Aluminum manufacturer Novelis faced an intriguing business challenge: how do you provide a continuous supply of aluminum to support production of a highly-anticipated pickup truck at plants located hundreds of miles away -- all while ensuring safety and sustainability, optimizing capital investment, and providing efficiency, flexibility and visibility into shipments?
The answer turned out to be a closed-loop recycling process that shuttles huge aluminum coils from a recycling plant in Oswego, New York, to a stamping plant in Dearborn, Michigan, and then transporting the aluminum scrap back to Oswego to be melted and incorporated into new coils. The entire process runs 24 hours a day, 365 days a year – with a truck heading out on the road approximately every 40 minutes.
Getting to that point involved a collaborative effort with Novelis, its automotive manufacturing customer, and third-party logistics provider Penske. Representatives from Novelis and Penske shared their journey as part of a panel about “Supply Chain Management and Communication” at the Automotive Logistics Global Conference held September 22, 2016, in Detroit.
Novelis is the global leader in aluminum sheet, which is becoming increasingly popular in vehicle production because its lighter weight improves fuel economy and it is infinitely recyclable. Novelis has melting, casting and fabrication facilities in Oswego, with expanding capacity to support high-volume auto production lines. The logistical puzzle was how to build a network to transport aluminum to the stamping plant in Dearborn.
“We needed to ensure that we partnered with the right organization that brought the expertise to the table,” said Jose Gonzalez, senior manager of regional logistics for Novelis North America.
Novelis turned to Penske Logistics.
“The overarching goal is to keep this moving non-stop in a very time-sensitive environment,” said John Mercer, vice president of sales for Penske Logistics. “We had to take into consideration safety, weather, drivers’ hours-of-service restrictions and many other factors.”
“We need every part of the company – including our expertise in leasing, logistics and rental – to make this work for Novelis,” Mercer said.
Penske drew on its expertise in spec’ing trucks and its relationships with original equipment manufacturers to design customized tractors and trailers to haul both the finished aluminum coils and the scrap left over after stamping.
“We really thought this out from the ground up,” Mercer said. Custom-designed equipment includes tractors, universal trailers that can tilt to haul and dump aluminum scrap, and Conestogas for the larger aluminum coils.
Penske Logistics worked on route optimization, and one of the goals was to support driver recruitment and retention for this critical network. The loop is set up to enable drivers to be home each night. Approximately 200 drivers are involved, and they live either near Oswego or Dearborn. A driver will leave Oswego with finished coils, drive about halfway along the 430-mile route and meet another driver who’s coming from Dearborn with aluminum scrap. The two drivers switch trucks and retrace their routes so they can make it home that same night.
On the road, the drivers know they can call on the same resources that support Penske’s truck rental operation, including highly skilled diesel technicians at company service facilities, as well as 24/7 roadside assistance service.
The retention effort is working, since the first driver hired for the closed-loop recycling network in 2013 is still on the team. “They’re driving with the latest and greatest technology, and there’s support all along the route,” Mercer said.
Coordinating this non-stop flow of materials involves skillful communication about transportation and rendezvous timing, contingency planning in the event of bad weather or other emergencies, and much more. The team funnels communication through area operating centers and communicates to drivers via mobile notifications. “We’re all in sync and talking 24/7,” Mercer said.
In addition, Penske Logistics makes use of its ClearChain™ technology suite, which provides increased visibility into routes and shipments. To ensure transparent communications with the production teams, there’s an in-house Penske representative at Novelis as well, Gonzalez said.
Mercer said, “We don’t just think about the product. We think about the culture and collaboration of the companies involved.”
By Steve Trapnell
Watch John Mercer and Jose Gonzalez discuss the closed-loop recycling program during a panel at the Automotive Logistics Global Conference on September 22, 2016, in Detroit: