Background:
World Wide Gases a division of Air Products’ supplies three types of gases.
I. Packaged Gas
II. Liquid Bulk Gas
III. On-site/Pipeline Gas
These three gases each make up about 1/3 of World Wide Gases sales. Of these three gases a significant percent of the overall sales were from the specialty chemicals/gases prepared primarily for the electronics industry.
ESM or Electronic Materials was part of World Wide Electronics which in turn was the division of World Wide Gases that served the electronics industry exclusively. ESM included many of the world’s most well-known electronics brands. Examples being Samsung and Chi Mei Optoelectronics.
ESM operated 5 plants in North America, one in Europe and one in Asia. In addition they had over 20 distribution center located close to major longer term contracts.
Q1: Characterize the supply chain and what makes the management of supply chain difficult in this case?
Due to the specialization of some of the gases and how they had to be handled and transported ESM was limited by the amount of chemicals and gases they could transport to their customer base. As would be expected most of the chemicals and gases to be transported were hazardous in nature. These products required specialized containers, ground transportation relying on a fleet of customized vehicles supplied by Air Products.
These same containers were stored at the customer’s sites until their contents were depleted and then they had to be returned to ESM.
Already issues that affect the supply chain are:
1. High expense of training employees to handle, load and transport these hazardous gases and chemicals.
2. Complexity of the containers required to transport said products and were created at a high cost.
3. The fact that the containers when delivered had to stay at the customer site until empty taking them out of the supply chain added to the challenges presented to ESM.
4. Expensive specialized vehicles...