Global consolidation

Sourcing commodity items from low-wage economies 

Two sourcing issues are used by internationally operating organisations  

Internationally operating companies are on a constant quest to find new, cheaper sources of labour and materials. This trend led to the move of manufacturing from developed industrial regions to lower-cost economies. Examples of this are  

These developing economies have seen impressive growth over recent years. This has led to increased prosperity for their people and rising standards of living. However, these advances in social standards raise the cost of labour and other resources. Therefore, the relentless search for the lowest production cost has led to some companies re-sourcing commodity items to lower-wage countries in Asia, North Africa and South America. 

In some cases this movement of facilities around the globe has come full circle, with Asian companies setting up plants in the UK not only to gain access to the EU market but also to take advantage of lower overall costs. 

---

Hence, value chain management and specifically global value chain planning of commodities plays an important role for chemical companies due to the direct relation to globalization, consolidation as well as commoditization. Specifics of chemical commodities are presented in the following. 

After a period of mushrooming with many national varieties, GMP and validation have entered a phase of global consolidation. The concept of GMPs has converged on the quality systems approach rather than having quality assurance as the unique custodian of quality in addition to being an internal police force. Validation has become accepted as a tool to be used with common sense instead of a cover-it-all paper exercise. Risk assessment has been identified as the important core activity controlling the extent and depth of validation. 

Prior to the global consolidation of the pharmaceutical industry in the past decade, compulsory licenses had been routinely used in North America and Europe to facilitate the distribution of new (generic or not) medications. The use of generic medicines, in turn, has resulted in important economies for the public healthcare system, thereby contributing to its viability and the protection of public... 

Owing to internationalisation, logistics pipelines are extended and have to cope with differences in infrastructure across countries, while needing to realise delivery within the time-to-market. This may drive localisation. On the other hand, the opportunity for global consolidation may drive international centralisation. 

Table 10.4 shows the main trends affecting the overall polymer business. However, differentiation according to polymer type is necessary (Table 10.5). The plastics industry still has a highly fragmented structure, and consolidation will continue in order to meet the demands of global competition, until there are no further incremental efficiencies to be gained. At the present time, the plastics industry is plagued by low profit margins and surplus capacity.

Oceanic zooplankton species, wax esters in, 26 204-205 Ocean ranching, 3 198 Ocean raw materials, 17 684-699 consolidated deposits of, 17 691-694 economic aspects of, 17 697 fluid deposits of, 17 694-695 minerals recovery from, 17 695—697 unconsolidated deposits of, 17 686-691 Ocean resources, global, 17 684—686 Oceans, selenium content of, 22 11. See also Marine entries Seawater Ocean thermal energy conversion (OTEC) power plants, 13 267, 268 26 92-93 Ocean transportation, 25 328 Ochratoxin A, 7 267-268 Ochre (mineral hematite) color, 7 333... 

Value planning described in subchapter 5.3 consolidates all values in a consistent profit and loss statement view and maximizes global profit. In addition, value planning addresses the requirements of planning future inventory values across the value chain network. 

Hendrickson, M., Heffernan, W.D., Howard, P.H. and Heffernan J.B. 2001 Consolidation in Pood Retailing and Dairy Implications for Farmers and Consumers in a Global Pood System. Report to the National Farmers Union, January 8, 2001. Department of Rural Sociology, University of Missouri, Columbia. 

Thayer, A. Consolidation Reshapes Drug Industry, Shifts Employment and R D Outlook In Response to Global Pressmes on the Industiy, Companies Are Merging lo Cieale Entities With the Critical Mass to Compete, Chem. Eng News, 73(42),... 

Ozawa, M., Hirano, H., Koma, Y., Kawata, T. 1995. Enhancing actinides separation by consolidated PUREX and TRUEX processes intensified by salt-free requisite. Int. Conf. Evaluation of Emerging Nuclear Fuel Cycle Systems. GLOBAL 95, Vol. 1, Versailles, France, September 11-14, pp. 585-594. 

---