A hierarchical approach for evaluating energy trade-offs in supply chains

Supply chain design and operational decisions may impact the energy needed to keep the products flowing through to the customers. It is a challenge to determine the energy consumption and even more challenging to understand the impact of design and operational decisions on the energy consumption along the supply chain. This paper presents a hierarchical simulation based approach for estimating the energy consumption to keep the products flowing through a supply chain. System dynamics simulation is used at a high abstraction level to understand the major factors that may affect the energy consumption. Discrete event simulation is then used to delve down in detail for evaluating the critical stages in the supply chain. A case study for a closed loop supply chain of forklift brakes is used as an example of application of the approach.