Journal of Cleaner Production 133 (2016) 182e187

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Risks, determinants, and perspective for creating a railway biodiesel

supply chain: case study of India
Mohita Gangwar a, *, Sachinder Mohan Sharma b
a
FORE School of Mamangement, India
b
National Academy of Indian Railways, Vadodara, India

a r t i c l e i n f o a b s t r a c t

Article history: Globally, the demand for energy is increasing, and the transportation sector is a major consumer of
Received 22 June 2015 energy. There has been a momentum and a mandate to promote the use of biofuels. Although biofuel
Received in revised form usage has been analysed extensively from the technological viewpoint, very few researchers have studied
5 April 2016
biofuel implementation and the supply chain. Biodiesel is being considered as an alternative fuel for
Accepted 2 May 2016
Available online 21 May 2016
railway transportation, which poses some challenges given the structural constraints of the industry. As
has been argued, for the successful implementation and adoption of biodiesel in the railway sector, a
tailor-made country-specic supply chain should be designed. The paper discusses how geographically
Keywords:
Sustainable transport
diverse demand and common technological usage points complicate the decision to make or buy in the
Biodiesel context of railway transportation. Furthermore, the biodiesel and diesel supply chains are compared,
Supply chain risks risks of a biodiesel supply chain are identied, and implementable strategies are suggested. Indian
Indian Railways Railways is a bulk consumer of fuel, and as a public sector focal rm, it should take the lead in sustainable
transportation solutions in view of energy security requirements. This study is unique because it deals
with a biodiesel supply chain in a public sector transport organization in an emerging economy.
2016 Elsevier Ltd. All rights reserved.

1. Introduction Ramdhas et al., 2005) or small local biodiesel production units

Designing a biodiesel supply chain for a railway system is a
unique problem because of the risks and uncertainties (Escobar
et al., 2014) posed not only by the supply side but also by the na-
ture of demand usage in the transportation industry, especially
railways. Most studies on biodiesel are focused on the
manufacturing sector. Studies in the transportation sector are
limited to vehicle eet and road transport (Lonnqvist et al., 2015;
Pereira and Gomez, 2015) and are strongly inuenced by country-
specic policies (Falde and Eklund, 2014). Studies on biofuel us-
age in a railway system from the supply chain perspective are rare
and have to be understood because of their distinctiveness. The
present study is based in India, and this poses the challenges of vast
geographical disposition and extreme climate uctuation, along
with the limitations of an emerging economy vis-a-vis a developed
economy. This leads to the question of having either a large- or
medium-scale centralized system (Skarlis and Kondili, 2012;
(Ewing and Mangi, 2009; Bot et al., 2015). In this paper, the bio-
diesel scenario in India, which has a common single railway system,
is reviewed, and the constraints faced in developing a biodiesel
supply chain are analysed.
The paper contributes to the literature on biodiesel and sus-
tainability by focussing on a specic transportation industry in an
actual scenario. It provides a comprehensive policy perspective on
the design of a biodiesel supply chain for a focal railway trans-
portation company. Moreover, it contributes to the transportation
and railway fuel literature by highlighting the differences between
diesel and biodiesel usage from the demand and supply chain
perspectives. The literature on sustainable supply chains is also
benetted because of the analysis of uncertainties and the risk
management strategies presented herein.
2. Global scenario

