Production portfolio

Total sales of the fine chemical industry were estimated to amount to about 12 biUion in 1991, by an in-depth analysis of the product portfolio of representative fine chemicals manufacturers (11) and by performing top-down analyses of the fife science industry (12). However, some consulting firms gave higher (- 60 x 10 ) figures for the size of the fine chemicals business (13). 

Acknowledgments We are grateful to Christophe Le Ret for his support, Dr Renat Kadyrov (Evonik) and Tom Buel (Materia) for details concerning their product portfolio. 

Ben Venue Laboratories founded in 1938, specializes in the manufacturing of sterile products. Its activities and capabilities can be contracted on a project basis. Since its foundation, a long history of experiences on customized production of a wide variety of sterile products. Product portfolio includes lyophilized dosages, liquid dosages, small molecule compounds, biologicals, cytotoxics, diagnostics, veterinary products, potent compounds. 

USAMRMC Products Portfolio. U.S. Army Medical Research and Material Command, Fort Detrick, MD (May) 2004. 

The product type can be commodity or specialty. Commodity products are considered with a defined standard quality, where price is the key buying criterion. The product life cycle for chemical commodities can be relatively long meaning that the products are in the market partly for decades. Examples for short life cycle commodities on the other hand are semiconductors that are also mainly sold over price, but are shortly out-dated due to technology advances. The number of products is medium and does not reach the complexity of specialty product portfolios, where often more than 1,000 products need to be handled by a company. The product customization is standardized with some variants with respect to product properties but not related to a specific customer. Product perishability is... 

Pharmaceutical firms often choose to in-license compounds to beef up their developmental pipeline or round out their existing product portfolio. Structurally, in-licensing can be represented with a simple extension of the basic stock/flow framework, as shown in Figure 35.19. 

The chemical industry manufactures and supplies the citizen of the world with thousands of chemicals essential to daily life. The industry product portfolio ranges, for example, from epoxy resins designed for paints protecting concrete or metal, to membranes for water purihcation or pharmaceuticals protecting human life. 

Nevertheless, rapid progress through Phase 111 development will allow a longer effective patent life, which will increase the commercial return on a new medicine. In recent years, this factor alone has been a major driver for large pharmaceutical companies to project manage their product portfolios more efficiently. 

In fine chemicals, it does not make sense to build dedicated production units for individual products, because the requirement for single fine chemicals rarely exceeds 100 tons per year (see Figure 5.1) and because the majority of fine chemicals can be produced in standardized equipment. Moreover, the product portfolio is regenerated at a fast pace, so that a single product can be superseded before a dedicated plant could be reimbursed. 

PET packaging has allowed drinks companies to move into in-house bottle production and to operate more independently from packaging manufacturers. In turn the packaging manufacturers have had to offer a more comprehensive service, from managing in-house operations to training customers operating personnel for fully owned operations. This has allowed drinks companies to drive their own packaging developments and product portfolios. 

Product plants serve the company s entire market for the products they produce specializing on the competitive priorities associated with their product portfolio. 

Since the primary role of sites in specialty chemicals production networks is to provide infrastructure services for the different plants they host, the design principle underlying specialty chemicals production networks has to be analyzed from the value chain perspective. Both market area plant and product plant segmentations can be found (cf. Schmenner 1982a, p. 13). Often, in case of relatively small production volumes, each plant produces a segment of the value chain s product portfolio for global... 

Since scope economies are especially hard to quantify, a separate class of optimization models solely dealing with plant loading decisions can be found. For example, Mazzola and Schantz (1997) propose a non-linear mixed integer program that combines a fixed cost charge for each plant-product allocation, a fixed capacity consumption to reflect plant setup and a non-linear capacity-consumption function of the total product portfolio allocated to the plant. To develop the capacity consumption function the authors build product families with similar processing requirements and consider effects from intra- and inter-product family interactions. Based on a linear relaxation the authors explore both tabu-search heuristics and branch-and-bound algorithms to obtain solutions. 

Specialty chemicals value chains often contain a large number of different products. Considering the data requirements discussed above, it is critical to sufficiently aggregate the product portfolio. In a first step a classical ABC analysis was performed to identify the most important products. The pilot value chain analyzed consisted of a total of 350 different products. As can be seen in Figure 38, the top 10% of products already represent more than 60% of the total production volume. The share of total production volume that should be modeled explicitly depends primarily on the variability of raw material and - to a lesser extent - processing requirements across the product portfolio. In the case study 20% of products representing 80% of demand were modeled explicitly. 

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