Greening the supply chain: A study of Saturn Corporation manufacturing facilities

In the modern world

of global business

competition, every

company is caught

in the seemingly

endless struggle for

an “edge”—the mar-

gin or advantage

that can give them a

favorable position compared to competitors.

In the manufacturing world, this search for

competitive advantage repeatedly leads compa-

nies to ask the same enduring questions:

• How can my company distinguish itself from

the competition?

• How can I convince my customers that it’s me

they want or need, and not my competitors?

• Where is the next improvement to my opera-

tion coming from?

• How can I improve my product’s market share?

• How can I do all this and, at the same time,

be a good corporate citizen and environmen-

tal steward?

The answer to the last of these questions can

sometimes appear incompatible with the rest: An

organization can achieve either good corporate

citizenship and environmental performance, or

good business re-

sults, but not both.

In pursuing

profitability and

market share, the

corporate philoso-

phy of “better,

faster, and cheaper”

has long been the

mainstay of many companies. Now, however, the

expectation is that management must also pro-

tect the well-being of its facility, its people, and

the environment.

A Simple AnswerA new employee once asked me what his job

was. I had what I thought was a simple answer:

“Make what the customer wants, when he wants

it. Try to do it at a reasonable cost, so the cus-

tomer gets a fair price. Don’t hurt yourself, your

equipment, or the environment. If you can do

this, you’ve done your job.”

The employee thanked me, and said that

made a lot of sense. Then he asked, “OK, so what

do I need to do to make it happen?” So much for

my sage “pearls of wisdom”!

Environmental Quality Management / Autumn 2003 / 3

© 2003 Wiley Periodicals, Inc.Published online in Wiley InterScience (www.interscience.wiley.com).DOI: 10.1002/tqem.10093

Lynn Reed

Greening the SupplyChain: A Study of SaturnCorporationManufacturing Facilities

Enhancing environmental perfor-

mance and profitability for both

customers and suppliers

Lynn Reed4 / Autumn 2003 / Environmental Quality Management

As this anecdote demonstrates, the really dif-

ficult part of the problem is in the “how.” Or, as

the common saying goes, everything is always

easier said than done.

Competitive Strategies The approaches used by companies in position-

ing themselves to “do battle” with their competi-

tors seems to be the chess game of the millen-

nium—a never-ending conflict filled with strategies

and counter-strategies. Business leaders who suc-

ceed in this game find they must constantly change

and transform their companies and themselves.

Leaders who fail in their quest for the com-

petitive edge soon find their companies out of

business, and them-

selves out of a job.

Stockholders always

seem to be asking the

same question, “What

have you done for me

lately?”

Given this back-

ground, it is not surprising that company officers

sometimes will try almost anything to gain ad-

vantage over the competition. They know that

this competitive advantage can mean the differ-

ence between winning or losing the corporate

chess match.

This change process resembles a high-speed

car race. An edge is found that moves one com-

pany ahead of the others. Competitors then

struggle to catch up by searching for their own

competitive advantages. As a result, they may

catch up or perhaps even speed ahead. The com-

pany originally leading the race is then forced to

alter course once again, moving on to a different

place or searching for that next distance maker—

something that will allow them to win the race

or, at the very least, finish near the top.

Without the ability to change, a company

stagnates and is doomed to ultimate failure. The

competition catches and passes them by, leaving

behind an organization that is unsure of its next

steps—and sometimes unaware of exactly what

happened to them.

Fresh ideas are the fuel that powers the engine

of change within any organization. The old say-

ing about necessity being the mother of inven-

tion was never truer than it is today.

Invention requires innovation—sometimes

even a paradigm shift in thinking. Innovation de-

pends on curiosity and an eagerness to question

the old way of doing things. It reflects a desire to

take risks and to investigate why things are the

way they are. Innovation has the potential to

change everything in its path because it springs

from a fundamental willingness to try new

ideas—that is, to change.

This need for constant change has made our

world, in many ways, what we know today. A

willingness to be a part of change and to foster

work environments where change can take place

naturally and easily is foundational to the inven-

tive and creative genius that is in all of us.