Globally, the use of alternative fuels, including biodiesel, has

* Corresponding author.
increased substantially owing to legislation that mandates their
E-mail addresses: mohitagsharma@gmail.com (M. Gangwar), smsharma23@ blending with fossil fuels. In February 2008, Virgin Atlantic used a
gmail.com (S.M. Sharma). 20% biofuel blend in one of its engines on a LondoneAmsterdam

http://dx.doi.org/10.1016/j.jclepro.2016.05.005
0959-6526/ 2016 Elsevier Ltd. All rights reserved.
 M. Gangwar, S.M. Sharma / Journal of Cleaner Production 133 (2016) 182e187
Table 1
Biofuel consumption and production (thousand barrels per day).
Region Year
Consumption
2007 2008 2009 2010
North America 494 676 769 891
Europe 173 238 293 331
Asia & Oceania 46 69 83 92
World 991 1350 1585 1772
Source: (US EIA, 2014).
ight, while Amtrak conducted a yearlong trial with B20 in 2010
(Sims, 2011).
Table 1 summarizes the biodiesel consumption and production
trends of different regions over the years. North America is the
largest producer and consumer. Most regions consume their pro-
duce, except Asia, which exports its biofuel produce. Most biofuel is
ethanol, and it is used for blending with petrol and biodiesel.
Among countries, Germany and Brazil are the world leaders in
biodiesel production. The motivations for biofuel production and
use are different in different countries. The US does it for saving fuel
import costs, Europe does it as a climate change mitigation mea-
sure, and countries such as Brazil do it for providing social benets
and inclusion to poor farmers. Brazil's Federal Government created
the Social Fuel Seal (SCS), according to which biodiesel manufac-
turers are required to purchase a minimum quota of raw material
from small farmers, thereby integrating the small farmers into the
supply chain as raw material suppliers (Leao et al., 2011). Bio-
ethanol is also popular because it has a lower gestation period
(time between plantation and production of biofuel) of 1e2 years
compared to biodiesel made from crops such as jatropha, which
requires 4e5 years, thus lengthening the investment payback
period. In all of these countries, government mandates and the
taxes imposed on CO2 emissions incentivize biofuel use.
In India, the installed biodiesel capacity is about 1.2 million
metric tons per annum (MTPA), and most of this is in the private
sector. Against this, actual consumption from 2009 to 2014 was
about 0.11 MTPA against a consumption potential of 33 MTPA.
Biodiesel exports are in the range of 0.18 MTPA, and they have been
growing at a compounded annual growth rate (CAGR) of 13% since
2009. Therefore, the need for policy intervention on both the
supply and demand sides for incentivizing the use of biofuels in the
domestic market is apparent. Furthermore, the success of such an
intervention/program will depend on the effective design and
implementation of the associated value chain (Biswas and Pohit,
2013).
Biodiesel has various advantages, the most important being that
it is a clean and renewable fuel (Leonardi et al., 2012). The by-
products of the esterication process employed to manufacture
biodiesel, such as oil cake and glycerol, have economic value and
reduce the cost of biodiesel. Moreover, according to the well-to-
wheel approach, biodiesel production requires the least amount
of energy compared to the production of any fossil fuel. It is carbon-
neutral because the CO2 generated in biodiesel manufacturing is
consumed by the oil seed plant. Moreover, biodiesel emits reduced
levels of pollutants such as unburned hydrocarbons, carbon mon-
oxide, sulphates, and particulate matter compared to diesel: blends
as low as B20 can bring about a substantial reduction in greenhouse
gas (GHG) emissions. The cultivation of jatropha and similar feed-
stock on semi-arid land increases green cover and reduces GHG
emissions. With continued cultivation, such semi-arid land will
become fertile in due course, and it could then be used for culti-
vating food crops.
183
Production
2011 2007 2008 2009 2010 2011
946 473 666 769 917 1005
344 154 198 233 255 250
102 49 76 94 100 118
1820 1103 1477 1635 1865 1897
3. Biomass supply chain
The biomass supply chain involves end-to-end management,
starting from the farmer to the end user, and it comprises many
actors including farmers (harvesters), transporters, warehouse
operators, energy plant developers, energy producers, the gov-
ernment, utility providers, and end users (Adams et al., 2011;
Annevelink and de Mol, 2007; Gold and Seuring, 2011). The spe-
cial characteristics of this chain include seasonal availability of in-
puts, demand variation due to uncertain energy production, and
variability of biomass, and the underlying objective is to reduce
environmental impact and minimize costs. Organizations will have
to follow different supply chain congurations, ownership ar-
rangements, and norms (Mafakheri and Nassiri, 2014; Mafakheri
et al., 2012; Lloyd and Dey (2014).
