Sustainable Supply Chain Networks and Design

The New York Times should be commended for publishing not one but two articles on sustainable supply chains and transportation in the same issue! Yesterday, in its Business Day section, The Times had an article, Clearing the Air at American Ports, written by Steven Greenhouse (appropriate name for this topic) and Wal-Mart Plans to Make its Supply Chain Greener by Stephanie Rosenbloom.

The former article discusses how the ports of LA and Long Beach are the single largest contributors to air pollution in the Los Angeles area, due to diesel pollution, and how a unique partnership, a labor-green alliance, is looking to prevent old trucks, which generate greater levels of emissions, from hauling cargo from the ports. The burden of replacing the older trucks with new trucks, which emit fewer emissions, is to be placed on the trucking companies, rather than on the individual truckers, many of whom, because of the large costs, are just barely eking out a living.

The article on Wal-Mart, in turn, emphasizes how Wal-Mart is working with suppliers to reduce greenhouse gas emissions in its supply chain to a tune of 20 million metric tons by 2015 (which would be equivalent to removing more than 3.8 million cars from roads for one year)! Suppliers are to examine the complete carbon lifecycle of their product -- from the manufacturing and use of raw materials through the recycling stage. Given Wal-Mart's clout and heft, as well as its growing emphasis on sustainability, such initiatives are proactive and timely (and also help to reduce energy costs).

We have been conducting research on sustainable supply chains and transportation for many years and have published articles (and even books) on such topics.

In 2007, I wrote the article, "Sustainable Supply Chain and Transportation Networks," with Dr. Zugang "Leo" Liu and Dr. Trisha Woolley, two of my former doctoral students, who are now, respectively, professors at Pennsylvania State University at Hazelton, and at Texas Wesleyan University in Fort Worth. This article, which appeared in the inaugural issue of the journal, International Journal of Sustainable Transportation, is available for downloading for free from the journal's website.

Our article demonstrates how competition among decision-makers in supply chains, who are multicriteria decision-makers, and interested in reducing emissions, can be combined with collaboration across successive tiers of the supply chain. Hence, this framework allows for the determination of the ultimate supply chain network design for sustainability in the case of alliances and partnerships, as we have been reading more and more about in the press.

This article of ours is one in a series on sustainability, supply chain networks and transportation, which can be accessed on the Virtual Center for Supernetworks (please use Internet Explorer or update your Mozilla browser for downloading of pdf files from this site).

Taking the Slow Boat to China and Reducing Emissions

Maersk, the Danish shipping company, has greatly reduced its long distance ship speeds (including on trips from Germany to China) in order to reduce emissions. At the same time, even with greater employee costs that such trips entail, it has reduced its total costs.

This fascinating article in The New York Times discusses how Maersk, as a corporation, considers the strategy of speed reduction to be a win-win situation and this in a world of rush-rush and faster and faster. The article reports that:

Slowing down from high speeds reduces emissions because it reduces drag and friction as ships plow through the water.

That principle holds true in the air and on land. Planes could easily reduce emissions by slowing down 10 percent, for example, adding just five or six minutes to a flight between New York and Boston or Copenhagen and Brussels.

Maersk should be commended for having the guts to go against the grain as a company and for being so proactive in helping the environment.

My research team has been investigating environmental issues that firms are faced with from how to create cost and environmental synergies in mergers and acquisitions, to the evaluation of cap and trade schemes and carbon taxes, to the effects of the deterioration of roads on emissions, to the optimal design of sustainable supply chain networks (something which an expert in the same article implies is hard to do), among just a few topics.

You may find some of our latest research on the website of the Virtual Center for Supernetworks.

In the meantime, it makes sense to, literally, take the slow boat (and plane) to China.