Most optimization studies focus only on diminishing the cost of distributing merchandise – at a price to the environment. But new research by Prof. Claudia Archetti, ESSEC Business School, turns the perspective around to propose a solution that both optimizes delivery and diminishes C02 emissions. From an interview with Prof. Adrian Zicari.    

Distribution and Supply Chains: Making them greener while more effective with Claudia Archetti, from an interview with Adrian Zicari and edited by Tom Gamble.

The standard objective of companies that deal with logistic operations are related to distribution and environmental management. Typically, the objective is minimization of the cost. Moreover, in terms of cost of distribution, this is typically translated in minimizing the distance that the distribution vehicles have to travel to distribute the goods to the customers in the distribution or supply chain.

Prof. Archetti and her fellow researchers tried a different approach, attempting to evaluate environmental impact in terms of the distribution plan and vehicle emissions during the distribution of goods.What they noticed was that, typically, vehicles consume more fuel when they have a higher load.

Changing the distribution perspective

This is true for trucks, but even for cars, and, moreover, for any kind of vehicle. If the vehicle is heavier, so it has a higher load, and it consumes more fuel. And this means it pollutes more. The researchers goal was therefore to take that into account when optimizing the distribution from the perspective of minimizing the fuel consumption. This way, Prof. Archetti et al changed the objective from minimizing the distance as representing the cost to minimizing the pollution, which is related not only to the distance traveled, but also to the load that is on the vehicle.

“This means that by changing the perspective, we can observe that this completely changes the structure of the distribution plan that you obtain at the end,” states Prof. Archetti. “As such, when you try to find the best way for distributing your goods while minimizing pollution, what you will do is try to travel with light vehicles, and so with a lower load.”  

“For example,” she continues, “if a certain customer requires a high quantity of goods, you have to deliver that quantity to the customer. And if the quantity is high, you will try to serve the customer as soon as you can from the moment the vehicle departs from its starting point. In this way, you reach the customer quickly and you get rid of the high quantity quickly and the vehicle becomes lighter and you pollute less. We observed exactly that in our research paper. If you change the perspective, you have a change in the distribution plans that might help reduce pollution.”

Distribution and Supply Chains: Tension between cost and environment

In practice, companies are still mainly driven by cost objectives more than environment. In this kind of logistic or distribution problems, Prof. Archetti et al observed that companies tend to measure the cost of distribution in terms of distance only. “However, what we wanted in our research was take into account the environmental issue instead,” she asserts.

“We said, okay, environmental impact – we measure it in terms of pollution, and pollution is measured in terms of fuel consumption, and fuel consumption is related to both distance and load of the vehicles. If you change this perspective, you change the distribution plan, but at the same time, fuel consumption is indeed what drives the cost of the distribution.”

The results of the research show that the companies should change their measure of the distribution cost by not considering simply the distance, but the distance and the load at the same time because if you reduce the fuel consumption, not only you reduce pollution, but you reduce the cost as well.

The aim is to show that if companies carefully assess their environmental impact, at the same time, they can reduce costs. In a nutshell, a win-win situation that is both better for companies and better for the environment.

Useful links:

• Link up with Profs. Claudia Archetti and Adrian Zicari on LinkedIn
• Read a related article: Supply chains and climate impact – the need for companies to become more accountable
• Discover ESSEC Business School and its MSc in Sustainability Transformation programme.

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