An analytical model to investigate the economic and environmental benefits of a supply chain resource-sharing scheme based on collaborative consolidation centres

Abstract

This study evaluates the cost and carbon dioxide-equivalent emissions of different supply chain configurations to determine when suppliers should move to a greener resource-sharing scheme. We build an analytical model based on a case study of a retailer that has developed a resource-sharing initiative introducing collaborative consolidation centres (CCC) between its suppliers and its warehouses (WH). We compare the costs and carbon dioxide-equivalent emissions of using a pair of CCCs with direct delivery to twenty WHs. Our parameters include the distances between suppliers, CCCs, and WHs, in addition to the volumes delivered. This model determines when there should be a switch to the CCC system. We also compare the actual CCC locations with better alternatives, the centres of gravity of the regions. On a real cost basis, economic gains, but not environmental ones, occur, highlighting a need for alternative models for optimal locations, which would include economic and environmental constraints.

Keywords:

• Green supply chain
• cost reduction
• carbon dioxide-equivalent emissions
• resource-sharing scheme
• collaborative consolidation centre

Acknowledgements

The authors would also like to thank Carrefour, in addition to some of its suppliers and transporters, for giving us access to some of the data used in this research.

Notes

1. Such a multiobjective combinatorial problem is NP-complete and needs approximate algorithms (heuristics) to solve it (Ehrgott, 2000).

2. Salted grocery represented in 2014 a turnover of 13.341 million euros, compared with 15.195 million euros for sweet grocery. (source: LSA http://www.lsa-conso.fr/marche-de-l-epicerie-2014-chiffres-et-analyse-d-un-bilan-decevant, 210709 05/28/2015).

3. Source: http://agriculture.gouv.fr/sites/minagri/files/documents//10-71A_Fabrication_industrielle_de_pain_et_patisserie_fraiche_2014_cle41b8ca.pdf

4. Demonstration of this choice: Given r the random locations of the suppliers in R₁ assumed to be uniformly distributed within a circle with a radius a₁. These locations can be defined by the distribution function f(r) = (2πr), with 0 < r < a₁. The mean distance between all points and the edge of the “super-ring road” is: $E[D(S_1)]=a_1-\frac{{\int }_0^{a1}rf(r)dr}{{\int }_0^{a1}f(r)dr}=\frac{a_1}{3}$.

5. Carbon dioxide emissions represent 98% of greenhouse gas emissions associated with transport. The remaining 2% are methane and nitrous oxide. These 2% are taken into account in the emission factor guide published by the French Environment Agency, which we used as a reference.

6. http://www.feef.org/Portals/0/150707-CP%20Nielsen%20FEEF.PDF

7. Statistical sheets of Association Nationale de la Meunerie Française ANMF.