Proceeding of the 32nd International Conference on Computers & Industrial Engineering

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1 Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 44

2 A GAP ANALYSIS FOR GREEN SUPPLY CHAIN BENCHMARKING Slem Y. Lkhl * Sou H M 2 Assocte professor of Opertos Mgemet; 2 Assstt professor of Mrketg Fculty of Busess Amstrto, Uversty of Mocto, Mocto New Bruswck, EA E9, C, Offce Phoe: (+ 506) Fx: (+ 506) , E-ml: lkhls@umocto.c ABSTRACT The pst few yers hve see reserchers prcttoers stuyg mplemetg umber of rectve proctve mesures to orgztos ther respose to evrometl pressures from govermets, commutes, customers compettors. I fct, my orgztos hve come to relse tht orgztol strteges prctces tht corporte coserto of the turl evromet c be source of compettve vtge. Although proctve vlue-seekg pproches to greeg hve bee suggeste mgemet lterture, few groue theores frmeworks c be fou the om of supply ch opertos. My theores pot to the ee for reserch tht goes beyo the frgmete cotrbuto of reverse logstcs reverse supply ch. I ths pper we suggest frmework of the gree supply ch tht c be use to evelop qutttve moels to mge the process of greeg the supply ch. We lso use gp lyss to compre fferet supply chs tht c help mgers to () ssess the egree of greeess of exstg supply chs wth or cross sectors (2) eterme the gp betwee the curret supply ch the el or the trgete gree supply ch therefore to pl the ctvtes to be performe, the resources to be eploye the steps to be followe to reuce/elmte ths gp. A llustrtve s presete. Keywors: Greeg Supply Ch Mgemet, Gp lyss, Bechmrkg. INTRODUCTION My meto greeg s crtcl future veue evrometl mgemet (Wlto et l., 998; v Hoek, 999; Gree et l., 2000; Bowe et l., 2000; Kärä et l., 2002) cresg tteto s gve to gree mgemet strteges for the supply ch. Artcles the tre press, coferece sessos, s well s my books ppers hve bee publshe o the topc. Three pproches re propose (Kopck et l., 99; v Hoek, 999): the rectve, proctve vlue-seekg pproch. Ths pper focuses o vlue-seekg pproch tegrtg evrometl ctvtes to busess strtegy opertg t to reuce egtve mpct o the evromet. Therefore, greeg the supply ch s strtegc ttve leg to the mprovemet of eergy/resource use the mgemet of ll forms of wste (Bemo, 999). The blce of ths pper s orgze s follows: secto 2, we efe the gree supply ch by comprg t to the reverse supply ch suggest frmework of the gree supply ch tht coul be use evelopg qutttve moels to mge the process to gree the supply ch. I secto, we use gp lyss to compre fferet supply chs. Coclug remrks re gve secto EXTENTED ACTIVITIES OF GREEN SUPPLY CHAIN As suggeste by Wu Du (995), to mmze the compy s totl egtve evrometl mpct, we must evlute t from totl system perspectve. For my, the supply ch coul represet ths holstc system perspectve (Wlto et l., 998; v Hoek, 999; Bemo, 999; Preuss, 200). However, the gree supply ch s sometmes ssmlte to reverse logstcs or * Correspog uthor Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 45

