In response to the rapid business growth of the High-Voltage Union concern, the company owners set the task of optimizing accounting and management processes. The solution was to implement a unified ERP system by IT-Enterprise for all the manufacturing plants of the concern.
The Ukrainian assets of international concern, namely Rivne Plant of High-Voltage Equipment and High-Voltage Union–Ukraine were the first to undergo the automation process to develop an off-the-shelf solution for all other plants.
Tasks to be solved with the project:
- building an integral planning system instead of piecemeal solutions;
- creating a management system for processing plant’s orders throughout the production cycle;
- promptly providing estimated prime cost of production at all its stages;
- implementing a management system for product life cycle from marketing till warranty handling.
Due to a spike in production volume and tight delivery schedule, the concern’s production management had to be automated. Moreover, the concern’s plants were already using various automation systems for individual business processes.
When the plants merged into High-Voltage Union concern, it became a matter of urgency to create a unified informational space for coordinated resource management from the concern’s main office. It required having up-to-date information on the plant’s orders progress and financial statements from all plants within the holding.
The concern's owners wished for a real-time insight into production in relation to operational management, cost accounting, and prime cost management.
The plant’s management immediately started full implementation of the integrated ERP-system by IT-Enterprise with complete functionality. A pre-project study of the enterprise and development of "TO BE" business processes took place beforehand. Alongside with project implementation the following areas were to focus on:
- pre-production planning and CAD for process engineers;
- management and accounting;
- logistics and inventory control;
- financial planning, cost accounting, and budgeting;
- bookkeeping and tax accounting;
- HR management and wages;
- repair management;
- quality assurance.
While the Rivne Plant of High-Voltage Equipment was implementing the information system by IT-Enterprise, the concern’s leaders were testing the off-the-shelf solution at other manufacturing plants. In addition, the goal was to unify business processes and data processing technologies to consolidate the financial statements from the plants into single corporate report.
The main task was to launch all systems of production planning: APS, MPS, MES, Cash Flow Budget, Revenues & Expenditures Budget. Then it was necessary to adopt a real-time accounting of parts and materials used throughout the production and of finished products with promptly estimated cost.
Integrated ERP system by IT-Enterprise
Key project factors
- Over 600 users of the corporate information system
- Up to 3 million detailed operations using plant’s MRP system with daily production replanning
- 40-60% shorter production lead time
With the solution by IT-Enterprise the plant achieved a key target indicator of the project, which was 40-60% shorter production lead time.
Moreover, information on the prime cost of manufactured products, work in progress, remains of raw materials at the warehouse, production capacity utilization and status of orders is available in real time.
Production-wise, the aggregate planning was adopted to assess production programs according to their capacity. The project allowed for sales and release planning with estimated lead time (APS), utilization optimization of production capacity (MES), real-time production accounting with estimated direct costs.
Finances-wise, now the accounting department at manufacturing plants and managing companies operates automatically including centralized planning and payments approval and signing. Cash flow budgeting, revenues & expenditures budgeting, end-to-end plan-fact analysis of budget utilization and payroll calculations are all automated as well.
Having implemented the solution by IT-Enterprise, the concern set up a transparent order management system using “today-for-today” strategy as well as a supply chain of internal and external collaboration. It was able to coordinate material and financial flows to cover production requirements, adopt real-time accounting and optimize production costs.
The company streamlined its production processes, inventories, and capacity utilization.