PATP-5 Municipal Unitary Enterprise increases cost efficiency of business by implementation of a domestic ERP system

The project of automation of the Novosibirsk motor transportation enterprise PATP-5 Municipal Unitary Enterprise with the help of 1C: Manufacturing Enterprise Management 8 ("1C: Manufacturing Enterprise Management 8") is complete, the company integrator - the contractor in the project, 1C-Rarus reported in the press release of November 29, 2012.

Start

Versatile activity of the enterprise customer forced the management - to set as the purpose increase in cost efficiency of each of the directions, strengthenings of positions in the city market of transport services.

"We approached such stage of development of the enterprise when it was required to strengthen considerably control of operational activity – more effectively to use municipal routes, to calculate and plan consumption of fuel and lubricants, employment of drivers, to service the clients addressing us directly more qualitatively, – the director of PATP-5 Municipal Unitary Enterprise Valery Ilyenko noted. – All this led to understanding that complex control automation and accounting is vital to the enterprise".

Project

Process of automation began with audit of the existing business processes and their detailed study. Specialists of 1C-Rarus branch in Novosibirsk defined the major project tasks:

• Provide operating control of operation of vehicle fleet – to consider a consumption of fuel and lubricants, costs for repairs, to keep track of wear of motor transport, to automatically create waybills and to give an opportunity of the detailed analysis of cash flows;
• Optimize the existing business processes and accounting schemes;
• Develop a technique of efficiency evaluation of the enterprise on the basis of financial and managerial performance;
• Implement the budgeting system, the most full corresponding to requirements of PATP-5.

For the solution of these tasks the product "1C: Manufacturing Enterprise Management 8" (1C: Manufacturing Enterprise Management) – the complete solution for control automation and accounting including instruments of budgeting and the expanded cost accounting necessary for the enterprise was selected.

Solution

First of all it is decided to automate enterprise accounting which data, are basic for assessment of a financial status of the enterprise. The accounting service is transferred to work in a new information system which standard functionality did not undergo significant changes. Specialists of the Novosibirsk branch "1C-Rarus" perform data transfer, setup of the software product is made, the customer's specialists are trained. The possibility of preparation and delivery of the specialized regulated reporting for transport enterprises is implemented.

Work in a system

Accounting and control of work of drivers in PATP-5 Municipal Unitary Enterprise is imposed on dispatching service. Its main objectives: work with drivers, operational execution of waybills at departure in run, the statement of write-off orders, distribution of the park of machines by routes. Before implementation of 1C: Manufacturing Enterprise Management 8 the staff of dispatching service did not use any automation equipment. In a new system for this division means of the analysis and control of activity of vehicle fleet are implemented that allowed the enterprise to reduce costs for consumption of materials (fuel and lubricants, auto parts), to optimum distribute vehicles along city routes, proceeding from data of a passenger traffic, to estimate efficiency of each vehicle and the driver, to control revenue which is handed over in cash desk.

The budgeting system customized taking into account allocation of costs on different activities – passenger, freight transportation, repair services, services of the taxi park, based by the principle of the plan-fact analysis became the final stage. At the same time costs for each type of activity, from purchase of materials before final product sales are controlled that allows to estimate profitability of the specific direction. Thus, except control of expenditure of finance, PATP-5 Municipal Unitary Enterprise can estimate the valid profitability of each direction of business that allows to distribute more effectively resources and to make the correct and timely management decisions.

The system of efficiency evaluation on key indicators (KPI) implemented at the enterprise is closely connected with budgeting. Strategically important performance indicators of the enterprise for each direction are for this purpose defined and control of achievement of these indicators is organized. In a basis of process assessment technique on key indicators of KPI which provisions are developed, proceeding from specifics of activity of PATP-5 is put. For example, are carried to such performance indicators:

• Machine-hours in work – the general operating time of all automatic telephone exchanges on the line;
• Receivables level;
• (Put) the average number of clients at night;
• Staff turnover level;
• Development on one driver, proceeding from the average number of drivers;
• Transportation share on UTC (Uniform Transport Card) – the project of the mayor's office of Novosibirsk connected with payment transfer of travel by city passenger transport on non-cash payment.

Sets of indicators developed for PATP-5 Municipal Unitary Enterprise automatically form in an information system and help top managers to trace quickly a current status of the organization at any moment.

For example, based on control of an indicator "The accounts payable level" is carried out work on its significant reduction, and the indicator "machine-hours in work" shows efficiency of use of vehicles therefore decisions on their redistribution between the existing routes or expansion of the serviced route network are made.

Result

In an automation project deliverable based on 1C: Manufacturing Enterprise Management 8 the management of PATP-5 Municipal Unitary Enterprise managed:

• It is essential to reduce costs and to increase the volume of transportations more, than by 10%;
• Provide high-quality control of all services of the enterprise due to increase in transparency and efficiency of acceptance of management decisions;
• To objectively assess the current situation in the market, based on passenger traffic inventory data along each route;
• It is considerable to simplify the procedure of submission to regulatory authorities of the reporting which prepared workers manually earlier.

Less than for half a year the project began to justify the financial investments and to bear the first fruits: it was succeeded to reduce costs, to increase efficiency of conducting financial and management accounting. As a result, the enterprise managed to increase the volume of transportations more than by 10%.

Valery Ilyenko emphasized: "Beginning the project of automation based on 1C: Manufacturing Enterprise Management 8, we did not expect so fast effect. But the implemented system of operational assessment of passenger traffics allows to optimize loading on routes already now, increasing their profitability, and respectively, and profitability of all enterprise in general".