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Us Chemicals Case Summary

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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 …show more content…

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

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