Value Chain Planning Requirements

Chapter 3 and 4 introduce the specific global value chain planning problem to be solved in the work. The problem is determined by the industry specifics. This part has two functions first formalizing the problem and sharpening the work s scope secondly, define value chain planning requirements as basis for a state of the art analysis to identify specific research gaps in the current literature. 

B. Empirical-inductive Global Value Chain Planning Requirements and State of the Art Analysis Identify planning requirements based on case studies and literature Analyze requirements coverage by state of the art research and further specify research gaps... 

The considered global commodity value chain is specified applying a value chain typology. The typology is used also to define the work scope and to derive the value chain planning requirements. 

Value Chain Planning Requirements and State of the Art Analysis... 

Value chain planning requirements are structured along the value chain and value chain planning framework. Requirements are presented in requirements packages and numbered from R1 to R13 across the value chain areas. 

State of the art literature is analyzed to evaluate the coverage of value chain planning requirements in related models. The review helps to iden-... 

Specific areas with gaps considering formulated value chain planning requirements... 

The global value chain planning model is structured in parts mapping the value chain planning requirements structure as shown in fig. 53. 

The developed value chain planning model is very comprehensive with its model basis, value, sales, distribution, production and procurement part. The comprehensiveness of the model is a logical consequence of the comprehensiveness of value chain planning requirements based on industry case and literature analysis. Conclusions ... 

Up to this point, it is assumed that prices are deterministic, which is true for contract demand and procurement but is not necessarily true for spot demand and procurement prices. Therefore, an important value chain planning requirement is the consideration of uncertain prices and price scenarios. Now, uncertain spot demand prices are under consideration and it is illustrated how price uncertainty can be integrated into the model in order to reach robust planning solutions. 

Fig. 108 Value chain planning requirements coverage by the model...

The problem to monthly plan a global value chain for commodities in the chemical industry puts specific requirements considering on the aspects of values, sales, distribution, production and procurement planning in a global network. Recent research related to value chain planning can be clustered into global-oriented, chemical industry-oriented or commodity-oriented research. 

Thirdly, a value chain planning model is elaborated in chapter 5 and 6 to support postulated requirements and to fill identified research gaps. 

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

The introduced methods can be used in a value chain planning model. A model - derived from the Latin word modellus meaning measure - is a focused representation of reality focusing on problem-relevant aspects and their functional relations (Teich 2002, p. 219). The model applies reference, optimization, simulation and/or analysis and visualization methods to support decisions based on formulated requirements. 

Typical management problems given volatile raw material and sales prices are driven by bottleneck steps in the network e.g. Styrene is an example in the network shown in fig. 34 for a product used in multiple subsequent products. In this case, value chain planning across multiple steps from sales to raw material is required to decide the optimal use of Styrene on the subsequent steps not only considering this relation but the entire value chain network including raw material volumes and prices required to produce Styrene. 

Planning Process detailing the global value chain planning process requirements incl. interaction between regional and global level... 

This effect can be compared to the gas consumption of a car requiring more gas per 100 km being run at a higher average speed. Selective papers address the specifics of variable raw material consumption e.g. in the case of fuel consumption of container ships (Jetlund et al. 2004, p. 1271). Hence, the problem to balance raw material consumption and volatile raw material costs with sales quantities and prices has to be solved in value chain planning. 

The coverage shows that models rather focus on specific requirements areas and functions in value chain planning. It turns out that some requirements such as future inventory planning and process throughput smoothing are less investigated than others. 

The procurement planning model part needs to meet the requirements to distinguish spot and contract procurement planning including volumes and values integrated in the overall value chain planning. 

The optimization system architecture is supporting the planner to conduct the planning activities integrated within the required monthly value chain planning process as defined in section 4.1.2. 

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

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. 

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