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Case Study: Wal-Mart’s Distribution and Logistics System

As the world’s largest retailer with net sales of almost $419 billion for the fiscal year 2011, Wal-Mart is considered a “best-in-class” company for its supply chain management practices . These practices are a key competitive advantage that have enabled Wal-Mart to achieve leadership in the retail industry through a focus on increasing operational efficiency and on customer needs. Wal-Mart’s corporate website calls “logistics” and “distribution” the heart of its operation, one that keeps millions of products moving to customers every day of the year.

Wal-Mart’s highly-automated distribution centers, which operate 24 hours a day and are served by Wal-Mart’s truck fleet, are the foundation of its growth strategy and supply network. In the United States alone, the company has more than 40 regional distribution centers for import flow and more than 140 distribution centers for domestic flow. When entering a new geographic arena, the company first determines if the area will be able to contain enough stores to support a distribution center. Each distribution center supports between 75 to 100 retail stores within a 250-mile area. Once a center is built, stores are gradually built around it to saturate the area and the distribution network is realigned to maximize efficiencies through a process termed “reoptimization”. The result is a “trickle-down” effect: trucks do not have to travel as far to retail stores to make deliveries, shorter distances reduce transportation costs and lead time, and shorter lead time means holding less safety inventory. If shortages do occur, replenishment can be made more quickly because stores receive daily deliveries from distribution centers.

An important feature of Wal-Mart’s logistics infrastructure was its fast and responsive transportation system. The distribution centers were serviced by more than 3,500 company owned trucks. These dedicated truck fleets allowed the company to ship goods from the distribution centers to the stores within two days and replenish the store shelves twice a week. The truck fleet was the visible link between the stores and distribution centers. Wal-Mart believed that it needed drivers who were committed and dedicated to customer service. The company hired only experienced drivers who had driven more than 300,000 accident-free miles, with no major traffic violation.

Wal-Mart truck drivers generally moved the merchandise-loaded trailers from Wal-Mart distribution centers to the retail stores serviced by each distribution center. These retail stores were considered as customers by the distribution centers. The drivers had to report their hours of service to a coordinator daily. The coordinator scheduled all dispatches depending on the available driving time and the estimated time for travel between the distribution centers and the retail stores. The coordinator informed the driver of his dispatches, either on the driver’s arrival at the distribution center or on his return to the distribution center from the retail store. The driver was usually expected to take a loaded truck trailer from the distribution center to the retail store and return back with an empty trailer. He had to dispatch a loaded truck trailer at the retail store and spend the night there. A driver had to bring the trailer at the dock of a store only at its scheduled unloading time, no matter when he arrived at the store. The drivers delivered the trailers in the afternoon and evening hours and they would be unloaded at the store at nights. There was a gap of two hours between unloading of each trailer. For instance, if a store received three trailers, the first one would be unloaded at midnight (12 AM), the second one would be unloaded at 2 AM and the third one at 4 AM. Although, the trailers were left unattended, they were secured by the drivers, until the store personnel took charge of them at night. Wal-Mart received more trailers than they had docks, due to their large volume of business.

Because Wal-Mart’s fast, responsive transportation operations are such a major part of the company’s successful logistics system, great care is taken in the hiring, training, supervising, and assigning of drivers’ schedules and job responsibilities. From the onset of his retailing career, Wal-Mart founder Sam Walton recognized the importance of hiring experienced people and of building loyalty not only in his customers but also in his employees. The company hires only experienced drivers who have driven more than 300,000 accident-free miles and whom it believes will be committed to customer service. Its retail stores are considered important “customers” of the distribution centers. As stated in the “Private Fleet Driver Handbook” that each driver is given a copy of, drivers are expected to be “polite” and “kind” when dealing with store personnel and others. In addition to containing a driver’s code of conduct, the Private Fleet Driver Handbook gives instructions and rules for following pre-planned travel routes and schedules, the responsible unloading of a truck trailer at a retail store, and the safe-guarding of Wal-Mart’s property. For example, although drivers deliver loaded trailers in the afternoon and evening hours, a trailer can be brought to the store’s docks only at its scheduled unloading time. Because unloading is done at two-hour intervals during the night, a driver is expected to spend the night, returning to the distribution center at a pre-scheduled time with an empty trailer. Coordinators closely monitor the detailed records of each driver’s activities for adherence to rules. Violations are dealt with according to handbook procedures, which include employee education to prevent future occurrences of incorrect actions. By effectively managing every aspect of its transportation operations and treating its drivers fairly, Wal-Mart gets results that are unrivaled in the logistics arena. This philosophy parallels the successful coaching style of New York Giant’s football coach Tom Coughlin who believes that rules are more than just discipline. Rules are a key to consistency, which leads to preparedness, which then leads to proper execution.

To make its distribution process more efficient, Wal-Mart also made use of a logistics technique known as ‘cross-docking.’ In this system, the finished goods were directly picked up from the manufacturing plant of a supplier, sorted out and then directly supplied to the customers. The system reduced the handling and storage of finished goods, virtually eliminating the role of the distribution centers and stores. There were five types of cross-docking.

• Opportunistic Cross docking – In this method of cross docking, the exact information about where the necessary good should be shipped and from where it should be procured and exact quantity which will be sent was necessary. This method of cross docking has allowed the company to ship directly the goods, necessary retail clients, not storing them in warehouse bins or shelves. Opportunistic cross docking could also be used when the warehouse software of management installed by the retailer, has set ready it, that the specific product was ready to moving and could be moved immediately.
• Flow-through Cross docking – In this type of cross docking, there was a constant inflow and outflow of the goods from the distribution center. This type of cross docking was mostly suitable for the perishable goods which had very short interval of time, or the goods which were difficult to be kept in warehouses. This cross docking system was mainly accompanied by supermarkets and other retail discount stores, especially for perishable items.
• Distributor Cross docking – In this type of cross docking, the manufacturer has delivered the goods to directly to retailer. No intermediaries have been involved in this process. It has allowed the retailer to save a major portion of the expenses in the form of storage. As the retailer should not support the distribution center for storage various kinds of the goods, he has helped it to save warehouse costs. The lead time for the delivery of goods from the manufacturer to the consumer was also drastically reduced. However, this method had some disadvantages too. Expenses of transportation both for the manufacturer and for the retailer tended to increase during time when the goods have been required to be transported to different locations several times. Besides, the transportation system should be very fast. Otherwise, the purpose of cross docking has been lost. The transportation system should be also highly responsive and to take the responsibility for delays in delivery of the goods. The retailer was at a greater risk. He has lost that advantage to sharing risks with the manufacturer. This type of cross docking was suitable only for those retailers who had the big distributive network and could be used in situations when goods had to be delivered in a short span of time.
• Manufacturing Cross docking – In Manufacturing cross docking, these cross docking facilities served the factories and acted as temporary and “mini warehouses.” Whenever a manufacturing company required some parts or materials for manufacturing a particular product, it was delivered by the supplier in small lots within a very short span of time, just when it was needed. This helped reduce the transportation and warehouse costs substantially.
• Pre-Allocated Cross Docking – Pre-allocated cross docking is very much like the usual cross-docking, except that in this type of cross docking, the goods are already packed and labeled by the manufacturer and it is ready for shipment to the distribution center from where it is sent to the store. The goods can be delivered by the distribution center directly to the store without opening the pack of the manufacturer and re-packing the goods. The store can then deliver the goods directly to the consumer without any further repacking. Goods received by the distribution center or the store are directly sent into the outbound shipping truck, to be delivered to the consumer, without altering the package of the good. Cross docking requires very close co-ordination and co-operation of the manufacturers, warehouse personnel and the stores personnel. Goods can be easily and quickly delivered only when accurate information is available readily. The information can be managed with the help of Electronic Data Interchange (EDI) and other general sales information.

In cross docking, requisitions received for different goods from a store were converted into purchase or procurement orders. These purchase orders were then forwarded to the manufacturers who conveyed their ability or inability to supply the goods within a particular period of time. In cases where the manufacturer agreed to supply the required goods within the specified time, the goods were directly forwarded to a place called the staging area. The goods were packed here according to the orders received from different stores and then directly sent to the respective customers. To gain maximum out of cross-docking, Wal-Mart had to make fundamental changes in its approach to managerial control . Traditionally, decisions about merchandising, pricing and promotions had been highly centralized and were generally taken at the corporate level. The crossdocking system, however, changed this practice. The system shifted the focus from “supply chain” to the “demand chain,” which meant that instead of the retailer ‘pushing’ products into the system; customers could ‘pull’ products, when and where they needed. This approach placed a premium on frequent, informal cooperation among stores, distribution centers and suppliers with far less centralized control than earlier.

Besides, if the supplier knows also, that for the company it will be incredibly difficult to make proper adjustments to guarantee smooth transition to the different supplier, then they will be less inclined to lower their price as much. It is not, how existing suppliers deal with Wal-Mart; when they see that Wal-Mart has found the supplier who will give them lower price, current suppliers lower their prices accordingly. They know that logistical system of the Wal-Mart can address with transition easily, and consequently they do not receive additional leverage, as it will not be difficult or expensive for Wal-Mart to choose other supplier.

Another reason that Wal-Mart’s prices are so competitive is because they buy in such large quantities that transportation from one end of the supply chain to another is not as expensive for additional units. This aspect of the logistical system does not come from skill or expertise it simply comes from the sheer size of the company, but this is still a factor. On the other hand, the Wal-Mart buys so many supplies from different places throughout the world, that they have the luxury of using bigger trucks and using less fuel to go back and forth. Also if by chance they have to use shipping services to transport material from one location to another, Wal-Mart will give them so much business that they will get huge discounts.

On the whole, the logistical system that Wal-Mart uses is so effective because it is so flexible. This is why Wal-Mart is able to offer things much cheaper than other companies can.

About Wal-mart Stores

Wal-Mart Stores, Inc. is the largest retailer in the world, the world’s second-largest company and the nation’s largest nongovernmental employer. Wal-Mart Stores, Inc. operates retail stores in various retailing formats in all 50 states in the United States. The Company’s mass merchandising operations serve its customers primarily through the operation of three segments. The Wal-Mart Stores segment includes its discount stores, Supercenters, and Neighborhood Markets in the United States. The Sam’s club segment includes the warehouse membership clubs in the United States. The Company’s subsidiary, McLane Company, Inc. provides products and distribution services to retail industry and institutional foodservice customers. Wal-Mart serves customers and members more than 200 million times per week at more than 8,416 retail units under 53 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs more than 2.1 million associates worldwide. Nearly 75% of its stores are in the United States (“Wal-Mart International Operations”, 2004), but Wal-Mart is expanding internationally. The Group is engaged in the operations of retail stores located in all 50 states of the United States, Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, Central America, Chile, Mexico,India and China.

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A ‘Case Study’ on Distribution Channels

Sep 21, 2021 | Case Studies , Chain of Responsibility , Distribution Channels , Logistics , Supply Chain , Videos , Vlogs | 2 comments

Distribution channels are frequently overlooked as a source of performance enhancement in the Supply Chain. But if you think outside the box, your company could save 18% annually.

Remember that one of the most important factors to consider when evaluating Distribution Channels would be the cost to serve. It can lead to some excellent alternative Distribution Strategies.

Editor’s Note: This post was originally published on September 08, 2021, under the title “A ‘Case Study’ on Distribution Channels and Thinking Outside the Box to Save 18% on Costs”  on Logistics Bureau’s website.

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After an acquisition, ExpressPoint needed a single distribution management system that could handle its legacy repair business as well as its new sales business. Learn why it chose SalesPad by Cavallo.

