Abstract

Adama Agan Ltd. is a global leading manufacturer and distributer of crop protection, providing solutions to farmers around the world to combat weeds, insects and disease. Presented study focused on supply chain improvement of agricultural pesticides from enterprise organization production (located in Ashdod). The main motivation was high logistics costs of 34M$ yearly versus targeted 23M$. Initial study identified that the main cause would be supply gap of 12% of late orders (compered to SLA of 10% allowance), which highly affects logistics costs. Therefore, main goals were to increase the on-time orders rate supply by 8% (from 78% actual) and logistics costs reduction of 20% of current situation.

Methodology in use included process mining, scheduling methods, linear programing, Lean management improvement and economic feasibility evaluations. Data gathering included interviews and massive data collection from information systems. Analysis of current work process identified gaps at company's packaging facilities. Using cause and effect diagram, mapped the main problems that cause delays in supply and estimated that the work methods and environment cause 65% of the reasons for late orders. Exporting from ERP system all data for the year 2019, enabled usage of process mining, massive analysis method with DISCO software (by Fluxicon).  While examining the prevalence of organizational actions and performance research focused on relevant parts of the process. Map process analysis identified gap between desired and actual situation, the average time for order processing 96 days compared to the 54- day factory standard. Economic calculations showed the costs incurred due to this delay caused logistics expenses of 9 M$ a year.

            In order to improve the delivery of orders to customers researches employed several models. Lean management method was utilized to improve the packaging process workflow. Using scheduling methods EDD was selected as most appropriate approach to minimize the late days and orders, opposed to SPT, CR and existing WSPT method. With the linear programing model, we determined the amount of facilities required for each type of packaging, and found that according to the annual capacity, an additional packaging facility was required for the 5-liter facility. This could be implemented by outsourcing or investment in purchasing. Weighted factor model, while criteria and weights chosen by company executives, implied the best alternative is to add a packaging facility, for which the economic viability examination showed positive NPV with ROI of six months. All the results were gathered to 3 main recommendations – changes in orders scheduling, implementation of Lean recommendations and purchase of a new packaging facility.

            Based on this study, implementation of full recommendations will reduce the rate of late orders in 14%, increasing the supply measure to 98.6%. Adama Agan LTD. will save in the logistics cost 12.9 M$ and thus overall logistics cost will be 21.1 M$. This is reduction of 62%, better than the target of 20%. This case used the methods in distinguished way, so other companies with worldwide logistics can learn from it and improve complicated supply chain measures to reduce logistic costs.