The biomass supply chain is laden with uncertainties (Beamon,
1999; Ramadhas et al., 2005) studied the large-scale production of
biodiesel, while Skarlis and Kondili (2012) explored the small-scale
dynamics of biodiesel production on Crete Island. Escobar et al.
(2014) performed lifecycle assessment of two alternative supplies
in Spain. Bot et al. (2015) studied the biodiesel supply chain for
remote areas in Indonesia. This situation poses its unique chal-
lenges and a small-scale bidirectional supply chain, in which the
producers are the consumers, is an option. The present paper
further suggests the existence of two types of bidirectional supply
chains, namely, xed and mobile, wherein the processing unit itself
is moved (Oliveira et al., 2009). Mirkouei et al. (2016) looks at the
efciencies of this unit. The broad uncertainties (Awudu and Zhang,
2011; Bot et al., 2015) listed in the literature are as follows:
i) Biomass Supply Uncertaintydvariability in the yield and
quality of the supplied inputs. Biomass supply is affected by
seasonality, whereas demand is continuous, which poses the
challenge of storage (Yue et al., 2014). This uncertainty is
pronounced in decentralized and mobile processing because
of variability and reduced control over produce (Iakovou
et al., 2010; Banister, 2005).
ii) Transportation and Logistics Uncertainty: In the case of xed
processing units, the low energy density of biomass neces-
sitates the transport of larger quantities, and from the
viewpoint of mobile processing, density differences and
timeliness can pose problems (Fredericks, 2012).
iii) Production and Operations Uncertainty: This uncertainty
could be attributed to poor inputs, quality, and machine and
operator failure.
iv) Demand and Price Uncertainty: This uncertainty is related to
the price of alternative fuels and other inputs.
v) Government and regulatory uncertainty.
Researchers have studied the technical and economic pre-
requisites for reducing CO2 emissions through the use of biomass-
based energy in the transportation sector (Johansson, 1996).
184 M. Gangwar, S.M. Sharma / Journal of Cleaner Production 133 (2016) 182e187
Banister (2005) suggested seven main barriers to sustainable
transport, namely, nancial, technical/commercial, institutional/
administrative, public acceptance, legal/regulatory, policy related,
and physical. Coelho (2005) explored the trade barrier angle, while
Hoekman (2009) explored the commercialization perspective of
using biofuel in the US. Browne et al. proposed a framework for
assessing the barriers and potential policies to address them.
Studies on the demand elasticity of road transport diesel fuel have
found that the income elasticity for diesel fuel is higher than the
price elasticity of diesel demand (Ramli and Graham, 2014). From
the commercialization viewpoint, biofuels are commercially viable
low-carbon alternatives to fossil fuels in road transport, and they
can help meet the targets of climate change mitigation measures
(Borjesson et al., 2014). Regional factors such as level of local
competition, technical difculties, and government action inu-
ence the introduction of biodiesel (Periguero and Jimenez, 2011).
Biodiesel technology is low risk and easily implementable, but most
countries need to implement solutions customised to local re-
quirements (Steenberghen and Lopez, 2008). Hall (2000) indicated
the need for a technologically competent leader to ensure that
other channel members maintain a sustainable supply chain.
Furthermore, as mentioned by Seuring and Mueller (2008), for a
sustainable supply chain to emerge, the focal company should take
responsibility for designing the product. Hall et al. (2012) looked at
the sustainable implication for the oil and gas, ethanol, and bio-
diesel industry in Brazil. Currently, to the best of the authors'
knowledge, no study has addressed this aspect of supply chain
implementation, especially in the railway sector and, specically, in
relation to India. Transportation logistics in biomass supply chains
have been addressed, but biomass supply chains for the trans-
portation industry have not been researched adequately.
4. Current biodiesel supply chain in India
The Government of India has stipulated a target of blending 20%
biofuel in fossil fuels. IR's Vision 2020 envisages that 10% of its
energy requirement should be satised by renewable sources of
energy (Banerjee, 2009). IR stands to save USD 41.5 Million for
every rupee of reduction in fuel price. Given that the price of a litre
of high-speed diesel (HSD) is 52e55 INR (0.85 USD), biodiesel is an
economically viable substitute. The biggest advantage, of course, is
that HSDebiodiesel blends of up to 20% can be used without any
modication to the engine. Other competing fuels such as CNG/LNG
have been tried as traction fuels. The main disadvantages of these
fuels are storage on locomotives and obtaining explosive clearance
for use in mobile applications. IR modied a diesel-electric multiple
