Demand and Supply Forecasting at Air Products
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 Electronics, served electronics industry exclusively.
ESM’s responsibilities included accomplishing and balancing the following factors: * forecasting future demand and container usage * managing inventory and tracking the flow of containers * planning distribution capacity * creating the shipping schedule * managing supply chains
ESM managers can enhance forecast accuracy by integrating the variable causal factors in the operational forecasting. Collaboration and accurate data collection is a must in current chemical industry for relevant prediction of future demand.
Supply chain model and constraints
ESM customers included many of world’s leading electronics companies and operated in seven production plants with approximately 20 distribution centers. While production capacity was a primary consideration in developing supply plans, ESM’s output was more limited by distribution capacity. Most of their products were designated as hazardous materials. They required shipment within specialized containers and good transportation by specialized vehicles. The containers in which the products were transported and stored were returned to ESM once the products got depleted. They were then decontaminated for
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 Electronics, served electronics industry exclusively.
ESM’s responsibilities included accomplishing and balancing the following factors: * forecasting future demand and container usage * managing inventory and tracking the flow of containers * planning distribution capacity * creating the shipping schedule * managing supply chains
ESM managers can enhance forecast accuracy by integrating the variable causal factors in the operational forecasting. Collaboration and accurate data collection is a must in current chemical industry for relevant prediction of future demand.
Supply chain model and constraints
ESM customers included many of world’s leading electronics companies and operated in seven production plants with approximately 20 distribution centers. While production capacity was a primary consideration in developing supply plans, ESM’s output was more limited by distribution capacity. Most of their products were designated as hazardous materials. They required shipment within specialized containers and good transportation by specialized vehicles. The containers in which the products were transported and stored were returned to ESM once the products got depleted. They were then decontaminated for