The use of an optimisation model to design a green supply chain. A case study of the Thai rubber industry

• Pages: 595-618
• DOI: https://doi.org/10.1108/IJLM-10-2013-0121
• Date: 08 August 2016
• Published date: 08 August 2016
• Author: Janya Chanchaichujit,Jose Saavedra-Rosas,Mohammed Quaddus,Martin West
• Subject Matter: Management science & operations,Logistics

The use of an optimisation model

to design a green supply chain

A case study of the Thai rubber industry

Janya Chanchaichujit

School of Information Systems, Curtin Business School,

Curtin University, Bentley, Australia and

School of Management, Walailak University, Tha Sala District, Thailand

Jose Saavedra-Rosas and Mohammed Quaddus

Graduate School of Business, Curtin University, Perth, Australia, and

Martin West

School of Business and Quality Management,

Hamdam Bin Mohammed Smart University, Dubai, United Arab Emirates

Abstract

Purpose –The purpose of this paper is to take the first step in solving environmental supply chain

management issues. It proposes a green supply chain management (GSCM) model which would

provide environmental benefits to the Thai rubber industry. To this end, a GSCM optimisation model

was formulated, whereby the manufacturing processes of rubber products, along with their

distribution and transportation, could be improved. The expected result is that total greenhouse gas

emissions would be minimised and environmental performance maximised.

Design/methodology/approach –Linear programming was chosen as the mathematical programming

for investigation into the problem of finding the association of quantity of rubber product flow between the

supply chain entities (farmer, trader group, and factory) and the transportation mode and route, with a view

to minimise total greenhouse gas emissions.

Findings –The results indicate that by using the proposed model, GHG emissions could be minimised

to 1.08 tons of GHGs per ton of product.

Practical implications –A GSCM model developed in this research can be used as a decision

support tool for Thai rubber policy makers. This would allow them to better manage the Thai rubber

industry to achieve environmental benefit.

Originality/value –This research is among the first attempts to develop a GSCM model for the Thai

rubber industry. It can contribute to providing a basis for a GSCM modelling framework, along with a

formulation for research development in this area.

Keywords Decision making, Supply chain management, Green supply chain management (GSCM),

Linear programming, Optimization based method, Thai rubber industry

Paper type Research paper

1. Introduction

As global environmental concerns increase, regulatory requirements and consumer

activism have pushed many companies to redesign their supply chains. Environmental

pollution and waste is generated at all stages of the supply chain, from resource

extraction through to manufacturing, distribution and use of goods (Srivastava, 2007).

Early work on supply chain management (SCM) paid little attention to environmental

pollution and waste, and did not adequately address environmental concer ns.

A fundamental shift in these traditional management techniques is required such that

environmental issues are appropriately integrated.

The International Journal of

Logistics Management

Vol. 27 No. 2, 2016

pp. 595-618

©Emerald Group Publis hing Limited

0957-4093

DOI 10.1108/IJLM-10-2013-0121

Received 29 October 2013

Revised 20 June 2014

18 December 2014

7 August 2015

6 September 2015

Accepted 7 September 2015

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

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Green supply

chain

When traditional SCM principles take into account the environmental aspects of all

activities, from raw materials to the final disposal of goods, the notion may then be

widely integrated into green supply chain management (GSCM) principles. GSCM

incorporates environmental criteria into its decision making beyond traditional

SCM ideas (Emmett and Sood, 2010). Grossmann and Guillén-Gosálbez (2010) define

GSCM as the combining of environmental management and SCM into a single

framework. In addition, GSCM must not only concern itself with environmental

problems in the supply chain decision-making process; it must also pay close attention

to the generation of financial profits (Nikbakhsh, 2009).

The origin of GSCM is based on two principles. The first principle deals with

waste-directed and emissions-directed technology, such as the reuse of materials or the

recovery of products. The aim behind the principle is to analyse problematic

environmental issues that occur throughout the lifecycle of the product as it travels

through the entire supply chain (Bloemhof-Ruwaard et al., 1995). Research regarding

this principle is prolific (Sheu et al., 2005; Jayaraman, 2006; Sheu, 2008; Quariguasi

Frota Neto et al., 2008, 2009; Gupta and Evans, 2009). The second principle is concerned

with environmental problems as they apply to the internal operations that interface

with external organisations; the purpose being to ensure that the products and services

meet with environmental standards (McKinnon, 2010). McKinnon (2010) has pointed

out that this GSCM principle has become a major concept in recent GSCM development

areas such as green design, green purchasing, eco-efficiency, and environmental

management systems. The work related to this principle includes that of Rao (2004),

Chen (2005), Linton et al. (2007) and Zhu et al. (2008).

The progress in GSCM research in recent years has gradually widened in scope

beyond its two original principles to cover all stages of the supply chain. To date, the

literature offers various definitions of and terminologies for GSCM. This ranges from

defining functional areas in the supply chain such as “green purchasing”by Chen (2005),

to the naming of processes such as green production by Rao (2004). Another key aspect of

GSCM is the integration of a supply chain associat ed with customers, manufacturers,

disposal, and the closed-loop concept of reverse logistics (Zhu and Sarkis, 2004; Hervani

et al., 2005; Rao and Holt, 2005; Srivastava, 2007; Sarkis et al., 2011). Other themes of

research that have been defined as concerning GSCM include: environmental

sustainability (Linton et al., 2007; Zhu et al., 2008), environmental management (Corbett

and Klassen, 2006; Vachon and Klassen, 2008), ecological sustainability (King and Lenox,

2001), and eco-efficiency (Huppes et al., 2007; Quariguasi Frota Neto et al., 2009).

To integrate environmental concerns into the supply chain model, there is a need for

an adequate GSCM model to deal with differing environmental criteria in the activities

within the supply chain and in the decision-making process. The literature pertaining

to modelling for GSCM is mostly divided into three approaches. The first approach uses

a model for recycling and waste management incorporating reverse-logistic activities

for used products. The second approach concerns the development of a model for the

industrial supply chain network design, where logistical activities are considered as a

part of the whole operation. The third approach applies to the development of a model

for the specific type of transport and route selection, without the incorporation of other

logistical activities such as manufacturing or distribution. The summary of the GSCM

modelling approach is presented in Table I.

Chaabane et al. (2008) haveargued that the models in GSCM have been studied more

from a recycling and waste management perspective rather than an integrated supply

chain network perspective. McKinnon (2010), also emphasised that there was a strong

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