Data‐driven control and a prey–predator model for sourcing decisions in the low‐carbon intertwined supply chain

Imad El Harraki, Mohammad Zoynul Abedin, Amine Belhadi, Sachin Kamble, Karim Zkik and Mustapha Oudani

Business Strategy and the Environment, 2024, vol. 33, issue 8, 9141-9160

Abstract: This paper addresses the challenges of low‐carbon sourcing in intertwined supply chains by proposing a data‐driven control framework and a prey–predator model for sourcing decisions. The objective is to optimize low‐carbon objectives and reduce environmental impact. Existing static models fail to capture the dynamic nature of supply chain systems and overlook the ripple effects when sourcing decisions propagate throughout the interconnected network. To bridge this gap, our study develops a dynamic model that explicitly captures the bullwhip effect and leverages real‐time and historical data. This model conceptualizes suppliers as prey and manufacturers and consumers as predators, employing an ecological analogy to decipher the intricate interactions and dependencies within the supply chain. Through this approach, we identify strategies to promote sustainable practices and motivate suppliers to adopt low‐carbon measures. We assess two data‐driven algorithms, the nonlinear auto‐regressive exogenous (NARX) network and sparse identification of nonlinear dynamic systems with input variables (SINDYc). The results reveal that SINDYc outperforms prediction accuracy and control, offering significant advantages for rapid decision‐making. The study highlights how shifts in market demands and regulatory pressures critically influence the strategies of chemical firms and fertilizer markets. Moreover, it discusses the economic challenges in transitioning from high carbon footprint suppliers (HCFSs) to low carbon footprint suppliers (LCFSs), exacerbated by a notable cost disparity where HCFSs are approximately 30% cheaper. By advancing beyond conventional static models, this research provides a deeper understanding of the environmental impacts and operational dynamics within supply chains, emphasizing the significant “ripple effect” where decisions at one node profoundly affect others within the chain.

Date: 2024
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