Strategic network design in the chemical industry

Abstract

In the chemical industry final products of one producer act as input material to the production process of the following producer (i. e. the customer of the first producer). The following producer may be also a chemical company, further refining and processing the input chemicals, or it may be a producer of some other products, such as textiles, food, pharmaceuticals, etc., using the input chemicals as ingredients for their final products. As production lead times in the chemical industry are usually longer than the order lead times, chemicals are - in most cases - produced in make-to-stock mode. Thus, after production, the final products are pushed into a distribution network and stored in distribution centers. The structure and operational parameters (e. g. safety stock levels) of the distribution network are directly influencing the performance of the chemicals supply chain. © 2008 Springer-Verlag Berlin Heidelberg.