Sustainable Supply Chain Management

Erasmus+ ECOgREEN Project

Learning Goals (1 of 2)

1 Define the three elements of supply chain sustainability.

2 Explain the reverse logistics process and its implications for supply chain design.

3 Show how firms can improve the energy efficiency of their supply chains by using the nearest neighbor (N N) heuristic for logistics routes and determining the effects of freight density on freight rates.

Learning Goals (2 of 2)

4 Explain how supply chains can be organized and managed to support the response and recovery operations of disaster relief efforts.

What is Sustainability?

• Sustainability
• A characteristic of processes that are meeting humanity’s needs without harming future generations

Sustainability

• Sustainability Challenges
• Environmental protection
• Productivity improvement
• Risk minimization
• Innovation

Supply Chains and Sustainability

Figure 15.1 Supply Chains and Sustainability

The Three Elements of Supply Chain Sustainability

• Financial Responsibility
• Environmental Responsibility
• Reverse Logistics
• Energy Efficiency
• Social Responsibility
• Disaster Relief Supply Chains (Humanitarian Logistics)
• Ethics

Reverse Logistics

• The process of planning, implementing and controlling the efficient, cost-effective flow of products, materials, and information from the point of consumption back to the point of origin for returns, repair, remanufacture, or recycling.

Closed-Loop Supply Chain

• Closed-Loop Supply Chain
• A supply chain that integrates forward logistics with reverse logistics, thereby focusing on the complete chain of operations from the birth to the death of a product.

Flows in a Closed-Loop Supply Chain

Figure 15.2 Flows in a Closed-Loop Supply Chain

Energy Efficiency

• Carbon footprint
• The total amount of greenhouse gasses produced to support operations, usually expressed in equivalent tons of carbon dioxide (C O₂)

Transportation Distance

• Route Planning
• Shortest route problem
• Find the shortest distance between two cities in a network or map
• Traveling salesman problem
• Find the shortest possible route that visits each city exactly once and returns to the starting city

Transportation Distance

Transportation Distance

Four-City Traveling Salesman Problem – Class Discussion

Figure 15.3 Four-City Traveling Salesman Problem

1. CH-C-B-A-CH: 80+120+100+90 = 390
2. CH-B-A-C-CH = 85+100+130+80 = 395
3. CH-A-B-C-CH: 90+100+120+80 = 390
4. CH-C-A-B-CH =

80+130+100+85 = 395

Nearest Neighbor Heuristic

• Steps

• Start with the city that is designated as the central location. Call this city the start city. Place all other cites in an unvisited set.
• Choose the city in the unvisited set that is closest to the start city. Remove that city from the unvisited set.
• Repeat the procedure with the latest visited city as the start city.
• Conclude when all cities have been visited, and return back to the central location.
• Compute the total distance traveled along the selected route.

Transportation Mode (1 of 2)

• Major Modes of Transportation

• Air freight
• Trucking
• Shipping by Water
• Rail

• Intermodal shipments: mixing the modes of transportation for a given shipment, such as moving shipping containers or truck trailers on railcars.

Transportation Mode (2 of 2)

Social Responsibility

• Humanitarian Logistics
• The process of planning, implementing and controlling the efficient, cost-effective flow and storage of goods and materials, as well as related information, from the point of origin to the point of consumption for the purpose of alleviating the suffering of vulnerable people.

Social Responsibility

• Alem, D. (2021). Insights from vulnerability-driven optimisation for humanitarian logistics. Journal of the British Academy, 9(s8), 23-53.

Mini Case Study – Class Discussion

Earthquake in Surabaya last April 2024

• Preparedness:
• Response:
• Recovery:
• Mitigation:

Supply Chain Ethics (1 of 4)

• Buyer-Supplier Relationships
• Facility Location

Supply Chain Ethics (2 of 4)

• S A8000:2014

• Child Labor
• Forced or Compulsory Labor
• Health and Safety
• Freedom of Association and Right to Collective Bargaining
• Discrimination
• Disciplinary Practices
• Working Hours
• Remuneration
• Management Systems

Supply Chain Ethics (3 of 4)

• Examples of Unethical Activities
• Revealing confidential bids and allowing certain suppliers to rebid
• Making reciprocal arrangements whereby the firm purchases from a supplier who in turn purchases from the firm
• Exaggerating situations to get better deals
• Using company resources for personal gain

Supply Chain Ethics (4 of 4)

• Facility Location
• May affect the natural environment
• Energy efficiency
• Need to balance financial and environmental responsibilities

Thank you