Major players in specialty chemicals industry operate global production networks with numerous sites located in every economic area. If properly managed, these global production networks can by themselves be a source of competitive advantages e.g., via exploitation of factor cost advantages or providing operational hedging against currency fluctuations. However, in most cases today’s production networks still lack the design required to do so. Among the historical reasons responsible for this gap are that:
  • production capacities are concentrated within a few countries, primarily in Europe and North America, while economic growth in general and particularly demand growth for chemical products has shifted to the developing regions of Asia.

  • the ongoing price-cost squeeze forces an industry that traditionally competed on product characteristics and was subsequently accustomed to high margins to focus on cost-efficient production.

  • organic network growth often occurred in the form of market area plants that replicated production activities in new markets due to the significant trade restrictions that prevailed at the time capacity was added.

  • the mergers and acquisitions leading to today’s industry structure were often not accompanied by a comprehensive integration of the respective production networks.


Network Design Production Network Specialty Chemical Decision Support Model Application Case Study 
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© Springer-Verlag Berlin Heidelberg 2007

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