A Framework for Economic and Environmental Sustainability and Resilience of Supply Chains

Abstract

Traditionally supply chain management decisions are based on theeconomic performance which is expressed by financial and non-financialmeasures, i.e. costs and customer service. From this perspective, in thelast decades, several logistics trends, i.e. Outsourcing, offshoring andcentralization, emerged. Recently, studies have shown that the focus onthe cost aspect is no longer sufficient. Due to internal and externaldrivers (e.g. customer pressure, regulations, etc.) environmentalcriteria become more and more important for the decision-making ofindividual enterprises. Furthermore, the risk which is related to theincreased transportation distances resulting from these strategies isoften not taken into account or underestimated. These shifts inpriorities of companies force them to search for new logisticsstrategies that are at the same time cost-efficient, environmentallyfriendly and reliable. Based on this integrated perspective newlogistics trends, like on- and nearshoring, flexible Supply base orflexible transportation, have come up recently and will gain moreimportance in the near future. Relying on a flexible supply base acompany can benefit from low costs in an offshore facility andsimultaneously be able to respond quickly to demand fluctuations andreact to delivery delays and disruptions by serving the market also froman onshore site. A single-period dual sourcing model is presented toshow the effects of emission costs on the offshore, onshore and totalorder quantity.