unit (DEMU) to work in the dual-fuel mode using biodiesel and
CNG, but this was at the cost of reduced passenger space because
the CNG cascade was installed in the passenger area. For operating
freight locomotives using CNG, the fuel must be carried on a
separate wagon. Hauling this dead weight would increase fuel
consumption and take up the space of one commercial wagon, thus
reducing the overall benet. As for biodiesel, it can be carried in the
fuel tanks of existing locomotives without any modication.
India has about 300 different varieties of unutilized oilseeds. It is
estimated that the current annual availability of these seeds is
around 25 mn tons. These include pongamia, mahua, cottonseed,
and jatropha. In addition, animal-fat-based oils and waste oils can
be used to produce biodiesel. There is potential to produce about
500e600 mn litres of biodiesel annually from these unutilized
sources, and this would more than satisfy the B20 requirement of
IR. Moreover, India can consider importing palm styrene, palm fatty
acid distillate, and so on, until it becomes self-reliant. The future,
however, lies in lingo-cellulose, biomass, and algae-based biodiesel.
These are second-generation biofuels with shorter production cycle
times, which means raw material production can be scaled as
required. These materials can also be grown on ponds, for example,
and do not require land, thus helping avoid competition with food
crops. In addition, second-generation biofuels can use the portions
of food crop not consumed by humans to avoid competition with
food needs, for example, the use of corn stover for ethanol pro-
duction. In such a case, increased food demand will increase the
supply of feedstock for biofuel production (Mckinnon et al., 2012).
Although the raw material exists, non-governmental organiza-
tions and professional project management organizations will have
to support raw material collection. The jatropha-based seed pro-
cessing industry would be viable if operated on economies of scale.
Backward integration with the seed market and forward integra-
tion with the biodiesel supply industry is necessary to remove
layers from the supply chain that do not add any value to the
process (Shinoj et al., 2010). Moreover, various state governments
and the Ministry of Environment and Forests would need to sup-
port such a program through incentives and subsidies. If successful,
the program will generate employment in rural areas. Positive ef-
fects would be felt in other sectors as well, owing to the prots
generated at different levels of the value chain. The by-products of
the esterication process in biodiesel manufacture include oil cake
and glycerol, and these are of commercial value. The sale of these
products makes the whole process viable because the feedstock
cost is about 78% of biodiesel production cost (Gunatilake et al.,
2011).
Owing to its huge size and criticality to transportation within
the country, Indian Railways (IR) has different priorities, risks, and
decision-making processes compared to rail networks elsewhere.
Furthermore, in developing countries, there is a debate of
competing land use between biomass production for food material
and energy use (Kerckow, 2007). Therefore, there exists a gap in
terms of the models capable of capturing the potential for coop-
erative decision making pertaining to the biomass supply chain and
coordination of individual players' objectives towards a range of
collective supply chain goals.
5. Challenges for biodiesel supply chain
It can be seen that a typical biodiesel supply chain consists of
four stages, namely, seed cultivation, seed marketing, biodiesel
production, and biodiesel distribution. The various stakeholders
involved include farmers, seed researchers, market intermediaries,
traders, biodiesel processors, distributors, consumers, and regula-
tors (the Government). The farms supplying the biomass material
could be owned locally or centrally, resulting in different supply
priorities and attitudes towards the risks and the decision-making
process. In building institutional capacity, community-owned
biomass suppliers should be considered to ensure sustained, ef-
cient supply (Altman and Johnson, 2009; Gold, 2012; Mafakheri
and Nasiri, 2014). McCormick and Kaberger (2007) summarized
that the challenges to this end are more non-technical than
technical.
Certain risks are inherent in the biodiesel supply chain. Weather
and natural causes can adversely affect feedstock availability. Lack
of processing capacity and infrastructure limitations may lead to
reduced feedstock production. There may be a surge in requirement
from competing sectors such as food, and less land may be available
for feedstock plantation.
The risks associated with fossil fuels and biofuels are slightly
different. The volumes of crude oil and rened fuel are comparable,
 M. Gangwar, S.M. Sharma / Journal of Cleaner Production 133 (2016) 182e187 185

