Energy and Carbon Dioxide Impacts from Lean Logistics and Retailing Systems: A Discrete-event Simulation Approach for the Consumer Goods Industry

abstract: Consumer goods supply chains have gradually incorporated lean manufacturing principles to identify and reduce non-value-added activities. Companies implementing lean practices have experienced improvements in cost, quality, and demand responsiveness. However certain elements of these practices, especially those related to transportation and distribution may have detrimental impact on the environment. This study asks: What impact do current best practices in lean logistics and retailing have on environmental performance? The research hypothesis of this dissertation establishes that lean distribution of durable and consumable goods can result in an increased amount of carbon dioxide emissions, leading to climate change and natural resource depletion impacts, while lean retailing operations can reduce carbon emissions. Distribution and retailing phases of the life cycle are characterized in a two-echelon supply chain discrete-event simulation modeled after current operations from leading organizations based in the U.S. Southwest. By conducting an overview of critical sustainability issues and their relationship with consumer products, it is possible to address the environmental implications of lean logistics and retailing operations. Provided the waste reduction nature from lean manufacturing, four lean best practices are examined in detail in order to formulate specific research propositions. These propositions are integrated into an experimental design linking annual carbon dioxide equivalent emissions to: (1) shipment frequency between supply chain partners, (2) proximity between decoupling point of products and final customers, (3) inventory turns at the warehousing level, and (4) degree of supplier integration. All propositions are tested through the use of the simulation model. Results confirmed the four research propositions. Furthermore, they suggest synergy between product shipment frequency among supply chain partners and product management due to lean retailing practices. In addition, the study confirms prior research speculations about the potential carbon intensity from transportation operations subject to lean principles.Dissertation/ThesisPh.D. Sustainability 201

Warehousing and Inventory Management in Dual Channel and Global Supply Chains

More firms are adopting the dual-channel supply chain business model where firms offer their products to customers using dual-channel sales (to offer the item to customers online and offline). The development periods of innovative products have been shortened, especially for high-tech companies, which leads to products with short life cycles. This means that companies need to put their new products on the market as soon as possible. The dual-channel supply chain is a perfect tool to increase the customer’s awareness of new products and to keep customers’ loyalty; firms can offer new products online to the customer faster compared to the traditional retail sales channel. The emergence of dual-channel firms was mainly driven by the expansion in internet use and the advances in information and manufacturing technologies. No existing research has examined inventory strategies, warehouse structure, operations, and capacity in a dual-channel context. Additionally, firms are in need to integrate their global suppliers base; where the lower parts costs compensate for the much higher procurement and cross-border costs; in their supply chain operations. The most common method used to integrate the global supplier base is the use of cross-dock, also known as Third Party Logistic (3PL). This study is motivated by real-world problem, no existing research has considered the optimization of cross-dock operations in terms of dock assignment, storage locations, inventory strategies, and lead time uncertainty in the context of a cross-docking system. In this dissertation, we first study the dual-channel warehouse in the dual-channel supply chain. One of the challenges in running the dual-channel warehouse is how to organize the warehouse and manage inventory to fulfill both online and offline (retailer) orders, where the orders from different channels have different features. A model for a dual-channel warehouse in a dual-channel supply chain is proposed, and a solution approach is developed in the case of deterministic and stochastic lead times. Ending up with numerical examples to highlight the model’s validity and its usefulness as a decision support tool. Second, we extend the first problem to include the global supplier and the cross-border time. The impact of global suppliers and the effect of the cross-border time on the dual-channel warehouse are studied. A cross-border dual-channel warehouse model in a dual-channel supply chain context is proposed. In addition to demand and lead time uncertainty, the cross-border time is included as stochastic parameter. Numerical results and managerial insights are also presented for this problem. Third, motivated by a real-world cross-dock problem, we perform a study at one of the big 3 automotive companies in the USA. The company faces the challenges of optimizing their operations and managing the items in the 3PL when introducing new products. Thus, we investigate a dock assignment problem that considers the dock capacity and storage space and a cross-dock layout. We propose an integrated model to combine the cross-dock assignment problem with cross-dock layout problem so that cross-dock operations can be coordinated effectively. In addition to lead time uncertainty, the cross-border time is included as stochastic parameter. Real case study and numerical results and managerial insights are also presented for this problem highlighting the cross-border effect. Solution methodologies, managerial insights, numerical analysis as well as conclusions and potential future study topics are also provided in this dissertation

