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Shipping or local production? CO2 impact of a strategic decision: An automotive industry case study

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  • Nieuwenhuis, Paul
  • Beresford, Anthony
  • Choi, Andrew Ki-Young

Abstract

For Asian manufacturers the trade-off between shipping from domestic plants and investing in transplant facilities is of particular importance. Korean vehicles indirectly account for significant amounts of greenhouse gases as they travel. Here, an established transport cost model is adapted to track CO2 emissions along the built-up vehicle supply chain from the final assembly plant to a local distribution location, taking the cases of Hyundai and Kia, such that initial estimates of the environmental impact of both the Korea–US and the Korea–Europe automotive supply chains may be made. It is found that in both cases the local option, even using road-based distribution, leads to significantly lower emissions than seaborne sourcing direct from South Korea.

Suggested Citation

  • Nieuwenhuis, Paul & Beresford, Anthony & Choi, Andrew Ki-Young, 2012. "Shipping or local production? CO2 impact of a strategic decision: An automotive industry case study," International Journal of Production Economics, Elsevier, vol. 140(1), pages 138-148.
    • Handle: RePEc:eee:proeco:v:140:y:2012:i:1:p:138-148
    DOI: 10.1016/j.ijpe.2012.01.034
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    References listed on IDEAS

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    1. Hahn, Chan K. & Duplaga, Edward A. & Kim, Kee Young, 1994. "Production/sales interface: MPS at Hyundai motor," International Journal of Production Economics, Elsevier, vol. 37(1), pages 5-17, November.
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    Cited by:

    1. Wu, Peng & Jin, Ying & Shi, Yongjiang & Shyu, Hawfeng, 2017. "The impact of carbon emission costs on manufacturers' production and location decision," International Journal of Production Economics, Elsevier, vol. 193(C), pages 193-206.
    2. Jain, Sanjay & Lindskog, Erik & Andersson, Jon & Johansson, Björn, 2013. "A hierarchical approach for evaluating energy trade-offs in supply chains," International Journal of Production Economics, Elsevier, vol. 146(2), pages 411-422.
    3. Ali Cheaitou & Pierre Cariou, 2019. "Greening of maritime transportation: a multi-objective optimization approach," Annals of Operations Research, Springer, vol. 273(1), pages 501-525, February.
    4. Li, Hui-Chieh, 2015. "Optimal delivery strategies considering carbon emissions, time-dependent demands and demand–supply interactions," European Journal of Operational Research, Elsevier, vol. 241(3), pages 739-748.
    5. Wang, Lei & Wang, Xiang & Yang, Wenxian, 2020. "Optimal design of electric vehicle battery recycling network – From the perspective of electric vehicle manufacturers," Applied Energy, Elsevier, vol. 275(C).
    6. Lai, Kee-hung & Wong, Christina W.Y. & Veus Lun, Y.H. & Cheng, T.C.E., 2013. "Shipping design for compliance and the performance contingencies for shipping firms," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 55(C), pages 74-83.
    7. Yusuf, Yahaya Y. & Gunasekaran, A. & Musa, Ahmed & El-Berishy, Nagham M. & Abubakar, Tijjani & Ambursa, Hafsat M., 2013. "The UK oil and gas supply chains: An empirical analysis of adoption of sustainable measures and performance outcomes," International Journal of Production Economics, Elsevier, vol. 146(2), pages 501-514.
    8. Sanchez Rodrigues, V. & Pettit, S. & Harris, I. & Beresford, A. & Piecyk, M. & Yang, Z. & Ng, A., 2015. "UK supply chain carbon mitigation strategies using alternative ports and multimodal freight transport operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 78(C), pages 40-56.
    9. Zhi-Hua Hu & Yingxue Zhao & Sha Tao & Zhao-Han Sheng, 2015. "Finished-vehicle transporter routing problem solved by loading pattern discovery," Annals of Operations Research, Springer, vol. 234(1), pages 37-56, November.
    10. Yuzhi Li & Xiaojing Wang, 2023. "Research on Optimal Design of Recycling System Based on Recovery State Assessment of Household Energy Storage," Energies, MDPI, vol. 16(4), pages 1-22, February.
    11. Jiangtao Hong & Chaher Alzaman & Ali Diabat & Akif Bulgak, 2019. "Sustainability dimensions and PM2.5 in supply chain logistics," Annals of Operations Research, Springer, vol. 275(2), pages 339-366, April.
    12. Liotta, Giacomo & Stecca, Giuseppe & Kaihara, Toshiya, 2015. "Optimisation of freight flows and sourcing in sustainable production and transportation networks," International Journal of Production Economics, Elsevier, vol. 164(C), pages 351-365.
    13. Bourlakis, Michael & Maglaras, George & Aktas, Emel & Gallear, David & Fotopoulos, Christos, 2014. "Firm size and sustainable performance in food supply chains: Insights from Greek SMEs," International Journal of Production Economics, Elsevier, vol. 152(C), pages 112-130.
    14. Mohammad Fathian & Javid Jouzdani & Mehdi Heydari & Ahmad Makui, 2018. "Location and transportation planning in supply chains under uncertainty and congestion by using an improved electromagnetism-like algorithm," Journal of Intelligent Manufacturing, Springer, vol. 29(7), pages 1447-1464, October.

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