Sustainable Supply Chains: Simulation for Carbon Optimization
Explains how simulation modeling helps manufacturers and 3PLs measure and reduce energy use across supply chain processes without harming service levels or costs.
This paper examines regulatory, fiscal, and environmental drivers pushing organizations to cut carbon emissions and energy costs. It reviews McKinsey's six levers for lowering oil consumption in global supply chains and highlights the limitations of traditional approaches. The document positions discrete-event simulation, specifically Lanner WITNESS with its green module, as a practical method to model energy variables alongside operational constraints and optimize trade-offs.
Energy reduction and cost savings are achieved together by eliminating process waste.
McKinsey identifies six levers: value density, transport distance, mode mix, asset technology, individual asset use, and collective asset coordination.
Simulation enables granular modeling of energy costs linked to machines, routes, schedules, and sourcing decisions.
WITNESS green module adds electricity, fuel, and gas pricing to existing models with no additional programming.
Organizations must balance emission cuts against customer service, quality, and profitability risks.
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