Certainly, innovation is alive and well in-

side twenty-first-century factories, and in the

manufacturing infrastructure that makes up

what we know as “supply chains” for customer

goods and services.

Supply ChainsIn the modern business world, very few com-

panies are entirely self-sufficient. Companies de-

pend on their suppliers for goods and services.

These suppliers in turn depend on their suppliers,

and so on, in a long chain.

During the early years of the industrial revo-

lution, supply chains were relatively short. They

have evolved and changed markedly over the

years because of changes in consumer demands

and competition.

We have seen an almost natural evolution to

integrated supply activities, allowing companies

Fresh ideas are the fuel that powersthe engine of change within anyorganization.

Environmental Quality Management / Autumn 2003 / 5Greening the Supply Chain: A Study of Saturn Corporation Manufacturing Facilities

to be the proper management of resources and

keeping the ownership happy, be they private

owners or public stockholders.

Resource ConstraintsAs in the past, the quest for today’s better,

cheaper, and faster product is limited by how

many resources a company has at its disposal and

what it is willing to devote to the effort.

Better equipment, improved techniques,

more highly trained staff, and innovation de-

voted to designing and making a product—plus

getting it out the door in a reasonable amount of

time at an acceptable cost—are certainly difficult

enough to achieve in

themselves. Add the

other issues (such as

concerns about the en-

vironment, and the

health and safety of

workers and the com-

munity) and it be-

comes an almost un-

manageable quest.

Time and resource constraints limit the

amount of effort expended on every product cre-

ated and offered for sale in a supply chain. There

are constraints at every turn in the road that leave

companies no recourse but to start down a path

littered with issues that could potentially impact

product quality, speed, cost, safety, the environ-

ment, the community, and worker health in a

negative fashion.

To deal with these constraints, companies

spend a great deal of their time making sure they

understand what the customer wants. Once this is

ascertained, they work at a furious pace building

and engineering their product to fill that need.

Environmental and Safety IssuesFailure to accomplish these objectives, partic-

ularly in the automotive industry, can have dev-

to focus on their strengths, while purchasing ma-

terials they need but are not good at producing

themselves.

Better, Cheaper, FasterOf course, being the good corporate cus-

tomers that we are, we want the best of the best

in our supply chain—keeping in mind the cardi-

nal rule of “better, cheaper, and faster.” Compa-

nies are perfectly willing to outsource their prod-

ucts or services when it makes economic or

strategic sense to do so.

Modern industrial supply chains include nu-

merous organizations and multiple levels of supply

within chains. Suppliers can be two, three, four, or

more steps removed from the final customer who

ultimately receives the finished product.

Many times, during the chain development

process, final specifications may be predeter-

mined (with written or unwritten requirements)

long before any organization has an opportunity

to bid for material supply.

These externally driven factors (customer re-

quirements) force each supplier in the chain to be

the lowest bidder, or the best provider of quality,

or the fastest supplier—or any combination

thereof. Successful companies typically are bene-

ficiaries of this healthy competition, winning

that first opportunity to supply quality product

for a price.

If the supplying company fails to “get it

right,” the results can be disastrous. The competi-

tion is always waiting in the wings with their

own edge, looking for the next opportunity to

speed ahead.

With the right mix of equipment, people, in-

novation, and creativity, companies manage to

remain leaders in this race. Some struggle and

work harder than others. Some fare better and

find it easier going than others. Some survive

longer or just simply outlast the competition

with sheer willpower and tenacity. The key seems

Modern industrial supply chainsinclude numerous organizations

and multiple levels of supplywithin chains.


astating consequences for the supplier. But ac-

complishing these production, delivery, and

quality objectives without addressing environ-

mental and safety issues can be even worse.

Environmental and safety issues also affect

the short-term and

long-term viability of

the operation. In an

attempt to ensure that

“bad things never hap-

pen,” companies have

searched for and gath-

ered together a whole

host of tools with

which to generate

their next “edge” idea. Companies have devel-

oped and trained entire groups of personnel to

focus on eliminating waste from their production

processes while adding value to their products

and services.

