Global business units

With the global business unit set up, what, then, is the appropriate role and design for the corporate center and the shared services ... 

Global business divisions do have some disadvantages, such as a loss of some synergies in, for example, financial functions or in national sales operations. In our eyes, however, they are clearly outweighed by the advantages. The value of such global business units lies in several different areas ... 

Dow Coating Materials, a global business unit of The Dow Chemical Co., has named JOSE MARIA BERMUDEZ its new... 

Global business units (GBUs) focus solely on consumers, brands, and competitors around the world. They are responsible for the innovation pipeline, profitability, and shareholder returns from their businesses. 

In the United States, approximately one-third of all processed crude oil, amounting to about 5 x 10° bbl/day, is catalytically converted over fluidized catalysts. Over 500 tons of catalyst are required daily, yielding sales that in 1987 were estimated at -250 million dollars (1). Thus, in terms of catalyst usage and product value, catalytic cracking is still the most important unit operation of the petroleumrefining industry. This year, the worldwide sales of catalysts to the petroleum, petrochemical, and chemical industry are expected to exceed 2.4 billion dollars, and catalyst producers are preparing themselves for the turn of the century when catalysts are projected to become a 5 billion dollars per year global business (2). 

Animal health is a segment of the life sciences industry at the interface of pharmaceuticals and agrochemicals. Global sales were 15 billion in 2005 ( 14.5 billion in 2004, 13.8 billion in 2001, inflation-adjusted). Of the top 10 companies, 9 are business units or spinoffs from pharmaceutical companies (see Table 11.9). The industry is rather concentrated, with the top 10 companies accounting for 75% of total sales. As they do in pharma, US companies dominate in animal health products. Many of the veterinary products in the portfolios had originally been developed for human use or as pesticides. In the pet (respectively companion animal) segment, which comprises cats, dogs, birds, some rodents, reptiles, and horses and represents about 40% of the total market, the association with human health is particularly prominent. 

Our own research into best practice in this area does not surface one right answer, and given the vast differences between chemical companies, we would be very surprised if it did. Nevertheless, one organizational model seems to fit the needs of the chemical industry particularly well in our experience, this is an organization with global business divisions (i.e., product-based business units with worldwide control of all critically important business functions) as the main axle, guided by the corporate center and supported by shared services. About three quarters of the global players in chemicals have adopted this structure. 

Global lead key account managers across some or all business units for selected global customers whose buying needs span several chemical businesses. This helps to avoid pitfalls such as refusing business unit X s most important customer a product from business unit Y in times of product shortage because unit Y rates the customer as a second-tier customer. 

Ralph Marquardt is an Associate in the Frankfurt Office and is a member of the chemical practice. His focus is on global strategy and e-commerce projects. Prior to joining McKinsey he gained three years of experience in the R D department of Degussa AG, leading projects in Degussa s hydrocyanic acid derivatives and methylmethacrylate business units. He holds a PhD from the Ruhr-Universitat Bochum. 

Efforts to develop sustainability indicators and metrics have been made at various scales, ranging from global down to local community, business unit, and technology levels. In general, indicators and metrics are designed to capture the ideas inherent in sustainability and transform them into a manageable set of quantitative measures and indices that are useful for communication and decision-making. In this section, we provide an overview of sustainability indicators and metrics, especially as they relate to the chemical industry. This section will be followed by two specific case studies on the uses of sustainability metrics and indicators in product/process development in chemical companies. 

Automotive production activity is now increasingly globalised, as are also the lubricant companies and their lubricant products, and also the additive companies. The players are now global businesses with common issues to address, well beyond regional and national problems. Whilst European lubricant methods continue to evolve, they increasingly converge with United States and international practice. It is accepted that quality classifications cannot be developed and maintained on poor test procedures, therefore the initial focus was ... 

The benefits of this kind of system could be enormous, in particular, for the crucial issue of current business unit of work management, discussed earlier. Instead of aborting the entire request when a business service object that is required to complete the business transaction is not available, the dynamic business flow management system (DBFMS) will globally search the required... 

Typical TRPM systems perform some of the same operational tasks as transportation administration and management systems but have the ability to plan and execute enterprise-wide pians rather than single business unit plans. Such systems, therefore, must consider inbound, outbound, and replenishment demands throughout a global supply chain network. 

Companies are not limited to only one of the four types. Instead, each company can be involved in several company network types on a horizontal as well as a vertical level. In the automobile industry, for example, it is common practice for companies to cooperate in regional networks with companies on the same value-adding level and at the same time be part of the global supply chain of an automobile manufacturer. In other words, companies do not necessarily have to focus on one cooperative arrangement. Different business units might establish different cooperative arrangements. 

In a complex supply chain network, multiple business units including retailers, distribution centers and factories may be considered in an ATP search. These business units can be dispersed geographically. Hence, an intuitive method for ATP search is based on distance (or lead-time) between inventory location and customer order location. The search process may also be based on a pre-assigned location priority scheme, or on the echelon-level of the business units, e.g. retailer level, distribution center level, manufacturer level. Considering a complex supply chain with multiple distribution centers and factories, Jeong et al. (2002) proposed a global search model to find avail-... 

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