Product network

At present, the trend is moving from the analysis of individual production and logistics systems towards the optimization of entire production networks, that is, the optimization of the distribution to different production locations taking account of the procurement and distribution chain as indicated by the remarks on supply chain simulation earlier in this chapter. However, in particular for these applications there are some challenges in the basic work of providing consistent and coherent data describing the processes at different sites which most likely are located in different countries. 

The product flow connects the products to the product network. Here BOMs (bills of material), work flows and additional information how to control the generation of quants (see Figure 4.1) and how to enumerate all necessary alternative BOMs are represented in this net. Important data are ... 

Comparisons show that the quant-based combinatorial optimization is a leading approach when it comes to big production networks with many constraints which are typical for the chemical or pharmaceutical industry. 

As illustrated in fig. 27, products produced in a chemical production network are by default finished products, meaning they can be sold to customers instead of being used as intermediate products in the next production step. This principle leads to additional complexity since production demand for a product is composed of secondary demand caused by the subsequent production step as well as market demand or sales opportunities for this product. On the other hand, this also provides the opportunity to better utilize production assets by pushing excess production quantity to the market if the price is sufficiently attractive. 

Timpe CH, Kallrath J (2000) Optimal planning in large multi-site production networks. European Journal of Operational Research 126 (2) 422-435... 

Glasmeier, A. 1991. Technological discontinuities and flexible production networks the case of Switzerland and the world watch industry. Research Policy, 20(5) 469-485. 

Expertise to help companies already exists in many countries. Companies who are adopting safer alternatives often contract outside help. Chemical producers have their own in-house research teams. Other institutes work with SMEs such as the European Cleaner Production networks and some Member States have well-established programmes that focus on sustainable product design and safer chemical use. 

Over the past decade UNIDO, being responsible for the implementation and management of the Programme, established National Cleaner Production Centres (NCPCs) and National Cleaner Production Programmes (NCPPs) in 38 countries. In addition, UNIDO started its first Regional Cleaner Production Network in Latin America in 2005 with 14 countries participating. 

This article presents an overview of the general content of UNIDO s Chemical Leasing toolkit, which aims at enabling a systematic approach to the implementation of Chemical Leasing business models at company level. It has been elaborated in close cooperation with the national and international experts involved in the UNIDO project "Promotion and implementation of Closing-the-Loops cooperation and business models in the chemical industry" that started in 2004. The experience obtained in Egypt, Mexico and Russia presents the basis for this instrument, which is expected to be applied by the entire UNIDO Cleaner Production network. 

The dissertation consists of 5 chapters in addition to this introduction. Chapter 2 lays the foundation by establishing the role of production network design within supply chain management. To this end key terms are defined, the role of Advanced Planning Systems in production network de-... 

Chapter 4 covers the site selection and site controlling phase. Consequently, it deals with the assessment of individual production sites based on primarily qualitative criteria. Alternative Multiple Attribute Decision Analysis methods are reviewed and a decision support model employing the Analytic Hierarchy Process, which can be used both for site selection problems and as a controlling tool to perform site portfolio rankings of entire production networks, is proposed. Experiences from application in industry are reported. 

An application case study of the production network optimization model is reported in Chapter 5. In this context the integration of the optimization model into a planning tool to support interactive explorations of the solution space is demonstrated and guidance on how to develop the data required for quantitative strategic network design analyses is provided. Additionally, important analyses that can be performed using the proposed optimization model are introduced and improvement potentials identified in the course of a pilot application in industry are explained. 

Supply Chain Management and Production Network Design... 

Tactical planning lays out a step by step approach for the implementation of the strategic objectives with a time horizon of 1 to 3 years. Typical decisions include the launch or discontinuation of specific products, production capacity adjustments and product transfers within the existing production network. 

Major decisions to be made when designing a production network are 3... 

The definition of the production network s geographical footprint (e.g., only in one country, only within one economic area or global operations),... 

The underlying design principle of how to split production across a multi-plant net-work and the integration of individual sites into the overall production network,... 

Production Network Design and Advanced Planning Systems... 

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