On the design of ustainable, green supply chains

Abstract

Increasing regulatory legislations for carbon and waste management and the concerns on corporate social responsibility are driving forces behind sustainable supply chain network design which involves taking into account social, economic and environmental objectives at design time. While the social dimension is sometime harder to capture or quantify in mathematical terms, the emission trading schema (ETS) introduces a natural trade-off between the economic and the environmental dimensions. This article addresses the design of supply chains that are sensitive to the carbon market where carbon emissions (environmental dimension) and total logistics costs (economic dimension) are integrated in the design of the supply chain using a multi-objective mixed-integer linear programming model that is solved by goal programming. The approach is presented through an illustrative example in the steel industry where new legislation imposes regulatory carbon caps on emissions. The results show that this approach is viable and offers a good starting point for a comprehensive framework for sustainable supply chain network design that can be expanded to include social aspects relating to the community.