Global value chain

The problem to monthly plan a global value chain for commodities in the chemical industry puts specific requirements considering on the aspects of values, sales, distribution, production and procurement planning in a global network. Recent research related to value chain planning can be clustered into global-oriented, chemical industry-oriented or commodity-oriented research. 

Chapter 3 and 4 introduce the specific global value chain planning problem to be solved in the work. The problem is determined by the industry specifics. This part has two functions first formalizing the problem and sharpening the work s scope secondly, define value chain planning requirements as basis for a state of the art analysis to identify specific research gaps in the current literature. 

B. Empirical-inductive Global Value Chain Planning Requirements and State of the Art Analysis Identify planning requirements based on case studies and literature Analyze requirements coverage by state of the art research and further specify research gaps... 

C. Analytical-deductive Global Value Chain Planning Model Model development for formulated requirements... 

Three research areas with respective sub-topics are relevant to the problem of managing a global value chain end-to-end by volume and value ... 

The value chain management framework is used as conceptual basis for developing a global value chain planning model for the specific scope of a global commodity value chain in the chemical industry. 

The chemical industry is the application field for the study and the development of a global value chain planning model. General characteristics of the chemical industry as application field are described in this chapter. Particularities of chemical commodities are described in more detail being relevant for the considered case. 

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. 

The global value chain network for commodities in the chemical industry is composed by locations, resources and transportation lanes as illustrated in fig. 39... 

Here, the scope is on an intercompany value chain network for one focal company that can make central planning decisions for its own facilities and tries to optimize the internal global value chain network with clear interfaces to multiple customers and multiple suppliers. 

Relevant characteristics of the chemical industry and the considered global value chain network have been presented in more detail. Results can be summarized ... 

Planning Process detailing the global value chain planning process requirements incl. interaction between regional and global level... 

Distribution Planning detailing the requirements for planning transportation and inventory volumes and values addressing the aspect of a global value chain... 

Planning a global value chain on a monthly basis is based on the value chain planning framework introduced in chapter 2 and shown again as an excerpt in fig. 43... 

Profit III tries to match the EBT level not considering taxes on a tactical value chain planning level, taxes are not decision-relevant for a global value chain strategy and network design decisions, taxes are of course an important parameter to consider when deciding on sites and locations in the value chain network... 

Distribution planning covers transportation and inventory planning in the global value chain network from a company perspective. Distribution planning has to balance volumes and flows in and between the respective sales, production, distribution and procurement locations. Significant lead... 

In the following an integrated global value chain planning model for chemical commodities supporting end-to-end value planning of volumes and values is developed to close the research gap. 

The global value chain planning model is structured in parts mapping the value chain planning requirements structure as shown in fig. 53. 

Fig. 53 Global value chain planning model-overview...

The planning framework consists of planning bucket, granularity, horizon and frequency. Characteristics and possible attributes of the global value chain planning problem are shown in table 20. 

The planning objective is to plan global value chain volumes and values. Initially, the value planning model with the objective function to maximize global profit is presented. The objective function also includes a relaxation concept for hard constraints leading to potential plan infeasibility. The future-oriented inventory value planning concept based on volatile raw material prices is presented at the end of the subchapter. 

In a global value chain network, products are not always composed of materials from the same location. A location mapping factor defines, which share of material from a defined location is included in the subsequent product. 

Concluding, the transportation planning model realized the planning requirements for a global value chain network with respect to global transportation send and received quantities as well as transit inventory planning. 

The case study demonstrated how the company can use the developed model in decision support. Having implementing the global value chain planning process and model the company could significantly improve overall profitability of the business. Specifically, the spot price mechanism used to better coordinate sales and supply decisions showed a significant impact for the company. 

So, the global value chain planning model covers the formulated requirements as illustrated in fig. 108. 

The model has been evaluated by means of a global commodity industry case. The evaluation proved the importance of value chain planning to integrate volume and value decisions from sales to procurement exchange rate, sales and raw material price and elasticity scenarios have key influences on total profit and volume planning decisions within the global value chain network. 

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