Manufacturing Standards and ConceptsOut of this need for change, several concepts,

processes, and standards have evolved, including:

• ANSI/ISO/ASQ Q9001-2000—Quality Man-

agement Systems

• ANSI/ISO-14001-1996—Environmental Man-

agement Systems

• Lean Manufacturing/Six Sigma/Flow Map-

ping/Value Stream Mapping

• 8-D Corrective Action Process/5S and Visual

Control Techniques

• Kaizen Events, Zero-Defect Manufacturing,

and Variance Reduction

• Quality circles and process improvement teams

• Kanban and Just in Time (JIT) Delivery Systems

• Statistical Process Control (SPC)

These are just a few of the tools that, when

combined with continuous improvement initia-

tives within an organization, can actually take a

company to the “next level”—giving them an

edge-building tool with which to work.

Eliminating Non-Value-Added Activities Companies can be almost ruthless in their ap-

proach to identifying and purging non-value-

added activities, eliminating waste of all types,

and reducing product variation—all in the name

of better, cheaper, and faster.

In some cases, the customer even gets in-

volved in the process because they see the impli-

cations of helping the supplier become a leaner

and meaner organization. This is increasingly the

case with original equipment manufacturers

(OEMs), such as automakers, who are among

their suppliers’ largest customers.

More often than not, however, the supplier is

left on its own to struggle with, find, and imple-

ment the necessary change that generates that

next competitive edge.

In many of our modern factories, the “low-

hanging fruit” has already been found and

picked. Manufacturing improvement and waste

elimination ideas that are cheap or easy to im-

plement have already been identified and im-

plemented.

Companies are now working on more diffi-

cult, more obscure, and substantially more com-

plex issues. These initiatives require greater effort

and sometimes offer less payback or reward in

terms of benefit to the factory.

To put it in straightforward terms, nowadays,

the edge is much more difficult to find, harder to

implement, and less economically rewarding.

GSC Pilot InitiativeRecently, a new idea has surfaced that has the

potential to provide companies with the next

competitive edge—and a look at a side of the tree

that has a few more low-hanging fruit opportuni-

ties. A group of people from business, govern-

ment, and academia has been quietly piloting a

Companies can be almost ruthlessin their approach to identifying andpurging non-value-added activities,eliminating waste of all types, andreducing product variation.


The GSC process should be viewed by inter-

ested company management as another tool to un-

cover the next edge—but not necessarily as a magic

bullet that will solve all of a company’s problems.

The GSC process can be used to address issues pre-

viously thought to be out of reach for suppliers and

customers alike, producing win-win results.

The GSC process helps identify problems and

conceptualize solutions for externally driven issues.

It can result in valuable project ideas for the supply

chain in terms of environmental and economic im-

provements. The GSC

process can be used to

peel away another layer

of product cost and, in

many cases, improve

the supply chain envi-

ronmental footprint at

the same time.

Change Factors andObstacles

Most organizations work very hard on im-

proving their internal processes and activities. It

is, after all, the one area of manufacturing in

which they have the most complete control over

what is changed—including, to a large extent,

how fast the change actually occurs.

In general, however, after a product design be-

comes established, a supplier has only limited op-

portunities for improving it through feedback such

as customer ideas on modifications, suggestions

for innovation, and learned experiences. In fact,

more often than not, the OEM customer discour-

ages change out of concerns about the unknown

impacts it may have on the product they sell.

As a result, these “change factors” are to a

large extent outside the supplier’s control and

sphere of influence, and often are not viewed as

worthy of effort or discussion. Instead, the supply

organization concerns itself with internally

driven improvement areas in order to make its

project that puts a different spin on customer

supply chain development and improvement.

