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Supply Chain Management of Israel Chemicals Ltd.

Discuss Supply Chain Management of Israel Chemicals Ltd. within the Elements Of Logistics forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; Israel Chemicals Ltd. (Hebrew: כימיקלים לישראל בע"מ) (TASE: ICL), also known as ICL, is a multi-national Israeli manufacturing concern that ...

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Supply Chain Management of Israel Chemicals Ltd. - January 11th, 2011

Israel Chemicals Ltd. (Hebrew: כימיקלים לישראל בע"מ) (TASE: ICL), also known as ICL, is a multi-national Israeli manufacturing concern that develops, produces and markets fertilizers, metals and other special-purpose chemical products.

ICL was formed in 1968 as a conglomerate of the Dead Sea Works and other state-owned companies that extracted minerals from Negev desert mines.

In 1977, ICL started its first manufacturing (as opposed to sales) efforts abroad, with the purchase of BK Giulini Chemie GmbH, a German chemicals manufacturer. This was followed in later years with further overseas acquisitions.

ICL was privatized on the Tel Aviv Stock Exchange (TASE) in 1992. The government still retains a "Special State Share," which entitles the State to certain veto rights. Since 1995, ICL's controlling interest is held by the Israel Corporation holding group. As of October 2007, ICL's market cap was US $12.9 Billion.

As of April 2009, the company was said to be considering a bond offering to raise 500 million shekels ($122 million). [1]

90% of ICL's sales are exports. A major player on world markets, ICL through its subsidiaries, accounts for[citation needed]:

* 35% of world bromine production
* 11% of world potash production and 13% of international potash trade (excluding the cross-border trade between the United States and Canada)
* 9% of western world primary magnesium consumption
* 3% of world phosphate rock production, 3% of international phosphate rock trade (excluding the cross-border trade between the US and Canada)
* One of the world’s most integrated manufacturers and suppliers of phosphate products.


Israel Chemicals Ltd is a significant sector of most of the economy of world. Israel Chemicals Ltd derives its importance from the fact that it provides any a country self reliance in terms of food for their people, providing huge direct and indirect employment and more over huge revenue by export of surplus food grain. Israel Chemicals Ltd is backbone of the economy and infrastructure for many countries like India, Brazil and others. Due to technical advancement, improved irrigation system and several other reasons production in Israel Chemicals Ltd has increased several folds. To meet this increased production and business in Israel Chemicals Ltd sector an equally reliable supply chain support is imperative.
Supply chain is basically-“a set of processes functioning synergistically to satisfy a customer’s demand”. Any supply chain trades off between two main attributes of supply chain, “Efficiency and Responsiveness”. Any supply chain is adopted or designed keeping only this two attributes in mind because it defines about which kind of customer the supply chain wants to cater and what is the scale of “return on investment” is being planned for. Agricultural industry uses both kind of supply chain as per the need.
Designing supply chain for products:
Most of the produce in Israel Chemicals Ltd can not be sold directly; as per their mode of consumption they can be categorized as follows-
• There are some products which are not highly perishable like cereals but needed to be processed like- rice is polished, and wheat has to be husked.
• Some products are highly perishable so they must be sent to market very fast or otherwise needed to be processed and packaged well.
For designing a supply chain for any Israel Chemicals Ltd product, it’s important to know which kind of Israel Chemicals Ltd products is that, and accordingly a responsive or efficient supply chain is designed.
Supply chain for non perishable items:
Most all the cereals like Wheat, Rice, Maize etc. and some vegetables like Potato and Onion are highly inelastic in demand, more over they are not highly perishables so the supply chain for such products should focus more on efficiency and cost effectiveness than responsiveness. These products have vital supply and demand links with the market. Cereals needs some kind of processing and polishing after they are harvested from field and from here onwards supply chain comes into play. The food grain is then packed in jute bags and then stored in cold storages till they get order from market.
These type of agricultural products are highly in elastic in demand and the demand more or less remains constant so their demand can easily be forecasted and hence while designing supply chain for such products efficiency should be more preferred.
Supply chain for perishable items:
Fruits, green vegetables and flower come under perishable items and they need all together a more responsive, fast and accountable supply chain as a means of propagation from farms to the market.
These products are elastic and erratic in demand hence their demand forecasting is also difficult. They need more costly type cold storage and refrigeration, special transportation mechanism and on time delivery, all these requirements make this supply chain very costly, but at the same time the price of these products are consummately adjusted to ensure higher margin and profit. While designing supply chain for such items main focus should be given on the responsiveness.
Supply chain management for fruits:
To handle supply chain for these items is a very demanding task. Such products need facilities like refrigerated vans, more efficient cold storage faster transportation. This is the sector where India needs more improvement. India is the second largest producer for both fruits and vegetables, next only to China. Major vegetables include potato, eggplants, tomatoes, cassava, cabbage, dry onions, cauliflower, pumpkin, okra and green peas, while fruits include mangoes, oranges, apples, grapes, pineapples and papaya. So we severely need better support system to handle this massive produce. For example refrigerated vans, the need for refrigerated vans is driven by economics. Every year, India wastes over 30 per cent of the fruits and vegetables owing to shortage of proper cold chain infrastructure. As of today, most of the fruits and vegetables and meat get spoilt by the time they are transported from the farmlands to the retail chains in the cities. The export potential of fresh fruits, vegetables and dairy sector in India has not been fully tapped considering the size and diversity of these sectors. A poor supply chain is a chief reason behind this. However, India has a negligible share in imports of fruits and vegetables by countries like Australia, Hong Kong, Indonesia, Iran, Japan, Jordan, Republic of Korea, Lebanon, Mongolia, New Zealand, Pakistan, Philippines, Singapore, Syria and Thailand. Considering the level of imports in Asian countries, the study noted that India has a high potential in many Asian markets. Potential fruits identified by the study for increasing the exports include apples, oranges, bananas, watermelon, mandarin, pineapple, mangoes and guavas. Potential vegetables identified by the study include garlic, cauliflower, tomatoes, potatoes, cucumbers, peas, mushrooms, onions and eggplants.
Major problems for fresh fruit and vegetable exports from India include low productivity (cost competitiveness) as compared to global standards, prevalence of a low level of pre-harvest and post-harvest technologies, international quality standards and existence of distortion in market channels and poor supply chain system. Developing region specific export facilitation centers and emphasizing the role of Agri-Export Zones (AEZs) further in tandem with the market requirements, especially to provide a specific thrust to the quality and supply chain requirements of the target markets.

ICL's operations also make it a leading supplier of fertilizers in Europe and a major player in numerous specialty chemical market segments. In Israel, ICL is the leading supplier of fertilizers and the leading chemical concern, as well as one of Israel's largest companies.

60% of ICL's raw products (minerals) are excavated in Israel. ICL also owns and operates underground mines in Spain, United Kingdom (North Yorkshire), China, the US and South America.
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Last edited by abhishreshthaa; April 29th, 2011 at 04:23 PM..
   
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