Agrium Inc. : Strategic Network Design
The Company
Agrium Inc. is a leading global producer and distributor of fertilizers and other agricultural products and services. They are one of the top two nitrogen producers in the world with approximately three percent of the nitrogen market. The Corporation produces and markets four primary groups of fertilizers: nitrogen, phosphate, potash and sulphur. Agrium’s twelve fertilizer plants are among the most modern and efficient in North America.
Agrium uses railcars, trucks, pipelines, barges, and lake vessels to transport fertilizer across its distribution network to roughly 10,000 customer locations. Intermediate distribution facilities include inland marine terminals, company-owned warehouses, leased-warehouses on long and short-term contracts, and rail sidings used for temporary in-transit storage.
Goals and Issues
Agrium wished to purchase computer software that would be used by managers and staff in the marketing, sales, transport, and distribution groups to optimize the sourcing of products to customers and the design of the fertilizer distribution network. The software had to be capable of optimizing large-scale multi-product distribution networks in which products could be sourced from a number of producing plants, ports, or other vendors, shipped by different modes of transport across a multi-echelon distribution network to thousands of customer locations.
The software was required to search out the most profitable or the most economical network flow or design subject to business policies, operating rules, capacity constraints on facilities and transportation lanes, and customer service requirements.
Implementation and Results
Agrium Inc. chose TechnoLogix and Opti-Net ™ for the development and implementation of its supply chain optimization system in a competition whereby software vendors had to submit an RFD (Request for Demonstration) that met an exhaustive list of requirements.
The customized solution took 3+ months to complete and has been used to analyze a host of strategic and tactical issues. The interface was built to be easy and intuitive to use by specialists and non-specialists alike allowing users to construct and modify network models quickly and easily.
The system imports data from Agrium’s SAP ERP system to minimize user input time and uploads back to the SAP system the results of the optimization.Standard reports for both input and output data are provided in different formats including Excel, tabular, graphical, and GIS, available to users to analyze network problems and their solutions.
Our Tools
This was an Opti-Net ™ customized solution, designed and developed to fit corporate requirements and constraints beyond the needs of an entry level user of supply chain management systems. The large volume of data, complex modeling challenges and unique business requirements were handled very efficiently by our state-of-the-art software and our experienced developers.