Fuhua Tongda Chemical: Overcoming global operational and cost challenges through data-driven lean management
A foundation for digitalization
To integrate domestic and international manufacturing, R&D, and sales operations, Fuhua Tongda Chemical chose an SAP Cloud ERP Private solution as its digital operations foundation. In doing so, it overcame market challenges both at home and abroad, establishing a strong data governance framework to prepare for enterprise-level model applications.
| Industry | Region | Company Size |
| Chemicals | Sichuan, China | >3,000 employees |
increase in procurement and finance automation.
improvement in procurement plan execution rate.
reduction in inventory capital occupancy rate.
Vice General Manager, Fuhua Tongda Chemical Co. Ltd.
Embracing lean digital management to overcome global cost pressures
Founded in 2003, Fuhua Tongda Chemical Co. Ltd. has leveraged its advantages in mineral resources to build a circular supply chain spanning crop science, chemicals, and new materials. One of the top 20 global agrochemical companies, Fuhua ranks among the world’s top three enterprises in herbicide production capacity and has maintained its position as China’s largest exporter of glyphosate for six consecutive years. Exports to around 80 countries and regions account for approximately 70% of sales.
As a global integrated chemicals company, Fuhua Tongda Chemical has faced dual pressures in recent years. Internationally, escalating trade protection policies and frequent exchange rate fluctuations pose significant challenges to its export business. Domestically, the chemicals industry is marked by overcapacity, rising labor and energy costs, and increasing competition, leading to a stagnating effect known as “involution.”
Against this backdrop, production and sales were siloed, making it difficult to synchronize operations and collaborate efficiently on a single platform. Overseas sales orders were not promptly transmitted to the production side, causing delays in logistics scheduling, stock preparation, and shipment. Meanwhile, to mitigate uncertainty, both production and sales warehouses were forced to overstock, leading to inventory buildup and higher capital costs. Inefficient logistics management further increased operational costs.
Adding to these challenges, in the absence of information sharing and collaboration, Fuhua Tongda Chemical’s procurement department was unable to access real-time information on business requirements and urgency levels. As a result, it focused solely on short-term needs, lacking procurement plans and standardized procurement processes that aligned with production schedules and inventory levels. This not only increased the pressure on the procurement team but also led to resource wastage by hindering effective supplier comparison and selection.
Fuhua Tongda Chemical urgently needed a digital solution to help it optimize resource allocation, enhance operational efficiency, and maintain its competitive edge in a complex and ever-changing global market.
Vice General Manager, Fuhua Tongda Chemical Co. Ltd.
Integrating finance and operations for smoother management
To support global business growth, Fuhua Tongda Chemical embarked on its digital transformation by launching the “Fuzhi” project comprising the five strands of equipment, control, production execution, business management, and strategic management. As part of its digital transformation goals, it introduced the “5100” initiative, aiming to achieve three digital breakthroughs over the following five years: integrated finance and operations, zero manual production, and error-free business decision-making. SAP Cloud ERP Private became the digital operations foundation for these efforts.
Using the solution, Fuhua Tongda Chemical integrated and streamlined processes across production, procurement, logistics, warehousing, quality control, sales, and finance, creating a unified finance and operations management platform. It synchronized overseas orders, procurement plans, production schedules, and logistics in real time on a single solution, accumulating a wealth of actionable data that became an asset for the company. Presented through visual reports and a management dashboard, this consolidated data offered a comprehensive view of the company’s operations.
The next step was to let the data “speak” by building a business analysis system that uncovers key leverage points for lean management. So, for example, where net-profit targets aren’t being met, the company can analyze gross margins, costs, sales volumes, and unit prices to optimize spending, such as by detecting a cost spike on one line caused by incorrect coal input through its monthly consumption data. To drive down costs, it can use dynamic models based on temperature, raw-material prices, market rates, and input ratios—and take action such as adjusting the phosphorus-trichloride mix in response to price swings.
This data-driven decision framework spans production, sales, and financial settlement, empowering Fuhua Tongda Chemical to achieve its lean-management objectives.
Increasing efficiency across three key areas
With SAP Cloud ERP Private, Fuhua Tongda Chemical has integrated data flows across procurement, production, and logistics, building a standardized data governance system. Today, the company uses its “three key reports”—financial, performance, and management reports—to achieve transparency and analyze operational data. Among them, the management report has become a critical tool for operational decision-making, enabling real-time monitoring of company performance. Whereas inconsistencies between management and financial reports were once common, data can now be quickly traced to identify discrepancies, enhancing decision-making.
Lean management is reflected not only in reporting but also in efficiency gains in areas such as procurement, where Fuhua Tongda Chemical has integrated sales, production, procurement, and finance processes. The procurement department can now develop a robust plan based on production schedules and inventory levels. With standardized and transparent procurement processes, Fuhua Tongda Chemical has improved plan execution and automated finance operations. Furthermore, efficient collaboration and information sharing between departments, along with a systematic management approach, have reduced the risk of stockouts and inventory backlog caused by poor communication and planning. As a result, Fuhua Tongda Chemical has also decreased inventory capital turnover.
And the impact of accurate data extends far beyond lean management. Fuhua Tongda Chemical is using its new data assets to gradually implement AI and Big Data, moving from informatization to digitalization and, ultimately, to intelligence.