Table 2 whereas the volume of feedstock for biofuels is considerably higher

Understanding biodiesel and diesel supply characteristics for Indian Railways. than the volume of the nal product. Therefore, in the case of
Diesel Biodiesel biodiesel, local processing would be benecial. Furthermore, bio-
Demand Certain Certain
diesel has a short shelf life, which means the decay rate of stored
Low seasonality Low seasonality commodity is high. This tilts the balance in favour of decentralized
Supply production. Considering the decaying quality of fossil fuel, it is
Lead time Year Months benecial to transport crude oil, but in the case of biofuel, this is not
Subsidy structure No subsidy Subsidy
true. Thus, local supply risks are more prominent for biofuels.
Primary production Low variety Medium variety
Homogenous Heterogeneous Moreover, it is difcult to vary the production of feedstock within a
Low seasonality High seasonality short period because the gestation period is higher, whereas the
Higher shelf life Lower shelf life quantity of fossil fuels pumped can be varied to stabilize supply or
Primary process Extractive Agri-processing
meet any sudden increase in demand.
Storage Inammable Perishable

Table 3
Risk, strategies, and perspectives for railways biodiesel supply chain.

Risk management strategies Relevant determinant of effectiveness Railways perspective

Raw material supply uncertainty

Feedstock/Geographical
Diversication/Mitigating Supply
Volatility
Geographical diversication/Risk
sharing with diesel
Transportation and logistics uncertainty
Geographical diversication
Production and operations uncertainty
Storage/Risk sharing with diesel
Storage
Storage
Government uncertainty
National and Govt. Policy
Price and demand uncertainty
Risk sharing with Biodiesel/
Mitigating supply volatility
Ability to produce in less risky regions/
Improve resilience of crops/Flexibility
of single processing unit to use multiple
stocks/Cost competitiveness of multiple
stocks
Cost of transporting feedstock versus
fuel/Cost competitiveness of multiple
production centres/Flexibility of biofuel
mandate.
Cost of transporting feedstock versus
Biodiesel/Cost competitiveness of
multiple production centres/
Importance of economics of scale in
production
Operational cost of storage/Flexibility of
biofuel mandate
Decay rate of stored product
Construction cost of storage facility/
Operational cost
Subsidies, duties, and tax exemptions
for cultivation and infrastructure
development/Setting prices of
feedstock and nished biodiesel
relative to the price of diesel
Flexibility of Biodiesel mandate/Spare
capacity of diesel/Market volatility
Seed selection: With the huge expanse of India under one railways system and
the geographical and climatic diversity of the country, the option of using
diverse seeds suitable to the climate is justiable. Although a decentralized
system works for a biomass chain, the land use debate could be settled by using
a combination of patches of fertile and arid land available in each zone, and this
decision could be decentralized at the zone level.
Procurement: Central procurement may result in better prices but may cause
delays and reduce exibility for the consumer. It will, however, ensure a
standard price across IR's various divisions and simplify the procurement
process. For a biodiesel manufacturer to set up a unit to sell to a dedicated
customer, long-term contracts would be required.
Transportation: Diesel is transported by both road and rail. In case Biodiesel has
to be supplied through roadways, one should ensure that the same trucks
should not be used for carrying diesel and biodiesel because this may cause
degradation of biodiesel. It would be essential to colour-code the trucks being
used for biodiesel for easy identication by IR staff as well. Locations
inaccessible by road may not be able to use biodiesel because their requirements
would be considerably lower than a train load of supply.
Dispensing and blending issues: One way of blending is splash blending on
the locomotive. The staff would need to mix both HSD and biodiesel
proportionately to make B5 fuel. The density of biodiesel is higher than that of
