In the quest for sustainable and efficient supply chains, a recent study offers a roadmap for businesses and governments alike, with implications that could reshape the energy sector’s approach to logistics and carbon reduction. Led by Longlong Zang of the Shaanxi Provincial Land Engineering Construction Group Co., Ltd and Shaanxi Dijian Real Estate Development Group Co., Ltd, the research delves into the intricate world of low-carbon supply chains and the optimal strategies for channel and contract selection under government subsidies.
The study, published in the journal “Cleaner Logistics and Supply Chain” (translated from Chinese), employs a two-stage Stackelberg game model to analyze the dynamics between government subsidy policies, supply chain member strategies, and contract selections. The findings are particularly relevant for the energy sector, where the push for decarbonization is both a regulatory imperative and a commercial opportunity.
Zang and his team constructed three distinct models to evaluate different supply chain systems: a single-channel subsidy decision model (Model S), a closed-loop channel subsidy decision model (Model C), and a dual-channel subsidy decision model (Model D). Through numerical analysis, they identified the optimal supply chain channel structure that maximizes the benefits of government subsidies.
“The results were quite revealing,” Zang explains. “When different subsidy policies are adopted, the performance of the three models in terms of overall supply chain profit is as follows: Model D > Model C > Model S.” This suggests that dual-channel systems, where both traditional and reverse logistics channels are utilized, offer the highest profitability under government subsidy schemes.
The study also explored the impact of benefit-sharing contracts (DRS) and cost-sharing contracts (DCS) on supply chain performance. Notably, when the government subsidy rate is high, the cost-sharing contract (DCS) was found to complete the Pareto improvement of the wholesale price contract in Model D. This means that under favorable subsidy conditions, cost-sharing contracts can lead to a win-win situation for all supply chain members.
Moreover, the research revealed that in the cost-sharing contract (DCS), the optimal subsidy rate and the optimal cost-sharing coefficient are inversely proportional to the demand transfer coefficient and the level of consumer environmental awareness. This insight underscores the importance of understanding consumer behavior and environmental consciousness in designing effective subsidy and contract strategies.
The implications for the energy sector are profound. As companies strive to meet carbon reduction targets, the optimization of supply chains becomes a critical factor in achieving sustainability goals. The findings suggest that dual-channel systems, coupled with well-designed contracts, can enhance profitability while reducing environmental impact.
“Our research provides a decision-making framework for governments and businesses to optimize their low-carbon supply chain strategies,” Zang notes. “By leveraging government subsidies and selecting the right contracts, companies can achieve both economic and environmental benefits.”
As the energy sector continues to evolve, the insights from this study could shape future developments in supply chain management, logistics, and carbon reduction strategies. The journey towards a sustainable future is complex, but with the right tools and strategies, businesses can navigate this path more effectively and profitably.