Value Planning Requirements

Now, future inventory value planning as a specific chemical commodity value planning requirement reflecting the volatility of working capital and capital costs influenced by volatile raw material prices is described. 

As postulated in value planning requirements, value planning results are structured by ... 

Developed frameworks are applied to the specific industry problem to monthly plan a global chemical commodity value chain by volumes and values. Sub-objectives are to elaborate characteristics and planning requirements for a global commodity value chain in the chemical industry and to develop, implement and evaluate the respective model. Research question 2 is directed to a real industry case study demonstrating the real existence of formulated requirements, showing the applicability of the developed model in reality and evaluating the model using industry data. 

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. 

The defined scope determines the applicability of developed planning requirements and the planning model limited to the selected attributes. For example, the value chain for commodity production is focused on campaign and continuous production modes batch production is out of the scope that planning requirements and consequently, planning model are not developed for batch production problems. 

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

Planning requirements for the specified value chain are elaborated in this chapter based on the value chain management framework established in chapter 2. Planning requirements are gathered from industry cases, research literature analysis and practice studies. A state of the art analysis of recent literature is conducted for these requirements in order to present recent concepts and applicable ideas and to specify research gaps. Requirements collection and coverage by state of the art literature is summarized at the end of the chapter also as input for the model development in the subsequent chapter. 

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. 

Value Planning-, detailing the requirements to plan monthly values consistent to the company profit and loss statement... 

Procurement Planning detailing the planning requirements for procurement of raw materials and products for a commodity business by volume and values... 

A global value plan has to be calculated on the basis of the corporate base currency requiring all values measured in other currencies to be transformed into the basis currency applying exchange rate plans (Delf-mann/Alberts 2000) and also applying interest rates to discount period cash flows to a net present value of the tactical value plan (see also Eppen et al. 1989, p. 520 for an example in the automotive industry). 

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... 

Global models target to support strategic invest decisions and consequently follow also the requirements of value planning to have actual costs and turnover as decision basis as it is done in classical investment calculation including taxes... 

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

Value planning described in subchapter 5.3 consolidates all values in a consistent profit and loss statement view and maximizes global profit. In addition, value planning addresses the requirements of planning future inventory values across the value chain network. 

In order to reflect these lead times, the concept of a timestamp is introduced. Timestamp is used in computer science documenting the system time when a certain event or transaction occurs e.g. for logging events (N.N. 2007). In the context of future inventory value planning, the time-stamp marks the period, when the first raw material has reached a certain stage in the value chain network included into a specific product. In the example illustrated in fig. 57, the raw material is processed in the same period to be converted into product 1. Therefore, all four value chain steps indexed from one to four occur in the same period and have the same time-stamp one. Conversion into product 2, however, requires additional time caused by production lead times, safety inventory and/or transportation time, that the steps indexed with five and six have a time stamp of two. The timestamp reflects that the inventory value of product 2 is not based on the raw material costs from the same period but based on the raw material costs from the previous period in order to reflect the lead time. Consequently, value chain indices and timestamps are defined for all steps and can cover multiple periods reflecting that raw materials in a global complex multi-stage value chain network can take several months, until they are sold as part of a finished product to the market. 

Concluding, the transportation planning model realized the planning requirements for a global value chain network with respect to global transportation send and received quantities as well as transit inventory planning. 

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 ... 

Solution times are sufficiently fast to be applied in tactical planning where no real time response times are required. Secondly, value results are presented. All value results are indexed focusing on comparing results and to ensure confidentiality of industry data. Initially, the value plan with total profits and single values in sales, distribution, production and procurement is analyzed. 

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. 

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