HSD, and one would need to ensure that biodiesel is not put rst in the tank;
otherwise, it may not mix properly with HSD. Another option for the railways is
to purchase blended fuel and dispense it into the locomotive. This requires
providing training to personnel.
Consistency of Quality: As far as quality control is concerned, a standard BQ
9000 exists for biodiesel. Facilities need to be set up at different regional
distribution centres to check various parameters of the supplied biodiesel to
ensure it conforms to the specications.
Storage: Biodiesel storage is a challenge. Given that 5% of the fuel would be
biodiesel, the use of existing facilities for dispensing biodiesel would be
effective. One of the tanks can be used for storage. This tank should be colour
coded, and the associated piping arrangement should be modied so that
blending can be performed and separate accounts of HSD and biodiesel can be
maintained. Because metals such as brass, bronze, copper, lead, tin, and zinc
react with biodiesel and accelerate its oxidation, these metals should be avoided
in the pipeline and its valves. Rubber hoses, too, may react with B100 biodiesel
and would need to be modied and replaced from time to time.
Government intervention begins with the setting of the minimum support price
for seeds, environmental norms, and legal provisions concerning the food versus
fuel debate.
Market: The market prices of oil are volatile. Biodiesel is a substitute for HSD,
and the same volatility shall impact the demand and supply of biodiesel. The
market for biodiesel will not be very stable. It will be difcult to ascertain the
price of biodiesel because it will vary with the price of feedstock. It may also not
be viable for biodiesel sellers to sell biodiesel to IR at such a price because it is
expected that selling price of biodiesel will follow a trend similar to the market
rate of HSD. The government should intervene at the policy level to reduce the
price of biodiesel by reducing the duties and taxes applicable.
186 M. Gangwar, S.M. Sharma / Journal of Cleaner Production 133 (2016) 182e187
Biofuels are also limited by the availability of storage facilities
and product shelf life. Long-term biodiesel storage is an issue
because the fuel tends to oxidize. Oxidation causes gel formation,
and the use of such fuel may choke the fuel lters used in loco-
motives. Biodiesel storage at temperatures below 4
C leads to
oxidation and gel formation, and it should be avoided. There is a
need for biodiesel additives to stabilize the fuel at low tempera-
tures. Because India is a vast country with extreme weather con-
ditions, IR may need to decide on whether to use biodiesel at all
during the winter months or in colder regions.
Price volatility can be due to both increase in demand or
reduction in supply. Diesel price is subjected to market manipula-
tions based on strategic volatility risks. However, the other side is
that fossil fuel prices are open to manipulation by prominent
suppliers such OPEC (Ghoddusi et al., 2012). The supply risks in the
context of biofuels include disruption due to weather events and
demand from competing sectors. The impact of riskiness of an input
is reduced if the exibility to shift demand between different pe-
riods or across substitute goods is available. In terms of the trans-
portation sector and its biofuel usage, the requirement is xed or
inelastic. Biofuel has the characteristics of both a substitute and a
complement. Thus, it is argued that blindly copying the practices of
other industries cannot work for the railway industry, and the in-
dustry must develop its specic supply chain solutions comprising
decentralized distribution structures with vertical integration.
According to Fischer (1997), before devising a supply chain, one
should consider the nature of product demand. An attempt has
been made to understand the demand and supply characteristics of
the two fuels, namely, fossil fuel (diesel) and biodiesel, in order to
create the right supply chain (Table 2). As can be understood from
the demand characteristics of biodiesel, the demand is stable and
has low margin. Diesel has characteristics of an extractive supply
