Environment

@RISK Manages Operational Risks in the Green Supply Chain

graphicerauniversityAs the public becomes more aware of environmental issues and global warming, consumers are asking more questions about the products they purchase. This has resulted in a growing number of companies considering the move to green supply chain management (GSCM) and integrating environmental thinking into their supply chain management.

“Many companies are concerned that changing their established processes and implementing a green supply chain could result in lower quality products, delayed shipments, or even a loss of business,” explained Dr. Sachin K. Mangla of the Indian Institute of Technology Roorkee and Graphic Era University – Dehradun.

“Going green” can be a complex transition from an operational perspective, and not all companies are convinced that improved environmental performance will lead to financial gains. As green supply chain (GSC) considerations typically introduce different operational activities and processes to the supply chain, they also create new uncertainties and risks which can have a significant impact on a manufacturing-based business.

Dr. Sachin K. Mangla with Graphic Era University-Dehradun used Palisade risk analysis software @RISK to identify and evaluate the operational risks of implementing a GSC for a well-established plastic manufacturing company in India. The results generated a wide variety of possible risk scenarios, as well as associated probabilities. “@RISK enabled us to not only predict the type of risks that could happen, but also anticipate what risks were most likely to happen,” said Mangla. “This enabled us to create a model that provides companies with visibility into the potential ecological-economic gains of a green supply chain, as well as recommendations to best manage the operational risks.”

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» Graphic Era University – Dehradun

The Department of Energy and Climate Change uses @RISK for UK carbon emission targets

DECCThe UK government’s Department of Energy and Climate Change (DECC), is tasked with maintaining secure and economic energy supplies for the UK, while ensuring that the UK’s greenhouse gas emissions meet international targets set to combat climate change.

Under the Climate Change Act, the UK has a legal obligation to meet several national emission targets, called carbon budgets, including cutting UK greenhouse gas emissions by at least 80% by 2050 (which requires sourcing at least 15% of energy from renewable sources by 2020).

To monitor carbon budgets, the Central Modelling Team at the DECC undertakes annual projections of energy use and emissions by modelling both overall UK energy demand and the electricity supply system and calculating the emissions based on the fuels used. These projection figures are uncertain however, due to variation in each of the economic and technical inputs used in the models.

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DECC uses @RISK to explore the overall effects of these uncertainties and estimate the probabilities of not meeting the carbon budget.

“@RISK has all the sophisticated functionality required for Monte Carlo modelling, but is straightforward to use,” explains Dr Roger Lampert from the DECC Central Modelling Team. “Before adopting Monte Carlo modelling, the custom was to use scenario analysis. Using @RISK we can now use the statistical properties of the input data to better represent the full spectrum of possible model inputs. Consequently. we have more insight into the spectrum of outputs. The statistical rigour of the modelling gives us much more confidence in the level of uncertainty of our emissions estimates and therefore the UK’s ability to meet the carbon budgets.”

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