Executive Summary
The US Chemicals industry once, one of the largest American industries, is facing an ongoing trade deficit that was aggravated by volatile natural gas prices and a surge in foreign based manufacturing centers. Subsequently, chemical producers doubled the foreign direct investments as compared to ten years earlier. Despite this increase, US chemical industry remained in a trade deficit since 1996.
Air Products, based in Pennsylvania, ranked among the top specialty gas and chemical companies in US. Their high sales are attributed to Worldwide Gases’ sales, derived from specialty chemicals and gases prepared specifically for the electronics industry. Electronics Specialty Materials (ESM), a business unit within Worldwide
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Though the containers were reusable, they represented a very significant capital investment.
Planning the distribution capacity and creating the shipping schedule required that ESM predict when specific containers would be returned. While the time to product depletion could be estimated based on a customer’s historical usage patterns, cycle time from shipment to container return often varied from these estimates. Tracking the flow of containers on a worldwide basis was a continual challenge for ESM.
Yet another strain on distribution capacity was managing two supply chains for consumers in transition. It was ESM supply chain managers’ responsibility to build the inventory according to the number of product lines they wanted to employ or the speed at which the transition needed to occur. The mere demand-based nature of the industry required ESM to be able to meet the requirements of the customer, often at the expense of inventory and forecast accuracy.
Role of forecasting in Supply chain management
The demand forecasts for different horizons were generated using a software tool. The forecasting system used historical customer demand patterns and statistical models to predict future demand by customer or by SKU. The supply chain team received a compilation of business intelligence from the regional marketing managers and used it to adjust the forecast. It included data on industry growth
Supply chain operations focus on demand planning, forecasting, and inventory management. Forecasts estimate customer demand for a particular product during a specific period of time based on historical data, external drivers such as upcoming sales and promotions, and any changes in trends or competition. Using
As the brand manager for Allround cold medicine, there were many decisions regarding product formulation, strategy, line extensions and product launches over the company’s last 10 periods. The brand was focused on remaining a profitable, mature product family within the cold medicine category, but also maintaining a premium brand image.
The current demand forecasting method is based on qualitative techniques more than quantitative ones. If the forecast is not accurate, the company would carry both inventory and stock out costs. It might lose customers due to shortage of supply or carry additional holding costs due to excess production. If the actual demand doesn’t match the forecast ones, and the forecast was too high, this will result in high inventories, obsolescence, asset disposals, and increased carrying costs. When a forecast is too low, the customer resorts to a competitive product or retailer. A supplier could lose both sales and shelf space at that retail location forever if their predictions continue to be inaccurate. The tolerance level of the average consumer
During the game, I realized that wide gaps in orders of every role in the supply chain such as factory, distributor and retailer create inventory management challenges. For example, distributor records 0units between week1-week 4 compared to retailer within the same period. The retailer records 3units, 5units, 2units and 2units between weeks 1- week 4. The same applies to factory with 0units from weeks 2-4. Addressing inventory management problems requires developing an average unit level to avoid disappointing customers when demand
There was insufficient evidence to demonstrate that Barnes did understand the label to constitute a representation in the form suggested. It was found that Glendale was negligent and in all circumstances, it was considered there was a duty on Glendale to include in the packaging a warning as to the consequences of using corrosive product with hot water in a confined space such as a drain. There was no specific defect with the caustic soda but the issue is whether it was defective within the meaning of Section 75AC. It was found by the court the label to be defective within the meaning of section 75AC.
Chabot needs to increase the flexibility in its supply chain. Chabot is an innovative product manufacturer trying to utilize an efficient supply chain. In order to be able to meet demand, the company needs to deploy excess buffer capacity. Lead time is not up to par so Chabot needs to increase its inventory if it plans to meet unpredictable demand. This will also help increase Chabot’s level of
Forecasting is the methodology utilized in the translation of past experiences in an estimation of the future. The German market presents challenges for forecasting techniques especially for its retail segment. Commercially oriented organizations are used to help during forecasting as general works done by academic scientists are not easy to come across (Bonner, 2009).
Effective supply chain management can provide an important competitive advantage for a business marketer, resulting in improved communication and involvement among members of the chain, increased motivation, and decreased costs. Tracking the movement of and demand for components used to manufacture a product across a variety of potential and actual suppliers, provides insight and the ability to respond instantly to shortages, surpluses, and changes in market conditions. It seeks to optimize production, decrease manufacturing time, minimize inventory, streamline order fulfillment, and reduce cost.
Supply Chain Management : The vertical integration in the supply chain led them to achieve shorter time frame of release and also helped them to
Before, the concept of demand forecast was to serve the key functional groups in achieving their own interest. Facing the new challenges, forecast needed to be more accurate. And therefore it needed a new concept that is to have a consensus forecasting that would accurately reveal market demand and align the needs of key actors in the forecasting process. Leitax implemented two specific changes in forecasting process. The first one is to switch the focus from sell-in to sell-through and second one is to ignore capacity constraints.
Hanover-Bates Chemical Corporation produces chemicals for the chemical plating industry. It has plants in Los Angeles, Houston, Chicago, and Newark. The production process involves taking chemicals purchased from other suppliers and mixing them into user-based formulas. The Hanover-Bates has a strong balance sheet and trades on the over-the-counter market. There are seven sales districts within the organization with a total of forty sales representatives. Each receives a salary, fringe benefits, and commissions of 0.5 percent of their dollar sales volume up to their sales quota. Field sales efforts are extremely important and quality control is critical with supplying the plater with the
The class text states that Supply chain management is frequently divided into supply chain planning applications, supply chain execution applications, logistics management, and warehouse management. Often when companies fail at implementing an efficient supply chain because of the planning section, or inaccurate demand forecasts. The text states electronic data interchange is one of the earliest uses of information technology for supply chain management, Electronic data interchange is the use of the Internet for everyday business transactions. “In this era of information a firm’s supply chain should operate at speed of thought and this is possible only by enhanced e-speed communications and information sharing with their critical partners.” (4)
The concept of demand forecasting more accurately measures and predicts the changes and opportunities in the supply chain.
Business forecasting is the process of studying historical performance for the purpose of using the information gained to project future business conditions so that decisions can be made today that will assist in the achievement of certain goals. Forecasting involves taking historical date and using it to project future data with a mathematical model. Forecasts are extensively used to support business decisions and direct the work of operations managers. In this paper I will introduce different types of forecasting techniques.
Supply change management (SCM) is active in many organizations today. The purpose of SCM is to maximize the company value in order maintain a competitive advantage in the market place. As an Operational Managers (OM) it is essential to oversee the supply chain within an organization. The OM responsibility is to manage the supply chain flow, and to ensure the supply chain has a quality design in order to reduce cost and drive efficiency. (Reid & Sanders, 2010) An organization supply chain includes activities such as product development, sourcing, productions, logistics, material, and other information systems needed to coordinate the movement of goods from suppliers to manufactures, and to final customers.