Miller Welding Supply

Maintaining Miller Welding Supply’s legacy distribution management system took three employees five to six hours per day. Learn how SalesPad by Cavallo cut that overhead to improve the company’s speed and flexibility.

By working with teams from Admiral Consulting and Cavallo, Krowne overcame these obstacles and recognized transformative results.

By choosing a solution that combined flexibility, ease of use, and reliability, Bon Chef established new processes that led to scalable growth.

Chadwell Supply

As the top supplier of maintenance and flooring products in the United States, Chadwell Supply needed an Operational ERP platform that could handle its growing business.

BlenderBottle

To keep up with skyrocketing sales, BlenderBottle needed a software upgrade. Flexibility in a new solution was a must, one that could grow with the company for years to come.

Picnic Time Family of Brands

Frustrated by its previous software’s lack of flexibility, Picnic Time was in the market for a solution that could keep its order processing moving as the company continued to grow.

Hoy Shoe Co

Find out why SalesPad was the answer to Hoy Shoe Co’s® pursuit of perfect customer service.

Regal Fabrics

Before Regal Fabrics implemented SalesPad, it struggled with an order processing system that required clicking among multiple different screens, with little to no visibility over its inventory. Now, order processing is free from worries about inventory status.

The Handi-Craft Company

Toy manufacturer-turned-baby product distributor, the Handi-Craft Company moved to Cavallo for its user-friendly interface — but stayed for major efficiency improvements.

Ohio Power Tool

Ohio Power Tool turned to SalesPad by Cavallo for streamlining its order management processes, improving inventory management, and creating workflows for every business process.

National Band Saw Company

The National Band Saw Company turned to SalesPad by Cavallo when it needed a software solution that was easy to work with, could handle complex shipping demands, and didn’t compromise on power or scope.

Key Surgical

Key Surgical is a Minneapolis, Minnesota-based manufacturer and distributor of sterile processing and operating room supplies. With SalesPad added to their on-premises order-to-cash cycle strategy, the company was able to extend the life of its Dynamics GP investment significantly.

Dental City

While searching for an improvement on the company’s old system, Dental City was introduced to both Microsoft Dynamics GP and SalesPad by Cavallo®, which provided additional power and more user-friendly options for managing the company's order-to-cash cycle.

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Negotiating With A Chatbot: A Walmart Procurement Case Study

Talking Logistics

MAY 1, 2023

This past February we asked members of our Indago supply chain research community — who are all supply chain and logistics executives from manufacturing, retail, and distribution companies — “Is your company using Artificial Intelligence in its supply chain or logistics operations?”

Distribution Network Cost- A Mini Case Study

Logistics Bureau

SEPTEMBER 7, 2022

You can access a recorded webinar about Distribution Network Costs on this link: [link]. ?. Related articles on this topic have appeared throughout our website, check them out: The 7 Principles of Warehouse and Distribution Centre Design. The Long and Short of Designing a Distribution Network.

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Logistics Viewpoints

The Logistics of Logistics

• Enterra Insights

A ‘Case Study’ on Distribution Channels

SEPTEMBER 7, 2021

Distribution channels are frequently overlooked as a source of performance enhancement in the Supply Chain. Remember that one of the most important factors to consider when evaluating Distribution Channels would be the cost to serve. It can lead to some excellent alternative Distribution Strategies.

Supply Chain Case Study: the Executive's Guide

Supply Chain Opz

JUNE 1, 2014

Analysis of case study is certainly one of the most popular methods for people from business management background. In order to accelerate the learning, this article has gathered 20+ most sought-after supply chain case studies , analyzed/categorized them by industry and the findings are presented.

Case Study: DSV Implements a Single-Instance Control Tower with a Global Footprint

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DSV is one of the biggest names in transport and logistics , operating in over 90 countries with a global network of over 75,000 employees. Supporting inbound freight management, outbound flows, domestic distribution , and storage and value-added services would require all three of DSV’s multi-national business units to participate.

AI in the Retail Industry: Benefits, Case Studies & Examples

MARCH 27, 2024

The Evolution of Retail Supply Chain & Logistics : A Pre-AI Overview In the pre-AI era, the retail sector was markedly different, especially since the traditional supply chain and logistics models were largely driven by manual labor. This has made deliveries faster. Another way of ensuring greater customer satisfaction!

AI in the Food Industry: Case Studies, Challenges & Future Trends

MARCH 28, 2024

Integrating Artificial Intelligence (AI) within different segments of the Food Industry, including transportation and logistics , production planning, quality control, and others has kicked off revolutionary transformations. Energy-efficient processing and distribution have minimal environmental impact.

A Case Study in Closed-Loop Operational Management

NOVEMBER 19, 2014

As I’ve said before, the biggest challenge facing supply chain and logistics executives today is not managing change, because that’s always been the norm in supply chain management, but managing the rapid pace of change. In a recent webcast hosted by Logistics Management and sponsored by Solvoyo , I had the opportunity to interview Orhan Da?l?o?lugil,

Principles of Distribution Network Design

APRIL 12, 2022

Here is a simple case study on Distribution Networks that illustrates some key principles in Distribution Network Design. ?. Related articles on this topic have appeared throughout our website, check them out: Do You Know the Signs of Poor Distribution Network Design?

CEVA Logistics Drives Agile, Multi-Leg Inbound Flows for Tech Company

CEVA Logistics , a global leader in third-party logistics , was contracted to help a technology company manage its complex supply chain, supporting B2B, B2C, and reverse flows across multi-leg transport.

Cross Docking 101: What, Why and How? [with case studies]

SEPTEMBER 23, 2021

Cross docking is an option to consider if you’re thinking about ways to streamline your supply chain – it’s a popular distribution system for fast-moving consumer goods, but can be used in a variety of other industries. This removes the ‘storage’ element of warehousing logistics , and saves on costs, warehousing space, time and labour.

Distribution Center Robots: How Robots Continue to Power the Distribution Center

GlobalTranz

APRIL 6, 2018

Spurred by the record-breaking growth of e-commerce and rising labor costs, robots can have a very positive impact in distribution centers when implemented correctly. As explained by Clint Raiser of Logistics Viewpoints , e-commerce retail sales have grown at 15% annually, doubling in size since 2012. Measure performance.

A ‘Case Study’ on Distribution Channels and Thinking Outside the Box to Save 18% on Costs

TMS for SMB: A Case Study with Carhartt

OCTOBER 19, 2016

Rapid growth, coupled with new market segments and channels (including ecommerce), prompted Carhartt to embark on a multi-million dollar upgrade of its distribution center, which included investments in warehouse management and transportation management solutions. Is SMB defined by a company’s annual revenues?

Judging Supply Chain Improvement: Campbell Soup Case Study

Supply Chain Shaman

AUGUST 11, 2014

Our approach simply breaks accountabilities and goals across the areas of Manufacturing, Logistics /Network Optimization and Ingredients/Packaging. We now have the ability to focus more on materials management and suppliers upstream, and distribution and customer solutions downstream, to drive optimization. What have you learned?

Delivering Green: Three Case Studies in Low-Carbon Logistics

MIT Supply Chain

APRIL 29, 2013

Caterpillar is the subject of one of three case studies that show how supply chain management can support both environmental and financial goals. Here are three case studies that offer clear, irrefutable evidence that sustainability and profitability can be compatible in the supply chain domain.

A Case Study in Reverse Logistics Optimization!

Supply Chain Game Changer

NOVEMBER 23, 2018

Check out What Exactly Is Reverse Logistics ? The OEM turned over management of one of the most critical, high-volume segments of its reverse logistics program—the processor business—saving the manufacturer millions of dollars each year; reducing excess inventory; increasing same-day, on-time ship rates; and improving customer satisfaction.

Fast Track Your Logistics Career: Expert Training with SCMDOJO

JUNE 11, 2024

Are you ready to excel in logistics management? The SCMDOJO Logistics Management Track is your ultimate logistics training pathway. It’s designed to equip you with the skills and knowledge needed to thrive in the logistics industry. Visit Website to Read Full Program Why SCMDOJO Logistics Track is Unique?

Recent Case Studies Highlight Weber’s Retail Logistics Expertise

West Coast and California Logistics

MAY 30, 2024

Weber Logistics continues to demonstrate excellence in retail logistics through its partnerships with leading brands. Weber’s work with Cuisinart Outdoors and Reduce Everyday illustrate how 3PL services are tailored to meet their diverse needs of clients, ensuring efficiency, scalability, and superior customer satisfaction.

Importance of Digitalisation to Improve Supply Chains: Helping Businesses Navigate Through Supply Chain Disruptions

The Logistics & Supply Chain Management Society

AUGUST 19, 2022

IoT is making a mark on more and more industries, including logistics . Logistics companies are also leveraging IoT and automation to create more efficient processes. In logistics , this differs significantly from the use of IoT in other industries. In logistics , this differs significantly from the use of IoT in other industries.

How Exceptional Companies Grow with Sarah Ahern & Jonathon McKay

SEPTEMBER 15, 2023

Focused on logistics , manufacturing, and distribution channel strategies, Jonathon helps organizations make confident decisions for bold growth. The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Greenscreens.ai

The Critical Path: Navigating Supply Chain Efficiency in the Oil Industry

JUNE 27, 2024

Distribution : Transporting oil products to various markets. How Does Automation Enhance Production and Distribution ? What Are the Logistical Challenges in the Oil Industry? How Do Seasonal Weather Patterns Affect Transportation and Distribution ? Extraction : Drilling and pumping oil from underground.

Free Trade Zone – Is Your 3PL Giving You All the Warehouse and Distribution Cost Savings You Deserve?

ModusLink Corporation

FEBRUARY 8, 2023

Fulfillment Free trade zones, or FTZs, are controlled places in a country that offer warehouse and distribution services for goods from foreign markets, excluding them from paying taxes on those goods. Managing a free trade zone can impact warehouse and distribution operations. The answer, unfortunately, is only sometimes yes.

Supply Chain Risk Management: Revisiting Ericsson

SCM Research

JUNE 29, 2020

Norrman & Jansson’s (2004) case study on Ericsson’s supply chain risk management (SCRM) practices is definitely part of the canon of SCM literature. International Journal of Physical Distribution & Logistics Management. After 15 years, it was time for an update. Norrman, A. & & Wieland, A.

Next Generation Supply Chain Risk Management: A Case Study

DECEMBER 16, 2015

A case in point is offered by AGCO. AGCO is a global leader in the design, manufacture and distribution of a wide range of agricultural equipment. We are entering an era where it is becoming possible to detect supply chain risks much more quickly.

AutoSchedler.AI is Named Sponsor of the Supply Chain Matters Blog

Supply Chain Matters

AUGUST 29, 2024

Developed originally to support Procter & Gamble material synchronization movements between production, warehousing and distribution channels, this company has deployed its technology capabilities to lighthouse customers such as General Mills , Kimberly Clark , PepsiCo , Unilever along with other firms.

Retail Delivery Trends with Matt Schultz

OCTOBER 21, 2022

Matt is Vice President of Logistics Partnerships at OneRail , an Orlando-based last mile transportation visibility solution providing shippers with Amazon-level dependability and speed. Matt Schultz is Vice President of Logistic Partnerships at OneRail. Premier Pet Case Study . The Logistics of Logistics Podcast.

Adexa is Recipient of 2024 Top Supply Chain Projects Award

JUNE 17, 2024

The past 12 months has seen companies within the supply chain and logistics space upgrade, enhance, adopt and adapt in order to achieve greater efficiency along the chain. Supply & Demand Chain Executive and sister publication Food Logistics also operate SCN Summit and Women in Supply Chain Forum.

