Skip to content

OM in the News: Sustainability and the Ford F-150 Truck

November 29, 2014

ford“Bucolic upstate New York is an odd place to be building the future of the U.S. auto industry,” writes Forbes (Nov. 24, 2014). Yet here, in a factory that makes aluminum cans for the beverage industry, workers are gearing up for a crucial role in the launch of the next generation of America’s bestselling vehicle.The Novelis plant is the birthplace for Ford’s innovative new F-150 pickup, 700 pounds lighter–and thus more fuel-efficient to meet government requirements–because its steel body panels have been replaced by lightweight aluminum. The stakes could not be higher. The F-150 pickup is Ford’s crown jewel, generating $20 billion in revenue annually and 40% of its annual profits.

Novelis, the world’s largest aluminum recycler, showed Ford how it could afford the switch to higher-priced aluminum (adding about $750 per truck) by using recycled scrap instead of buying virgin aluminum mined from bauxite. Together they created an innovative supply chain that allows Ford to recover a big chunk of its aluminum costs by selling the scrap back to its suppliers and reusing it. The rest of the industry is watching closely. Tough new fuel-economy laws require automakers to double their fleetwide average to 54.5 mpg by 2025.

Here’s how it works: When a vehicle body panel is stamped, about 40% of the metal winds up as scrap. Instead of gathering up all the various metal scraps from its stamping plants, Ford installed pneumatic scrap-handling equipment that will separate the aluminum alloy on conveyors and deposit the scraps in dedicated containers. Novelis contracted a fleet of 150 trailers to ship the scrap back to its plant for reprocessing. The scrap is then melted in a 2,000-degree furnace. Once the molten metal is ready, it is cast into massive 30,000-pound ingots for subsequent processing. It’s then ready to be rolled into sheets 1/16 of an inch thick and shipped in giant coils back to Ford’s stamping plants, where the process begins anew.

Novelis’ goal is to have 70% recycled content in its automotive sheet by 2020, up from 10% five years ago.

Classroom discussion questions:

1. Why is the switch to aluminum a big risk for Ford’s F-150?

2. What are the advantages of this process?

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Supply Chain Management Research

Andreas Wieland’s supply chain management blog for academics and managers

better operations

Thoughts on continuous improvement: from TPS to XPS

%d bloggers like this: