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.
Phil Martens, a former Ford executive who is now chief executive of Atlanta-based Novelis, says the virtuous circle is a clever example of risk management. “Give us your scrap and that will turn into your product.”
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