Sustainable Operations Management

Sustainable Operations Management

Tarkan Tan
Associate Professor
SCIENTIFIC DIRECTOR

Operations form the base of every organization, whether in manufacturing, service, or non-profit industries. Operations Management (OM) is a multidisciplinary field that addresses the efficiency and effectiveness of the operations of an organization. In the past few decades firms have experienced increasing globalization and a shifting focus to competition among networks of firms. Due to these evolutions Supply Chain Management (SCM) field of OM has received increasing attention. Beamon (1999) defines the SCM approach as ‘an integrated process wherein a number of various business entities (i.e., suppliers, manufacturers, distributors, and retailers) work together in an effort to: (1) acquire raw materials, (2) convert these raw materials into specified final products, and (3) deliver these final products to retailers’. However, lately firms are also experiencing that they need to incorporate sustainability at the core of their businesses. Indeed, the widespread concern over sustainability and in particular the climate change puts pressure on companies to become greener. It is imminent that the global pressure will increase in an increasing manner and that sustainability will -and should- increasingly drive Supply Chain Management Decisions.
This research lab focusses the on sustainability of supply chains. It aims for solutions that make supply chains more sustainable, while maintaining efficiency.

Importance

Trade-off

Sustainability problem is by no means a recently discovered concern. Considering climate change alone, the effect of emissions from human industry on global warming is reported already in the 19th century by Arrhenius (1896), who proposed a relation between atmospheric carbon dioxide concentrations and temperature. Irrespective of whether humankind’s involvement in climate change is an inconvenient truth or a myth, the basic question from a business point of view remains the same: Why should firms / supply chains care about sustainability from a business perspective? This is all the more relevant keeping in mind that within its three pillars (environmental, social, and economic) sustainability has many more dimensions than climate change, such as resource scarcity, pollution, biodiversity, waste, water use, social issues, etc. The basic motivation for businesses is not necessarily a corporate responsibility point of view or even cost efficiency; it is the market shift which is vital for business survival, as sustainability is becoming the norm rather than the exception. Increasing resource scarcity (physical or economic), customer pressure (individual consumers in B2C environments, as well as customers in B2B environments), current and upcoming regulations, stakeholder pressure, and company image for attracting young talents are among the pressure factors for companies to pursue sustinability practices in their operations.
Furthermore, while sustainability is generally seen as a costly effort, evidence shows that those companies who focus on sustainability generally perform better in the stock market than the industry average.

Key Topics

The key topics address what can be done to make a supply chain more sustainable. Amongst others, important topics that are studied by our lab are:

Transportation
The transport sector is the second-largest carbon emissions contributor in Europe, and its emissions continue to increase. Traditionally the trade-off in transport decisions has been between lead time (and corresponding inventory costs) and transportation costs but now emissions come into the equation. Cleaner modes are often cheaper, but also slower, leading to higher inventory costs. We incorporate carbon emissions into transportation and inventory theory models, in order to make decisions such as the transportation mode(s), transportation routes, and network design.

Closed-loop supply chains
Modern firms that use closed-loop supply chains as a competitive strategy receive many benefits—particularly higher profitability and control over a product’s entire lifecycle. In fact, the market for multiple lifecycle products continues to grow. We analyze the remanufacturing sector and propose effective closed-loop supply chain strategies.

Supply chain collaboration
Because of the joint processes and existing deficiencies in scope definitions, it is essential for a sustainable supply chain management that the companies take the responsibility of the entire supply chain’s emissions and collaborate with their supply chain partners to investigate the most efficient ways of emission reduction, rather than focusing on their “own” emissions alone. Therefore we also strive to evaluate the collaboration options within the supply chain and try to find ways to decrease the carbon emissions of the supply chain as a whole.

Carbon footprinting and allocation
Carbon footprinting is a tool for firms to determine the total greenhouse gas (GHG) emissions associated with their supply chain or with a unit of final product or service. Carbon footprinting typically aims to identify where best to invest in emission reduction efforts, and/or to determine the proportion of total emissions that an individual firm is accountable for, whether financially and/or operationally. We model GHG emissions in general supply chains and investigate how those emissions can be allocated to individual firms.

Food waste management
Food waste is a serious problem with detrimental environmental, social and economic consequences, due to not only its contribution to the excess consumption of freshwater and fossil fuels, but also the carbon emissions for the production of the food wasted. Retailers play a crucial role in the food chain as they have direct relationships with both suppliers and consumers. We focus our attention on them with respect to food waste management and pricing. The questions that we study include the relation between demand, price, and shelf life, optimal pricing strategies, shaping choice environment, and taking human factors (employees) into account.

Achievements

The sustainable operations management lab has published a number of high impact papers, edited a research-based textbook, and conducted numerous industry projects in different forms.

Shaunak Dabadghao
Assistant Professor
SCIENTIFIC DIRECTOR
Simme Douwe Flapper
Assistant Professor
SCIENTIFIC DIRECTOR
Jan Fransoo
Professor
SCIENTIFIC DIRECTOR
Tarkan Tan
Associate Professor
SCIENTIFIC DIRECTOR
Maximiliano Udenio
Assistant Professor
SCIENTIFIC DIRECTOR
Geert-Jan van Houtum
Professor
SCIENTIFIC DIRECTOR
Tom van Woensel
Professor
SCIENTIFIC DIRECTOR

Our lab is involved in a number of (in-company) graduation projects of Bachelor and Master students. Some interesting, recently performed projects are:

Our lab is involved in a number of research & development projects. These projects are usually conducted in collaboration with other universities and companies. Contact our us if you are interested in teaming up for a new project proposal.

  • In this dissertation the impact of carbon emissions on the design and control of supply chains is studied. Increasing awareness for global warming and the role of greenhouse gasses in this has made companies more aware of carbon dioxide emissions caused by supply chains. As a result of this awareness, carbon emission regulations have been ...
  • Terra Footprinting helps its customers in making their transport more carbon-efficient. Through an online service, calculating and analyzing the transport carbon footprint of a complete supply chain becomes accessible for large and small companies. The online Terra tool is currently the best way to calculate and get insight into your actual transport carbon footprint.
  • Efficient Carbon-reduction and Optimisation of Logistic Operations Generated via Innovative Services, Training and ICT using Cooperative Standards. Ecologistics aims at raising awareness and opportunities for companies to optimize their freight operations by using standardized collaborative ICT tools. The tools developed by Ecologistics will enable an improved data exchange between the actors from different levels of ...