Global Value Chain Planning Model

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

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. 

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...

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

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. 

Models in literature with relation to the scope of this work are reflected by the key words in the title planning, global, commodity and chemical industry in the context to value chain management. Given the comprehensive scope of the value chain planning problem, literature analysis is grouped into these four groups ... 

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. 

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. 

Model implementation and case study evaluation need to prove that the model supports value chain planning decisions towards global optima that the model is applicable in practice based in industry case data and that solution times are acceptable for application in the global monthly planning process. 

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. 

Cause-effect-relations of these dynamics in the value chain may still be obvious, when operating a simple value chain comprising few products, locations and production steps. Considering the global multi-stage, multilocation value chain network, price changes in raw materials cannot directly be related to intermediate or even sales products and their prices. This problem requires specific planning models and methods. 

Developed frameworks are applied to the specific industry problem to monthly plan a global chemical commodity value chain by volumes and values. Sub-objectives are to elaborate characteristics and planning requirements for a global commodity value chain in the chemical industry and to develop, implement and evaluate the respective model. Research question 2 is directed to a real industry case study demonstrating the real existence of formulated requirements, showing the applicability of the developed model in reality and evaluating the model using industry data. 

Li YF, Xia GP, Yang YX et al (2005) Global supply chain tactical planning model based on fuzzy stochastic expected value programming. Syst Eng Theory Pract 8 1-9... 

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