Exploring the potential of using radio frequency identification technology in retail supply chains - A Packaging Logistics perspective

In recent years RFID technology has attracted interest from the retail industry where it is being presented as a possible key to creating more efficient and effective retail supply chains. If RFID technology is to be implemented in packaging throughout retail supply chains, there is a need to develop an understanding of how and why the technology affects activities and processes within retail supply chains. Accordingly, the overall purpose of this licentiate thesis is to explore how the application of RFID technology to packaging could affect packaging logistics activities in retail supply chains. The packaging logistics activities discussed in this licentiate thesis are those related to ambient fast-moving consumer goods, from the product-filling point at the manufacturer’s, where the product is merged with the primary packaging, to the point of sale at retail outlets, where the products are sold to the end consumer. This thesis is based on multiple research strategies; a case study and a modelling and simulation study. The case study was conducted to describe and gain an in-depth understanding of and insight into existing packaging logistics activities in retail supply chains. A Dutch retail supply chain was chosen as a single-case study. The single-case study was both data-triangulated and investigator-triangulated with three Swedish case studies to further broaden the understanding of packaging logistics activities in retail supply chains. The case study resulted in a framework of packaging logistics activities in retail supply chains. The modelling and simulation study was conducted to describe what, how and why packaging logistics activities are affected when RFID technology is applied to packaging. A conceptual model and a simulation model were developed in the modelling and simulation study. The conceptual model describes and analyses “could-be” processes and activities in retail supply chains, whereas the simulation model primarily describes and anal

Design and Analysis of a Materials Management System for Boeing Commercial Airplanes\u27 (The Boeing Company) Metallic Raw Material Supply Chain with a Focus on Lead Time Manipulation and Corresponding Effects on Inventory and Cost

The purpose of this project is to identify the costs associated with an aggregation strategy run by Boeing Commercial Airplanes. In order to identify these costs, a rudimentary replenishment system must be designed for the supply chain due to the fact that there is currently no such system in place. This replenishment system will be used to create a model (created in Excel) to calculate the total annual costs of the system. The model must allow changes to some of the important inputs such as mill performance measures and lead times and report the resulting changes in the total annual cost. Boeing has contracted out the responsibilities of operating the aggregation strategy to an outside company called TMX Aerospace. TMX operates the system out of warehouses that also act as distribution centers (metal moves from the metal mills to the TMX warehouses and then to the suppliers). Among the many benefits that demand aggregation provides, TMX also provides a service known as lead time manipulation. This service essentially transforms a long lead time from the mills to TMX into a dramatically shorter lead time between TMX and the suppliers. The costs of this service are particularly important for this project. The results of this study will be used to identify an optimal replenishment strategy and the costs of running the operation. In addition, this project will pave the path for a supply chain management software package to be implemented at the distribution center in the future

Cross-Docking: A Proven LTL Technique to Help Suppliers Minimize Products\u27 Unit Costs Delivered to the Final Customers