The concept originated with a discussion

among individuals from the University of Ten-

nessee and Saturn Corporation, a division of

General Motors. Saturn has a plant located

south of Nashville, Tennessee, in a small town

called Spring Hill. The idea has continued to

gain momentum with support and encourage-

ment from the U.S. Environmental Protection

Agency (EPA) and the National Institute of

Standards and Technology (NIST) in Washing-

ton, D.C.

The concept is called Greening the Supply

Chain, or GSC, and it has a simple approach at its

core. Plainly stated, GSC is a structured process

for waste identification and problem solving.

GSC is used to identify areas within an organiza-

tion that have externally driven requirements

that could provide companies with an environ-

mental and cost reward.

Saturn Supply Chain PilotThe GSC team recently completed the pilot-

ing phase of this initiative with four assessments

at plants in Tennessee. The manufacturing facili-

ties piloted are currently part of the Saturn as-

sembly plant supply chain in Spring Hill.

The supply chain provides parts for Saturn’s

most recent automotive product line, the Saturn

VUE. The teams that worked on the GSC pilot ef-

fort consisted of supplier company employees

(who provided company knowledge), University

of Tennessee consultants (who acted as facilita-

tors for the process), and Saturn representatives

(who represented the OEM customer).

GSC uncovered substantial environmental

and economic opportunities at these four facili-

ties, which has created considerable enthusiasm

on the part of both the suppliers and the cus-

tomer. An opportunity to expand the suppliers’

“sphere of influence” has emerged.

The GSC process should be viewedby interested company managementas another tool to uncover the next

edge—but not necessarily as amagic bullet that will solve all of a

company’s problems.


product cheaper and faster while maintaining the

customer’s requirements.

In fact, many (if not most) of the tools in the

supply organization’s toolbox are focused on lis-

tening to the customer, with the intent of dis-

cerning what the customer wants and then trying

to provide for those needs.

These tools often work very well with respect

to the company’s internally driven requirements

and issues. This is not to say that many of the

tools could not be used in fixing externally

driven factors. It is just not an area that is fre-

quently visited.

More times than not, the supplier pays limited

attention to improve-

ments in the customer

product. After all, it is

ultimately the sup-

plier’s OEM customer

that assures that prod-

uct design and specifi-

cations fulfill their ulti-

mate consumers’ needs.

The position of most

suppliers could be summed up as follows:

The OEM customer gave me this require-

ment and I can’t change it! Who am I to

tell the OEM customer what he or she

wants? I’ve got a piece of the action

(supply) and I’m making a good profit

doing what they want. Now, go away, I

have more important things to worry

about!

In taking this position, however, the supplier

may lose chances for improvement.

Opportunity Knocks with GSCGSC invites both the supplier’s OEM cus-

tomer and the supplier’s supplier to the table. The

group works on issues that they can address to-

gether to improve operations, lessen impacts on

the environment, lower costs, and improve prof-

itability—all in a single step that can produce

win-win results for all parties.

The focus of GSC is on those externally driven

factors that the supplier would not otherwise

have addressed, and with respect to which there

is a substantial economic or environmental rea-

son for change.

Issues of importance identified during the

GSC process can then be addressed by the appro-

priate parties. The supplier becomes able to effect

organizational change that benefits both itself

and its customer or suppliers.

Using GSCThe steps followed in the GSC process are out-

lined and briefly discussed in the sections below.

In addition, Exhibit 1 depicts the major steps in

the process.

Identifying OperationsThe process begins with the organization’s

commitment to reviewing their processes and op-

erations from an environmental perspective. The

GSC process itself is a multi-step activity utilizing

a simple mapping tool developed by Saturn and

modified by the University of Tennessee to ad-

dress environmentally driven issues.

Identifying Inputs/OutputsThe process utilizes an input–output ap-

proach for identifying factors and issues related

to the process being investigated. Inputs, outputs,

and operations ultimately become the focus for

identifying externally driven factors.

Identifying Environmental and Other ImpactsThe process continues by identifying the im-

pacts associated with each input, output, or oper-

ation, if they are known. The impacts or effects

caused by these factors can range from strictly fi-

The focus of GSC is on those exter-nally driven factors that the sup-plier would not otherwise have ad-dressed, and with respect to whichthere is a substantial economic orenvironmental reason for change.


tailed solution; these issues are left for a later

date and time.

