Sustainable Supply Chains to Save Our Planet Through Operations Research

This has not been a good day with President Trump announcing, as had been expected (but we were hoping otherwise), that the US is quitting the Paris Climate Pact. This puts US at odds with over 190 nations that had signed this pact. 

Frankly, I feel physically repulsed and ill by his decision, which is contrary to that of not only many world leaders but also top executives and even some of his very own advisors. I guess for some, breathing clean air and having their children breathe clean air, too; having clean water, and a diversity of species, and not dealing with more  turbulent weather, uncertainty, and possible food insecurity due to climate change, does not matter. This is so ironic, since the green economy can actually be a very successful economy and can generate jobs and is doing so (as the Chinese have even started to figure out). The costs of not slowing down climate change will be immense and are already upon us.

I do have some hope, however, in leaders from certain industries in the US as well as on the state levels (including California, New York, and Massachusetts) that progress will, nevertheless, be made to reduce pollution and emissions and to combat climate change.

In addition, I have hope because of students and this generation as well as a community of academics and practitioners that has a passion for sustainability and saving our planet.

Our most recent work on supply chains and sustainability, we will be presenting at the MSOM meeting this month. There we will present the paper,  A Competitive Multiperiod Supply Chain Network Model with Freight Carriers and Green Technology Investment Option, which was co-authored by Professors Sara Saberi and Joe Sarkis of WPI, Professor Jose M. Cruz of UConn, and me. In this work, we construct a model with multiple manufacturers, retailers, and freight carriers who maximize the net present value (NPV) of their investments in ecologically friendly technology. Future production, inventory, transaction, and transportation costs savings are used to help fund investments. The environmental impact of production, inventory, transportation, and consumption of products in the supply chain network are all integrated. The tradeoff between the initial technology investment and its ecological footprint effect are considered for the supply chain planning period. This is a large-scale multiperiod game theory problem for  a supply chain of multiple echelons, which we provide theoretical results for an extensive numerical results with policy implications.

We have also published on design of sustainable supply chains:  Design of Sustainable Supply Chains for Sustainable Cities, Anna Nagurney,   Environment & Planning B 42(1): (2015) pp 40-57 and Sustainable Supply Chain Network Design: A Multicriteria Perspective, Anna Nagurney and Ladimer S. Nagurney, International Journal of Sustainable Engineering 3: (2010) pp 189-197.

Also, topics related to transportation have been a theme in our sustainability research:   Environmental Impact Assessment of Transportation Networks with Degradable Links in an Era of Climate Change, Anna Nagurney, Qiang Qiang, and Ladimer Nagurney, International Journal of Sustainable Transportation 4: (2010) pp 154-171 and  Environmental and Cost Synergy in Supply Chain Network Integration in Mergers and Acquisitions, Anna Nagurney and Trisha Woolley, in Sustainable Energy and Transportation Systems, Proceedings of the 19th International Conference on Multiple Criteria Decision Making, Lecture Notes in Economics and Mathematical Systems, M. Ehrgott, B. Naujoks, T. Stewart, and J. Wallenius, Editors, Springer, Berlin, Germany (2010) pp 51-78.

Electronic recycling has also been a theme of several papers of ours, including:   When and for Whom would E-waste be a Treasure Trove? Insights from a Network Equilibrium Model of W-waste Flows, Tina Wakolbinger, Fuminori Toyasaki, Thomas Nowak, and Anna Nagurney, International Journal of Production Economics 154: (2014) pp 263–273.

Food, given the costs associated with waste, has obsessed us in our research, with an example being:  Competitive Food Supply Chain Networks with Application to Fresh Produce, Min Yu and Anna Nagurney, European Journal of Operational Research 224(2): (2013) pp 273-282.

Other sustainable supply chain research of ours has included work on fashion supply chains: Fashion Supply Chain Network Competition with Ecolabelling, Anna Nagurney, Min Yu, and Jonas Floden, in Sustainable Fashion Supply Chain Management: From Sourcing to Retailing, T.-M. Choi and T.C.E. Cheng, Editors, Springer (2015) pp 61-84 and Sustainable Fashion Supply Chain Management Under Oligopolistic Competition and Brand Differentiation, Anna Nagurney and Min Yu, International Journal of Production Economics, Special Section on Green Manufacturing and Distribution in the Fashion and Apparel Industries 135: (2012) pp 532-540.

