A sustainable operation is one that can be carried out forever. To that end, a sustainable operation in a for-profit organization maximizes the triple bottom line of economic, environmental and social outcomes.  In other words, it takes into account the 3P’s:

• Profit: The operation has to be profitable, by definition.
• People: The operation has to satisfy its stakeholders: shareholders, employees, customers, suppliers, governments, and communities where it operates.
• Planet: Inputs can be sourced forever, the transformation process is non-polluting, and the outputs can be repaired, reused, recycled, composted, and/or remanufactured.

The INFORMS community in operations management, in particular the Manufacturing & Service Operations Management (M&SOM) Society, has a rich history of research in sustainability. For the purposes of this collection, we categorize the research into five separate themes: (i) energy and emissions reduction, (ii) responsible sourcing, (iii) closed-loop supply chains and the circular economy, (iv) social sustainability & poverty alleviation, and (v) transportation and servicizing. We briefly comment on each now.

The order of research papers for each of the sections is in chronological order, starting from oldest to newest. At the end of each section, we also provide some relevant teaching cases and videos.

Energy Efficiency, Renewable Energy, and Emissions Reduction: Research has analyzed the effectiveness of different practices to reduce energy consumption, both residential and commercial, such as demand response programs, time of use electricity pricing, and environmental management systems, among others.  There is also significant research in renewable energy systems, in particular optimal investments in renewable energy capacity by utilities (utility solar, wind), firms and consumers (e.g., rooftop solar) and the impact of different government policies such as net metering, feed-in tariffs, and tax credits on such investments. The optimization tools to analyze such investments must take into account (random) supply intermittency, which makes the problem more challenging, particularly when coupled with other investments in conventional generation, such as natural gas.  Some studies also consider energy storage, such as batteries, and pumped hydro.  This is a significantly more challenging problem, as it also requires an optimal operating policy for the battery, which transforms the one-time investment problem into a dynamic problem.  Some research finds optimal operating and commitment policies for renewable and storage resources. Renewable resources may need to be curtailed when there is excess production, and storage resources help fill this gap between supply and demand.

The M&SOM community is also actively engaged in research in emissions reduction, including carbon footprint reduction.  Research has analyzed the impact of emissions regulation, such as cap and trade and carbon tax, on firms, suppliers, and markets where such firms operate. For firms, research also studies the economics and effectiveness of different carbon footprint reductions available, such as carbon offsets, and internal reductions. 

The table below provides a list of the research papers in this section:

Responsible Sourcing:  Generally speaking, research on responsible sourcing concerns how to ensure or incentivize that suppliers behave in an environmentally and/or socially responsible manner.  Such efforts include vertical integration, auditing, contingency payments, supplier certification, offer of more business to responsible suppliers, improving visibility in the supply chain (including revealing the supplier list), disclosing operations to investors, and so forth.  Some of these efforts have competitive implications, and the literature studies such trade-offs.  A significant stream of research analyzes the key role of auditing suppliers, and what are efficient and effective auditing mechanisms.  Examples here include how to avoid a collusion between auditor and supplier, prioritizing “central” suppliers for auditing (when there are too many), and cooperation among competing firms for auditing suppliers (joint and shared audits), among others.  A stream of research analyzes the impact of providing information related to social responsibility in the supply chain on consumer demand.

The table below provides a list of the research papers in this section:

Closed-loop supply chains and the circular economy: A “regular” supply chain has forward flows of materials and information, from suppliers to manufacturers and then to retailers. A closed-loop supply chain (CLSC) has, in addition to these forward flows, reverse flows of products post-consumer use, from consumers to collection points, retailers, manufacturers and/or suppliers, for reuse, remanufacturing (refurbishing), recycling, composting, and/or disposal.  These reverse flows might be motivated for regulatory reasons, as is the case with take-back legislation for electronics and pharmaceuticals, or from profitability reasons–a manufacturer might find it profitable to remanufacture (or refurbish) a product and re-market again as a remanufactured (or refurbished) product, or re-use it for warranty claims.  Research in CLSCs is fairly well developed, in particular in the area of remanufacturing.  Introducing a remanufactured product to the market has cannibalization and market expansion effects, and research has analyzed this key trade-off, including empirical insights into how consumers perceive both types of products.  Research has also studied the general design of a CLSC to maximize profitability. There is a significant body of research on inventory management systems for managing the forward and reverse flows, especially because with remanufacturing there is uncertainty not only in market demand, but also supply of used products, particularly in industries such as automotive parts where competition for “cores” (as used products are often called) is intense.  There is also a large body of research in take-back legislation, which requires manufacturers to ensure that used products are responsibly recycled; this type of legislation is common for electronics and pharmaceuticals. Such research has addressed how firms respond (in terms of product design, pricing, investments, cooperation with other firms, etc.) to different types of legislation, including implementation details such as how to collect used products, and how to organize the recycling system.  There is also significant research into consumer returns (e.g., how to reduce consumer returns, what are “good” product return policies, and so forth), but this is not included here unless there is an explicit link to sustainability, for example, the research addresses the reuse or remanufacturing of product returns.  A circular economy usually refers to the combination of a closed-loop supply chain, a sustainably designed product (that makes product recovery attractive), and a business model. 

The table below provides a list of the research papers in this section:

Social responsibility, poverty alleviation: Here is an area that has significant potential for research, considering the UN 17 Sustainable Development Goals, and the fact that most of the OM literature so far focuses on operations in developed countries, where the infrastructure is good, and standards for working conditions in factories are high. There is research here on different ways that operations can improve the lives of people in developing countries: improving farmer welfare through improved access to water, improving access to electricity to the poor and to those in remote areas, empowering women and the poor through new business models, improving factory conditions, and reducing slavery in supply chains, among others.

The table below provides a list of the research papers in this section:

Transportation and servicizing:  A significant body of research in OM concerns the design of the charging station (and/or battery swapping) infrastructure for electric vehicles, as well as different business models for firms in the electric vehicle value chain, including utilities.  Research also studies the proper role of government in the on-going transition to electric vehicles, including different types of incentives (such as subsidies) to different value chain actors. There is some emerging research on autonomous vehicles.  Finally, there is research on the environmental and welfare impacts of servicizing, leasing, and the sharing economy, which plays a large role in transportation. (We do not include here research that strictly addresses operational/optimization aspects of the sharing economy, such as better algorithms for matching supply and demand, without discussing their environmental and/or social welfare impacts).       

The table below provides a list of the research papers in this section: