Microsoft Dynamics AX to Agrisovgaz (Gazprom)

Situation

In 2009 owners of the company made the decision on restructuring of business for the purpose of increase in controllability of the company.

Initially in the company the boiler method of cost accounting which is not allowing to receive a financial result by different productions was used. The structure of cost value was opaque, including because of outdated methodology of calculation. At the enterprise 13 different IT systems for accounting were used, a significant amount of transactions was executed manually that did not allow to receive the authentic reporting quickly.

In such situation management of the company made the decision on separation of the company into six business directions, each of which was controlled independently and on each of which the separate financial result should be received. Considerable business process reengineering could not be implemented without development of new methodology of accounting and implementation of the ERP system capable to implement the delivered requirements.

Choosing a Solution

As a result of the careful analysis of the offers which are available in the market a choice was made for benefit of the Microsoft Dynamics AX platform which advantages are the flexibility and scaling options taking into account the further growth of the company. The AFM Consulting company having the specialized solution and considerable examination in business processes of the machine-building industry and industry of metal working acted as the partner in implementation.

When choosing the partner experience of the company in management consulting in the field of accounting and management accounting since development of methodology of cost value, management accounting and budgeting was one of assigned tasks was considered.

Project implementation is one of major steps of the strategic project on creation based on Agrisovgaz company of a modern industrial cluster in the Kaluga region.

Solution

Within the project specialists of AFM Consulting automated all key business processes of the company: accounting, tax and management accounting, treasury, budgeting, management of material stocks, sales processes, quality management and production circuit.

The company developed cost value methodology, having made transition from model of complete cost value to the direct costing model, developed methodology of accounting and management accounting.

Regarding implementation of the production module and the module of summary planning of the Microsoft Dynamics AX system processes of maintaining the normative reference information about specifications and technology processes of the made products and services, calculation of planned and actual cost, operational planning, accounting and the analysis of course of production were automated.

Scales of the project characterize the following parameters: the number of at the same time working users in a system - 120, a total quantity of users – more than 300 people; the volume of the nomenclature reference book – more than 100,000 positions; the number of the processed primary warehouse documents (delivery notes, acts, magazines, etc.) – more than 280,000 in a year; quantity of the selected storage locations (warehouses) – 205.

For the solution of assigned tasks the solution of AFM Consulting company for the metalworking and engineering companies was actively used. This solution allows to consider a simultaneous combination of different models of production organization: custom production, assembly to order and make-to-stock production; manage the range of products with changeable characteristics (length, a covering, material, a type of packaging, etc.), including flexible configuration of specifications; it is effective to apply different cost accounting methods on production.

The main feature of the project is need of managerial division of the uniform company into several independent business directions. For implementation of such opportunity not only issues of planning and formation of a separate financial result in each business direction, but also questions of management of information flows within design-technology preparation and operational production management were carefully handled.

Results

As the CEO of Agrisovgaz company Dmitry Sergeyevich Kolbichev noted: "The project implemented by consultants of AFM Consulting has a strategic importance for our company - the implemented ERP system considerably increased efficiency of our business. For example, due to more operational and reliable accounting of stock balance and production planning it was succeeded to reduce the volume of material stocks by 8%. Using the ERP system we had an opportunity to execute planning and the analysis of product cost by each assortment position, but not on ton or group of products as it was before automation project implementation. Now a system provides base for operational and reasonable acceptance of management decisions".

"As a result of project implementation time for preparation of the management reporting was more than three times reduced. Broad use of OLAP technologies allows to solve problems of flexible configuration of managerial reports depending on current demands of users of a system. Extent of control of the course of accomplishment of customer orders raised – now at any moment it is possible using end-to-end analytics on an order number of the client to trace his current status. Thanks to system implementation of Microsoft Dynamics AX the company received the flexible tool allowing to increase considerably effective management of complex modern manufacturing enterprise, to raise the level of service for clients of the company and, as a result, to increase competitiveness of business", - the Director of consulting of AFM Consulting company Muratov Oleg Mikhaylovich commented.