Chemical Technology March 2015

Chemical Technology • March 2015

drives all other functions, such as planning and scheduling.

The process of developing accurate and consistent projec-

tions of market demand and continuously updating these

projections as circumstances change is known as demand

management, and can include activities such as:

• Consolidating the shipment data for various market

segments

• Generating forecasts

• Reconciling forecasts with firm orders

• Collaborating with sales, marketing and customers to

refine the forecast

• Tracking forecast accuracy

• Other processes that are essential for developing a sound

business plan.

Best-of-breed software uses this demand forecast to gener-

ate an optimal plan that factors in labour and equipment,

raw materials or feedstock, inbound/outbound transporta-

tion, storage capacity and other variables. The role of supply

chain planning software in the S&OP process is to focus on

business-wide supply and inventory planning, and speci-

fies ‘where to make what’ based on customer demand. It

involves allocating production across various plants while

minimising transportation and operating costs.

The best supply chain software provides web-based

S&OP analytics for enterprise-wide reporting and access to

data and analysis during the planning process. Additionally,

the latest software features easy-to-use software interfaces

with streamlined workflows to help users visually navigate

operational complexity. Combined, these capabilities al-

low users to attain visibility into their current situation by

combining data from their ERP and production systems, as

well as results from their planning and scheduling tools for

a complete picture of their supply chain.

Many leading specialty chemicals companies have ad-

opted aspenONE® Supply Chain Management to address

inefficiencies in end-to-end processes, to drive first quality

production, tominimise inventory and distribution costs, and

to allow rapid innovation to meet customer requirements.

Plant scheduling

Together with S&OP, Scheduling is the other critical busi-

ness component of an effective supply chain management

system. Schedulers face the similarly complex task of

translating the product plan into an execution plan at the

plant level. In this area, companies require supply chain

systems that can support the high level of business and

manufacturing agility required to handle sudden changes

to the schedule.

Specialty chemicals manufacturers have a diverse set of

multi-stage operations that must simultaneously consider

all manufacturing constraints. Timing of these multi-stage

operations is an essential element in meeting customer de-

mand and keeping work-in-process inventory at acceptable

levels. As always, the detail is crucial. Best-in-class chemical

companies aremaking sure the details aremodelled by their

decisions support tools. Decision support software provides

visibility into the following key areas:

• Shared resources –

Resources that can be used by more

than one asset (such as people, pipes, tanks, warehouse

space, clean-in-place and emissions) must be recognised

to avoid bringing production to a halt.

• Production sequence optimisation –

Optimisation of complex

setups and transitions based on an unlimited number of

properties or attributes, such as product family and raw

materials consumed.

• Time-dependent properties –

Specialty chemicals compa-

nies in particular often have shelf life constraints where

Schedulers need to have forward visibility into materials

that must be used before they expire in order to minimise

product loss.

• Product blending –

Blending optimisation is vital. Perfecting

the combination of rawmaterials with the right properties

to get on-spec finished product, taking into account the

physical and equipment handling constraints that are

associated with blending problems.

With complex and detailed modelling of the production

process, there is the danger of going too far into the realm

of highly customised scheduling solutions at each plant.

Business leaders should resist the temptation to pursue

highly customised and difficult to maintain models. The

focus should be on scheduling solutions that are stan-

dardised, yet scalable and flexible enough to capture the

unique requirements of a particular business.

The bottom line of supply chain

excellence

Specialty chemicals companies today face numerous un-

certainties and constantly navigate internal and external

business variables – but sophisticated software systems

are available to drive supply chain excellence and to align

people and processes. By building S&OP and scheduling

operations grounded in the latest supply chain optimisation

software, companies can make the best operational deci-

sions, respond to market fluctuations, absorb disruptions

and execute against the plan. The tangible benefits are

clear – improve margin improvement 4 – 20 %, improve

customer service 5 – 10 %, improve first-quality production

5 % and reduce costs 4 – 6 %. Conversely, the cost of lost

opportunity may never be known. Through leading-edge

supply chain software, specialty chemicals manufacturers

can optimise performance, align processes and empower

decision makers to maximise profit and gain the competi-

tive advantage.

SUPPLY CHAIN

MANAGEMENT

For more informa-

tion on how to

achieve supply chain

management excel-

lence, go to www.

aspentech.com