The group is asked to step “outside the box”

for a moment and consider innovative opportu-

nities. No one solution can be discussed for more

than five minutes. If more time is needed, it is

tabled for later discussion off-line.

Flagging Issues and Solutions for ActionOnce issues are identified, the team identifies

drivers that are worthy of further work and flags

them a second time. In screening this final set of

impacts to be addressed, the team uses prelimi-

nary cost figures, rough-cut economics, environ-

mental information, and other data.

More detailed information can be generated

later in the project phase of the process. The team

can use solution flags to indicate where addi-

tional investigation and review are needed.

Developing an Action Item ListEach impact-driver-solution set flagged for

further action must be translated into an action

item list. The list can be customized by the or-

nancial to totally environmental, or some combi-

nation of the two.

The group that maps the operational steps is a

cross-functional team capable of identifying

most, if not all, of the issues within the product

supply process—including issues outside the sup-

plier’s sphere of influence.

Identifying Drivers/Highlighting ExternalFactors

Each impact is then assessed to determine

whether the issue is internally or externally

driven. External factors are marked and high-

lighted. If there are no identified drivers, the im-

pact is considered an open issue and may likely

need additional expertise for evaluation.

Brainstorming for Potential SolutionsOnce external drivers are identified, the group

quickly assesses each highlighted impact for po-

tential solutions. At this point, the team is looking

for concepts, original ideas, and new thinking.

No idea, however unusual, is rejected. The

object is to capture thinking, not engineer a de-

Exhibit 1. Major Steps in the GSC Process


ganization to include assignments, target dates,

and information on progress toward completion.

The GSC Road MapThe GSC process does not necessarily need to

be limited to externally driven factors. It can also

be used to find solutions for internal factors

(items not flagged). In this context, the factor

would simply become one of the issues that the

supplier addresses with its own internal resources

as a stand-alone project.

The GSC process can in effect create a sort of

environmental road map through which the

company can address external and internal issues

that otherwise might not be identified or easily

addressed.

Once completed, the road map can be revis-

ited over and over again in order to identify ad-

ditional ideas and issues the organization wants

to tackle.

Developing a Program to Address ActionItems

The companies involved in the GSC process

must develop their action items into complete

programs for implementation by the appropriate

parties. These programs may include information

on resources and capital investment required (if

any), along with detailed plans, designs, imple-

mentation schedules, and other components.

Time RequirementsAs part of the GSC process, a pre-assessment

(taking two to four hours) is normally completed

by members of the facilitating team and the sup-

plier. The information obtained during this

process is organized and put into draft form for

review by the entire GSC team at the assessment

meeting.

A mutually agreed-upon date is then set to

pull the supplier, customer, and facilitation team

together in a meeting place with sufficient floor

and wall space to map the organization’s process.

The scope of the assessment generally is lim-

ited and defined during the pre-assessment

process. The assessment for one operational

process usually can be completed in one day, or

eight to ten hours.

GSC Pilot FindingsAt every site piloted, issues were identified

during the assessment process that had not, up to

that point, been recognized—or in many cases

even discussed—by the supplier or the customer.

Exhibit 1. Major Steps in the GSC Process (continued)


The supplier reaps the benefit of the GSC ef-

fort by becoming a more viable and competitive

link in the chain, while the customer sees savings

over the long term in reduced costs for parts. The

supply base becomes more reliable environmen-

tally, and the entire chain more profitable—pro-

ducing a win–win for both parties.

Much of the effort expended in the GSC

process can be channeled directly into a com-

pany’s environmental management system or

ISO 14001 initiatives with the creation of fully

developed management programs to address

items marked for attention.

Completing the Assessment and Following UpEach GSC assessment is followed with a for-

mal report by the assessment team summarizing

the issues identified, what was discussed, initial

economic and environmental analysis (where ap-

propriate), and additional information on possi-

ble solutions in cases where it makes sense to

offer them.

