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Decision Support for Green Supply Chain Operations by Integrating Dynamic Simulation and LCA Indicators: Diaper Case Study

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journal contribution
posted on 01.12.2011 by Arief Adhitya, Iskandar Halim, Rajagopalan Srinivasan
As the issue of environmental sustainability is becoming an important business factor, companies are now looking for decision support tools to assess the fuller picture of the environmental impacts associated with their manufacturing operations and supply chain (SC) activities. Lifecycle assessment (LCA) is widely used to measure the environmental consequences assignable to a product. However, it is usually limited to a high-level snapshot of the environmental implications over the product value chain without consideration of the dynamics arising from the multitiered structure and the interactions along the SC. This paper proposes a framework for green supply chain management by integrating a SC dynamic simulation and LCA indicators to evaluate both the economic and environmental impacts of various SC decisions such as inventories, distribution network configuration, and ordering policy. The advantages of this framework are demonstrated through an industrially motivated case study involving diaper production. Three distinct scenarios are evaluated to highlight how the proposed approach enables integrated decision support for green SC design and operation.