A systematic approach for synthesis and optimisation of sustainable oil palm value chain (OPVC)

Abstract

An oil palm value chain (OPVC) considers the interconnectivity between each activity within the oil palm industry to allow for a top-down overview of the industry, while capturing the details for more substantial system interactions. However, it is a challenge to deliver the big picture without a proper tool, especially for an extensive value chain network with various processes, the existence of multiple facilities for each process, and supply chain management system. In this respect, a novel systematic approach is developed to synthesise and optimise an integrated OPVC network for higher economic and environmental performance. In this work, an OPVC case study in Johor state is presented and solved to illustrate the proposed approach. Besides, the coalition reliability index is introduced to measure the reliability of the OPVC network formed under different supply chain management. The results demonstrated that the value-added across the entire value chain improves significantly, from 167.0 million US$/y in the conventional design to 220.2 million US$/y. Meanwhile, greenhouse gas emission is reduced substantially from 2700 to 1878 kt CO2e/y. To ensure more strategic sourcing of materials, and therefore, improves the likelihood of successful implementation for the value chain network developed, a Pareto-optimal front is plotted to predict the economic performance generated based on the changes in coalition reliability index.