Improving supply chain sustainability using exergy analysis

Sustainable supply chain management is the improved level of management through the integration of environmental and social issues in parallel to the economic issues. It has emerged as a growing subject that now receives increasing interest from practitioners and academicians. Limited attempts have been made to take a broader look at the overall issues that form the core topics of this type of supply chain. In fact, there have been many exclusive studies that investigated the impact of inadvertent or unavoidable costs of supply chain processes. Exergy analysis is a powerful thermodynamic tool that may be employed to analyze and identify the inefficiencies in a process or a system. It has also been extended to efficiently evaluate how sustainable an industrial system, process or product is. This paper introduces exergetic models that compute and compare the consumed exergy for two coordination policies. It, also, evaluates the consumed exergy when producing/ordering locally versus globally. It recognizes the importance of financial, social and environmental aspects of choosing the more sustainable destination to produce and distribute a product. Numerical examples are presented and discussed to provide some insights for managers and decision-makers to select between domestic policies based on the consumed exergy and the monetary cost. Results show that societies can gain more from less consumed exergy and firms can save on some costs when producing/ordering domestically. This paper recommends to governments and other stakeholders to take actions that are effective in making societies consume resources wisely.