5 Logistics Best Practices

DECEMBER 2, 2021

These logistics best practices will help businesses of all sizes turn their supply chain into a revenue driver for their business. Prioritizing logistics and supply chain has become a top prior ity for many businesses recovering from recent supply chain disruptions and volatile consumer demand. Logistics Best Practice #4: Plan Ahead.

Top Talking Logistics Posts & Episodes (Q3 2017)

NOVEMBER 7, 2017

Before You Hire a Logistics Data Scientist. The Mind-Boggling Complexities of Food Distribution (Why Optimization is Critical). 3 Steps to Achieving Predictive Logistics . Using Intelligence Over Scale: The Power of AI and Machine Learning in Supply Chain and Logistics . A Case Study in Project Logistics .

A New Model for Grocery Delivery with Sean Coakley

NOVEMBER 19, 2021

Sean is the Chief Commercial Officer of Capstone Logistics , a leading provider of technology-enabled warehouse services, freight management, and last mile distribution solutions. He is responsible for helping the company continue its rapid growth across its end-to-end logistics services offering. About Capstone Logistics .

Restructuring Global Value Chains & Tariff Reduction – A Continuous Evolution for Supply Chains

Feature Article by Dr. Raymon Krishnan – President at the Logistics and Supply Chain Management Society. Owning sound data is crucial to planning optimal shipping routes, locating distribution centers and warehouses, and forecasting revenue volumes and other trends. MORE FROM THIS EDITION.

11th annual Cold Chain Distribution Conference and Exhibition

Supply Chain Movement

JUNE 20, 2016

11 th annual Cold Chain Distribution Conference and Exhibition. Following the fruitful discussions in 2015, SMi’s annual Cold Chain Distribution conference will bring back lively debates and industry updates to London, offering the best platform for delegates to stay ahead of this lucrative market! Date: 12-13 December 2016.

Leveraging Cold Chain Logistics Visibility for COVID-19 Vaccine

FEBRUARY 4, 2021

Let's explore the logistics case study of one of the world’s largest pharma companies, the story of how this US-headquartered, globally present pharma giant improved teamwork in their logistics and is now confidently shipping COVID-19 vaccines using cold chain logistics visibility.

Lull Case Study: Order Fulfillment that Doesn’t Keep You Up at Night

OCTOBER 11, 2018

Get the PDF of Lull’s case study >> Challenges to Order Fulfillment. Limited Options: It didn’t make sense to continue with only dropshipping, but signing a long-term contract with a third-party logistics provider (3PL) wasn’t the right fit. They make it possible to solve traditional logistics challenges.”.

Best Logistics Management Software: Everything You Need to Know Before Making a Purchase Decision

MAY 3, 2024

As we step into 2024, the world of logistics isn’t what it used to be. Everything is connected – what happens in one part of the supply chain can shake things up in logistics , and the other way around. That is why logistics management software (LMS) is so much more today than what it used to be. We’ve all been witness to this!

Basic Introduction on Supply Chain and Logistics Benchmarking

OCTOBER 13, 2020

Robobyrne: Warehouse & Distribution Centre Benchmarking Case Study . Also, we have a recorded webinar on this topic. You can access it here: [link]. Related articles on this topic have appeared throughout our websites, why not check them out? Supply Chain Secrets: One Of The Best KPI Ever.

Best AI Tools for Supply Chain and Logistics: The Ultimate Guide for 2024

APRIL 30, 2024

Exploring the world of AI tools for supply chain and logistics can be quite overwhelming. That’s why we put together this guide – to help you get a glimpse of the best AI tools for supply chain and logistics , how to implement these tools, what to take care of and more. Best AI Tools for Supply Chain and Logistics 1.

Strong Supply Chains Required For an Economic Rebound: Six Steps To Take

APRIL 15, 2020

No doubt about it, we are characters in a supply chain case study searching to define a new normal. Today, we find ourselves in the middle of a risk management case study . News coverage showcases the differences between logistics and supply chain management. Expect border friction and logistics to be an issue.

How AI-led Demand Forecasting Helped Church Brothers Farms Optimize Order Fulfillment

AUGUST 22, 2024

Click to Download Case Study About Church Brothers Farms Church Brothers Farms is a leading vertically integrated, family-owned, US-based vegetable producer, supplier, and processor that prioritizes customer experience and provides the highest quality produce in an increasingly competitive and volatile market.

Temperature Controlled Logistics leadership forum – DACH – 2016

JULY 20, 2016

Temperature Controlled Logistics leadership forum – DACH – 2016. Bringing together industry leaders from across logistics , quality, supply chain and distribution the brand new Temperature Controlled Logistics Leaders Forum takes a hard look at core challenges and best practices to take your TCL strategy to the next level!

Rockwell Automation: A Case Study in Supply Chain Excellence

DECEMBER 4, 2018

In his role, Ernest owns strategic sourcing, materials planning, customer care, and logistics operations globally. This methodology was especially crucial for Rockwell Automation global customers, whose impact was notable since it didn’t have the benefit of their distribution network. He is a humble and quiet leader.

Book Review: Logistics Clusters-Delivering Value and Driving Growth

OCTOBER 24, 2012

Case Studies . Book Review: Logistics Clusters-Delivering Value and Driving Growth. Recently, Ive found the new book called " Logistics Clusters: Delivering Value and Driving Growth ". Recently, Ive found the new book called " Logistics Clusters: Delivering Value and Driving Growth ". Author of the Book.

Blockchain in Supply Chain: 2 Ethereum-Based Projects That Demonstrate How Blockchain Can Improve Supply Chains

FEBRUARY 6, 2018

Otherwise known as a distributed ledger, the automatic recording of data into the blockchain allows for cryptocurrencies such as Ethereum or Bitcoin to serve as way more than just a store of value. It’s still early days, but there are already two Ethereum-based projects that address some of the major problems that hamper logistics .

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Case Studies in Channels of Distribution

Case studies were employed as research tools, for undergraduate and MBA students for 25+ years. The International Management course was taught in two classes at an undergraduate Business program. Channel of Distribution course was given at a MBA program. Real-world examples were utilized and applied in class whenever applicable. Students did final projects individually or in a team, by employing case studies via library and internet search. Class evaluations indicated that the case studies enhanced significantly their overall learning experience. Students rated the courses good to excellent. This paper gave the summary.

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What Is Distribution Management?

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Distribution Management: Definition, How It Works, and Advantages

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

Investopedia / Yurle Villegas

Distribution management refers to the process of overseeing the movement of goods from supplier or manufacturer to point of sale. It is an overarching term that refers to numerous activities and processes such as packaging, inventory, warehousing , supply chain , and logistics .

Distribution management is an important part of the business cycle for distributors and wholesalers. The profit margins of businesses depend on how quickly they can turn over their goods. The more they sell, the more they earn, which means a better future for the business. Having a successful distribution management system is also important for businesses to remain competitive and to keep customers happy.

Key Takeaways

• Distribution management manages the supply chain for a firm, from vendors and suppliers to manufacturer to point of sale, including packaging, inventory, warehousing, and logistics.
• Adopting a distribution management strategy is important for a company's financial success and corporate longevity.
• Distribution management helps keep things organized and keeps customers satisfied.

Understanding Distribution Management

Distribution management is critical to a company's ability to successfully attract customers and operate profitably. Executing it successfully requires effective management of the entire distribution process. The larger a corporation, or the greater the number of supply points a company has, the more it will need to rely on automation to effectively manage the distribution process .

Modern distribution management encompasses more than just moving products from point A to point B. It also involves gathering and sharing relevant information that can be used to identify key opportunities for growth and competitiveness in the market. Most progressive companies now use their distribution forces to obtain market intelligence which is vital in assessing their competitive position.

There are basically two types of distribution: commercial distribution (commonly known as sales distribution) and physical distribution (better known as logistics). Distribution involves diverse functions such as customer service, shipping, warehousing, inventory control , private trucking-fleet operations, packaging, receiving, materials handling, along with plant, warehouse, store location planning, and the integration of information.

The goal is to achieve ultimate efficiency in delivering raw materials and parts, both partially and completely finished products to the right place and time in the proper condition. Physical distribution planning should align with the overall channel strategy.

Advantages of a Distribution Management Strategy

Aside from keeping profits up, there are many reasons a company may want to use a distribution management strategy. First, it keeps things organized. If there was no proper management system in place, retailers would be forced to hold stock in their own locations—a bad idea, especially if the seller lacks proper storage space.

A distribution management system also makes things easier for the consumer. It allows them to visit one location for a variety of different products. If the system didn't exist, consumers would have to visit multiple locations just to get what they need.

Putting a proper distribution management system in place also alleviates any potential for errors in delivery, as well as the times products need to be delivered.

Businesses can adopt distribution management strategies through electronic platforms, which can help simplify the process and boost product sales.

Distribution Management as a Marketing Function

The fundamental idea of distribution management as a marketing function is that the management of distribution happens in an ecosystem that also involves the consideration of the following:

• Product :   Not always a tangible object, product can also refer to an idea, music, or information.
• Price : This refers to the value of a good or service for both the seller and the buyer, which can involve both tangible and intangible factors, such as list price, discounts, financing, and likely response of customers and competitors.
• Promotion : This is any communication used by a seller to inform, persuade, and/or remind buyers and potential buyers about the seller’s goods, services, image, ideas, and the impact it has on society.
• Placement :   This refers to the process that ensures the availability, accessibility, and visibility of products to ultimate consumers or business users in the target channels or customers where they prefer to buy.

Effective distribution management involves selling your product while assuring sufficient stocks in channels while managing promotions in those channels and their varying requirements. It also involves making sure a supply chain is efficient enough that distribution costs are low enough to allow a product to be sold at the right price, thus supporting your marketing strategy and maximizing profit.

How Does Distribution Management Impact Business?

Distribution management is a key leg in the business cycle for both distributors and wholesalers, with company sales and ongoing profitability impacted by how quickly and efficiently a company can sell and distribute their products.

What Activities Occur During Distribution Management?

Distribution management involves moving finished goods from a manufacturer or supplier to the so-called end user. The process includes warehousing, inventory management, packing, shipping, and delivery.

What Are the Main Distribution Channels?

Distribution channels are the intermediaries through which goods or services pass on their way to the final buyer or consumer. The main channels include wholesalers, retailers, distributors, and in some cases, the internet.

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Thank you to the 2023 Reviewers of International Journal of Retail & Distribution Management

The publishing and editorial teams would like to thank the following, for their invaluable service as 2023 reviewers for this journal. We are very grateful for the contributions made. With their help, the journal has been able to publish such high...

Thank you to the 2022 Reviewers of International Journal of Retail & Distribution Management

The publishing and editorial teams would like to thank the following, for their invaluable service as 2022 reviewers for this journal. We are very grateful for the contributions made. With their help, the journal has been able to publish such high...

Thank you to the 2021 Reviewers of International Journal of Retail & Distribution Management

The publishing and editorial teams would like to thank the following, for their invaluable service as 2021 reviewers for this journal. We are very grateful for the contributions made. With their help, the journal has ...

Literati awards

International Journal of Retail & Distribution Management - Literati Award Winners 2022

We are pleased to announce our 2022 Literati Award winners. Outstanding Paper Choice of prevailing deliver...

International Journal of Retail & Distribution Management - Literati Award Winners 2020

We are to pleased to announce our 2020 Literati Award winners. Outstanding Paper Non-traditional marketplaces in the retail apocal...

The International Journal of Retail & Distribution Management (IJRDM) focuses on issues of strategic significance in retailing and distribution worldwide and provides a forum for researchers in academia, business, consultancy and management.

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The competitive retail sector is under pressure to provide efficient services to hold its share of the market. As consumers demand higher levels of service and supply, they are simultaneously wooed by other alternatives like mail order and out of-town-shopping.

