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Supply Chain by the Numbers

April 10 , 2014

  Supply Chain by the Numbers for Week of April 10, 2014

Tesla Plans to Cut Logistics Waste in Sourcing for New Battery Plant; Walmart Riding a New WAVE (Truck); US LPG Exports to China Will Surge; Toyota Says More Manual Work Needed with Automation



The share of key metals and minerals that high end electric car maker Tesla says it will source from North America for its planned "Gigafactory," which will produce the batteries for its cars - as many as 500,000 large batteries per year. These minerals/metals include things like graphite, cobalt and lithium, several of which lack capacity currently in North America to deliver the volumes Telsa will require, so this is a risky commitment. Many of these minerals currently come from risky/controversial regions such as central Africa, and China is closing many graphite mines over environmental concerns. Tesla in part wants to reduce "logistics waste" - commodities travelling thousands of miles from mine to processors to manufacturer.




Number of barrels per day that China has recently locked up with US suppliers of liquid petroleum gas (LPG), up from virtually nothing a couple of years ago, as the shale energy boom for the US continues. Those shipment volumes, including a big deal between Phillips in the US and Chinese state-owned refiner Sinopec, could triple by 2020, industry experts on CNBC said this week. LPG is a compressed mix of propane and butane, used for heating and transport, and now also increasingly utilized for making petrochemicals as well. Middle Eastern firms dominate the market currently, but the US is now changing that status quo in a major way. While there are still major exports restrictions in the US for liquefied natural gas, there are no such rules for LPG, enabling these new deals with China, which will be worth billions of dollars in annual exports.



Reduction in pounds for the trailer portion of Walmart's new WAVE (Walmart Advanced Vehicle Experience) concept truck. That comes from being made of carbon fiber, rather than metal. The WAVE truck has an unusual front end cab design, which includes placing the driver in the middle rather than the left, which is a key factor in being 20% more overall aerodynamic than existing tractor-trailers. It also used a hybrid electric motor which when needed can be powered by a variety of fuel types. Walmart admits the truck, co-developed with Peterbilt, Great Dane Trailers, and Capstone Turbine, may never see the light of day in terms of actual deployment, but the company is committed to creating "technology trucks" that will be game changing, says Elizabeth Fretheim, Walmart's director of logistics sustainability.



Reduction in the amount of materials Toyota uses to make crankshafts after a new program in which workers manually produce some of the parts, versus the more automated process used for the bulk of crankshaft production. Why? Toyota now believes that growing levels of automation have led to a loss of "craftsmanship" among its workers, resulting in a lacking of ability to really tune and improve machine performance. The manual crankshaft production created insights that led to improvement in the machine processes. In fact, the company believes high levels of automation often put a lid on continuous improvement - now that's an interesting thought. Toyota has now put more than 100 manual manufacturing cells in its plants in Japan to gain back some of that craftsmanship and manufacturing knowhow that it says were once common in its workers.

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