Finally, in addition to several books that I have written on sustainability, with examples highlighted here,  we have also written on sustainability issues in healthcare in the papers: 
Securing the Sustainability of Global Medical Nuclear Supply Chains Through Economic Cost Recovery, Risk Management, and Optimization, Anna Nagurney, Ladimer S. Nagurney, and Dong Li, International Journal of Sustainable Transportation 9(6): (2015) pp 405-418 and Supply Chain Network Design of a Sustainable Blood Banking System, Anna Nagurney and Amir H. Masoumi, in Sustainable Supply Chains: Models, Methods and Public Policy Implications, T. Boone, V. Jayaraman, and R. Ganeshan, Editors, Springer, London, England (2012) pp 49-72.

We have also published on policies and energy and the environment with an example of that research being:  Spatially Differentiated Trade of Permits for Multipollutant Electric Power Supply Chains, Trisha Woolley, Anna Nagurney, and John Stranlund, in Optimization in the Energy Industry, J. Kallrath, P. Pardalos, S. Rebennack, and M. Scheidt, Editors, Springer, Berlin, Germany (2009) pp 277-296.

Sustainability of our supply chains has never been more essential.

Lessons from a CEO and Alum

Today, my Logistics and Transportation class had the pleasure and honor of having Marc Schneider, the CEO of Kenneth Cole Productions, who is also an Isenberg School alum, class of '81, come and speak.

It was a perfect October day with bright sunshine, blue sky, and the foliage in its colorful majesty.

I managed to see Marc, who had driven from his home 100 miles away, sitting in front of the Isenberg School so we began the day with a very pleasant chat and then were joined by the Isenberg School Dean, Dr. Mark A. Fuller, so I could not resist taking the photo below.

 

Marc was being escorted throughout his busy day by Andrew Clendinneng, our Executive Director of Development, who was kind enough to bring us coffee and a latte.. Marc's  day included meeting with 3 classes of students, meeting with our Dean, and a special lunch. But my class was his first slot of the day, which was great.

We benefited from his wisdom delivered in a conversational mode with a lot of questions from the students. Marc has had a meteoric career in retail, with positions at Macy's, where he worked for 13 years, as Executive VP of Bob's Stores of Melville Corp., as Senior VP of Timberland Co., as President of Dress Furnishings of PVH Corp., and Group President of Heritage Brands at PVH.  PVH has name brands such as Calvin Klein, Bass, Tommy Hilfinger, and Van Heusen. He majored in Management and Finance at the Isenberg School.

He emphasized that the most important resource in a company is the individual and one needs to be able to maximize the team since so much in an organization depends on teamwork. He also noted how important it is to be nice but, ideally, both nice and talented. He joined Macy's because of its training program, which included rotations in management, finance, logistics, etc., and he wanted a company that would invest in him. While there, he even did college recruiting and traveled the country with alums of various universities.

He told the class to be flexible and noted that success is not a vertical path and sometimes you have to turn around on the highway or take a different route as he did today when encountering traffic on I91. While at Macy's, he hired someone who later became the President of Gap and someone who became the President of Coach. Clearly, Mr. Schneider knows how to identify talented individuals! He became VP at Macy's at age 26 and headed a private label there at age 28.

During 10 years at Timberland he would fly to Europe 15 times per year. The main offices were in NH, NYC, and London. The company was a leader in CSR (corporate social responsibility) and that is something that Marc is now leading as CEO of Kenneth Cole Productions.

His travel has continued and he has been to Asia 60 times and is off to China again on Sunday.

We very much appreciated his frankness with us. He mentioned that, at the beginning of his career, his dream was to be a CEO and now he wants to be happy. This change has resulted also in a change in his demeanor he said.

He is very proud that in 35 years with leading retailers and brands, he has had only 1 direct report resign on him. He was clearly pained when he noted the firing of an executive who had been causing many problems because of his behavior.

Another piece of advice to the students was to make the team really comfortable and challenged and to encourage them.

He also emphasized the critical attribute of curiosity and, once, you lose that, you are done - I could not agree more.

He is a huge fan of strategic planning and it was nice to see him mention a former faculty member, long-retired, Professor George Odiorne, who Marc said was a true mentor him. Odiorne was renowned for all his work and books on Management by Objectives. Marc emphasized that you need to know where you want to be down the road, know where you are now, and then figure out the route to get there. I just loved all the transportation analogies!