The International Journal of Retail & Distribution Management (IJRDM) provides a link between production and consumer, and by understanding their relationship it allows retail personnel to study operations practice in other organizations, and to compare methodologies

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Open Access

Peer-reviewed

Research Article

A multi-level multi-product supply chain network design of vegetables products considering costs of quality: A case study

Roles Methodology, Writing – original draft, Writing – review & editing

* E-mail: [email protected]

Affiliation Industrial Engineering, Iran University of Science and Technology, Narmak, Tehran, IR

Roles Supervision

Affiliation Agricultural Garden, Yaman Avenue, Shahid Chamran Highway, Tehran, IR

Roles Conceptualization

• Sareh Khazaeli, 
• Ramazan Kalvandi, 
• Hadi Sahebi

• Published: September 3, 2024
• https://doi.org/10.1371/journal.pone.0303054
• Peer Review
• Reader Comments

Effective logistics management is crucial for the distribution of perishable agricultural products to ensure they reach customers in high-quality condition. This research examines an integrated, multi-echelon supply chain for perishable agricultural goods. The supply chain consists of four stages: supply, processing, storage, and customers. This study investigates the quality-related costs associated with product perishability to maximize supply chain profitability. Key factors considered include the network design, location of processing and distribution centers, the ability to process raw products to minimize post-harvest quality degradation, the option to sell the excess produce to a secondary market due to unpredictable yields, and the decision not to fulfill demand from distant customers where significant quality loss and price drops would be involved, instead diverting those products to the aforementioned secondary market. Quantitative methods and linear mathematical programming are employed to model and validate the proposed supply chain using actual data from a real-world case study on vegetable supply chains. The main contribution of this research is the incorporation of quality costs into the objective function, which allows the supply chain to prioritize meeting nearby customers’ demands with minimal quality loss over serving distant customers where high quality loss is unavoidable. Additionally, deploying a faster transportation fleet can significantly improve the overall profitability of the perishable product supply chain.

Citation: Khazaeli S, Kalvandi R, Sahebi H (2024) A multi-level multi-product supply chain network design of vegetables products considering costs of quality: A case study. PLoS ONE 19(9): e0303054. https://doi.org/10.1371/journal.pone.0303054

Editor: Md. Monirul Islam, Bangladesh Agricultural University, BANGLADESH

Received: September 8, 2023; Accepted: April 18, 2024; Published: September 3, 2024

Copyright: © 2024 Khazaeli et al. This is an open access article distributed under the terms of the Creative Commons Attribution License , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Data Availability: The most critical data are presented in Supporting Information files. All are not presented due to the high space they need. If there is no space limitation in the paper, it can be published.

Funding: The author(s) received no specific funding for this work.

Competing interests: The authors have declared that no competing interests exist.

1. Introduction

Vegetables are perishable, edible, agricultural products that deteriorate during a limited shelf life [ 1 ]. Quality of perishable products is essential to the customer because such products deteriorate fast and endanger the consumer’s health [ 2 ]. There is a consensus in the literature on the reasons why people buy organic food; however, there is also a gap between the consumers’ generally positive attitude toward organic food and their relatively low level of actual purchases [ 3 ]. Quality of vegetables is one of the important measures to its customers due to the quality deterioration rate of products which relates to the health of consumers [ 2 ]. Time decay and shortages are common phenomena in products with short life cycles, and financial volatility necessitates a more accurate characterization of inventory costs based on time-adjusted value [ 4 ]. The supply chain management concept evolved when manufacturers experienced a strategic partnership with their direct suppliers. Then the logistics and transportation experts improved it one step forward and involved the distribution and transportation operations. Next, the concept of integrated logistics was recognized as the supply chain management [ 5 ]. Product quality is another novel concept in the supply chain management [ 6 ]. Moreover the quality deterioration often happens in traditional supply chains which, for the most part, are poorly planned [ 7 ]. From a product quality perspective, when processed products decay at a faster rate than raw materials, storing raw materials is favored [ 8 ]. Alternatively, when processing decreases the quality decay rate, a short time until processing is favored [ 9 ]. The supply chain (SC) of vegetables consists of four echelons: 1) purchasing raw materials, 2) processing, 3) distribution, and 4) customers to which products are delivered [ 10 ]. Since perishable products (agri-foods) have limited shelf life, logistic-related topics are important in business [ 11 ]. Transportation share in supply chain costs reached about 92% in the distribution sector in some traditional chains [ 12 ]. The post-harvest pre-customer-sent product loss [ 13 ] accounts for more than 40% of the supply chain costs even in industrialized and developed countries [ 14 ]. It occurs in terms of both the product quantity and agri-food quality loss throughout the chain and imposes quality costs on the chain [ 15 ]. Although considering the shelf life losses is in relation to an increase in transportation costs, it worth investing on transportation infrastructure due to less quality loss. Moreover, from a system’s point of view, integrating warehousing and transportation in the supply chain can highly affect the total cost, customer satisfaction and inventory level. Integrated models of providing and storing perishable products help to maximize meeting demands [ 11 ]. Integration of storing and distributing decisions leads to more efficiency than other operational integration [ 16 , 17 ]. Integration of strategic decision making and operational processes appears relevant, especially for such perishable products as agri-foods [ 18 ]. Recently some strategies were studied in supply chain management of perishable products to control the perishability of products which are inventory management [ 19 ], reverse logistic management [ 20 ], pricing [ 7 ], and robust optimization [ 21 ].

Notably, product quality is characterized by the product’s remaining shelf life and thus is time-dependent [ 22 ]. Taguchi described the deviation in performance using the quality loss function that measures the product’s quality loss in terms of the total loss to society due to functional variation and harmful side effects [ 23 ]. For perishable foods, product quality degradation must be identified because it significantly affects consumers’ decisions and retailer profitability [ 22 ]. On the other hand, computing the cost of quality loss for an integrated supply chain allows for exploring the interrelationships among business entities. It enables the supply chain to achieve a minimum total cost by investing in quality and, hence, increasing the overall benefit [ 24 ]. Today, lateral marketing is the most effective way of competing in mature/immature markets, where micro-segmentation and plenty of brands don’t leave any space for new opportunities [ 25 ]. One of problems in the perishable agricultural products’ supply chain is a high quality loss post-harvest, which leads to different quality costs and the customer dissatisfaction. A brief review of the literature reveals that rarely is there any established advanced multi-echelon vegetable supply chain wherein the profit is maximized by considering such features as product quality degradation, quality loss-related costs, and settling lateral markets. Due to this research gap, current study is aimed to maximize the profit of perishable products supply chain considering their related quality costs. The question in this research is how considering both the cost of qualities and the second market in the supply chain network design (SCND) of perishable products can affect the benefits of stakeholders, such as farmers and customers in the supply chain.

The research objective is to formulate a SCND of perishable products by considering different costs of qualities in the supply chain and settling a lateral market and processing the part of perishable products that have not entered the supply chain due to its high level of perishability and enters to the second market be used in specific form satisfying customers, in the mathematical mixed integer linear programming. The current study intends to make affecting decisions in different levels of decision making as: 1) strategic level; locating different centers in the supply chain, 2) tactical level; determining the processing type, and quantities of different products be delivered to the customers, and 3) operational level; selecting a suitable mode of transportation and quantities in the SCND. To address this challenging problem, vegetables, important perishable products, were examined in a case study by first studying the multi-echelon agri-food supply chain (AFSC) based on the post-harvest quality features.

The remainder of this paper is structured as follows: In the next section, a brief overview of related literature reviews on the quality management of perishable agricultural products is given. Section 3 describes the research methodology, a quantitative supply chain modeling approach in a linear programming framework. The case study and sensitivity analysis results in the optimum point are presented in Section 4, the research conclusions in Section 5, managerial implications in Section 6, and future research and limitations in Section 7.

2. Literature review

2.1. agricultural products supply chain.

Customers pay special attention to the quality and safety of agri-foods because they directly affect their health [ 26 ]. This quality can be measured by such different criteria as the purchasability [ 27 ], lifetime (day) left [ 28 ], color [ 29 ], freshness [ 30 ] and light-greenness of vegetables (L. in the Hunter Laboratory) [ 31 , 32 ]. Creating an efficiency-responsiveness balance in quality-based customer-oriented supply chains is worth considering [ 9 ]. The optimal operation strategy is acquired based on product quality [ 6 ]. Organizations that have instituted a system of quality cost measures have experienced dramatic positive results because it translates the implications of poor quality, activities of a quality program, and quality improvement efforts into a monetary language for managers to understand which factors are important in affecting profitability and the consumer need [ 24 ].

Decisions made in the supply chain of perishable products are strategic, tactical and, operational; strategic decisions that have long-term effects on firms are those made on the network design, supply chain network design [ 33 ] and the location of different equipment in the processing, distribution and, hub centers to make the best use of the capacity of the existing facilities [ 34 ]. In the strategic level of decision-making in the perishable products’ supply chain design, different ways to cope with increasing product quality decay can be identified. On the one hand, the network can be centralized to decrease handling time (for each transport to a hub, a fixed handling time is incorporated in the transport time) and hence decay. On the other hand, more hubs can be opened to decrease transport time and decay [ 9 ]. Moreover, technical models are popular and have public applications in harvest programming, product selection, and labor capacity in agricultural products supply chains. Besides strategic and tactical decisions, the supply chain also involves operational decisions for which it is assumed that the former two are already known and sufficient knowledge is available about production, demand, and transportation [ 35 ]. Pasha et al. studied an integrated bi-objective quality-based production-distribution agri-food MILP supply chain model in which profitability is maximized by defining the quality as a function of such decisions as the location of hubs and transportation strategy throughout the supply chain [ 17 ], whereas making decisions in an integrated way will reduce costs compared to individual decisions made at each level [ 36 , 37 ]. Moreover, in the greenery supply chains, De Keizer et al. presented a model in which decisions made on the greenhouse location (strategic) are based on the plant’s lifetime in that location [ 9 ]. As changes in the temperature and enthalpy levels change the food quality [ 38 ], Khazaeli et al. and Rong et. al determined the temperature of distribution centers and deliveries to meet the expectations of different customers as the operational decision-making in a supply chain management [ 39 , 40 ].

2.2. Quality of agricultural products

In most supply chain designs, cost, profit, quality, responsiveness and environment are the general decision-making factors [ 34 ]. Although cost and profit are still the main criteria in almost all quantitative mathematical programming models of the supply chain of perishable agricultural products, in recent years, other criteria, such as product quality [ 9 , 17 , 18 , 41 , 42 ] and environmental protection [ 43 ] have also been considered in some studies. The quality function of perishable agricultural products can be either complex or simple [ 44 ]. It has been shown that, the decrease of a single quality attribute of agricultural products can be approximated by one of the four basic types of mechanism which are zero-order reactions having linear kinetics, Michaelis Menten kinetics, first-order reactions having exponential kinetics, and autocatalytic reactions with logistic kinetics [ 45 , 46 ]. For the concept of keeping quality, it is convenient to assume zero-order reaction kinetics [ 28 ], and mostly the Michaelis Menten kinetics reduces to a linear one in the initial region of decay, which is the most important in quality assessment [ 47 ]. Therefore, the quality variable of vegetables in the initial region of decay can be considered in a widely used equation, in which the quality function changes by the time linearly. It is shown in Eq 1 .

Where, Q 0 is the initial quality, t is time and k is a degradation rate. In a dynamic environment, the well-known Arrhenius equation shows that the degradation rate (k) depends on the activation energy of the material, and the environmental factors [ 28 , 48 , 49 ].

