Supply chain design and planning: influence of the social sustainability

Industries are facing the challenge of incorporating sustainability into their supply chains. A global supply chain, which is already a very complex system to manage is now having its complexity increased with sustainability... [ view full abstract ]

Industries are facing the challenge of incorporating sustainability into their supply chains. A global supply chain, which is already a very complex system to manage is now having its complexity increased with sustainability concerns from different stakeholders, namely customers, governments and overall society.
The sustainability term itself is broad and complex. If a couple of decades ago environmental sustainability was the main concern, social sustainability is currently finding its own place in the literature. The subjectivity and the lack of quantifiable indicators to address the social pillar of sustainability makes this research area quite challenging and there is still a long road to be traveled.
The objective of this work is to contribute to filling these research gaps and to do so in two ways. The first goal is to provide a decision support tool for company’s decision makers to be able to adequately design and plan their already complex global supply chains. This is achieved through a mixed integer mathematical programming optimization model of a 4-echelon closed-loop supply chain with various integrated strategic and tactical decisions. Namely: supplier selection and purchase levels; facility location and capacity; technology selection and allocation; product recovery and remanufacturing strategies; transportation network definition with unimodal, multimodal and intermodal transportation options; inventory policies and stock planning; and supply planning. The second contribution of this work arises from the development and proposal of three different quantitative social indicators, based on the European Union Sustainable Development Strategy, applicable to supply chain strategic decisions. These indicators are included in the model as objective functions. Additionally an objective function measuring the Net Present Value of the supply chain is developed to assess the trade-offs between the economic and the social pillars of sustainability.
The developed model was applied to a case-study involving a global supply chain from where interesting results and important managerial insights were retrieved. Conclusions could be drawn on how considering different social objectives is significantly influencing the supply chain design and planning decisions, as well as the economic pillar of sustainability.