No matter what the product produced, the process industry almost always faces a predicament. The nature of the processes used require production runs to be somewhat decoupled from customer demand to optimise batch sizes and cost per unit. Furthermore supply patterns might be irregular and seasonality plays an important part both on the supply as well as the demand side. Companies producing their products in a continuous or semi-continuous process are caught in the middle. The only feasible response to the problems encountered is usually the buffering of supply and demand patterns through inventories.
Inventories are expensive and add to the cost of the product.
Additionally the nature of the products is often such that the products have a limited shelf live and need to reach the customer in perfect condition before the expiration of the shelf live. The challenge lies in right-sizing any inventories and strategically positioning them around the globe so that customer requirements can be met timely and cost effective.