The perishable products’ quality model shown in Eq 1 has been frequently used to capture the degradation of food products over time. For example, in the grocery retail chain, Wang and Li presented a pricing model to maximize food retailer’s profit in a dynamically identified food shelf life by using Eq 1 [ 50 ]. Chen and Chen proposed an on-site direct-sale dynamic supply chain inventory model, considering time-dependent quality losses for perishable foods [ 22 ]. Lejarza and Baldea presented a closed-loop, feedback-based control framework, that employs real-time product quality measurements for optimal supply chain management [ 51 ]. Moreover, Xu et al. presented a real time decision support framework to mitigate the quality degradation in the journey of agricultural perishable products from farm to the retailer in the supply chain based on the Eq 1 [ 52 ].

Generally, cost, benefit, and quality factors are the most important factors that are to be optimized in network designs. Mostly, agri-food should make a logical balance between two topics, which are the price reduction and the customer service improvement [ 38 ]. In the field of multi-objective supply chain network design, De Keizer et al. and Khazaeli et al. showed that, the quality of agricultural products causes cost in the supply chain’s network [ 18 , 39 ]. A review of quantitative supply chain research on the perishability of agri-food by considering related quality costs is summarized in Table 1 .

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2.3. Research gaps and contributions

Due to the importance and necessity of developing SCM from a larger perspective to provide a win-win situation for each participant in the supply chain, in this paper, we aim to develop a novel mathematical model to design a supply chain network, based on quality function elements in the vegetables’ sector. The summary of the literature review outlines the gaps in the literature as follows:

• Despite the importance of the cost of qualities in designing supply chains due to the perishability of the products, the cost of quality concept has not been widely incorporated by researchers in the design of agricultural products’ supply chains.
• No research has paid attention to the lateral market to look at the quality problems from the side covering some target customers.
• Few researchers have considered the benefits of several stakeholders of the agricultural supply chains simultaneously. The stakeholders in agricultural Products’ supply chain are consumers, farmers, the environment, and society.

The proposed SCND is a multi-product, multi-echelon model with exact (certain) demand that makes decisions at strategic, tactical, and operational levels. It has focused on “quality” by considering the quality deterioration which is time-dependent in the initial region of decay, moreover, by defining costs of quality degradation in the quality-cost functions. Features that differentiate the present research from others are displayed in the last row in Table 1 . As previous researches have demonstrated, traditional supply chain of agri-food is unstructured, which generally leads to low quality and low benefit of agricultural products, the presented research is developed, in which the main contributions are as follows:

• ✓ Providing a network design model for an integrated multi-level supply chain of perishable products wherein profit is optimized by considering quality decay aspect of the products.
• ✓ Optimizing the profit of the supply chain of perishable products considering different quality costs for them due to unmet demand, product waste and reduced revenue of low-quality products.
• ✓ Introducing a strategy of selling perishable products to lateral markets before letting products enter the chain to prevent the production of low-quality products along it.
• ✓ Enabling the purchase of the farmer’s total agricultural product above the contract ceiling due to unpredictable production to prevent waste production and its scattering in the environment.
• ✓ Introducing a strategy of producing semi-processed, low-quality products (from those that did not enter the chain) to meet part of the market demand for lower-quality lower-price products.

The developed model is a four-echelon supply chain of perishable agricultural products in which the time-dependent quality of the products is considered. In addition, a lateral market is considered in the designed supply chain that does not stand higher than vertical marketing and completes the primary market.

In the end, the developed model is applied to a case study of a firm in the agricultural products industry with four echelons of farm-processing-distribution-customer centers. The vegetables selected as candidates for the present supply chain network design are Yarrow , Borage flower , and Melisa , due to their priority in agricultural studies and their application in various industries [ 55 ].

Although there are some studies done to minimize quality losses of perishable products by multi-objective problem-solving approaches [ 17 , 19 , 20 , 21 , 39 ], the programming in the present research is done as a single objective problem solving by profit objective function underlying quality loss costs.

3. Problem description and formulation

From the perspective of the research approach, this research is quantitative, done as a mathematical mixed integer linear programming (MILP) modeling with the objective function of profit by considering the cost of quality factors of products in the multi-echelon perishable products’ supply chain. It is applicable to the related supply chains. It focuses on an integrated multi-product SCND of agricultural products that provides, processes, stores and distributes materials. It considers customer demands and sells the farmers’ in-excess products to the second market. The designed model was solved using GAMS 24.1.2 software by exact solution method by epsilon-constraint. The model is validated by applying it in the case study of a multi-vegetable supply chain of a firm in a fertile area in Iran country. The designed supply chain of the firm is shown in Fig 1 .

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First, products through related contracts and in-excess products are bought from farmers in the study area. In the second echelon of the proposed supply chain, some or all of the purchased products are processed at related centers resulting in different degrees of product quality. Third, the products in the former echelon are stored in cool storage centers until being distributed and fourth, they are sold to wholesalers. Another part of the purchased products are transferred to the second market as lower quality products in different industries (tea bags, spices in food, etc.). Different road modes of transport are used between different echelons of the supply chain.

The modeling makes decisions at different echelons of the supply chain. Decisions made are (1) selecting farms and the quantity of raw products to be purchased from each of them, (2) the quantity of products sold to the second market, (3) the number of processing and storage facilities to be settled in the supply chain, (4) product flow and the vehicles to carry out the transportation between the active facilities i. e. from farms to wholesalers and (5) assignment of processing facilities to the products. They are made based on minimizing the total cost of the supply chain design considering the cost of qualities. In the following, assumptions and the modeling are described.

3.1. Assumptions

• The location of production centers is specified.
• Capacities of the processing centers, and also storage centers are determined.
• Customer demand for each type of processed product is pre-determined.
• Shortage to customer demand is allowed.
• The quality of products post-harvest in the supply chain is considered time-dependent.
• The deterioration rate of each product is considered specific, based on the activation energy of the material.
• The approach of quality costs is considered in measuring the quality of products in the objective function modeling.
• The transportation speed of each mode is assumed uniform.
• In-excess products are sold to the second market.
• Over-time quality loss-related cost, unmet customer demand and product waste are considered as quality costs.
• The cost of the lost product quality equals the price drop in proportion to the quality drop by a factor of ten (The coefficient (10) is proposed by experts based on pairwise comparisons of cost and quality criteria).
• The quality cost of the customer credit for each demand equals the revenue lost due to not meeting one unit demand.
• The quality cost of the product waste equals the revenue from the product sales not realized, causing that product to enter the environment as waste.
• Products are bought from farmers: 1) at a price for first-grade products based on the amount in the contract and 2) at a price for second-grade products for those over that in the contract (According to experts, the purchase-price-drop coefficient is 0.3 in the market).
• Products are sold to the supply chain customers at a price for first-grade products and those outside the supply chain are sold in the second market at a price for second-grade products (According to experts, the sell-price-drop coefficient is 0.3 in the market).

The mathematical model, its objective and its constraints are presented in the following.

3.2. Mathematical modelling

Symptoms used in the model consist of sets, related indexes, parameters and variables, objective functions and constraints, are as follows:

Sets and indexes.

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Parameters.

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Profit objective function and constraints are described as follows:

Profit objective function.

The objective function is defined to maximize the supply chain profit. It is equal to the revenue from both, selling products to customers and the second market minus the total supply chain and quality costs ( Eq 2 ).

Revenue consists of: 1) that obtained by selling the supplied demanded product, which is equal to the unit price of the sold product multiplied by the customer met demand; the latter equals the amount supplied in the supply chain minus that over the customer demand, and 2) that obtained by selling: a) the supply chain-decided products and b) in-excess products sent to the second market which is equal to the price of each unit of the low-quality product multiplied by the amounts in a and b.

Costs relate to: 1) purchasing high-quality (on contract) and low-quality (in-excess) products from farmers (with their own related prices), 2) locating processing and storage centers, 3) processing operations, 4) storing products in storage centers, 5) different supply chain distances (ton-km), 6) ordering different transportation modes, 7) revenue lost due to reduced product quality, 8) credit lost due to unmet demand and 9) unsold wasted product.

Constraints

Quantities equations..

Constraints (3) to (10) ensure the product weight in different supply chain steps—from the farm to the customer (considering the amount of the farm production). Constraint (11) addresses in-excess low-grade products to be sold in the second market; these are produced, but not delivered to customers through the supply chain for different reasons.

Constraints (12) to (15) indicate that quantities of processed and stored products, respectively, in activated processing and storage centers are determined based on the capacities of these centers. If centers are not active, the quantities would be zero.

Travel time in the supply chain equation.

Constraint (16) indicates that the vehicles used in the transportation system of the supply chain have uniform speeds.

Number of vehicles.

Constraint (17) to (20) determines needed vehicles in different modes to transfer materials in different supply chain steps and the whole supply chain assuming full-capacity active vehicles.

Shortage and extra quantities constraints.

Constraints (21) to (23) determine the in-excess and shortage amounts.

Constraints (24) and (25) illustrate non-negativity and binary variables.

4. Case study

In this section, we implement the proposed model in an Iranian raw and processed vegetable products’ company, the Razian Company, as a case study. Iran country has been bestowed with a wide range of climate and physio-geographical conditions and as such is most suitable for growing various kinds of vegetables, its production of vegetables is increasing. Moreover, agricultural products are profitable fields for investment. Since Iran possesses a large variety of flora with manufacturers, in equal measure, analysis of the working of the vegetable market is critical [ 55 ]. There is an apparent shortage of related supply chain in Iran country. The goal of the case study is to evaluate the efficacy of the proposed model under real-world conditions and to address the needs of the firm in question. The case study used a four-echelon SCND, and materials were supplied, processed, and stored (echelons 1–3) in the firm area (origin) while the last-level centers were located all over the country; in addition, a center was established as a second market to collect the in-excess products, as shown in Fig 1 . The mentioned lateral market imposes no costs on the supply chain because it is closest to farms, and customers pay the transportation costs.

At first, the firm seasonally provided the vegetables from the suppliers. Suppliers were specified and contracted in advance in fertilized source centers (i = 4) of selected vegetables (n = 3). The farm centers were, in Kaboudrahang , Razan , Nahavand , and Malayer , and the vegetable products were Yarrow , Borage flower , and Melisa . Secondly, the firm used the related processing on vegetables, or the products remained raw. There are potential processing center (j = 5) candidates in the case study. Thirdly, the firm stored the products in the storage centers for packaging. There are potential storage center (k = 5) candidates in the case study. The five potential processing and storage center candidates were Kaboudrahang , Razan , Nahavand , Malayer , and Asadabad . Finally, the firm delivered the demanded products to the customer centers. The customers were trade representatives of each province all over the country (l = 30). Due to the importance of the case study data for the application of the presented model, some were obtained from the enterprise resource planning (ERP) of Razian company [ 56 ]. In addition, data on fixed and variable costs of different transportation modes were obtained from the recent case study research done in Iran [ 39 ]. Data on the price of different raw and processed vegetable products were gathered from the statistics of the Ministry of Agriculture [ 57 ]. Details of the most critical data of the case study are presented in the table in S1 Table in the supporting information.

The designed mathematical mixed integer linear programming (MILP) model was implemented and solved using GAMS 24.1.2 software and an Intel 2.13-GHz processor by exact solution method by epsilon-constraint. The designed network, product type, amount (tons) produced and sent to, e.g., Tehran (Capital), the transportation mode at different supply chain levels, and amount (tons) delivered to the second market are shown in Fig 2 .

