MODELING OF CARBON COMPLIANT SUPPLY CHAIN NETWORK FOR TYRE REMANUFACTURING INDUSTRY

Abstract

The environmental concerns are growing from the resource reduction, depleting landfill capacities and increased human health hazard etc. So, the ‘green growth’ philosophy has been a key point in the business discussions globally to reduce anthropogenic global climate change. As a result of discussions at United Nations Conference COP21 Paris, on December 12, 2015, various countries reached an international agreement to mitigate climate change requiring deeper emission reduction commitments from all countries. Climate change-India-2015 report of government of India, stated that the share of CO2 emission is due to electrical energy 715829.80 (59.8%) and transportation 138858 (9.28%) of total 1497029.20 in thousand metric ton. Road transport sector has 87% share of transport sector carbon emission. Therefore, road transportation plays considerable role in the carbon footprint reduction potential of the nations. In addition, Industrial supply chains are considered as main emission source. Consequently, in addition to the cost, quality and service level, the carbon management is considered the fourth enterprise criterion for the supply chain performance. Rapid growth in vehicles is causing exponential growth in used tyres thrown away each year. It causes significant economic and environmental problem due to economic value loss of tyre, land fill space need, fire threat, human health threats from breeding insects, water and air pollution. The problem can be minimized by tyre remanufacturing (i.e. retreading) supply chain. Motivated by above mentioned developments, this work developed three mixed integer programme centered models (Model-I, Model-II and model-III) for strategic, tactical and operational planning, respectively. The proposed models were exhibited using an example inspired by tyre remanufacturing company in India. In order to show the practical solvability of the offered model for tyre remanufacturing industry, LINGO-12β is employed in this study. Firstly, this study proposed a comprehensive tyre remanufacturing supply chain strategic planning model (Model-I) under uncertainty and group decision making environment for Greenfield and Brownfield supply chain network design i.e. reconfigurable supply chain network design that integrates business economics- maximum profit, maximal coverage and maximum total capacity/ volume flexibility i.e. capacity cushion and carbon emission objectives for carbon tax policy consideration. Abstract iii A methodology was designed to solve the model by combining various techniques , namely, interactive programming , possibility programming, Jimenez’s uncertainty handling approach, Cheng’s Fuzzy AHP approach to establish weights of the group representatives in group making environment, Mirakhorli’s approach to formulate membership function, Liou and Wang’s approach to compute desired achievement degree of each goal to represents the index of optimism of the decision makers and Chen and Tsai’ s Fuzzy goal programming with different importance and priorities. Numerical experiments were performed employing data from Indian tyre remanufacturing industry. The analysis of the experimental outcomes specify key administrative insights for remanufacturing industry practitioners and policy insights for the government as (1) designed two carbon emission policy, namely, carbon tax and reward policy (CER) and carbon-taxreward- forex saving (CTRF) policy in addition to carbon tax policy (CTP) for framing future carbon emission tax rate policies, (2) analyzed the monetary benefit of a remanufactured tyre to India, (3) analyzed the possible influence of carbon tax rate with various carbon emission policies on tyre remanufacturing strategic supply chain planning, (4) analyzed and suggested the admissible carbon tax rate on tyre remanufacturing supply chain for negotiation between tyre remanufacturing industry and the government for the maximum environmental returns without noteworthy impressions on the competitive standing of firms and economy, (5) a greenness index of supply chain was suggested, (6) Further, Forex saving reward rate for the carbon tax- reward-forex saving policy was suggested for the various tyre remanufacturing supply chain using SC greenness index. A tyre remanufacturing tactical supply chain planning model (Model-II) was developed considering economic and carbon emission objectives under carbon tax policy. The study used mixed integer programming technique. The goals of Model-II were as (a) Maximization of business profit, (b) Minimization of carbon emission cost. The experiments are completed applying data from Indian tyre remanufacturing industry. The analysis of the experiments offer key administrative understandings for industry practitioners and policy insights for the government on (1) possible monetary and emissions related impressions of carbon tax rate at the tyre remanufacturing supply chain tactical planning, (2) the application of profit/emission objective trade off analysis to find investments decisions for carbon emission reduction technology, (3) to investigate the carbon emission policy other than carbon tax rate for remanufacturing supply chain tactical planning, (4) Two carbon saving indices were proposed Abstract iv for evaluation of carbon emission reduction technology investment decisions. The results have been analyzed with the help of these indices. Finally, an operational level tyre remanufacturing supply chain planning model (Model- III) was developed for tyre remanufacturing industry. This study also used mixed integer programming based methodology. The chief objective was to formulate multi-product, multi period, multiple quality level of incoming used products, multi-echelon, operational level tyre remanufacturing supply chain planning model with demand management through various capacity options and setting up buffer stock level of incoming used products and outgoing retreaded tyres at remanufacturing plants to hedge against uncertainty in used tyre supply and retreaded tyre market demand. Further, this study considered environmental cost in terms of carbon footprints cost for tyre retreading process and transportation between the elements of supply chain. This work estimated environmental benefits (Rs.) of carbon footprint savings by tyre retreading process, (b) Three carbon policies CTP, CER and CTRF for tyre remanufacturing supply chain were investigated in the Indian context. The impacts of three carbon policies were assessed on the business economics of the tyre remanufacturing supply chain and suggested appropriate policy for the government and the tyre remanufacturing supply chain. This study also assessed and estimated the national impact of tyre remanufacturing in India arising from foreign exchange requirement saving by decreasing the import of raw materials required for new tyre production.