Toward Global Food Security: Transforming OCP Through Analytics

Adrian Becker (), Kassem Benabderrazik (), Dimitris Bertsimas (), Nada Chtinna (), Nada El Majdoub (), El Miloudi Mahboubi (), Driss Lahlou Kitane (), Steve Kokkotos (), Georgia Mourtzinou () and Ilyas Rakhis ()
Additional contact information
Adrian Becker: Dynamic Ideas LLC, Waltham, Massachusetts 02452
Kassem Benabderrazik: OCP, 20200 Casablanca, Morocco
Dimitris Bertsimas: Sloan School of Management and Operations Research Center, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142
Nada Chtinna: OCP, 20200 Casablanca, Morocco
Nada El Majdoub: OCP, 20200 Casablanca, Morocco
El Miloudi Mahboubi: OCP, 20200 Casablanca, Morocco
Driss Lahlou Kitane: OCP, 20200 Casablanca, Morocco; Sloan School of Management and Operations Research Center, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142
Steve Kokkotos: Dynamic Ideas LLC, Waltham, Massachusetts 02452
Georgia Mourtzinou: Dynamic Ideas LLC, Waltham, Massachusetts 02452
Ilyas Rakhis: OCP, 20200 Casablanca, Morocco

Interfaces, 2022, vol. 52, issue 1, 90-107

Abstract: Humanity relies on cultivated lands to feed itself and thrive. Fertilizers are responsible for 30%–50% of food production, and phosphate, the naturally occurring form of phosphorus, which does not have a substitute, is an essential component of fertilizers. OCP, based in Morocco, is the world’s largest phosphate mining and processing company and therefore plays a critical role in global food security. Over the past decade, OCP, in collaboration with Dynamic Ideas, an analytics consulting company, developed a mixed-integer optimization model to holistically optimize its entire sales and supply chain—from the mines to physical treatments, to chemical facilities, to inventory facilities, and to the port for global distribution. The optimization model brings clarity to a complex supply chain, informs management decisions throughout OCP, and has consistently resulted in an improvement of over 20% in earnings before interest, taxes, depreciation, and amortization (EBITDA) annually. This amounted to over $2.3 billion in the period 2015–2020 (23.6% of the cumulative EBITDA of $9.9 billion over this period). This incremental profitability has fueled OCP’s financing capacity; as a result, OCP is implementing a $20 billion capital expenditures (CAPEX) program. The first phase of the CAPEX program led to the doubling of OCP’s mining capacity and the tripling of its fertilizer production capacity. As a result, OCP increased its fertilizer production capacity by eight million tons in the past decade. The model enabled OCP to produce customized fertilizers that helped improve agricultural yields, which in turn led to increased food production, especially in Africa. The increased production of fertilizers and the availability of customized fertilizers have contributed toward global food security. By demonstrating the interconnectedness of all OCP businesses, the model contributed to creating a culture of collaboration, innovation, and entrepreneurship across the company while breaking the existing silos among departments. This transformation led to the establishment of an analytics-based problem-solving approach throughout OCP and a successful executive education class at the Massachusetts Institute of Technology, thus enriching the university.

Keywords: supply chain; mining; mixed-integer optimization; fertilizers; optimal product portfolio; chemical transformation; Edelman Award (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/inte.2021.1111 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:52:y:2022:i:1:p:90-107

Access Statistics for this article

More articles in Interfaces from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().