(R indicates Yarrow product, C indicates Borage flower product, T indicates Melisa product). Optimally, 564 trailers and 33068 trucks were needed in the designed supply chain network. Generally, in presented agricultural products’ supply chain, some products have high quality-loss rates as well as demands for distances far from the cultivation center. This leads to a long post-harvest time for the product to reach the customer and, hence, a high rate of quality loss and a drop in the product price. This fact makes the supply chain decision maker set the lateral market due to not delivering those products to those customers and hence delivering them to the second market. It is considered newly in the present research due to make quality loss of products in the supply chain, the less, hence the profit the more.

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4.1. Results

As shown in Fig 2 , in the optimum point of maximizing profit by considering quality costs in perishable vegetables supply chain in the proposed MILP model, the processing, storage, and distribution centers are settled in similar locations, spatially. It leads to set process-storage-transfer type of hub centers, in compliance with the supply chain network proposed by Khazaeli et al. [ 39 ]. Out of 5 potential processing and storage/transfer centers, the model found all for the supply chain No. of facilities based on the center capacity and its setup costs (related parameters are listed in the table in S1 Table ). It is similar to the model proposed by De Keizer et al., in which to decrease transport time and hence decay in related supply chain design, the centers were decentralized, [ 9 ]. Therefore, more hubs were opened.

The model determined the amount and type of the delivered products between all supply chain levels, by the supply chain programming, and provided the information on the product (ton) if it was possible to supply to meet the customer demand. The details of provided products are presented in the table in S2 Table in the supporting file. Here, the supply chain management decides not to offer part of products to the customer and sells them at a second-grade price to the second market to maximize the chain profit by minimizing the quality loss-related cost along the chain (highlighted as unmet demands in the table in S2 Table ). In such a case, saving the low-quality cost of the perishable product will bring more revenue for the chain.

The model also selected the center-to-center transportation mode considering the vehicle speed to reduce time and, hence, the quality degradation and transportation costs. The table in S2 Table in the supporting file lists the number of each vehicle type required to transfer products. In result, the supply chain used trucks about 60 times more than trailers because of being faster. It used trailers, although with higher order costs, only in long distances, e.g., from storage centers to customer centers due to their more than ten times more capacity than trucks which led to fewer vehicle orders and, hence, less vehicle order costs. As shown in Fig 2 , in all supply chain steps, except the last, the model suggests using trucks because of their higher speed than trailers and their less order costs than trailers (The vehicle-related parameters are shown in the table in S1 Table ).

In this chain, some produced, but supply chain-decided undelivered to the supply chain were sold to the second market with price of high-grade products. The products produced more than that guaranteed in the farmer’s purchase contract, were sold to the second market with a much cheaper price (0.3 that of high-grade products). Both, amounted to 1820 tons of product Yarrow in Razan , 10020 tons of product Borage flower in Nahavand and 93.5 tons of product Melisa in Malayer and Nahavand , all were delivered to the second market.

Demands for all types of products were met except for fresh products, for which the demands were responded in centers closer to the previous echelon due, maybe, to their higher corruptibility and quality-loss rate than other types of products (The table in S1 Table in the supporting information lists the perishability rate of each processed products than the fresh one) and, hence, a price decline that makes them uneconomical to deliver to customers.

4.2. Benefit and quality loss of the products in the supply chain

In the designed supply chain, as shown for the optimum solution point in Fig 3A , the revenue and total cost are, respectively, 27.3 and 18.5 million USD; therefore, the benefit is 8.8 million USD. The final product quality and quality loss in the supply chain are 28,357 and 643 (Unit of quality), respectively ( Fig 3B ).

(a). Profit/ cost of the SC designed. (b). Final quality/ quality losses in the SC design.

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The revenue of the supply chain (27.3 million USD) is due to: 1) selling the chain-demanded supplied products 21.9 (Million USD), 2) selling products not supplied to the chain and sold to the secondary market based on the chain management decision 0.08 (Million USD) and 3) selling products supplied more than that specified in the contract 5.32 to the secondary market (Million USD) ( Fig 4A ).

(a). Supply chain revenue parts. (b). Farmers’ revenue parts.

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The revenue of farmers as main stakeholders, is 12.5 million USD, which goes to them by selling: 1) contract-demanded products delivered to the supply chain (10.2 million USD), 2) contract-demanded products supply chain-decided undelivered products (2.07 million USD) and 3) in-excess-of-contract products to the second market (0.24 million USD) ( Fig 4B ).

Total supply chain benefit (8.8 million USD) comes from supplying products to customers considering the demand (5.7 million USD) and products to the second market (3.1 million USD). In addition, the total revenue of farmers is (12.5 million USD) ( Fig 5 ).

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4.3. Supply chain cost breakdown considering quality cost and other supply chain costs

The supply chain cost (18.5 million USD) consists of 8 elements, among which purchasing, including buying raw materials for the supply chain (10.2 million USD) and in-excess materials (2.3 million USD) for selling to the second market, is the costliest, and revenue lost due to reduced product quality along the chain (5.4 million USD) stand next. Other costs in the case studied, in the order of higher values, include quality cost of unmet demand of fresh products in long distances (0.38 million USD), processing (0.1 million USD), logistic transportation (0.07 million USD), storage (0.03 million USD), establishing facility centers (0.02 million USD); product waste has zero cost. The percent share of total costs, including those of the network, supply chain logistics and quality costs is shown in Fig 6 .

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As shown in Fig 6 , 29% of the costs (5.4 million USD) in the supply chain of perishable product supply relate to the revenue lost due to the product quality loss by unmet fresh products. On the other hand, the quality cost of unmet demand for fresh products in long distances is 0.38 million USD. The most part of the mentioned costs are compensated by revenue earned by selling these products to the second market by 5.32 million USD.

The designed supply chain has other profits, which are: 1) preventing low-quality products from being produced at the request of the chain customers and 2) sending products produced over that specified in the contract (due to unpredicted agricultural products produced) to the secondary market and, hence, preventing them from entering the environment as waste.

The model accuracy was verified by changing its parameters and examining its responses to the changes. The validity of the proposed model has also been confirmed by comparing the results of the present SCND, with a vicinity secondary market ( Fig 2 ), and those of the existing chain, without such a market. Related experts have evaluated the proposed model, validated it, and concluded that the chain profit has increased due to its reduced quality costs. The sensitivity analysis is presented to evaluate the effect of changing some parameters on variables and the objective function, in the following.

4.4. Sensitivity analysis

Parameters to which model responses investigated in reaction, are the reaction rate of products and speed of different transportation modes as they relate to the quality loss of products and cost of supply chain during the time after harvest. Model responses to changes have been analyzed and explained orderly in the following:

Quantity of products and revenue versus reaction rate (k) of products.

The quality loss rate (k) of different products varies depending on their reactivity, and processing reduces this rate in fresh products. To prevent the quality cost resulting from the products’ quality loss and price decline, the chain provides just part of the fresh product demands, not far than a specific distance (The table in S2 Table in the supporting information). When the quality loss rate (k) changes, the amount of the customer-demanded met products as well as those not enter the chain change too; the latter are processed at the beginning of the chain immediately after they are purchased and then sold as low-grade products to the second market. The ratio of the customer-offered to customer demand for different types of products and the amount sold to the second market were examined considering the product quality loss rate (k). The effects of the quality loss rate (k) on the stakeholders’ profit and revenue have also been studied. A summary of the results is shown in Fig 7 .

(a) Changes in quantities of products. (b) Changes in revenue/ profit of farmers and SC parts.

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In the current chain, 96% of the demand for fresh products is met, and the rest is sold to the second market. As shown in Fig (7a), an increase in the quality loss rate (k) reduces the amount of fresh products. It increases the amount of those sold to the second market and supplied before entering the chain due to a sharp drop in fresh products, undesirability for customers, quality loss and price drop in the chain over time. A more increase in the mentioned rate (twice more) reduces the meeting rate of the customer-demanded fresh product from 96% to 35%; products sold to the second market increase from 64% to 100%, and the processed, dried and essence products, fully met, remain unchanged. Moreover, as shown in Fig (7b), an increase in the rate of product quality loss (k) does not reduce the farmer revenue, because the contract-specified products are bought from farmers at the original price.

As shown in Fig (7b), an increase in the quality-loss rate (k) of perishable products reduces the chain profit because some of these products, purchased from the farmer at the original contract price, do not enter the chain and are sold in the secondary market at lower prices (here, 0.3 times the contract price). Therefore, considering higher quality-loss rates (k) in the SCND will result in sharper reduced profits for the supply chain and the secondary market.

Supply chain cost/revenue versus speed of vehicles (v) changes.

Under present conditions and the speed (v) of the current fleet in the case study (V trailer = 80 and V truck = 100 (km/ hour)), the model meets 96% of the demand for fresh products and all that for the dried and essence products; Faster fleet speeds enable more demands to be met ( Fig 8A ).

(a) Change in quantities of products (b). Change in number of vehicles (c). Change in cost/ revenue.

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Increasing the speed (v) up to 50% will help the demand for fresh products to be met up to 100% and that for other products stays constant at 100%; however, reducing it up to 80% will not change the amount of processed products, but will cause the amount of the freshly supplied products to reach about 20% ( Fig 8a ).

As shown in Fig (8b), increasing the speed (v) leads to more use of faster vehicles (here, trucks). As shown, increasing the speed (v) to 100% will increase the number of needed trucks by 2%, but will not change the number of needed trailers. As mentioned earlier, trailers are used for outside-province long distances to respond to customers located far from the supply center. This will result in lower total long-distance transportation costs than trucks due to lower ton-km costs despite higher-order costs (The table in S1 Table in the supporting file).

Fig (8c) shows the minor increases in transportation costs and a noticeable reduction in the unmet-demand lost revenue due to the increased vehicle speed (v). Increasing the speed (v) up to 100% will increase the transportation costs by 11%, but reduces the unmet-demand lost revenue by 100%. This increased transportation cost of 0.008 million USD will prevent a revenue loss of 0.34 million USD, which is quite a significant figure.

It demonstrates that increasing the speed (v) will increase the number of vehicles, hence increase the transportation costs and the responded demand and ultimately prevent the revenue loss. Hence, increasing the speed (v) will lead to increased costs and enhanced chain revenue ( Fig 9 ).

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Since the increased revenue is greater than the increased cost, increasing the speed (v) will increase the chain profit; increasing the speed (v) up to 100% will increase the profit by 2.9 million USD (increased by 100%). Increasing the speed (v) will not affect the farmers’ revenue. The results comply with the findings of Patidar and Agrawal in research on traditional agricultural chains in India, in which the transportation share in supply chain costs reached about 92% in the distribution sector [ 12 ]. It shows the importance of transportation strategies in this sector.

A comparison of designed supply chain with traditional supply chain in the case study is demonstrated in Fig 10 .

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Regarding demands for fresh products, as shown in Fig 10 , their amounts in the two cases (with and without a secondary market) are 10868 and 10068 tons, respectively, showing an increase of about 0.08 times; this leads to a quality increase and, hence, customer satisfaction and profit increase. In both cases, demands for dry and essence products are fully satisfied. The comparison between the results of the present supply chain design in the case study and the results with the lateral market indicates that a lateral market in the supply chain will increase the chain profit and farmer income. However, in the optimal mode in this case study, they are increasing from 9.7 and 5.85 to 12.5 (about +50%) and 8.8 (about +20%), respectively.

The results show that newly designed supply chain is applicable in the field of the perishable products supply chain. It confirms the necessity of supplying innovative products of perishable ones such as processed agricultural products to meet new customer needs in a lateral market to the competitiveness. It complies with the findings of Malynka and Perevozova, who proposed the lateral markets in mature and immature markets in the brand creation process [ 25 ].

4.5. Managerial insight

Some lessons and insights for managers are as follows.

