Abstract

End markets such as Construction in 2009 went down 15 percent compared to 2007. This article will provide an explanation why the sales volume of upstream suppliers to Construction markets first went down 30-50 percent, and then recovered to around original levels, and then went down again. Royal DSM together with a group of scientists from Eindhoven University of Technology have investigated this effect based on the hypothesis that de-stocking in the long value chains of the chemical industry is the cause of a significant part of the decline, and that de-stocking has been triggered by the collapse of Lehman Brothers mid September 2008. It is further based on the hypothesis that the supply chains act elastically to a strong impulse, thus creating wave-like effects.

RESULTS OF THE INVESTIGATION OF DSM IN THE SUPPLY CHAIN FOR PAINT 

Following a dramatic decrease in sales in the last few months of 2008 at DSM Neoresins+, one of the resin units of DSM, the idea started to arise that this decrease might be due to inventory effects. At that time, actual sales of product in the end markets, such as construction and retail, did not show any substantial decline. To investigate this, however, information on the downstream supply chain of Neoresins+ and the inventory developments in that supply chain was necessary. In January 2009 there was no reliable public information available on inventories and sales, therefore, initiated by DSM NeoResins+, a series of 50 telephone interviews was conducted under distributors, paint producers, job coaters, part producers, OEM, and retailers in a variety of markets. We asked about actual sales, inventory levels, and changes in inventory policies. The results are shown in table 1.
This picture was later confirmed in various other investigations, including a survey with the newspaper Brabants Dagblad and in many quarterly reports. We also found that the supply chain between a Coatin ...