Much of the detailed analytical work needed

to effect change is left to the supplier and/or cus-

These issues were identified as a result of our en-

vironmental mapping study of facility inputs,

outputs, and process activities.

To date, GSC has uncovered and highlighted in

excess of $1,000,000 in potential savings for four

manufacturing and assembly facilities in east and

middle Tennessee. Approximately one-half of the

savings potential identified derives from externally

driven issues (either with shared responsibility be-

tween customer and supplier, or wholly driven by

the customer). The other half was related to inter-

nally driven issues that the facilities saw as poten-

tial improvements to their own operations.

Some solutions identified by the process

may not be realized immediately. Instead, these

solutions will take on a more long-range focus,

to be addressed in the future at the first avail-

able opportunity.

Benefits of GSCThe GSC approach is more holistic and sys-

tems-oriented than the approach that a supplier

typically would use in trying to effect simple in-

ternal change on its own.



tomer. The purpose of each assessment is simply

to uncover “edge generating” ideas and put some

rough estimates on environmental and cost-sav-

ings benefits.

GSC Case StudiesGSC offers numerous environmental and eco-

nomic benefits. A few examples are discussed in

the case studies that follow, all of which were

drawn from the four facilities involved in the

pilot project. Specific identifying information

about the facilities has been removed in order to

maintain their confidentiality.

Keep in mind that this discussion offers

only a sample of the many GSC assessments

that have been performed, all of which were as-

sociated with economic and/or environmental

improvement.

Case Study 1Case study 1 involved a rather significant

issue that surfaced during discussions about the

waste of time and materials. The facility had

seen an increase in the number of defective

parts produced, which then had to be reworked

or discarded.

The root cause of the problem stemmed from

the supplier having to manually build the prod-

uct (which involved very small parts) rather than

using automated machinery. It was discovered

that the supplier could have automated the

process, but that the customer’s special design re-

quirements prevented it. The volume of parts

being processed at that point did not justify the

expense of automation.

When asked what could be done to automate

the process, the supplier stated that greater com-

monality in design components (drawn from pre-

viously proven designs) could improve the situa-

tion and allow for automation. When the

supplier and customer evaluated the issue, they

found that as much as $500,000 could potentially

be saved by improving the design to leverage

common components.

The customer and supplier currently are work-

ing on the issue together, with the intent of cap-

turing as much of the potential savings as possi-

ble. Although it is not likely that all the potential

savings can be realized, less validation and design

work will be required by both parties. This will

mean fewer failed parts, better quality, and lower

part-manufacturing costs.



the time the suggestion was made, the low cost

per unit did not appear to justify the use of re-

turnable packaging.

By utilizing this approach, the OEM assembly

plant realized it could avoid conveyor line retro-

fit or replacement costs, resulting in a substantial

cost savings. At the same time, the solution

would impose only a minor inconvenience on

the supplier in terms of an additional externally

driven requirement.

However, final analysis indicated that the

$0.25 cost per unit failed to include a couple of

factors:

• the customer’s cost of disposing of the plastic,

estimated at $0.04 per unit and

• the cost of installing and removing the plas-

tic, estimated to be as much as $0.33 per unit.

When these costs were considered, what ini-

tially seemed to be a relatively simple and inex-

pensive solution would have been over twice as

costly as initially projected.

In this case, looking at the supplier–cus-

tomer–dealer chain from a holistic perspective

Case Study 2Case study 2, involving an OEM assembly

plant, addressed what appeared at first glance to

be a relatively minor problem regarding a product

conveyor. Parts sent to the plant for final assem-

bly were too tall to pass down a conveyor line at

the plant because of the height of the part, which

was being conveyed on a transport pallet.

Engineering did an economic analysis of the

situation that considered several options for ad-

dressing it. These options included retrofitting

the conveyor, replacing it, and addressing the

problem with some other type of solution. They

noted that the existing conveyor line was still

serviceable, not fully depreciated, and still being

used in the facility’s existing product line with no

problems.