• All of the contract products are supposed to enter the chain; if not (for different reasons, e.g., chain management decision), some are sent to the second market, the presence of which prevents the produced products and resources (land, labor, energy, etc.) spent for those not entering the chain (for different reasons) from being wasted.
• Not considering a second market for fresh perishable agricultural products e. g., vegetables will lead to ignoring the post-harvest quality loss-related costs.
• Increasing the fleet speed is of great benefit to all the chain stakeholders including customers, chain management and environment because, on the one hand, it leads to increased response to the customer demand for more fresh products and selling customer-demanded high-quality products at prices proportionate to their grades will increase the chain profit and, hence, the total revenue, on the other, it prevents environmental pollution by letting more products to enter the supply chain and preventing wastes to be generated.

5. Conclusions

In this paper, a new approach is presented to optimize a logistics network design for distributing multiple products that are highly perishable and sensitive in quality and health of products to consumers, such as vegetables. Echelons of supply chain design include supply, processing, storage and customer. Considering the unpredictable amount of production of agricultural products and their perishability post-harvest, the second market which is accompanied by processing technologies to produce innovative products from the perishable products has been considered in the related supply chain network design, beside the main chain. The supply chain network design has been done based on maximization of profit by considering different quality costs in the supply chain. Quality costs include those due to: 1) quality-loss price-drop, 2) product waste and 3) losing credit with the customer for not meeting the desired demand. Since the chain integrity of these types of products is essential, the integrated one considered in this study is managed by the chain management deployed in the product supply center. Programming has been done based on the maximization of profit by the MILP model considering the quality costs of products in the supply chain. To evaluate the modeling, a case study was used on three vegetables cultivated and harvested in a fertile area in Iran country in September 2023. The model was subsequently validated by multiple sensitivity analyses performed on some of the essential parameters that had a greater effect on the results.

In this supply chain design, as it is demonstrated in Fig 2 , different decisions have been made at strategic, tactical and operational levels in order to maximize profit by considering the costs of quality in the supply chain. Decisions made are on the location of processing centers and storage centers, and product flow allocations in the designed supply chain. Moreover, the model decides on the operations of processing after harvest, such as drying and extracting, which leads to mitigated products’ quality decay. In the next echelon after processing in the supply chain, there are storage centers in which products are stored to be distributed to the retailers. In the tactical level of decision making, the presented model decides on the allocation of farmers to processing centers and also processing centers to storage centers, moreover the allocation of storage centers to the retailers as the customers, also the number of products produced by farmers enters the supply chain and remains to be supplied to the second market and not deployed in the supply chain is determined. In the operational level of decision-making, the quantity of products and mode of transportation between different levels in the supply chain have been determined to meet the customers’ needs.

Results of this research were compared with those of related recent studies [ 9 , 12 , 25 , 39 ]. The comparisons demonstrated good conformity, especially, in compliance with recent research in lateral besides vertical markets [ 25 ]. It seems innovative second markets are required to meet other parts of demand. Settling the lateral market seems strategic, especially in perishable products. The lateral market regulates supply and demand and helps reduce the quality-loss-related costs of the chain and responds to another part of the market that has specific customers.

6. Managerial implications

The proposed model is generic and can help managers in food quality, customer service, and other related operations as a tool to assist in decision-making in the perishable agricultural products supply chain. Specially, the research done can have the following applications:

• The decisions stemming from the presented model are determined based on the products’ degradation pattern to maximize its quality. The decisions include supplier selection, supply chain design, processing technology deployment, and vehicle deployment.
• A second market besides the chain and not higher than the vertical one in supply-based products such as vegetables, may result in a considerable increase in the chain profit without changing the resources, no reduction in the farmer income for unpredictable amounts of agricultural products production, and no wasted products preventing the environment from being polluted.
• The usage of lateral marketing is relevant, as it is the most effective way of competition in mature markets. However, when chains are designed for perishable products for optimum profit, the demand for some products with high quality-loss rates is not met due too long distances from distribution centers (if it is met, high-quality costs will be imposed on the chain). The related products are processed for secondary customers and delivered to them in the second market.
• Increased perishability rate of agricultural products reveals the effects and necessity of second markets next to the chain.
• Although, high-speed shipping fleets are expensive, using them will increase the chain profit because they reduce the post-harvest travel time and, hence, reduce the quality-loss-related costs of perishable products significantly. This way, the demands of more customers are met, customer credit costs will be prevented and the supply chain management and customers will both be benefitted. By applying the proposed model in the perishable agricultural products supply chain, the products are sold in the second market to meet the lateral part of the market.

As a result, different stakeholders such as farmers, customers, the environment, and the owner of the supply chain may benefit from the new supply chain network design.

7. Future research and limitations

Our framework is limited in some respects. With that said, this modeling limitations serve as a platform for extending it in future researches. One primary limitation of the presented model is that it does not consider the uncertainty in the amount of customers’ demand. Therefore, the proposed model does not work for the problem in uncertain conditions. Also, the proposed model in this research has been solved by the exact-type solving method of mathematical programming, which is proper for solving the small size of problems such as the studied case. Considering the limitations above, using mathematical models by uncertainty considerations in the supply chain parameters and applying meta-heuristic methods to solve medium and large-sized problems are suggested in the future research. From the managerial perspective, the presented research works by the assumption of that upstream suppliers, freight transportation, processing centers, and storage facilities are integrated and it needs to build alignment between their organizations to deploy the solutions proposed by the output of the proposed framework. For these efforts to be successful, for future research, it is suggested to study how to cooperate all parties involved in the supply chain, and design the coordination infrastructure in the supply chain to yield the positive effects of proposed supply chain network design, in practice.

Supporting information

S1 table. parameters of case study network design..

https://doi.org/10.1371/journal.pone.0303054.s001

S2 Table. Quantity (tons) of each product delivered to customers and number of vehicles in logistics of designed SC.

https://doi.org/10.1371/journal.pone.0303054.s002

Acknowledgments

The authors are indebted to Mr. Ja’fary, the manager of “ Razian” Co. ( https://razian.co/ ), for his invaluable help to gather data in the case study. Also, the authors are grateful to the two anonymous referees for their valuable comments, which have led to significant improvements in this paper.

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Co-optimization of water–energy nexus systems and challenges  †.

1. Introduction

2. wens model, 3. case study, 4. challenges and prospects, 4.1. system modeling, 4.2. uncertainty management and solution robustness, 4.3. multi-stakeholder management, 5. conclusions, author contributions, institutional review board statement, informed consent statement, data availability statement, conflicts of interest.

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Zeng, J.; Liu, Z. Co-Optimization of Water–Energy Nexus Systems and Challenges. Eng. Proc. 2024 , 69 , 54. https://doi.org/10.3390/engproc2024069054

Zeng J, Liu Z. Co-Optimization of Water–Energy Nexus Systems and Challenges. Engineering Proceedings . 2024; 69(1):54. https://doi.org/10.3390/engproc2024069054

Zeng, Jiawei, and Zhaoxi Liu. 2024. "Co-Optimization of Water–Energy Nexus Systems and Challenges" Engineering Proceedings 69, no. 1: 54. https://doi.org/10.3390/engproc2024069054

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The University of Chicago The Law School

Abrams environmental law clinic—significant achievements for 2023-24, protecting our great lakes, rivers, and shorelines.

The Abrams Clinic represents Friends of the Chicago River and the Sierra Club in their efforts to hold Trump Tower in downtown Chicago accountable for withdrawing water illegally from the Chicago River. To cool the building, Trump Tower draws water at high volumes, similar to industrial factories or power plants, but Trump Tower operated for more than a decade without ever conducting the legally required studies to determine the impact of those operations on aquatic life or without installing sufficient equipment to protect aquatic life consistent with federal regulations. After the Clinic sent a notice of intent to sue Trump Tower, the State of Illinois filed its own case in the summer of 2018, and the Clinic moved successfully to intervene in that case. In 2023-24, motions practice and discovery continued. Working with co-counsel at Northwestern University’s Pritzker Law School’s Environmental Advocacy Center, the Clinic moved to amend its complaint to include Trump Tower’s systematic underreporting each month of the volume of water that it intakes from and discharges to the Chicago River. The Clinic and co-counsel addressed Trump Tower’s motion to dismiss some of our clients’ claims, and we filed a motion for summary judgment on our claim that Trump Tower has committed a public nuisance. We also worked closely with our expert, Dr. Peter Henderson, on a supplemental disclosure and on defending an additional deposition of him. In summer 2024, the Clinic is defending its motion for summary judgment and challenging Trump Tower’s own motion for summary judgment. The Clinic is also preparing for trial, which could take place as early as fall 2024.

Since 2016, the Abrams Clinic has worked with the Chicago chapter of the Surfrider Foundation to protect water quality along the Lake Michigan shoreline in northwest Indiana, where its members surf. In April 2017, the U. S. Steel plant in Portage, Indiana, spilled approximately 300 pounds of hexavalent chromium into Lake Michigan. In January 2018, the Abrams Clinic filed a suit on behalf of Surfrider against U. S. Steel, alleging multiple violations of U. S. Steel’s discharge permits; the City of Chicago filed suit shortly after. When the US government and the State of Indiana filed their own, separate case, the Clinic filed extensive comments on the proposed consent decree. In August 2021, the court entered a revised consent decree which included provisions advocated for by Surfrider and the City of Chicago, namely a water sampling project that alerts beachgoers as to Lake Michigan’s water quality conditions, better notifications in case of future spills, and improvements to U. S. Steel’s operations and maintenance plans. In the 2023-24 academic year, the Clinic successfully litigated its claims for attorneys’ fees as a substantially prevailing party. Significantly, the court’s order adopted the “Fitzpatrick matrix,” used by the US Attorney’s Office for the District of Columbia to determine appropriate hourly rates for civil litigants, endorsed Chicago legal market rates as the appropriate rates for complex environmental litigation in Northwest Indiana, and allowed for partially reconstructed time records. The Clinic’s work, which has received significant media attention, helped to spawn other litigation to address pollution by other industrial facilities in Northwest Indiana and other enforcement against U. S. Steel by the State of Indiana.

In Winter Quarter 2024, Clinic students worked closely with Dr. John Ikerd, an agricultural economist and emeritus professor at the University of Missouri, to file an amicus brief in Food & Water Watch v. U.S. Environmental Protection Agency . In that case pending before the Ninth Circuit, Food & Water Watch argues that US EPA is illegally allowing Concentrated Animal Feeding Operations, more commonly known as factory farms, to pollute waterways significantly more than is allowable under the Clean Water Act. In the brief for Dr. Ikerd and co-amici Austin Frerick, Crawford Stewardship Project, Family Farm Defenders, Farm Aid, Missouri Rural Crisis Center, National Family Farm Coalition, National Sustainable Agriculture Coalition, and Western Organization of Resource Councils, we argued that EPA’s refusal to regulate CAFOs effectively is an unwarranted application of “agricultural exceptionalism” to industrial agriculture and that EPA effectively distorts the animal production market by allowing CAFOs to externalize their pollution costs and diminishing the ability of family farms to compete. Attorneys for the litigants will argue the case in September 2024.

Energy and Climate

Energy justice.

The Abrams Clinic supported grassroots organizations advocating for energy justice in low-income communities and Black, Indigenous, and People of Color (BIPOC) communities in Michigan. With the Clinic’s representation, these organizations intervened in cases before the Michigan Public Service Commission (MPSC), which regulates investor-owned utilities. Students conducted discovery, drafted written testimony, cross-examined utility executives, participated in settlement discussions, and filed briefs for these projects. The Clinic’s representation has elevated the concerns of these community organizations and forced both the utilities and regulators to consider issues of equity to an unprecedented degree. This year, on behalf of Soulardarity (Highland Park, MI), We Want Green, Too (Detroit, MI), and Urban Core Collective (Grand Rapids, MI), Clinic students engaged in eight contested cases before the MPSC against DTE Electric, DTE Gas, and Consumers Energy, as well as provided support for our clients’ advocacy in other non-contested MPSC proceedings.