Something else that he said, which also very much resonated with me, is that too much change may be unhealthy for a company. Indeed, a new leader may come in and, without knowing all the people and why they were hired and the work that they have done, may decide to reorganize, etc. History is important and so is the history of a company or any organization including a business school or university.

Marc Schnedier emphasized that he always expected the "A" game from everyone. Timeliness is very important and he expects everyone in a meeting "to play," so always come prepared, have the facts, and have the highest standards for your work. He also reminded students of the importance of saying "Thank you!" and, if need be, to apologize and to be sincere about it. A student asked about his interviews when he was on the job market as a student and he told of his experience at United Technologies and the lessons learned from that interview. he had not been sufficiently prepared and though that they made planes and not engines.

It was very interesting for the students to hear about the specializing of production in different countries and he did say that about 95% of the products at his company are produced in Asia; the rest in Europe (Italy and even Portugal). Certain countries have refined the skill of producing particular products. He highlighted Vietnam and shoe production, for example, and, of course, noted design and Italy. He emphasized the impact of finance on supply chains and sourcing and although the strength of the US dollar is great for American tourists abroad, it is not so good for retailers in the US who need purchases by those in other countries. Furthermore, the US is a less attractive place for shopping for tourists now because of the strength of the dollar.

He answered students' questions on organizational change, on whether one should take the easier or more challenging tasks, even whether one should pursue an MBA? He spoke highly of education and its importance. I also very much appreciated that he talked about the meaning of CSR from human rights to community service and the environment. He stated that CSR is good business and good behavior.  He mentioned that even modes of transportation might be selected based on minimizing the environmental impact - yes! I have done work with collaborators on fashion supply chains, including sustainability aspects, and this is what we also see in our research studies:
Fashion Supply Chain Network Competition with Ecolabelling, Anna Nagurney, Min Yu, and Jonas Floden, in Sustainable Fashion Supply Chain Management: From Sourcing to Retailing, T.-M. Choi and T.C.E. Cheng, Editors, Springer (2015) pp 61-84.

In the discussions, he also emphasized how bright the millennial generation is and I agree. That it is why it is such a pleasure to be their Professor!

Many, many thanks for Mr. Marc Schneider for coming to the Isenberg School today! A student after class told him and me that this was the best guest lecture that he has ever been to while a student at UMass Amherst. Now, that makes a Professor's Day!

Operations Researchers Take Over Glasgow, Scotland with Fabulous EURO Conference

We arrived in Glasgow, Scotland, this past weekend, to attend and speak at the EURO 2015 conference, which has 2,300 operations research delegates from around the world. This is the biggest conference ever held in Glasgow and I was reminded of EURO 2006, which was in Reykljaik, Iceland, with 700 delegates and the biggest scientific conference there to that date. Frankly, the climate is not so different between the two but with more rain in Glasgow.

We were greeted, when we disembarked from the train from Edinburgh, by welcome banners in George Square.  The University of Strathclyde is the site and organizer of this fabulous conference. The registration at the Innovation Centre with so many student helpers in red t-shirts was very efficient. The assistants have been very helpful with providing directions and answering questions  throughout the conference. The emphasis on customer service has been extraordinary everywhere in Glasgow and Scotland that we have been. Queen Elizabeth and the Duke of Edinburgh had recently dedicated the Innovation Centre.

One of the first colleagues that I saw was Professor Panos M. Pardalos of the University of Florida, with whom I co-organized the Dynamics of Disasters conference in Kalamata, Greece, just two weeks ago (and we also connected in Edinburgh last week).

The first day of the conference was jam-packed. In the afternoon, my former PhD student at the Isenberg School, Dr, Amir Masoumi of Manhattan College, delivered our integrated disaster relief paper in a session organized by Professor Tina Wakolbinger of the Vienna University of Economics and Business (who also was my PhD student). Our paper is joint with Professor Min Yu of the University of Portland (another very successful former student of mine). The paper was recently published in an edited volume that includes a paper by the Nobel Laureate in Economic Sciences Paul Krugman.

Then it was time to run to a session organized by my long-time collaborator and Supernetwork Center Associate, Professor Patrizia Daniele of the University of Catania in Italy. Her session was on equilibrium problems and variational inequalities and I spoke in it on our ecolabelling and fashion supply chain research with Professor Jonas Floden of the University of Gothenburg and also Min Yu.

 We even took a group photo of the session participants.

 And, amazingly, the fashion supply chain paper that I presented was just published in a book by Springer, which was on display at the conference! Below I am with Christian Raucher of Springer.