Based on this analysis, the OEM considered it

preferable to effect a supplier requirement

change rather than attempt to alter or replace

the conveyor. Accordingly, a suggestion was

made that the supplier reduce the height of the

part by shipping a portion of its assembly in a

separate plastic bag and pouch that would be af-

fixed to each part, at a cost of $0.25 per unit. At



put a dramatically different spin on the decision-

making process. In fact, the true costs for the sup-

ply chain would have been in excess of $100,000

annually.

The parts supplier currently is looking into

less expensive and more environmentally

friendly alternatives, such as using returnable

storage pouches to lower the overall cost and

eliminate the environmental impact of plastic

disposal—a totally different approach from the

solution initially proposed.

Case Study 3At the facility involved in case study 3, final

manufactured OEM product subassemblies were

fitted onto flat plastic pallets weighing over 100

pounds. Each unit had a computer chip that con-

tained encoded information for the assembly line

regarding the product affixed to the pallet.

Sixty units per load were shipped to the OEM

assembly plant and then returned, with an antic-

ipated daily movement of 30 loads at full pro-

duction capacity. The pallets traveled in excess of

80 miles.

In reviewing the situation, it was discovered

that durable pallets weighing only about half as

much as the current versions could be built and

used for the same purpose. Using transportation

cost tables established by national truck transport

organizations, we determined that annualized

diesel fuel costs for transporting the additional

weight could be eliminated by using lighter pal-

lets in future replacements. Savings in fuel cost

alone could be as high as $7,000 annually if the

reduced-weight product pallet were adopted.

Although this alternative cannot immedi-

ately be implemented because the current pallets

are still serviceable, future replacement pallets

will be made of lower-weight material. This will

reduce both transportation costs and environ-

mental impacts.

Case Study 4Many parts installed on modern automobiles

are electrocoated (e-coated) to prevent rust-in-

duced failures of the exterior metal work. Case

study 4 involved this process.

The facility, a supplier, quality-checks its man-

ufactured parts for appearance and the ability to

take e-coating. At the time we did our assessment,

the supplier performed its quality check by coat-

ing sample parts with spray paint. A worker



Another important issue also surfaced during

the review process: safety. Before the steel rolls

were hoisted to a vertical position, workers lifted

them just enough to get the hoist chain in place,

creating a safety hazard.

We viewed the potential dollar savings and

the safety concerns as reason enough to work on

this project. The solution we found ultimately

addressed both issues. The facility opted to pur-

chase a lifting device that could move the steel

rolls to a vertical position, thus eliminating safety

concerns with the chain hoist. Implementing this

solution saved the facility $24,000 annually.

Case Study 6In case study 6 a supplier uncovered another

issue associated with painting. The facility oper-

ated an e-coat process that painted the finished

product prior to final assembly. Parts were trans-

ported to the e-coat operation, loaded onto a con-

veyor rack, e-coated, off-loaded, and returned to

the assembly department for final manufactur-

ing. They were then loaded onto a transport

frame for shipment to the OEM.

During movement of the parts, the paint would

sometimes be scratched or chipped. These surface

defects were covered with spray paint, a costly

process that also created a hazardous waste stream.

Saturn provided the supplier with informa-

tion on a repair methodology (an e-coat touchup

would then visually inspect the parts under

bright light, looking for surface defects (such as

scratches, pits, and machine marks) that would

negatively impact appearance.

Through our assessment process, we learned

that parts could be checked just as effectively by

being dipped in mineral spirits and examined

under light. Implementing this change will save

the facility as much as $1,700 annually. In addi-

tion, with this method, parts being checked can

be returned to the production run, thus reducing

scrap and resulting in additional cost savings.

Case Study 5At the facility involved in case study 5, a

stamping operation received steel rolls that were

shipped on wooden pallets. Each steel roll arrived

on its side, wrapped and banded to the pallet. The

facility was forced to toss out a significant

amount of the raw stamping steel at the end of

each roll because of damage (scratches and marks

caused by the handling equipment).