The Clinic started this past fall with wins in three cases. First, the Clinic’s clients settled with DTE Electric in its Integrated Resource Plan case. The settlement included an agreement to close the second dirtiest coal power plant in Michigan three years early, $30 million from DTE’s shareholders to assist low-income customers in paying their bills, and $8 million from DTE’s shareholders toward a community fund that assists low-income customers with installing energy efficiency improvements, renewable energy, and battery technology. Second, in DTE Electric’s 2023 request for a rate hike (a “rate case”), the Commission required DTE Electric to develop a more robust environmental justice analysis and rejected the Company’s second attempt to waive consumer protections through a proposed electric utility prepayment program with a questionable history of success during its pilot run. The final Commission order and the administrative law judge’s proposal for final decision cited the Clinic’s testimony and briefs. Third, in Consumers Electric’s 2023 rate case, the Commission rejected the Company’s request for a higher ratepayer-funded return on its investments and required the Company to create a process that will enable intervenors to obtain accurate GIS data. The Clinic intends to use this data to map the disparate impact of infrastructure investment in low-income and BIPOC communities.

In the winter, the Clinic filed public comments regarding DTE Electric and Consumers Energy’s “distribution grid plans” (DGP) as well as supported interventions in two additional cases: Consumers Energy’s voluntary green pricing (VGP) case and the Clinic’s first case against the gas utility DTE Gas. Beginning with the DGP comments, the Clinic first addressed Consumers’s 2023 Electric Distribution Infrastructure Investment Plan (EDIIP), which detailed current distribution system health and the utility’s approximately $7 billion capital project planning ($2 billion of which went unaccounted for in the EDIIP) over 2023–2028. The Clinic then commented on DTE Electric’s 2023 DGP, which outlined the utility’s opaque project prioritization and planned more than $9 billion in capital investments and associated maintenance over 2024–2028. The comments targeted four areas of deficiencies in both the EDIIP and DGP: (1) inadequate consideration of distributed energy resources (DERs) as providing grid reliability, resiliency, and energy transition benefits; (2) flawed environmental justice analysis, particularly with respect to the collection of performance metrics and the narrow implementation of the Michigan Environmental Justice Screen Tool; (3) inequitable investment patterns across census tracts, with emphasis on DTE Electric’s skewed prioritization for retaining its old circuits rather than upgrading those circuits; and (4) failing to engage with community feedback.

For the VGP case against Consumers, the Clinic supported the filing of both an initial brief and reply brief requesting that the Commission reject the Company’s flawed proposal for a “community solar” program. In a prior case, the Clinic advocated for the development of a community solar program that would provide low-income, BIPOC communities with access to clean energy. As a result of our efforts, the Commission approved a settlement agreement requiring the Company “to evaluate and provide a strawman recommendation on community solar in its Voluntary Green Pricing Program.” However, the Company’s subsequent proposal in its VGP case violated the Commission’s order because it (1) was not consistent with the applicable law, MCL 460.1061; (2) was not a true community solar program; (3) lacked essential details; (4) failed to compensate subscribers sufficiently; (5) included overpriced and inflexible subscriptions; (6) excessively limited capacity; and (7) failed to provide a clear pathway for certain participants to transition into other VGP programs. For these reasons, the Clinic argued that the Commission should reject the Company’s proposal.

In DTE Gas’s current rate case, the Clinic worked with four witnesses to develop testimony that would rebut DTE Gas’s request for a rate hike on its customers. The testimony advocated for a pathway to a just energy transition that avoids dumping the costs of stranded gas assets on the low-income and BIPOC communities that are likely to be the last to electrify. Instead, the testimony proposed that the gas and electric utilities undertake integrated planning that would prioritize electric infrastructure over gas infrastructure investment to ensure that DTE Gas does not over-invest in gas infrastructure that will be rendered obsolete in the coming decades. The Clinic also worked with one expert witness to develop an analysis of DTE Gas’s unaffordable bills and inequitable shutoff, deposit, and collections practices. Lastly, the Clinic offered testimony on behalf of and from community members who would be directly impacted by the Company’s rate hike and lack of affordable and quality service. Clinic students have spent the summer drafting an approximately one-hundred-page brief making these arguments formally. We expect the Commission’s decision this fall.

Finally, both DTE Electric and Consumers Energy have filed additional requests for rate increases after the conclusion of their respective rate cases filed in 2023. On behalf of our Clients, the Clinic has intervened in these cases, and clinic students have already reviewed thousands of pages of documents and started to develop arguments and strategies to protect low-income and BIPOC communities from the utility’s ceaseless efforts to increase the cost of energy.

Corporate Climate Greenwashing

The Abrams Environmental Law Clinic worked with a leading international nonprofit dedicated to using the law to protect the environment to research corporate climate greenwashing, focusing on consumer protection, green financing, and securities liability. Clinic students spent the year examining an innovative state law, drafted a fifty-page guide to the statute and relevant cases, and examined how the law would apply to a variety of potential cases. Students then presented their findings in a case study and oral presentation to members of ClientEarth, including the organization’s North American head and members of its European team. The project helped identify the strengths and weaknesses of potential new strategies for increasing corporate accountability in the fight against climate change.

Land Contamination, Lead, and Hazardous Waste

The Abrams Clinic continues to represent East Chicago, Indiana, residents who live or lived on or adjacent to the USS Lead Superfund site. This year, the Clinic worked closely with the East Chicago/Calumet Coalition Community Advisory Group (CAG) to advance the CAG’s advocacy beyond the Superfund site and the adjacent Dupont RCRA site. Through multiple forms of advocacy, the clinics challenged the poor performance and permit modification and renewal attempts of Tradebe Treatment and Recycling, LLC (Tradebe), a hazardous waste storage and recycling facility in the community. Clinic students sent letters to US EPA and Indiana Department of Environmental Management officials about how IDEM has failed to assess meaningful penalties against Tradebe for repeated violations of the law and how IDEM has allowed Tradebe to continue to threaten public and worker health and safety by not improving its operations. Students also drafted substantial comments for the CAG on the US EPA’s Lead and Copper Rule improvements, the Suppliers’ Park proposed cleanup, and Sims Metal’s proposed air permit revisions. The Clinic has also continued working with the CAG, environmental experts, and regulators since US EPA awarded $200,000 to the CAG for community air monitoring. The Clinic and its clients also joined comments drafted by other environmental organizations about poor operations and loose regulatory oversight of several industrial facilities in the area.

Endangered Species

The Abrams Clinic represented the Center for Biological Diversity (CBD) and the Hoosier Environmental Council (HEC) in litigation regarding the US Fish and Wildlife Service’s (Service) failure to list the Kirtland’s snake as threatened or endangered under the Endangered Species Act. The Kirtland’s snake is a small, secretive, non-venomous snake historically located across the Midwest and the Ohio River Valley. Development and climate change have undermined large portions of the snake’s habitat, and populations are declining. Accordingly, the Clinic sued the Service in the US District Court for the District of Columbia last summer over the Service’s denial of CBD’s request to have the Kirtland’s snake protected. This spring, the Clinic was able to reach a settlement with the Service that requires the Service to reconsider its listing decision for the Kirtland’s snake and to pay attorney fees.

The Clinic also represented CBD in preparation for litigation regarding the Service’s failure to list another species as threatened or endangered. Threats from land development and climate change have devastated this species as well, and the species has already been extirpated from two of the sixteen US states in its range. As such, the Clinic worked this winter and spring to prepare a notice of intent (NOI) to sue the Service. The Team poured over hundreds of FOIA documents and dug into the Service’s supporting documentation to create strong arguments against the Service in the imminent litigation. The Clinic will send the NOI and file a complaint in the next few months.

Students and Faculty

Twenty-four law school students from the classes of 2024 and 2025 participated in the Clinic, performing complex legal research, reviewing documents obtained through discovery, drafting legal research memos and briefs, conferring with clients, conducting cross-examination, participating in settlement conferences, and arguing motions. Students secured nine clerkships, five were heading to private practice after graduation, and two are pursuing public interest work. Sam Heppell joined the Clinic from civil rights private practice, bringing the Clinic to its full complement of three attorneys.

Water quality assessment of hydrochemical parameters and its spatial–temporal distribution: a case study of water resources in the Kebir Rhumel Basin, Algeria

• Original Paper
• Published: 02 September 2024

Cite this article

• Fatma Elhadj Lakouas 1 ,
• Ammar Tiri 1 ,
• Lazhar Belkhiri 1 ,
• Abdeltif Amrane 2 ,
• Hichem Salh 1 ,
• Abdelwahab Rai 3 &
• Lotfi Mouni   ORCID: orcid.org/0000-0002-5259-2357 3  

This study aims to present the surface water quality assessment of the hydrochemical parameters. The study area is the Kebir Rhumel Basin in Algeria which is characterized by extensive agricultural and industrial activity. The water quality index (WQI), Mann–Kendall (MK) test and hierarchical cluster analysis (HCA) were applied. Eleven hydrochemical parameters were measured monthly at eight stations from January 2016 to December 2020 in Kebir Rhumel basin, Algeria. The results revealed that the dominant cation in the surface water was found to be calcium (Ca 2+ ), followed by sodium (Na + ), and the dominant anion was sulfate (SO 2− 4 ), followed by chloride (Cl – ). In terms of WQI, a significant percentage of surface water samples at stations Ain Smara (AS), Beni Haroune (BH), Grarem (GR), and Sidi Khlifa (SK) exhibited poor water quality, with approximately 89.5%, 90.6%, 78.2%, and 62.7%, respectively, falling into this category. Mann–Kendall trend analysis revealed a significantly increasing trend in WQI values at stations Oued Boumerzoug (ON) and SK, indicating that the temporal variation of WQI in these stations is significant. Hierarchical clustering analysis classified the data into three clusters. The first cluster contained approximately 22% of the total number of months, the second cluster included about 30%, and the third cluster had the highest representation, approximately 48% of the total number of months. Within these clusters, certain stations exhibited higher WQI values. In the first cluster, stations GR and ON had the highest WQI values. In the second cluster, stations Oued Boumerzoug (OB) and SK showed the highest WQI values, while in the last cluster, stations AS, BH, El Milia (EM), and Hammam Grouz (HG) had the highest mean WQI values. Also, approximately 38%, 41%, and 38% of the total water samples in the first, second, and third clusters, respectively, were classified as having poor water quality. The findings of this study can serve as a scientific basis for decision–makers to formulate strategies for surface water quality restoration and management in the region.

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Methodology, A.T.; L.B. and H.S.; software, A.T. and L.B.; validation, L.M.; formal analysis, L.M and A.T. investigation, F.M.; A.T. and L.B.; resources, L.M. and F.E.; data curation, A.T. and L.B.; writing—original draft preparation, A.A., A.T. A. R and L.M.; writing—review and editing, A.A., A.T., A.R, L.M.; supervision, L.B., A.A and L.M; project administration, A.T. and L.B. All authors have read and agreed to the published version of the manuscript.

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Lakouas, F.E., Tiri, A., Belkhiri, L. et al. Water quality assessment of hydrochemical parameters and its spatial–temporal distribution: a case study of water resources in the Kebir Rhumel Basin, Algeria. Euro-Mediterr J Environ Integr (2024). https://doi.org/10.1007/s41207-024-00626-9

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DOI : https://doi.org/10.1007/s41207-024-00626-9

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