Analysing the impact of restructuring transportation, production and distribution on costs and environment – a case from the Thai Rubber industry. Issue 3 (4th May 2017)

• Record Type: Journal Article
• Authors: Chanchaichujit, Janya; Saavedra-Rosas, Jose; Kaur, Arshinder
• Is Part Of: International journal of logistics. Volume 20:Issue 3(2017)
• Page Start: 237
• Page End: 253
• Publication Date: 2017-05-04
• Subjects: Transportation network -- distribution network -- greenhouse gas emissions -- the Thai rubber supply chain -- restructuring; Business logistics -- Periodicals; 658.005
• DOI: 10.1080/13675567.2016.1217317
• Languages: English
• ISSNs: 1367-5567

Abstract

ABSTRACT: Transportation and distribution are key elements to successful supply chains, however there is some disagreement regarding the impact of distribution and transportation restructuring on costs and the environment. This paper explores the use of an optimisation model of Thailand's rubber industry supply chain, to assess the impact of distribution and transportation on costs and greenhouse gas emissions. It has previously been observed that there is a positive correlation between transportation cost reduction and environmental impact, nevertheless the correlation is not clearly established when the distribution system is restructured. This paper is divided into two parts: the first part examines the impact of transportation service capacity on distribution decisions; the second part of the paper aims to examine the impact of restructuring the distribution network considering multi-modal options on cost and greenhouse gas emissions. For both parts a scenario analysis is utilised in conjunction with an optimisation model to derive the best possible answer in terms of costs and GHG emissions. In this paper, the results obtained indicate that the impact on cost minimisation from the increase in rail freight service capacity is marginal, while the impact on GHG emission minimisation is more significant. In terms of short-sea shipping prices and service capacity, the scenario analysis shows a slight positive impact on cost minimisation but no positive or negative impact on GHG emission minimisation. Results also confirm that in terms of economic advantages, distribution network restructuring provides greater benefit to the industry than does capacity development for the transportation service.