Effect of Connected and Autonomous Vehicles on Supply Chain Performance

Connected and autonomous vehicles (CAVs) are an emerging technology that has great potential for increasing road capacity and reducing traffic incidents, congestion, fuel/energy consumption as well as emissions, all of which may support safer and more reliable and efficient (and potentially sustainable) transportation systems. Given that transportation network plays a key role in a supply chain system in terms of its performance and cost, CAVs will ultimately change many aspects of a supply chain system. While the effects of CAVs on transportation network have been extensively studied through simulations and experimental data, only a limited number of studies have been conducted to investigate potential opportunities (or challenges) that may arise from the introduction/adoption of CAVs in the context of supply chain design, operation and performance. Moreover, their quantitative effect on a supply chain system has yet to be explored in any depth.This paper proposes a simulation framework that quantitatively assesses the direct and indirect effects of CAVs on a supply chain system by varying the levels of CAV market penetration and driverless truck adoption. The paper first investigates the effect of CAVs on transportation network and incorporate it into supply chain analysis to evaluate how it would change supply chain performance measured by total travel time, greenhouse gas emissions, and supply chain cost. As the performance of supply chain systems involving perishable or semi-perishable products is highly sensitive to CAV market penetration rate and driverless truck adoption rate mainly due to reduced travel time, this paper uses fresh potato supply chain systems located in Washington, USA as an illustrative example. The case study results indicate that CAVs can greatly improve supply chain performance directly and indirectly by reducing total travel time and supply chain costs, while emissions are reduced primarily due to the adoption of driverless trucks in the supply chain system. The effect of CAVs on supply chain performance becomes even greater when commodities travel longer distances. Accordingly, CAVs can potentially release restrictions on the distance a perishable or semi-perishable commodity can travel by reducing the chances that its quality degrades significantly during the transport. This study will allow supply chain managers (and grocery delivery companies) to better understand how supply chain design and operation could be transformed and reoptimized in response to the introduction of CAV technologies. The research outcomes would help them better utilize the opportunities and address possible challenges that may arise as a result of CAVs to maximize their benefits while minimizing related costs