Over recent months we’ve been participating in the INFORMS blog challenge. This month the designated topic is ‘Operational Research (OR) and the Environment’ – how can OR and Analytics be used to tackle important environmental issues?
A classic OR problem immediately springs to mind – the Travelling Salesman Problem – where, given a list of cities and the distances between them, the task is to find the shortest possible tour that visits each city exactly once. Translated for the layman, the Travelling Consultant Problem is analogous: say you had to visit 12 different clients in a week and the order did not matter, how can you minimise your travel distance? Here, the solution will also be the most environmentally friendly, as by minimising your travel distance you are likely also to be minimising your carbon footprint.
Unfortunately environmental and business objectives do not always coincide. For example, to reduce our carbon footprint further and improve on the optimal solution to the Travelling Consultant Problem we can relax the constraints and consider technology options such as video conferencing. But do the limitations of video conferencing affect our ability as consultants to interact with our clients? Clearly there are occasions when a video conference is the best option from both an environmental and business perspective (it also saves travel time) but in other situations a face-to-face meeting is preferable.
Capgemini and Corporate Responsibility (CR)
The challenge for many businesses is therefore to integrate responsible practices into the core of the business and hence drives continuous improvement on business impacts in society and on the environment. Capgemini has recently achieved platinum status within the leading UK benchmarking CR Index indicating that CR is embedded in strategic decision-making and incentive structures. As part of this, one of our flagship projects, the Merlin data centre, was named as best green data centre in Europe.
The Capgemini OR team has played their part too. In recent years, a number of our consultants have been on secondment to the sustainability team – we have developed dashboards and predictive models to help raise awareness and set feasible targets.
Externally, we’ve also developed a business game focusing on emissions trading and delivered carbon estimation models to assess the impact of a portfolio of proposed projects on carbon emissions. By considering asset level energy consumptions, the carbon estimation models enable client executive to understand the expected reduction in carbon emission based on different programme assumptions.
Aligning Environmental and Business Objectives
I recently attended the OR Society Conference in Nottingham – the annual meeting of practitioners and academics from the OR and Analytics communities. The winner of the Presidents medal (presented to the best practical application of OR) provided a specific example of the alignment between environmental and business objectives. Stephen Hammond from NATS (the leading UK air traffic control provider) discussed the development of a new metric for regulated service quality targets and the corresponding financial rewards and penalties.
Central to the debate was the requirement to minimise CO2 emissions during the routing of aircraft as they arrive at congested airports. NATS required a transparent and measurable metric that drives the right behaviours without the unintended consequences that increase fuel use. In this instance, the airline industry was fully behind the change in regulation as reduced fuel consumptions would dramatically reduce their costs. In contrast, previous service quality metrics were focussed only on delay performance.
The solution was developed using regression models and considered explanatory variables such as the optimal altitude as well as excess distance flown and inefficiencies due to unnecessary climbing, cruising and decent. The vision is that by March 2020, NATS will have cooperated with the industry in reducing the air traffic management CO2 emissions by an average of 10% per flight.
In summary, OR and Analytics can clearly be used to address both environmental and business challenges. If you want to know more, please get in touch or browse a number of previous posts that have already discussed the topic.