The damage was caused by the chain hoist

equipment used to raise the roll to a vertical posi-

tion so that it could be transported and loaded into

the stamping press feeder mechanism. The wasted

steel had to be sent to recycling, at a substantial

loss compared to its cost—pennies on the dollar, in

fact. However, returnable vertical racks were too

expensive to justify from a cost standpoint.



kit) that eliminated the need for spray paint. By

implementing this alternative, it was estimated

that the supplier could save over $10,000 annu-

ally and eliminate the hazardous waste stream.

Case Study 7At the facility involved in case study 7, the re-

view and discussions were almost complete when

someone asked a design engineer, “If you could

do anything to your manufacturing process and

had an opportunity to change anything you

wanted to, what would you change?” The answer

revealed a huge opportunity for improvement.

At the facility, four parts were stamped in

presses and mounted

onto the final cus-

tomer subassembly.

Robots welded two of

the parts on each side

of the finished sub-

assembly prior to

painting.

The final sub-

assembly contained different parts at the left

front, left rear, right front, and right rear. None of

the parts were the same, although they all served

the same purpose—as mounting brackets for an-

other automobile part. The left and right front,

and left and right rear, brackets were mirror im-

ages of each other. The front and rear brackets

were substantially different in design.

The design engineer wanted to make all the

brackets identical so that the only requirement

during assembly and welding was simply to ro-

tate the part 90 degrees front to back or left to

right. This would lessen the need for press time

and eliminate tooling changeovers, resulting in

cost savings and improvement in throughput and

logistics.

Though no firm number was ever established

for economic benefit, a savings of one-half per-

cent in manufacturing costs was projected at

$150,000 to $200,000 annually. The supplier and

OEM plan to work on improving the commonal-

ity of design characteristics for this automotive

subassembly.

ConclusionsInitially, some of the suppliers involved in

this project were very reluctant to review their

processes in the presence of their customer—for

understandable reasons. Why, in fact, would

any facility want its processes to be scrutinized

by the customer or an outside third party? In ad-

dition, most participants initially were skeptical

that the assessment would uncover anything

that was not already known or being addressed

by the supplier.

We are still at an early stage of the GSC

process, having piloted only four facilities. How-

ever, it is already apparent that the process can

be used to leverage substantial environmental

and economic improvement for the entire sup-

ply chain.

Some preliminary analysis work done in an

attempt to understand the implications and im-

pact of GSC indicates that the process has the po-

tential to identify economic impacts of $390 mil-

lion to $520 million, all driven by external issues

with regard to the General Motors supply chain.

The potential for identifying internally driven is-

sues could be almost as large. Many of the issues

identified also involve environmental aspects.

The potential benefits of the GSC process can

be summarized as follows:

• improved environmental performance, result-

ing in less waste from facilities;

• substantial cost reductions for the supplier, re-

sulting in improved economic performance;

• improved competitiveness for the entire sup-

ply chain, ultimately allowing the OEM to

Initially, some of the suppliers in-volved in this project were very re-luctant to review their processes inthe presence of their customer—forunderstandable reasons.


In the near future, we hope to make GSC a na-

tional or even international program so that

other suppliers and OEM organizations can bene-

fit from the assessment tool.

If your company is looking for a competitive

edge, maybe GSC is a logical choice for your op-

eration. Consider adding it to your toolbox.

For More Information Companies interested in using the GSC

process should contact their local Manufacturing

Extension Partnership and ask for details.

benefit through lower long-term product

costs;

• improved supplier and customer relations;

• ability to address externally driven issues that

previously were considered to be beyond

reach; and

• a methodology for expanding the supplier’s

sphere of influence on environmental issues.

Although the initial GSC pilot phase has

drawn to a close, we have generated sufficient in-

terest to take this process to the next logical step.

Lynn Reed is with the University of Tennessee Center for Industrial Services in Nashville, Tennessee. He can be reachedat [email protected].

Greening the supply chain: A study of Saturn Corporation manufacturing facilities

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