chain with long lead time whereas biodiesel has agri-based supply
chain process with shorter lead time. The focus of storage of diesel
is ammability whereas biodiesel is perishability. As the two chains
run parallel the challenge is to address these characteristics
simultaneously. Based on Fischer's work of what is the right supply
chain the product can be classied as a functional one and there-
fore requires an efcient supply chain.
6. Discussion
The foremost critical supply chain decision is network design
(Babazadeh et al., 2015). Supply chain decisions can be classied
into strategic and operational according to their temporal inu-
ence. From the operational perspective, transporting high-water-
content biomass over long distances is cost-prohibitive and un-
stable (Yue et al., 2014). The transactional uncertainty resulting
from the volatility in the agri-market and changing yield supply
forces players to adopt different modes of governance (Gold, 2012).
The broad supply risk management strategies adopted for biofuel
include storage, feedstock diversication, geographical feedstock
diversication, shifting risk to the fossil fuel sector, and reducing
feedstock supply volatility (Ghoddusi et al., 2012). The discussion of
risks, determinants of effectiveness, and railways perspective for
the uncertainties identied by Bot et al. (2015) are summarized in
Table 3 below:
The supply chain should be resilient to all the aforementioned
shocks, and the larger the proportion of biofuel substitution, the
more critical this factor is. In the case that biofuels are produced
globally, various production centres with diverse feedstock crop up
in different locations, thereby increasing the number of nodes in
the supply chain and making it more resilient. The scale of use can
thus both mitigate and increase the supply risk. As mentioned by
Govindan et al. (2016) governance structures will evolve
accordingly.
7. Conclusion
This study considers the use of biodiesel in railway trans-
portation. Although technical literature on the use of biofuel in
railways is extensive, very few studies have analysed it from the
supply chain perspective. Furthermore, biofuel supply chain
research has explored different industries but not railways. This gap
is bridged by the present study. The purpose of this study was to
understand the challenges and address the supply chain risks for IR
because these would be similar for other railway systems. IR's po-
sition in the supply chain is that of a consumer, and it is the focus
partner. It thus has the responsibility of channelizing and opti-
mizing the supply chain. Various demand and supply characteris-
tics of biodiesel have been compared to illustrate the challenges
faced by the supply chain. The challenges include dealing with
geographically diverse demand with high variation in terms of
climatic conditions and terrain, all within the same technological
system. The demand is large. Hence, the use of decentralized
captive sources of supply is advised. Given that climatic and
geographical conditions impact yield, IR should not diversify into
production; hence, buying rather than making is suggested with a
focus on standardization of specication. Vertical integration into
farming is advised against. Different risk mitigation strategies
should be adopted for the different uncertainties faced by this
supply chain. This study looked at the determinants of these stra-
tegies, and perspectives and issues from the railways angle. Future
research may consider optimization models for the biomass supply
chain for a single stage with in-depth analysis and its impact on
total optimization. The empirical study or simulation of upstream
decentralized processing of biofuel feeding into a downstream
single system is another direction. One may also look at the
stakeholder dynamics of farmers, oil companies, and a public sector
railway operator.
Acknowledgement
The Financial and Infrastructural support provided by FORE
School of Management, New Delhi vide Seed money Project No.
(SMP/002/2014) is acknowledged for this study.
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