Green Supply Chain Design and Operation by Integrating LCA and Dynamic Simulation

Abstract

With sustainability increasingly becoming an important business factor, companies are now looking for methods and tools to help assess the fuller picture of the environmental impacts associated with their manufacturing and supply chain activities. Life cycle assessment (LCA) is a widely-used technique for measuring the environmental costs assignable to a product or service. However, LCA takes a high-level view and assumes a fixed supply chain structure and operation. It does not explicitly consider the effect of supply chain design and practices which can be a significant contributor to the overall environmental impacts. This paper presents an approach integrating LCA indicators and dynamic simulation for green supply chain design and operation. Environmental impact indicators are incorporated into a dynamic model of the supply chain along with profit and customer satisfaction, so that sustainability of various design and operational decisions can be assessed comprehensively. The application and benefits of the proposed approach are demonstrated using two case studies.