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Work in progress reduction by 15% in engineering due to operational production planning

Mechanical engineering
Work in progress reduction by 15% in engineering due to operational production planning
scale1000 employees 250+ userskpiimprove planning accuracy
ProductExpenses and controlling year of briefcase2002-2010
geographyUkraineIndustryMechanical engineering
customer"Kremenchug Wheel Plant"

Project Goals

Kremenchug Wheel Plant is a modern high-tech enterprise in the field of production of cold-pressed steel wheels for buses, cars and trucks, and agricultural machinery. Products of the enterprise are used in Ukraine, and exported to European countries. The production capacity of the plant exceeds 8 million wheels per year.

Before the IT-Enterprise implementation, IT department made several unsuccessful attempts to implement various automation systems. Local automation systems of various vendors were implemented by the control system department - logistics management, accounting, HR management and payroll accounting.

Maintenance of own information solutions became too consuming process. Since individual modules were developed at different times and on the basis of different technologies, it was difficult to integrate information flows. After analyzing current situation it became clear that the workload of such project is very high, it will be necessary to rewrite the functionality of many subsystems. At this point, management decided to implement a comprehensive ERP-system.

The company had to choose a full-scale corporate information system for engineering (large-scale production on the production lines), which would provide all the advantages from a united information base and integrated automation of all areas of economic activity.

Project Description

An interesting peculiarity of the implementation is that all the individual adjustments implemented by the plant's control system department were saved and transferred to the ERP system. Thus, the company preserved the unique experience of specialists, which has been developed during past years.

The implementation was carried out in several stages:

  • manufacturing design, master production planning and accounting (allowed to increase the product range by hundreds of times and to reduce the order size from 50 thousand to 500, to optimize costs);
  • operational planning and production accounting (allowed to respond quickly to the needs of the market, electronic workflow is implemented in the production to completely abandon paper documents)
  • life cycle management (time to the market of the new product was decreased from 9 months to 4-5 months, implemented end-to-end production control and manufacturing design)


Implemented production design functionality allowed to create schedules of production design that provide end-to-end monitoring of the PDM process at all its stages. An integral part of the transition to electronic technical document workflow is the maintenance of the archive of technical documentation. The implementation of the archive was a step towards the implementation of paperless technology of technical document workflow at the enterprise.

Now shop foreman can open the electronic drawing online, and the IT-Enterprise system guarantees that this will be the current version of the electronic original, which contains the latest changes. With this solution, all workers in the workshops always have current technical documentation.

Operational manufacturing control

When the engineering bill of material and manufacturing technology are known (each position of the bill of material associated with the manufacturing route), you can proceed to production planning.

At the Kremenchug Wheel Plant, was implemented all functionality of operational production control. The peculiarity of the enterprise is that there can be several design compositions for one type of product, since some parts can be produced both in the shops of the enterprise and purchased from contractors. The implemented solution takes this feature into account.

The sales department forms a supply plan for a month, containing the stock list of shipped products, taking into account the packaging and loading schemes. After adjustment and approvement of this plan, plant master production schedule (MPS plan) is generated. The scheduler chooses the one from several variants of product designs. It is the basis for the production. Based on this MPS-plan, a detailed operational production plan is generated, together with the calculation of the material resources requirements. On the basis of the detailed operational production plan, a detailed daily production plan (MES-plan) is generated. It is the basis for the shift tasks. Upon the fact of work for the shift, prepared a report on the execution of the shift task. The shift tasks are the basis for the daily duties generation.

An interesting solution implemented at the plant is maintaining the balance of the work in progress movements. Since it is impossible to keep a record of material movements in the shop, the balance of the movements allows you to monitor the accuracy of the in-house accounting and ensure its reliability in the operational mode. As a result, the management can accurately say how many details are currently in each shop.

Key project factors

By 1,5 times reduced lead time of the production design
By 15% reduced volumes of work in progress


As a result of the project, the company implemented a modern integrated ERP-system, which cover the production design, production control, and product lifecycle management. Solution is able to calculate planned and actual production costs, implement inventory management, sales and supply management, accounting and tax accounting, human resources management and payroll. Information platform of the solution is Oracle 11g.

With IT-Enterprise ERP-system, the plant has implemented a fundamentally new approach to operational planning and production accounting. The timing of the production design for the release of new products decreased from 9 to 4-5 months. The transition to detailed operational manufacturing planning allowed to reduce the amount of work in progress by 10-15%. Synergy of improvements led to a significant increase in the response of the sales department to customer requests, and as a result, to the growth in sales volumes.

The operational control of the balance of materials movements in the shops provided a reliable materials accounting. In combination with the operational production planning, this allowed company to radically expand the product nomenclature while reducing the number of accounting personnel.

Automation of the main areas of the enterprise led to the time reduction of the production and accounting reports generation.

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