Integrated Supply Chain Planning in Chemical Industry

The chemical industry is a key industry in developed countries. Not only its size but also its role as a raw material supplier for almost all other industries establishes the chemical industry as one of the most important industries in a nation’s economy. The chemical industry is defined by the type of production process. Chemical industry focuses on the modification of a substance’s chemical and/or physical properties.

This chapter provides an overview on basic definitions, terms, concepts, and techniques to describe and model chemical production processes. This allows modelling of the core components in chemical production networks. Figure 2.1 shows an exemplary chemical production network where the production plants are highlighted.

The chemical industry is one of the key industries in developed countries. In chemical industry, the probably most important sub-group is the basic chemical industry. The basic chemical industry produces a wide range of products which are used as raw materials in almost all other industries. The product portfolio encompasses basic plastics (such as PET or PE), rubber, fertilizers, coatings as well as other speciality chemicals. Most of the produced chemicals are commodities, i.e. products with precise chemical and physical specifications which are sold in huge quantities. The production processes in basic chemical industry are organized in complex multi-stage production plants where chemical and physical transformation processes take place. Multiple of these production plants are typically centralized at production sites to exploit economies of scope. These production sites form a network with interdependent product and energy flows. Larger scaled chemical companies run multiple of those integrated production sites which are again interrelated by product flows. Hence, basic chemical companies are faced with a highly competitive market environment and a highly complex production system. Therefore, companies in this industry particularly benefit from an improved management of their integrated, multi-level production networks.