3 reverse supply ch, whch s the movg goos from pot of use to pot of org for sposl or to recpture vlue. As we c see from tble, the reverse supply ch s clue the gree supply ch. The reverse logstcs s other term for reverse supply ch, whch the erlest escrpto ws gve by Lmber & Stock 98. Recet lyss ttempts to etfy curret future tres reverse logstc prctces (Rogers & Lembke 200), scuss the svgs tht coul result from reverse logstcs (Eml & Stec 2002), suggest moels to gue the process of exmg the fesblty of mplemetg reverse logstcs thrprty provers such s trsportto compes (Krumwee & Sheu 2002). Regrg the gree supply ch, scholrs professols hve tre to etfy fctors (evrometl, ecoomcl, socologcl, etc.) tht le to the emergece of the gree supply ch (Fksel, 995; Wlto et l., 998; Bemo, 999; v Hoek, 999; Meo et l., 999), escrbe the m chrcterstcs of the gree supply ch s compre to the trtol supply ch (Wlto et l., 998; Preuss, 200; Rogers Tbbe- Lembke, 200; Ro, 2002), suggest performce mesures (Bemo, 999; v Hoek, 999) eterme the steps towrs chevg mtg gree supply ch (Bemo, 999; v Hoek, 999). As we c see from tble, the reverse supply ch lmts greeg efforts to the reverse flow of goos. The gree supply ch llustrte by fgure ctes tht there re my other segmets of the ch tht coul be greee. Greeg c strt wth supply cotos cotue through, storge, esg, mufcturg, pckgg to strbuto e-cosumers. Tble : Comprso of reverse supply ch to gree supply ch Reverse Gree Implcto of supply supply ch ch compy customer Prouct returs Mrketg returs Secory mrket Recyclg Remufcturg Reusble pckgg Pckgg reucto Ar & ose emssos Evromet mpct of moe selecto Gree supply () Supplers (2) Mufcturers () Wholesler Fgure : Extee ctvtes of ech oe wth others the gree supply ch It c be extee to collectg, recyclg, remufcturg, sssemblg, resellg of proucts, prts of proucts or pckges. I the gree supply ch, the flows re both rectos betwee ll the plyers ech plyer c hve ctve prtcpto the greeg of ts proper ctvtes other ctvtes of the supply ch. After ths bref lterture revew, t ppers tht the theores cocepts evelope here shoul hve sgfct mplctos sou busess prctce. For ths reso, coserto shoul clue but ot lmte to: () evrometl bechmrkg wth respect to the supply ch. (2) Tools moels for gree supply ch mgemet tht corporte evrometl crter wth veor ssessmet utg pproches for curret members. Ths pper focuses o the frst pot. (4) Retler (5) Cosumer () Supply to reverse supply from mufcturers/wholeslers/retlers/cosumers; (2) Desg for sssemblg of proucts/servces; strbuto to reverse strbuto from supplers/wholeslers/retlers/cosumers; () Dstrbuto to retlers/cosumers reverse strbuto from retlers/cosumers/mufcturers/supplers (4) Dstrbuto to cosumers reverse strbuto from cosumers/wholeslers/mufcturers/supplers; (5) Purchse cosumpto of proucts/servces; sposl of proucts/servces pckges v retlers/wholeslers/mufcturers/supplers Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 46

