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

SUPPLY CHAIN

MANAGEMENT

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. z

For more informa- tion on how to achieve supply chain management excel- lence, go to www. aspentech.com

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Chemical Technology • March 2015