Using JIT in a Green Supply Chain
Read this article on the Green Supply Chain. The authors analyzed the JIT approach to a transportation supply chain. As you read, think about what JIC materials, goods, and labor must be on hand in order to deliver JIT products?
Numerical Sample
Comparison to the Traditional Supply Chain
In the traditional supply chain, the return journey of empty vehicles from the DC warehouses to the retailers is not considered. The total cost of Scenario 1 in the traditional supply chain is 3,875,518 (dollars), and the total carbon emissions are 9319.44 (tons). Table 6 and Figure 10 show a comparison of Scenario 1 in the traditional supply chain to the 20 Pareto points obtained by Scenario 1 and 2 models for this study. Pareto point 1 can reduce the most carbon emissions by 39.44% and has the least total cost of 2.23%. When comparing this data with Table 5, we can see that the Pareto points use 100% in the Scenario 1 model. From the data, it is clear that Scenario 1 model shows a significant reduction in carbon emissions and a small reduction in total cost, compared to the traditional supply chain. With the higher usage ratio, shown in the Scenario 2 model, the Pareto points indicate a slight increase in both carbon emissions and total cost. For example, from the 15th Pareto point, the reduction ratio of carbon emissions decreases rapidly, however, the reduction ratio of the total cost is more gradual.
Figure 10. Diagram comparing the total cost and carbon emissions between Pareto points and the traditional supply chain.
Table 6. Comparison of total cost and carbon emissions between the Pareto points and the traditional supply chain.
| Pareto Point | Total Cost (NTD) | Total Carbon Emissions (Tons) | Total Cost Reduction | Total Carbon Emissions Reduction |
|---|---|---|---|---|
| 1 | 3,788,938 | 5643.84 | 2.23% | 39.44% |
| 2 | 3,779,792 | 6139.62 | 2.47% | 34.12% |
| 3 | 3,773,009 | 6183.89 | 2.65% | 33.65% |
| 4 | 3,756,896 | 6424.73 | 3.06% | 31.06% |
| 5 | 3,753,054 | 6428.43 | 3.16% | 31.02% |
| 6 | 3,737,442 | 6651.47 | 3.56% | 28.63% |
| 7 | 3,734,557 | 6687.07 | 3.64% | 28.25% |
| 8 | 3,728,580 | 6695.74 | 3.79% | 28.15% |
| 9 | 3,721,358 | 6709.84 | 3.98% | 28.00% |
| 10 | 3,716,113 | 6950.68 | 4.11% | 25.42% |
| 11 | 3,714,874 | 6954.38 | 4.15% | 25.38% |
| 12 | 3,704,433 | 6980.86 | 4.41% | 25.09% |
| 13 | 3,692,042 | 7177.42 | 4.73% | 22.98% |
| 14 | 3,672,707 | 7280.07 | 5.23% | 21.88% |
| 15 | 3,659,275 | 8068.36 | 5.58% | 13.42% |
| 16 | 3,658,987 | 8516.16 | 5.59% | 8.62% |
| 17 | 3,658,454 | 8560.44 | 5.60% | 8.14% |
| 18 | 3,640,775 | 8804.98 | 6.06% | 5.52% |
| 19 | 3,630,660 | 9573.50 | 6.32% | −2.73% |
| 20 | 3,622,008 | 10,841.50 | 6.54% | −16.33% |
Compared to the traditional supply chain, we discovered that Scenario 1 and 2 models indicate significant improvements in the carbon emissions and total cost throughout the supply chain. Furthermore, we can utilize the usage ratio of Scenarios 1 and 2 to choose the most efficient expectation value, creating more options for the new transportation model in the supply chain. Moreover, the new transportation model of the supply chain can be used to reduce the carbon emissions and total cost, which results in an increase in the additional transportation cost. Therefore, the competitiveness of our Scenario 1 model is enhanced and the transportation pattern in the Scenario 2 model is able to provide a more stable and smaller inventory for the DC warehouse. The Scenario 2 model indeed has the effect of improving the inventory status at an overall reduction rate of 36%. However, the more realistic increase in transportation cost does not offset money saved from the inventory reduction.
The increase in transportation distance also increases carbon emissions. Therefore, compared to the traditional supply chain, the higher usage and additional transportation of the Scenario 2 model indicates higher carbon emissions in the supply chain of the total cost and total carbon emissions.