4 . GREEN SUPPLY CHAIN AND GAP ANALYSIS We exte the Gp lyss cocept (Frzelle, 2002) efe how to eterme ts fctors to bechmrk the overll gree supply ch of orgzto to other supply chs wth cross ll sectors. The gp lyss s use ths pper s forml wy to ssess the greeess of supply chs. Ths lyss brgs together qutttve qulttve ttrbutes relte to the gree supply ch. Fgure 2 llustrtes the supply ch gp lyss. Ech xes represets oe key ttrbute s greeess ctor. Supply ch s gp lyss c be use to etfy supply ch stregths wekesses greeess ctos. Furthermore, t c be use to compre bechmrk orgzto s ctos to gree ther supply ch. Accorg to Frzelle (2002), el bechmrkg shoul be betwee smlr orgztos wth offsettg stregths wekesses. But he cte (p.65), smlrty s ot ecessry the sme ustry. The steps of the gree supply ch gp lyss re: () eterme the ttrbutes of the gree supply chs to be cosere the lyss, (2) ormlze the mout of the ttrbutes usg 0-0 scle, () mrk the vlues o the xes se the gp, (4) Clculte the greeess effort of the orgzto the greeess gp. 2 The ttrbutes of gree supply ch (step ) Sce the m of ths gp lyss s to compre the greeess of the whole supply chs, the t s crucl tht the ttrbutes to be use c ssess the greeess of ll the 7 ctvtes of the gree supply chs (see fgure for extee ctvtes). The ture, umber mportce of these ttrbutes my ffer cross the members of the supply ch /or cross supply chs the 4 6 sme/fferet ustres. For exmple, the forestry 5 ustry, the resposble use of the resources my be more mportt th wste mgemet, whch s bg ssue chemcl ustry. I the sme ve, the ttrbutes of Fgure 2: Gp lyss greeg progrms for the mufcturer (esg for sssemblg) my be qute fferet f compre to those hle by supplers, wholeslers or retlers. I to, the ttrbutes my cocer polces s well s prctces of ech member of the supply ch. Ths c the evluto of the gp betwee the commtmets to the evromet of the supply ch s members versus the commtmet (polces) the behvour (prctces) of ech member. I tble 2, we suggest some ttrbutes of both types (prctces polces) for ech member of the supply ch (see fgure ). Supplers Mufcturers Tble 2: Attrbutes of the gree supply ch Extee ctvtes Attrbutes of the gree supply ch the gree supply ch Polces Prctces Supply to reverse supply from mufcturers, wholeslers, retlers cosumers Desg for sssemblg of proucts servces, strbuto to reverse strbuto from supplers, wholeslers, retlers cosumers Percetge of supplers hvg evrometl mgemet, utg systems lfe-cycle evrometl ccoutg Percetge of mufcturers hvg evrometl mgemet, utg systems lfe-cycle evrometl ccoutg Efforts resource coservto (mouts $ veste or sve, reucto eergy use $, certfcto), efforts polluto reucto (reucto mouts of toxcs, ozoe epletg substces or y other form of polluto), percetge of supplers offerg prouct moulrty, compoet recovery reuse, prouct pckgg retur recyclg Efforts resource coservto for prouct ssemblg (mouts $ veste or sve, reucto eergy use $), efforts polluto reucto (reucto mouts of toxcs, ozoe epletg substces or y other form of polluto), umber complexty of pckgg proucts collecto/recovery fcltes, costs gs of sssemblg, etc. Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 47

5 Wholeslers Retlers Cosumers Dstrbuto to retlers/cosumers reverse strbuto from retlers, cosumers, mufcturers supplers Dstrbuto to cosumers reverse strbuto from cosumers, wholeslers, mufcturers, supplers Acqusto cosumpto of proucts/servces; sposl of proucts/servces pckges Percetge of wholeslers hvg evrometl mgemet, utg systems lfe-cycle evrometl ccoutg Percetge of retlers hvg evrometl mgemet, utg systems lfe-cycle evrometl ccoutg Awreess of evrometl cocers commtmet to evrometl cuse Efforts resource coservto (mouts $ veste or sve, reucto eergy use $), efforts polluto reucto (reucto mouts of toxcs, ozoe epletg substces or y other form of polluto), ctve prtcpto of wholeslers proucts pckges collecto, recovery, reuse, etc. Efforts resource coservto (mouts $ veste or sve, reucto eergy use), efforts polluto reucto (reucto mouts of toxcs, ozoe epletg substces or y other form of polluto), ctve prtcpto of retlers proucts pckges collecto, recovery, reuse, etc. Prouct: use, retur to retlers, resell to other cosumers, slvge, recoto, refurbsh, recycle, ote, etc. Pckgg: reuse, refurbsh, recycle, slvge, ote, etc. v retlers, wholeslers, mufcturers, supplers M objectves of gree supply ch: resource svg, wste elmtg prouctvty mprovg Normlzto of mout of the ttrbutes (step 2) Let:. : ttrbutes j for ustry ; j,2,,,,2,, D; j : Qutty of ttrbutes of the gree supply ch c ;,2,, m; j,2,, ;,2,, D; S : Normlze qutty of ttrbutes of the gree supply ch c ;,2,, m; j,2,, ;,2,, D; Tble : Amout of ttrbutes for ech supply ch Attrbutes for sector To ormlze the ttrbutes we ee referece clle Trget Gree Supply Ch ( c * ) for ech sector. A trget gree supply coul be the supply ch of the leer the ustry or the supply ch tht woul coform to ll or most of the strs of ustry or the supply ch tht the compy wshes to hve the future ( trgete objectve). For ech supply ch, we evlute the qutty of ttrbutes. We get tble smlr to tble. Gree supply ch For ech gree supply ch ech ttrbute we clculte We coser two fferet cses, () the cse where the ttrbute s to be mxmze ( hgher the better ttrbutes wste utlzto %), the cse where the ttrbute s to be mmze ( lower the better such s eergy cosumpto). s :.. 2. j. 2 Gree supply ch : c 2 j Gree supply ch 2: c j Gree supply ch I: c 2 Gree supply ch m: c m Trget Gree supply ch: c * m * 2 m 2 mj * * j m * Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 48

