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Managing Environmental and Operational Risks for Sustainable Cotton Production Logistics: System Dynamics Modelling for a Textile Company

Author

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  • M. Ali Ülkü

    (Rowe School of Business, Dalhousie University, Halifax, NS B3H 4R2, Canada
    Centre for Research in Sustainable Supply Chain Analytics, Dalhousie University, Halifax, NS B3H 4R2, Canada
    Department of Industrial Engineering, Dalhousie University, Halifax, NS B3H 4R2, Canada)

  • Melek Akgün

    (Sakarya Business School, Sakarya University, Sakarya 54050, Turkey)

  • Uday Venkatadri

    (Centre for Research in Sustainable Supply Chain Analytics, Dalhousie University, Halifax, NS B3H 4R2, Canada
    Department of Industrial Engineering, Dalhousie University, Halifax, NS B3H 4R2, Canada)

  • Claver Diallo

    (Centre for Research in Sustainable Supply Chain Analytics, Dalhousie University, Halifax, NS B3H 4R2, Canada
    Department of Industrial Engineering, Dalhousie University, Halifax, NS B3H 4R2, Canada)

  • Simranjeet S. Chadha

    (Centre for Research in Sustainable Supply Chain Analytics, Dalhousie University, Halifax, NS B3H 4R2, Canada
    Department of Industrial Engineering, Dalhousie University, Halifax, NS B3H 4R2, Canada)

Abstract

Effective management of cotton production logistics (CPL) against volatile environmental conditions while maintaining product quality and yield at acceptable costs has become challenging due to increasing global population and consumption and climate change. In CPL, the harvesting, processing, and storage of cotton are all linked, prone to various environmental risks (e.g., flooding) and operational risks (e.g., excess spraying of pesticides). Thus, it is crucial for a resilient and sustainable supply chain management to prioritize risks and chart suitable risk response strategies. For a CPL, we employ a system dynamics (SD) approach to investigate the likelihoods of environmental and operational risks and their impacts in four dimensions: variable costs, fixed costs, quality performance, and yield. Using the case of a textile company in Turkey, we demonstrate an end-to-end framework for mitigating CPL risks. SD simulation results show that increases in seed prices and machine and equipment breakdowns are the risks that most affect the unit cost, whereas pests and plant diseases most hurt cotton harvest yield. Via scenario analyses, we demonstrate that a proper risk response strategy, compared to doing nothing, may reduce variance in cotton quality by about 35% at the expense of about an 11% increase in unit cost variability.

Suggested Citation

  • M. Ali Ülkü & Melek Akgün & Uday Venkatadri & Claver Diallo & Simranjeet S. Chadha, 2020. "Managing Environmental and Operational Risks for Sustainable Cotton Production Logistics: System Dynamics Modelling for a Textile Company," Logistics, MDPI, vol. 4(4), pages 1-20, December.
    • Handle: RePEc:gam:jlogis:v:4:y:2020:i:4:p:34-:d:461659
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    References listed on IDEAS

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