
The Project Evaluation provides summaries of the following "lessons learned" through "Auto P2":
- Engagement Methods and Techniques
- Advantages and Difficulties of Working Through Supply Chains to Provide Waste Reduction Assistance
- Participants? Reactions to the Program
- Case Studies: Manufacturing Efficiency (Waste Reduction) Reports
Dissemination of Results: The "Auto P2" project summary, evaluation and case studies are to be made available to NIST Manufacturing Extension Partnerships (MEPs) and other technical service providers.
Summary/Accomplishments (Outputs/Outcomes):
Targeting: A Case Western Reserve University (CWRU) research team led by Dr. Susan Helper prepared the deliverable for the Targeting task, a detailed report entitled Pollution Prevention Assistance in the Automotive Supply Chain: A Study of Northeast Ohio. The report was completed in March 1997. Dr. Helper?s team interviewed sixteen of thirty targeted auto industry suppliers, gathering information about products, business activity, environmental burdens, waste reduction initiatives, ISO/QS9000 status, management methods, competitors, suppliers and customers.The project description called for the targeting team to identify one assembly for each of the three domestic automakers. Supply chains identified by the Helper team (stampings, fasteners and aluminum die castings) did not include a single assembly. The finished part supplied by these chains to the domestic automakers is typically one formed piece of metal ? not an assembly. Supply chains and/or networks for one-piece formed metal parts are typically shallow ? The depth of the "chains" studied by the Helper team was rather limited.
The research and report prepared by the Helper team was used as a starting point for CAMP?s subsequent project tasks. The Helper team mapped three supply chains and interviewed sixteen Northeast Ohio auto supply chain companies (meeting EPA contract requirements). However, the selected chains and companies only provided CAMP with limited opportunities to determine the effects of supply chain (supplier/customer) relationships on the pollution prevention and manufacturing efficiency activities of lower-tier suppliers.
Outreach: Initial outreach efforts commenced in November 1996 and were largely unsuccessful. Potential contributors to the lack of early outreach success are listed below:
- References to "grant", "waste reduction", "pollution prevention" and "environmental" in introduction letter provided strong clues about which Federal agency is funding the project; many manufacturers are skeptical of EPA?s motives
- Manufacturer has in-house staff that perform P2 services
- Management is too busy, not enough time to devote to manufacturing efficiency assessment
A sales-oriented outreach approach suggested by a CAMP staff member was significantly more effective than the less personal "letter and phone" approach suggested in the project proposal and used during the beginning of the outreach task. This approach is summarized below:
- Identify the plant manager at each facility to be contacted. He (or she) is normally the facility?s primary decision-maker. The facility?s switchboard operator can usually provide this information.
- Place a telephone call to the plant manager. Provide a brief description of the program and ask to schedule a meeting at the plant to discuss the program in more detail.
- After the meeting has been scheduled, prepare a meeting agenda. Fax the proposed agenda to the prospect and ask him/her to communicate any necessary changes.
- Prepare a professional meeting presentation, using Microsoft PowerPoint or equivalent. Practice the presentation to ensure smooth delivery.
- Arrive at the designated meeting place 15 minutes early.
- Present the material in a convincing manner!
Supplier chain analysis included performing manufacturing efficiency (waste reduction) assessments for voluntary participants and identifying points of leverage within supply chains where opportunities identified in the assessments can be initiated. The assessments being performed consider the entire production operation, addressing material usage (Water, Air, Solid/Hazardous Waste) and the use of Time and Energy. CAMP used a modified Energy, Environment and Manufacturing (EEM) methodology as its primary assessment "tool".
Manufacturing efficiency (waste reduction) assessments were performed at eight facilities. The CAMP Auto P2 team has discovered that most of the companies that supply the American automobile manufacturers, including the eight companies studied by the team, do not operate as part of a cohesive supply chain. In defense of the suppliers, the American automobile manufacturers do not appear to promote strong and stable supply chains. Due to their size and dominance, automakers and upper-tier suppliers occasionally force unreasonable specifications and other requirements upon their suppliers and expect them to lower their prices at the same time. This approach results in increased costs to the supplier due to the generation of excess scrap. Without corresponding price increases to compensate the supplier for the increased scrap caused by the automaker?s specification change, the supplier either needs to find effective ways to reduce the scrap or manufacture parts or materials at a loss. Many undercapitalized suppliers simply do not have the capital resources to install state-of-the-art manufacturing equipment, particularly when there is little or no return on investment. Furthermore, they typically lack the in-house engineering and technical talent needed to assess the performance of manufacturing systems and implement process improvements.
At present, supply chain relationships have not catalyzed manufacturing efficiency improvements within the automotive supply chain. They have served only to impede progress to improve efficiency and reduce waste generation, particularly at lower-tier suppliers? facilities. CAMP and other technical service providers can offer recommendations to improve efficiency and reduce waste generation to lower tier suppliers that cannot be realized because of conflicting customer requirements. Any recommendations made to automotive suppliers must consider the restrictions imposed on them by their customers when evaluating potential savings or benefits. Despite these restrictions, CAMP was able to provide meaningful technical assistance to smaller companies operating within supply chains by focusing on opportunities not impacted by supply chain relationships. In other words, the technical assistance provider would evaluate a facility as a detached entity ? as if the supply chain did not exist. Significant pollution prevention opportunities requiring input from other supply chain members (particularly customers) were identified as such.
CAMP has developed and refined its manufacturing efficiency assessment tool during the assessment phase of the Auto P2 project. The broad definition of "waste" as defined in the project proposal has been used to develop the case studies presented as part of the Auto P2 final report. This definition includes emissions and releases to all environmental media (Water, Air, Solid), Time and Energy, or WASTE. The format used is a modified version of the Energy, Environmental and Manufacturing (EEM) assessment protocol developed for the National Institute of Standards and Technology (NIST) by the Industrial Technology Institute of Ann Arbor, Michigan (ITI). A one-page executive summary provides general information about a plant?s manufacturing operations and lists primary manufacturing efficiency recommendations. A detailed description of the plant and its manufacturing processes follows. The body of the report addresses each of the components of WASTE; describing material usage, time management and energy consumption. If applicable, opportunities for efficiency improvements and/or cost reductions are described. A brief summary of the impact of supply chain relationships on operations and identified opportunities is included at the end of each case study. An appendix that provides generic manufacturing efficiency improvement suggestions, primarily in natural gas and electricity usage, is provided after the case studies.
Conclusions:
Journal Articles:
No journal articles submitted with this report: View all 2 publications for this projectSupplemental Keywords:
Scientific Discipline, Industry Sectors, Geographic Area, Sustainable Industry/Business, cleaner production/pollution prevention, Manufacturing - NAIC 31-33, State, Economics, Social Science, automotive supply chain, manufacturing extension partnership, cleaner production, waste reduction, supply chain analysis, Ohio (OH), integrated energy, environment, and manufacturing method, technical assistance, pollution prevention, outreach and educationRelevant Websites:
American Automobile Manufacturers? Association, http://www.aama.comChrysler Motors Corporation, http://www.chrysler.com
Ford Motor Company, http://www.ford.com
General Motors Corporation, http://www.gm.com
http://www.camp.com/envsvcs.html
Progress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.