Production Network Design

Besides the issue of cost relevance, interdependencies between production and distribution networks are often limited for companies already operating global networks. Distribution facilities usually serve major markets 

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

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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-... 

Supply Chain Management and Production Network Design... 

Production Network Design and Advanced Planning Systems... 

Considering only production network design, Schmenner (1979) builds on the focused factory concept to develop four distinct multi-plant strategies. While he does not consider an international environment, the generic strategies developed for domestic networks are also applied to international production networks (cf. Kouvelis et al. 2004, p. 127). Based on a product/market or process focus Schmenner defines four plant types ... 

Production Network Design and Industrial Location Science 19... 

As discussed above, production network design includes several interdependent decisions such as number, location, capacity and technology of plants. While all of these decisions have to be made simultaneously to create an optimized production network, the location decision is at the heart... 

Within a plant, equipment is often organized in production lines. Variants of the product family produced by a plant are clustered and assigned to different lines to reduce the complexity of changeovers (e.g., pigments production lines for different color shades within a family of chemically similar pigments). The organization of equipment below the level of production lines is not relevant in the context of production network design (Packowski (1996, pp. 129-131) provides more details on the subject). 

Production network design includes decisions on production capacity and - if technically possible - choice of production technology. Consequently,... 

An additional lever often discussed in global production network design is to adapt production processes and sometimes also product design to the characteristics of the designated plant location (cf. Meyer 2005, pp. 119-... 

Figure 10 also explains why any production network design decision in specialty chemicals needs to take into account the interdependencies between the two perspectives. Restructurings at the value chain level usually affect several production sites. The decision to relocate a value chain s production to a different site may for example endanger the cost competitiveness of the entire site if a large share of the site s fixed costs was absorbed by this value chain. Similarly, the decision to close a production site generally affects multiple value chains and may require network redesign projects for each value chain to decide on how to redistribute production. 

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