An integrated supply chain model with excess heat recovery

Energy efficiency is gaining increasingly attention from industries and from several other stakeholders since energy costs cover a significant share of the industrial total cost for manufacturing companies. The improvement of the performances and the consequent reduction of energy consumption lead to multiple extra benefits in addition to cost savings, for instance improved competitiveness, profitability and quality. For that reason, energy efficiency should be considered as a strategic advantage instead of a marginal issue. The relevance of this issue is particularly significant in energy intensive processes such as the metal industry (e.g. steel and aluminium producers), where usually high temperature processes present a remarkable opportunity to save energy through the excess heat recovery. The aim of the present work is to study a single-vendor single-buyer integrated production-inventory system with the opportunity to recover energy from the excess heat at the vendor production site. The chance to incur in larger savings thanks to a wider integrated network of heat exchanges across various actors along the supply chain (integrated heat recovery) is analysed.