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Partners along the Value Chain

In the future, the outsourcing trend based on chemical producers strategic focus on core businesses and efficiency considerations is expected to continue in line with the increasing geographical coverage and availability of professional distribution services. [Pg.156]

This trend has also been accelerated by the fact that producers have, for instance, steadily increased the minimum order size they are willing to ship directly, seeking to provide direct delivery focused on large and strategic customers and to outsource distribution for all others. [Pg.156]

In this area in particular, distributors have opportunities for competitive differentiation by working in close cooperation with producers. We see this as the next industry S-curve to establish win-win situations and create joint value through the efficient assignment of resources along the value chain. [Pg.156]

Once more, distributors can benefit here from additional business and a higher degree of asset and personnel utilization. However, the major advantages for the chemical producers are less obvious outsourcing their business with smaller customers can allow them to save costs, reduce complexity, and achieve additional sales through their distributor s network and closer customer proximity (Fig. 12.3). [Pg.156]

The outsourcing of C and D customers, for example, allows producers to save sales, logistics, and administration costs. Furthermore, a focus on their core customers allows them to reduce their cost of complexity significantly and at the same time enhance the profitability of their overall customer portfolio. Further important added value arises from the distributor s in-depth knowledge of regional markets and ability to design tailor-made packages. As a result of their broader market access, distributors are often able to increase the sales of dedicated product lines outsourced by suppliers. New customers may be attracted and switch to products [Pg.156]


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