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Who's in the supply chain?

Date: 6/09/2013 | Author: Jason Fazackerley

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Jason Fazackerley looks at becoming part of the manufacturing chain

Since the days when Henry Ford pioneered the manufacturing principles that we still recognise today, the supply-chain has been a critical component in the production of goods. Of course, Ford cannot take all the accolades for the manufacturing techniques of the 20th and 21st centuries, we have also to take our hats off to the Japanese who copied them, improved them and then continued to improve them.

In fact, it was the Japanese who then brought their new improved manufacturing methodologies back to the west and they now use the United Kingdom’s skills, workforce and proximity to the European market to create global businesses. Take Toyota in Derby, Nissan in Sunderland and Honda in Swindon as examples.

While a typical car plant may employ a few thousand people, the suppliers to those plants employ many times that number.


What we traditionally describe as a manufacturer is often not much more than a final assembler of pre-manufactured parts. Success (or failure) of a 21st century manufacturer is not so much down to the quality of workmanship on their assembly lines, but down to the way they manage the supply chain. In fact, following product design, the supply chain management is probably the most dominant factor in determining the quality of the finished product, and therefore has a significant impact on the overall success of the business.

So, if to any significant degree, recycled material is to replace virgin material in the supply chain, whether it is metals being pressed to make car bodies or polymers to make milk bottles, we need to consider the practices of those virgin material producers.

But, also, we should not limit our thoughts to where recycled material is being used today – we need to think beyond plastic milk bottles and plant pots and think about how recycled material can used to make the dashboard of a BMW.

Quality

There is often talk of Quality, it has become a topic of much debate.

The MRF code of practice will give us a measure, though this is right at the front end of the process, and let’s be honest, the output from MRF’s is still a long way from anything that can go into most manufacturing processes. If you were to compare the output from a MRF with the traditional virgin sources, then the MRF is the crude oil or iron ore coming out of the ground – still a lot of refining to be done.

As with any process, the quality of the output is significantly determined by that of the input, and this is why quality management in a MRF is important; Understanding the composition of the input material allows you to manage the quality of the output. To do this, good record keeping is essential and can only be achieved with the support of good systems and practices. Let’s not forget, quality can be high or low, but good quality management is about providing the right quality for the next stage in the process.

Traceability

To take an extreme example, if you were to supply alloys that were used in the production of aircraft landing gear, you would need to provide absolute traceability for at least 25 years.

This is what the steel mills of the United Kingdom have been doing for many decades – and at the risk of showing my age, I know this because Prodware designed built systems to do it. Being able to trace every batch back to its chemical composition, physical properties and source is business as usual to these companies. Even if the material passes through many processes and business entities before becoming part of the finished product, that level of traceability must exist.

As I say, this is perhaps an extreme example, but if you supply any material into high-value streams or those that can impact health (food, pharma etc.) these are not unreasonable expectations.

Consistency

I used to buy wall paper and check the batch numbers on each roll to make sure I didn’t end up with a range of inconsistent shades.

Today, with modern optical production controls, this is generally not necessary, only my OCD forces me to continue this practice. Being part of a supply chain often involves continual supply, and if this is the case you need consistency of output over long periods.

This can be a challenge when your input is anything but consistent. However, if you understand the source of material, the composition of it, it becomes easier to blend inputs to ensure a consistent output.

Visiting a polymer plant recently I experienced this in action, where they regularly check the composition of material coming in from different MRF’s around the UK. They understood that if they mixed material from MRF “A” with material from MRF “B” at a two to one ratio they achieved the right quality output. As the incoming material altered over time they could adjust the mix to maintain that consistent output. Again, good systems and practices are necessary to achieve this.

Availability

If you have ever visited a successful manufacturing plant you will rarely see much stock. In fact, stock is considered bad.

One of the key measures for any manufacture is capital tied up in stock. Just-in-time and other such methods are used to reduce the need to carry stock, making it the supplier’s responsibility/problem. In some sectors this has created the need for intermediary stock-holders; these are companies that buy in scale from virgin sources, and then supply the right quantity at the right time to the manufacturer. Stock holders may buy material once a month, but then supply daily (or even hourly) to the manufacturer, with quantities varying almost real-time.

This is quite different from how most recyclers operate; they see the pile getting bigger in the yard and once there is enough to fill a truck, will ship the material, or perhaps sell what is available on a certain day of the week. Even the more sophisticated operations are constrained by the supply of input material and the through-put of their operations plant. This makes reacting to the customer’s just-in-time demands extremely challenging.

In the traditional world, manufacturers will share production forecast information with suppliers to ensure the supply needs are met and the manufacturing plant never stops. This can involve quite complex data flows, but they are essential to the success of the supply chain.

Is it all worth it?

The recycling sector, not just in the United Kingdom, is far from ready to meet the supply chain demands of sophisticated manufacturers. But, significant progress over recent years has had some reasonable results.

Producers, whether they be BMW or Proctor & Gamble, have made big commitments to the use of recycled material in their products. That quantity of material to the right quality is not yet available in the manner they expect. What they are often looking for is long-term contracts with trusted suppliers who can enable them to meet their commitments to the use of recycled materials.

For this to happen, the material supplier needs to meet the consistency, quality and availability needs in the way that traditional suppliers have previously. Comprehensive data management and good control systems are an essential element in achieving this. Also, if you employ the practices, and perhaps even the experienced people, from those traditional virgin suppliers then a tremendous opportunity exist to enter into very significant, profitable and long-term contracts. This does create sustainable opportunities to invest in growth. 

Jason Fazackerley Solutions Specialist ProdwareWriter: 

Jason Fazackerely is the solutions specialist at Prodware (www.prodware.co.uk)

Prodware creates, integrates and hosts IT solutions for businesses. It serves more than 17,500 active clients and is a key player and partner for the installation and management of global IT solutions and applications.

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