New government regulations to reduce GHG emissions are expected in the near future. These regulations can be modeled as “constraints” in the planning and scheduling tools.
The first major task in addressing compliance is to provide the documentation and standards for incorporating emissions-related constraints into the tactical planning models. The second task is to create a repository of standard data that can be used to measure a baseline for emissions-related costs.
Once the necessary data is compiled, a standard optimization model that reflects the constraints on GHG emissions can be designed. The model is intended to provide the starting point for incorporating the constraints into the planning models.
The benefits include facilitating the ability of a company to address the impact of GHG emissions within the overall tactical plan. Companies will also be able to assess the costs of regulation.
Green Brings Value
Making the supply chain greener is fundamentally no different than making the supply chain more efficient. If the true environmental impact was reflected in the cost of resources, it would indeed become readily apparent.
One of the probable results of the current environmental focus is that GHG emissions will cost many companies more in real dollars. Getting ahead of the curve allows a company to proactively reduce these and manage the likely increases in costs more effectively. Delaying the inevitable will most likely lead to more expensive remedies in the future. Also, being green will increasingly be used as a competitive advantage. Going green is not only good business in the near term, it also shows a high regard and concern for all of a corporation’s stakeholders, both now and in the decades to come.