At the exhibit were several books that I had chapters published in.

Another high point (so far) was listening to Professor Terry Rockafellar (since retiring from the University of Washington he has joined the University of Florida) give a plenary talk on his latest work on risk, which is brilliant. He also gave a talk the same day in another session organized by Patrizia Daniele! This is stamina and operations researchers have it.

After such an exciting day filled with great talks and reconnecting with colleagues and friends who had traveled to Glasgow, we convened a group for dinner, which included 3 of my former Isenberg PhD students (Wakolbinger, Masoumi, and Toyasaki), Professor Patrizia Daniele, Professor Monica Cojocaru, Professor Laura Scrimali, Professor Giancarlo Bigi, Professor Mauro Pssacantando, and my husband, Professor Ladimer S. Nagurney, at Amarone (which we had also eaten at in Edinburgh and enjoyed very much).

 EURO 2015 also is  serving as a great venue for a reunion of 5 Supernetwork Center Associates. 
And both Professors Wakolbinger and Toyasaki also took part in our Dynamics of Disasters conference! 

And, after all the great food that we have been consuming, what can be better than walking the Flasgow Green!

From Ecolabelling in Fashion to Supply Chains and Freight Quality Competition

The POMS (Production and Operations Management Society) Conference is now taking place in Washington DC.

Although I could not go since this (as happened last year as well) is graduation season at UMass Amherst,  3 of my present doctoral students are there (Shivani Shukla, Sara Saberi,  and Dong Li, who defended her PhD dissertation just lat week) presenting our joint work and one former doctoral student, Professor Min Yu of the Pamplin School of Business at the University of Oregon, is as well.

Two of  our papers are jount with my collabortaor in Sweden, Professor Jonas Floden.

Below I have posted links to our presentations. All of the presentations are based on recently published papers of ours with links also provided below.

The full presentation can be downloaded here. The presentation is based on the paper, Fashion Supply Chain Network Competition with Ecolabelling,.Anna Nagurney, Min Yu, and Jonas Floden, Sustainable Fashion Supply Chain Management: From Sourcing to Retailing, T.-M. Choi and T.C.E. Cheng, Editors, Springer (2015) pp 61-84.

The full presentation is available here. The presentation is based on the paper:  A Supply Chain Network Game Theory Model with Product Differentiation, Outsourcing of Production and Distribution, and Quality and Price Competition,, Anna Nagurney and Dong Li, Annals of Operations Research 228(1), (2015) pp 479-503.

 The full presentation can be downloaded here., And this presentation is based on our paper:  Supply Chain Network Competition in Price and Quality with Multiple Manufacturers and Freight Service Providers, Anna Nagurney, Sara Saberi, Shivani Shukla, and Jonas Floden, Transportation Research E 77: (2015) pp 248-267.

Needless to say, I love doing research on all aspects of supply chains and am very lucky to have such great collaborators as those above.

Meet an Executive in the Apparel Industry

The 2014 Nobel laureate in Economic Sciences, Professor Jean Tirole, said recently in an interview in the The Upshot column, in The New York Times: There’s no easy line in summarizing my contribution and the contribution of my colleagues. It is industry-specific. The way you regulate payment cards has nothing to do with the way that you regulate intellectual property or railroads. There are lots of idiosyncratic factors. That’s what makes it all so interesting. It’s very rich. It requires some understanding of how an industry works. And then the reasoning is very much based on game theory.

His words to me could be directly translated to why I find supply chains so fascinating and interesting to work on - the idiosyncratic characteristics of  supply chains in different industries, whether in high tech, food, pharmaceuticals, or even fashion! And, yes, we use game theory in our competitive supply chain network models.

Some of our most recent work, with a focus on perishable product supply chains, including blood supply chains and medical nuclear ones, we describe in our book, Networks Against Time: Supply Chain Analytics for Perishable Products., in which we also have a chapter on fast fashion supply chains. 

Interestingly, we have Professor T.M. "Jason" Choi of Hong Kong to thank for inspiring us to work on fashion / apparel supply chains and, to-date, we have written 3 papers on the topic, with the most recent one being with my great colleague, Professor Jonas Floden, of the University of Gothenburg, and a former doctoral student, Professor Min Yu of the University of Portland: Fashion Supply Chain Network Competition with Ecolabelling, Anna Nagurney, Min Yu, and Jonas Floden, in press in Sustainable Fashion Supply Chain Management: From Sourcing to Retailing, T.-M. Choi and T.C.E. Cheng, Editors, Springer. 