This study aims at proposing a decision-support tool to reduce the total supply chain costs (TSCC) consisting of two separate and independent objective functions including total transportation costs (TTC) and total cross-docking operating cost (TCDC). The full-truckload (FT) transportation mode is assumed to handle supplier→customer product transportation; otherwise, a cross-docking terminal as an intermediate transshipment node is hired to handle the less-than-truckload (LTL) product transportation between the suppliers and customers. TTC model helps minimize the total transportation costs by maximization of the number of FT transportation and reduction of the total number of LTL. TCDC model tries to minimize total operating costs within a cross-docking terminal. Both sub-objective functions are formulated as binary mathematical programming models. The first objective function is a binary-linear programming model, and the second one is a binary-quadratic assignment problem (QAP) model. QAP is an NP-hard problem, and therefore, besides a complement enumeration method using ILOG CPLEX software, the Tabu search (TS) algorithm with four diversification methods is employed to solve larger size problems. The efficiency of the model is examined from two perspectives by comparing the output of two scenarios including; i.e., 1) when cross-docking is included in the supply chain and 2) when it is excluded. The first perspective is to compare the two scenarios’ outcomes from the total supply chain costs standpoint, and the second perspective is the comparison of the scenarios’ outcomes from the total supply chain costs standpoint. By addressing a numerical example, the results confirm that the present of cross-docking within a supply chain can significantly reduce total supply chain costs and total transportation costs

Supply chain distribution system towards African marketplace : a case of Mr Price.

Master of Commerce in Supply Chain Management. University of KwaZulu-Natal, Durban, 2017.The expansion into new markets gives companies new challenges and unprecedented dynamics, which contribute significantly to the growth of the company. Companies seek to ensure that there are sufficient products available for distribution and that these are positioned correctly at the right time and right place. Companies must have the necessary supply chain technology for order fulfilment. The growth in the number of distribution centres towards creating a sustainable distribution system for the African marketplace is a means towards realising this fulfilment. The level of service and customer satisfaction cannot be completed at the store level without considering the full supply chain process, the product and its raw material, product manufacturing, logistical process, storage and product availability in the store. The non-availability of a product in a store when it is demanded by customers creates problems that dissatisfy the customers since their needs are not met. The main aim of this study, therefore, was to examine the influence of centralised, decentralised or hybrid processes in relation to service delivery, human capacity as well as supply chain technology. The objective of this study was firstly to establish whether a centralised or decentralised supply chain distribution system supports the expansion to the African marketplace. Secondly, to examine the extent of sustainable retail distribution systems towards improving product availability across the African region. Thirdly, to assess the challenges of inventory positioning on the existing outbound and inbound product flow systems across the African continent. Finally, to examine the influence of the supply chain distribution technology on the availability of real time information and visibility of inventory. A descriptive research design was used in this study. Statistical techniques such as descriptive statistics, multiple regression, factor analysis and one-way ANOVA technique were used to analyze the data collected from 100 staff of Mr Price Group. The main findings disclose that the most critical attributes of a good distribution centre are advanced supply chain systems, strong management team and strong workforce. Customer satisfaction as a driving force considers investment in human capital and technology as a vital component to the sustainability of Mr Price Group. There is a need to focus on training and development of employees which can improve productivity and efficiency of any organisation. The managerial implication comprises of some recommendations that will support management in decision making

An agent-based approach to modeling sustainable sociotechnical systems

A gradual evolution in the food and energy sectors towards decentralized decision-making is requiring participant organizations to consider new approaches to the design of policies and processes. Increasing consumer preference for food sourced from small-scale regional farmers has led to changing logistics requirements. Similarly, as consumers have become conscious of the impacts of climate change on the environment, they have begun to adopt renewable sources to meet their energy needs. Moreover, the emergence of new technologies has enabled consumers to generate their own energy. Such shifts in decision-making power to consumers necessitates the consideration of their perspectives and preferences when designing policies and business structures. In food and energy systems, which can be considered sociotechnical systems, the role of human behavior influences system dynamics as strongly as the technical artifacts. This dissertation utilizes an agent-based modeling approach to study such sociotechnical systems. Although agent-based modeling (ABM) has demonstrated the potential to understand and predict the dynamic behavior of sociotechnical systems, the biggest barriers in implementing ABM widely are its replicability and validation. This dissertation aims to address these two issues by developing empirical ABMs for applications in regional food supply chains and renewable energy systems. The applications of the ABMs in this dissertation are motivated by United Nations Sustainable Development Goals, specifically those goals that are focused on the objectives of responsible consumption and production, climate action, and affordable and clean energy for all