Supplychain Relationship

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Supply Chain Relation ships: Wheatco Ltd and Chemco Ltd

Case authors: Marie koulif-Souviron, Alan Harrison and jaques Colin


This case is based on two US owned chemical corporations and both industry leader in their chosen activities with equal size. Also it is mentioned in case both have similar organizational cultures and goals. In 1991, results of their partnership they have established Two unit plants in UK. They comprise large wheatco plant with 700 employees and Small chemco plant with 70 employees.

Key Issues:

- Quality issues relating to additive A1
-Issues in information sharing in operational, tactical, strategic levels -Communication in shop level
-high degree of interdependence
- Unreliability in upper stream and downstream of chemco
Indicative question

1. Map and (Using diagrams) describe the supply chain management process, indicating physical product flow within the companies.

Case study boundary

Physical FlowInformation Flow

Fig1. Supply Chain Map (Physical flow, Information Flow within companies) - Marie koulif-Souviron

The supply chain relation involve in this case study are about a chemco facility and two wheatco units namely basic chemical SBU and Specialities SBU. The two units are belonging to two different strategic units. The chemco facilities dedicated to produce chemical additive called ‘A1’ which is used in production of rubbers. B150 is part of basic chemical unit of wheatco is for sole purpose of supplying Feedstock 1 , feed stock 2 and a gas ‘B2’ to which are raw material of chemical additive ‘A1’ to chemco . A1 manufacturing process produces a gas B3 as a by product. This is recycling to the Wheatco Basic. The one only customer of wheatco basics is chemco, while more than half of A1 produced in chemco are supplied to wheatco rubber B88 it is specialities SBU specialized in manufacturing rubbers. Rest of chemco customers are in Europe and USA.

The Chemco UK plant was built in 1990 in near by Wheatco site and describe as ‘across fence neighbour’. The close proximity between both enables Chemco to get feedstock used in its manufacturing operations from Wheatco. And wheatco obtains the chemical additive A1 from Chemco for use in its rubber manufacturing process by pipe lines. The important attribute of this relation referred as ‘close supply chain’ because both of them are suppliers to and customers of each others. And both parties are dependent in others.

The production process is operated in a cyclic clock basis hence there are little buffer stock in supply chain. They have direct contact with each in order inform any variation. Apart from supplying chemicals and additives wheatco supplies utilities to chemco such as water, compressed air and gas etc. it handles chemco waste product as well. 2. Explain and illustrate the information flow that’s should ideally underpin the wheatco – chemco relationship. Supply chain processes involve the flow of information and materials. The information flow precedes and causes material to flow through the supply chain. Thus, supply chain material flow will, only if follows good information flow. The supply chain management overview diagram (Fig1) depicts the flows of information and material between wheatco basic- chemco – wheatco rubber. They have supply chain management processes and systems to support this model’s components. It is important to understand the distinctions between these components and what position each holds in the supply chain.


Fig 2. Wheatco - Chemco local relationship structure- Marie koulif-Souviron 2 The fig shows the direction of information flow within organizational members. Among them manufacturing engineer Wheatco basic, operation manager chemco facility are key people.

There is intensive relationship between upstream of wheatco basic chemco facility and chemco facility to wheatco rubber. In addition to this informal contact there are some teams formed...
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