I very much enjoyed working on this paper and would walk for miles in the beautiful city of Gothenburg stopping into a variety of stores from H&M and Zara and several with eco-labelled fashion products.

So, when an opportunity came to help host Mr. Marc Schneider of PVH, who is both an executive and an alum of the Isenberg School, I had to say "yes!" He had come to speak with us about 3 years ago and it was a terrific experience.

Mr. Schneider will be speaking at the Isenberg School of Friday, November 7, 2014. The students of the UMass Amhest INFORMS Student Chapter prepared the nice poster below.

I hope that you can join us.

 

After the event, many of us will be packing up and flying to the INFORMS conference in San Francisco!

Sustainable Fashion Supply Chains Using Game Theory

We have conducted a lot of research on sustainable supply chains with applications ranging from products in health care to electric power generation and distribution networks.

An industry, which just recently has started to receive attention because of its impact on the environment, is the fashion and apparel industry.

However, not much research has been conducted as to capturing the scope of the issues and the realities of this industry which includes different brands as well as competition, and even the speed of this industry, as in fast fashion.

A doctoral student of mine, Min Yu, has been working with me in this area for about two years now as part of our research on time-sensitive supply chains, in particular, and sustainability overall.

We will be presenting our latest study, "Sustainable Fashion Supply Chain Management Under Oligopolistic Competition and Brand Differentiation," at the INFORMS Annual Conference next week in Charlotte, North Carolina. This paper is in press in the International Journal of Production Economics, Special Issue on Green Manufacturing and Distribution in the Fashion and Apparel Industries.

In the paper, we developed a new model of oligopolistic competition for fashion supply chains in the case of differentiated products with the inclusion of environmental concerns. The model assumes that each fashion firm's product is distinct by brand and the firms compete until an equilibrium is achieved. Each fashion firm seeks to maximize its profits as well as to minimize its emissions throughout its supply chain with the latter criterion being weighted in an individual manner by each firm, since some firms may care more or less about their impact on the environment.

The competitive supply chain model is network-based and we use both game theory and variational inequality theory for the formulation of the governing Nash equilibrium as well as for the solution of the case study examples. The numerical examples illustrate both the generality of the modeling framework as well as how the model and computational scheme can be used in practice to explore the effects of changes in the demand functions; in the total cost and total emission functions, as well as in the weights.

Our full presentation can be downloaded, in pdf format here.

Fashion Supply Chain Management and Sustainability

Yesterday, one of my doctoral students and I finished a paper on fashion supply chain management that we were invited to write. Today, I see that The New York Times has an article on the fashion and apparel industry with a call for minimizing waste.

I enjoyed the article a lot since it highlighted the supply chain aspects of emission reduction, including the emissions generated in the transportation of fashion products, as well as the design of fashion products, such as jeans,which can be notoriously, and, ironically, I might add, environmentally-unfriendly due to the dyes used. What is particularly challenging about fashion and apparel design, as the article emphasizes, is that fashion should also look good. Hence, perhaps we now should also be concerned, as operations researchers and supply chain network designers, not only about the sustainability issues but also about the aesthetics, or shall we leave it to the Parsons School of Design folks who were quoted in the article. As for minimizing waste in this application sector, our discipline can contribute immensely since we have a long history and excellent track record in a variety of "cutting" problems, whether for paper products or fabric.

Our recent paper, "Sustainable Supply Chain Network Design: A Multicriteria Perspective," just published in the International Journal of Sustainable Engineering is definitely relevant to this topic as is the paper, "Fashion Supply Chain Management Through Cost and Time Minimization from a Network Perspective," which we have just completed.

If someone had told me a while back that I would be doing research on fashion supply chain management, I would have said that there are other problems of greater interest to me. I do recall, however, being at a terrific workshop at Stanford years back with both Professor Kenneth Arrow, the Nobel Laureate, in the audience, and Professor George Dantzig, the father of operations research, along with my former dissertation advisor at Brown University, Stella Dafermos. After my talk at the workshop, someone remarked that they thought I was talking about "Wardrobe" equilibrium, rather than "Wardrop" equilibrium (well-known to those who work and study transportation and logistics). I had a good laugh after this.

Clothes are rather basic and important, don't you think, and if one can assist this industry in sustainability, one can make a big impact.