6 Cse where the ttrbute s to mxmze Cse where the ttrbute s to mmze s 0 () * j * j s 0 (2) Vlues of the gp for ech gree supply ch (Step ) The umber of ttrbutes chrcterzes ech ustry. As metoe bove, the umber, ture mportce of the ttrbutes my vry from ustry to ustry ue to becuse of the prtculrtes of ech sector (forestry compre to the chemcl ustry). The umber of xes or rus the gp s equl to. The egree betwee ech rus s of course equl to 60 o /. The trget gree supply ch (c * ) s represete by ot t the gruto 0 o ech xe. We rw le betwee ech ot. Fgure represets gp lyss for sector wth 6 ttrbutes. It s possble to bechmrk more th oe compy by represetg ther ttrbutes o the sme grph. Determto of the greeess effort for ech gree supply ch (Step 4) The Preset Greeess Effort ote by PGE for y supply ch PGE ( c ) j The Greeess Gp ote by GG s efe: GG( c ) 0 - S j S Fgure : A sx ttrbutes gp lyss c from sector s efe: for, 2,, m ;,2,, D; () for, 2,, m;,2,, D; (4) I the exmple of fgure, the cler re represets the PGE the she oe represets the GG. To emphsze ther effort to gree the supply ch, compes c be ctegorze by ecresg (cresg) PGE. To hghlght the mout of effort to eploy orer to be close to the trget supply ch ( c * ) the GG c be use to ctegorze compes. Sce the ttrbutes my vry ther mportce, weghts reflectg the mportce of ech ttrbute coul be use. Let w j : the weght of the ttrbutes j; j,2,, w j j 4 5 Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 49

7 The Weghte Preset Greeess Effort ote by WPGE for gree supply ch c from sector s efe: WPGE ( c ) w j S for, 2,, m ;,2,, D; (5) j The Weghte Greeess Gp ote by WGG s efe: WGG( c ) w w S j * j j for, 2,, m;,2,, D; (6) j j Ths lyss coul help evelop romp to gree the supply ch wth other opertol mgemet progrmmes such s totl qulty evrometl mgemet, just--tme mgemet, esg for the evromet, etc. 4. Illustrtve Exmple The objectve of ths exmple s to show how to use pply mthemtcl formuls to clculte the Preset Gree Effort (PGE) Greeg Gp (GP). The exmple stuto s relstc usg some of the ctors vlble complete by the frst uthor ccorg to hs my yers of experece refrgertor mufcturg compy. Ths compy prouces 00,000 refrgertors, strbute s follows: 50 ltre refrgertors: 60,000 uts; 00 ltre refrgertors: 0,000 uts 250 ltre refrgertors: 0,000 uts. Step : After lyzg the compy supply ch prouct ttrbutes, scusso wth the ctvtes mgers, we scover tht to gree ts supply ch, frm shoul: reuce the mterl requremets for goos servces; reuce the eergy testy of goos servces; reuce toxc sperso; ehce mterl recyclblty; mxmze sustble use of reewble resources; exte prouct urblty; crese the servce testy of goos servces. Furthermore, s ech refrgertor hs volume cpcty, the m s use s the m ggregto ut for the vrous proucts of the frm. For the exmple, the ggregte proucto s 2,500 m. To evlute the effort ehce to trget theses objectves the followg ttrbutes my be rete. Core eergy testy MJ / m of proucto Aul totl eergy cosume by the frm MJ Aul proucto ggregte m 2 Core wste testy Kg / m of proucto Aul totl wstes use kg 2 Aul proucto ggregte m Wste utlzto % Aul totl wstes use kg Aul totl wstes geerte kg 4 Core wter testy m / m of proucto Aul totl wter tke m 4 Aul proucto ggregte m Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 50

