Developing tools for better supply chains

September 21, 2018

In today’s era of diminishing natural resources and shrinking bottom lines, businesses have to examine every aspect of their production and operations to ensure they are not only as efficient as possible, but also, environmentally sustainable.

Better managed supply chains could offer significant benefits in sustainability. This is important because carbon emissions from transportation, manufacturing and deforestation are considered major contributors to climate change.

But designing a supply chain for sustainability is no simple feat. It may include measures such as reducing packaging and waste, assessing suppliers based on their environmental performance, developing more eco-friendly products and reducing carbon emissions associated with the transport of goods. There is no single methodology that can be applied across the board. Each entity, be it a shoe factory or a printer cartridge refill provider, has unique requirements for the sourcing and composition of raw materials, as well as unique shipping routes.

This complexity, though precluding a simple one-size-fits-all solution, presents an exciting challenge to the engineering and systems management specialists at the Masdar Institute of Science and Technology, who are hoping to create systems that can be used to design efficient and sustainable supply chains.

Typically, the process of designing a supply chain involves formulating a mathematical model to characterise the chain, taking account of as many factors and inputs as possible.

The next step is to create a computer programme to solve the model. While that may sound simple, formulating and solving a model that describes a given supply-chain problem in its entirety is almost impossible.

For example, including every possible input for a supply-chain problem involving a port in the UAE would result in a problem so complex that not even a supercomputer would be able to solve the problem in a reasonable amount of time.

To be able to solve models in a timely manner, they must be formulated at an appropriate level of detail, and the computer programme used to do it must be efficient.

There is also an issue of integration. Traditionally, supply chains have been designed by solving a number of distinct problems – where to site warehouses, how much inventory to keep, and so on.

In reality, though, these problems are interconnected; integrating them into a single, comprehensive model results in solutions that are more realistic and thus more usable and valuable.

For example, when deciding on a shipping route, it may be necessary to take into account shipping time as well as the distance shipped, if the product has a limited shelf life. The location, distribution, inventory and customer service problems are all related.

My own research focuses on developing integrated supply chain models and on developing computer algorithms to solve them efficiently and meet sustainability and cost goals.

The aim is to help companies, from supermarkets to ports and factories, minimise their carbon emissions and environmental impact while maintaining good customer service, product performance and profit margins. This can help countries like the UAE reduce their environmental footprint while maintaining their competitive advantage.

It is our hope that the techniques we pioneer can also be applied to the UAE’s alternative energy-fuelled electricity grids and nuclear power plants as they come online in the coming years, ensuring they operate as efficiently as possible while minimising their environmental impact.

In this way we hope to provide critical tools for a green transformation of not only businesses and industries, but of entire countries and regions, to help them reach their goals for progress and sustainability.

Dr. Ali Diabat is an assistant professor of engineering and systems management at the Masdar Institute of Science and Technology.