8 5 Wter schrge m / m of proucto Aul totl wter schrge m 5 Aul proucto ggregte m 6 mterl recyclblty % Aul vlue of compoets recycle t the e of prouct lfe cycle $ 6 Aul proucto ggregte $ 7 Aul eergy cosumpto by oe ggregte prouct ut kwh / m of proucto Aul om l eergy cosumptoby ll the proucts 7 Aul proucto ggregte m Attrbutes 6 re to be mxmze (the hgher mout of the ttrbute s the best);, 2, 4, 5, 7 re to be mmze (the lower mout of the ttrbute s the best). Note tht the ex s ot relevt for the exmple below becuse we re coserg just oe ustry. Tble 4: Amout of ttrbutes for ech supply ch Attrbutes for sector Gree supply ch Gree supply ch : c Gree supply ch 2: c 2 7 Gree supply ch m: cm 5 Trget Gree * 825 * 2 65 * 55 * 4 2. * 5 2 * * supply ch: c * ( ) Attrbutes to be mmse Step 2: Normlzto of mouts of the ttrbutes The referece supply ch eee for the ormlzto (the lst le of the tble 4) coul be forme by the best mout of ech ttrbute. If the ttrbute s to be mxmze, we choose the mxmum of the frm ustry, f ths mxmum s kow. Otherwse, we choose the mxmum of the correspoet colum. But f the ttrbute s to mmze, we choose the mmum of the frm ustry, f ths mmum s kow. Otherwse, we choose the mmum of the correspoet colum. For the exmple, the oly formto vlble from the ustry s bout ttrbutes 7 (Aul eergy cosumpto by oe ggregte prouct ut kwh / m of proucto) whch s kwh (bse o str U.S. Govermet tests) ths mout of ttrbute 7 wll be use s referece. The for ech gree supply ch Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 5

9 we clculte s. For the exmple, for the gree supply ch the ttrbute, whch to 825 mmze s 0 9.2; for the ttrbute whch s to mxmze, s The resultg mtrx s the tble Gree supply ch Gree supply ch : c Gree supply ch 2: c 2 Gree supply ch m: cm Trget Gree supply ch: c * Tble 5: Normlze Amout of ttrbutes for ech supply ch Attrbutes for sector. s 9.2 s s s *. 2 s s 22 s s * 2. s 7.54 s s s *. 4 s 4 s s 4 7 s * 4. 5 s s 25 s s * 5. 6 s 6 s s 6 s * 6. 7 PGE GG s s s s * Step: Gp represetto Gree supply ch C Gree supply ch C2 Gree supply ch C Gree Trget Supply Ch 5 4 Fgure 4: Gp represetto of the three-supply ch of the exmple Step4: Determto of the greeess effort If ll the ttrbutes hve the sme weght, the preset Greeess effort (PGE) for the supply chs s clculte by the equto. For exmple, the Greeess effort for the Supply Ch s: PGE(c ) ( ) / The PGE for ech supply ch s presete tble 5. The greeess gp s eterme by equto 4 for the supply ch, the GG(c ) Accorg to PGE the supply chs re rke s follow c 2, c c. Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 52

10 O the other h, f the followg weghts: w 0.2, w 2 0., w 0.05, w , w 5 0.2, w 6 0., w 7 0. re opte th the Weghte Preset Greeess Effort (WPGE) the Weghte Greeess Gp (WGP) re clculte respectvely by the equtos 5 6 presete tble 6. Accorg to WPGE the frst posto s the supply ch c the seco posto s ow for c ste of c 2 whe PGE s use to rk the supply chs efforts. Tble 6: Normlze Weghte Amout of ttrbutes for ech supply ch Gree supply ch Attrbutes for sector WPGE Gree supply ch : c Gree supply ch 2: c 2 Gree supply ch m: cm Trget Gree supply ch: c * WGG w 0.2 w 2 0. w 0.05 w w w 6 0. w 7 0. w s W s 2 w s w s 4 w s 5 w s 6 w s w s 2 W s 22 w s 2 w s 24 w s 25 w s 26 w s w s W s 2 w s w s 4 w s 5 w s 6 w s w s * 2 W s * 2 w s * 0.5 w s * w s * 5 2 w s * 6 w s * 7 5. CONCLUDING REMARKS Ths pper hs focuse o the vlue-seekg pproch to gree the supply ch s whole hs suggeste frmework of the extee ctvtes of the gree supply ch tht coul be use to evelop qutttve lyss to mge the process of greeg the supply ch. A gp lyss ws performe to bechmrk compre fferet supply chs () to ssess the egree of greeess of exstg supply chs wth or cross sectors; (2) to eterme the gp betwee the curret supply ch the el or the trgete gree supply ch. Ths gp lyss c be useful to pl the ctvtes to be performe, the resources to be eploye the steps to be followe to reuce/elmte the gp. Oe of the questos to be swere s where to strt the greeg process? My suggest strtg wth supplers beeftg from the multpler effect of the greeg of cqusto. Others rgue tht trgetg gree mrkets shoul foster the greeg efforts of other members of the supply ch. I cocluso, more reserch s requre orer to support mgers ther evoluto towrs greeg the etre supply ch. REFERENCES Bemo, B. M., (999). Desgg the Gree Supply Ch. Logstcs formto Mgemet, 2(4): Bowe, F. E., P. D. Couss, R. C. Lmmg & A. C. Fruk, (200). The Role of Supply Mgemet Cpbltes Gree Supply. Proucto Operto Mgemet, 0(2): Eml, M. L. & D. J. Stec, (2002), Relzg svgs from ole reverse uctos, Supply Ch Mgemet; 7(): 2-2. Fksel, J., (995). How to Gree Your Supply Ch. Evromet Toy, 6 (2): 29-. Frzelle, E.H., (2002). Supply Ch strtegy, E. Mc Grw Hll. Gree, K., B. Morto, & S. New, (2000). Greeg Orgztos. Orgzto Evromet, (2): Kärä, J., E. Hse, H. Jusl, & J. Seppälä, (2002). Gree Mrketg of Softwoo Lumber Wester North Amerc Norc Europe. Forest Proucts Jourl, 52(5): 4-9. Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 5

11 Kopck, R., M. J. Berg, L. Legg, V. Dspp & C. Mggo, (99). Reuse Recyclg- Reverse Logstcs Opportutes. Coucl of Logstcs Mgemet, Ok Brook, Il. Krumwee, D. W. & C. Sheu, (2002). A Moel for Reverse Logstcs Etry by Thr-Prty Provers, Omeg; 0(5): 25-. Lmber, D. M. & J. R. Stock, (98). Strtegcl Physcl Dstrbuto Mgemet, Homewoo, Il Irw. Mkower, J., (99). The E Fctor: The Bottom-Le Approch to Evrometlly Resposble Busess. New York: Tmes Books. Meo, A. A. Meo, J. Chowhury, & J. Jkovch, (999). Evolvg Prgm for Evrometl Sestvty Mrketg Progrms: Sythess of Theory Prctce. Jourl of Mrketg Theory Prctce, sprg: -5. Preuss, L., (200). I Drty Chs? Purchsg Greeer Mufcturg. Jourl of Busess Ethcs, 4: Ro, P., (2002). Greeg the Supply Ch: New Ittve South Est As. Itertol Jourl of Opertos & Proucto Mgemet. 22(5-6): Rogers D. S. & R. Tbbe-Lembke, (200). A exmto of Reverse Logstcs Prctces. Jourl of Busess Logstcs, 22(2): V H., (999). From reverse logstcs to gree supply chs. Supply Ch Mgemet, 4(): 29-4 Wlto, S. V., R. B. Hfel, & S. A. Melyk, (998). The Gree Supply Ch: Itegrtg Supplers to Evrometl Mgemet Processes. Itertol Jourl of Purchsg Mterls Mgemet, Sprg: 4(2): 2-. Wu, H. J. & S. C. Du, (995). Evrometlly Resposble Logstcs Systems. Itertol Jourl of Physcl Dstrbuto & Logstcs Mgemet, 25(2) : Proceeg of the 2 Itertol Coferece o Computers & Iustrl Egeerg 54

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