Metalloinvest completed implementation of the digital platform of business process management

2019: End of the first stage of implementation IZA FJD based on SAP S/4HANA

On September 16, 2019 the SAP CIS company announced end of the first stage of large-scale digital transformation – implementations of the uniform integrated management system of financial and economic activity (IZA FJD) in Metalloinvest company.

More than 100 managerial and production systems of the Company were replaced with a uniform ERP system based on the SAP solution S/4HANA. The methodology and project management is exercised of a team of consultants of Accenture.

As of September, 2019 the ERP system is implemented on four production sites of Metalloinvest and also in trading and logistic operators of the Company. The number of users of a system in 2018-2019 increased almost twice (from 4 thousand people at the initial stage to 7 thousand for September, 2019). In a system 35 thousand users of IT services work.

The purpose of the program of digital transformation of Metalloinvest of Industry 4.0 – reaching essentially new level of business and achievement of long-term industrial leadership.

For September, 2019 the total investment volume into creation IZA FJD is estimated in more than 6 billion rubles. Implementation of a single digital platform is followed by complex transformation of business processes of 18 functional directions. 45 thousand employees of the company are transferred to the optimized structures, the realization of 24 adjacent projects of transformation is enabled.

"We are three years in active implementation phase of the Industry 4.0 program. In 2018 we implemented the integrated management system at our mining enterprises – Lebedinsk and Mikhaylovsk GOKAKH, in 2019 we started the second wave at the metallurgical enterprises – OEMK and Ural Steel. For September, 2019 the powerful platform for our further development is created. Digital technologies increase efficiency and stability of Metalloinvest, allow to react even quicker to the changing market conditions and to fulfill the requirements of customers for quality and speed of deliveries", 'Yury Gavrilov, the director of strategy, development and transformation of Metalloinvest Management Company noted'

As of September, 2019 in the Company function of supply, personnel management, accounting and IT is centralized, the general service center and internal IT department is created. Business processes of maintenance and repair, supply, inventory management, accounting and cost accounting, personnel and financial accounting are most simplified. The efficiency of key processes and accuracy of planning is increased. The company management is provided with an information system of decision making on the basis of the reliable data on all enterprises available in a single system. The number of levels of management in the Company decreased from 13 to 6-7, terms of closing of reporting period and approval of documents are reduced.

Further it is going to automate processes project managements, to begin to use digital opportunities SAP of S/4HANA for purchases and accounting and also to apply scenarios SAP Cloud Platform and SAP Cloud Analytics.

2018

Productive start uniform IZA FJD based on SAP S/4HANA

The companies Metalloinvest SAP announced also on July 13, 2018 productive start of the uniform integrated management system for financial and economic activity (IZA FJD) based on SAP S/4HANA. A system was designed with assistance of a command SAP Digital Business Services. As the main contractor on implementation the company acted Accenture.

Objectives

The key purposes of implementation of the project in Metalloinvest — to optimize business processes, to increase the accuracy of planning and to reduce costs.

It is expected that IZA FJD will help Metalloinvest to lower labor costs on execution of operations, to increase reliability and data processing rate for decision making and also to control marginality of transactions and the price of purchases. At the production rate equipment downtime reduction, increase in inventory turnover and complex monitoring of stock balance is planned.

The solution in a basis IZA FJD

According to representatives of the company, transition to IZA FJD — a key stage of strategy of digital transformation of Metalloinvest. SAP S/4HANA is an intellectual ERP system which unites all trends of the Industry 4.0: a giperpodklyuchennost, an opportunity to work with In-memory technologies and Big Data in real time that means implementation of the concept of Real Time Enterprise.

The integrated management system is designed to rebuild cardinally production and business processes of Metalloinvest on the basis of the principles of Industry 4.0. Program implementation of digital transformation will allow to increase efficiency, controllability and competitiveness of our company, will make it more flexible and steady against market changes — the CEO of Metalloinvest Management Company Andrey Varichev said.

Project Progress

During the IT project more than 3 thousand organizational changes are implemented. 18 functional directions are transformed, processes of repair, purchases and sale, production and logistics are cardinally rebuilt.

Results

According to Metalloinvest, started at the enterprises of an ore dressing segment of Metalloinvest company — Lebedinsk and Mikhaylovsk mining and processing works — the platform replaced more than 100 production and managerial systems and integrated in one information space of 4000 users.

Start of the S/4HANA platform on the scale of such company as Metalloinvest, is implemented for the first time century Russia. Joint work of a big project team where entered as representatives of business divisions, the staff of JSA, and consultants of Accenture companies EVOLA, Saprun and also use of methodology of Accenture for implementation of large projects of transformation allowed to execute the project in time and within the planned budget. We are sure that high-quality implementation of this technology will become a basis for successful transformation of business of Metalloinvest and its further growth — commented project results Maria Grigorieva, the managing director, the head of Technology, Digital and Operations Accenture in Russia.

In 2018 Metalloinvest intends to invest more than 3 billion rubles in the projects connected with implementation of the integrated management system.^[1] the Second wave of implementation starts in the summer of 2019.^[2]

SAP implementation of S/4HANA to go to the Industry 4.0

On April 24, 2018 the Metalloinvest company announced the implementing solution SAP S/4HANA to go to the Industry 4.0.

Metalloinvest started the comprehensive program of transformation of business of Industry 4.0 in 2016. Main objectives of the program are transformation and increase in efficiency of business processes of the company, decrease in labor costs on execution of operations, increase in accuracy of planning and quality of control of execution of plans, ensuring transparency of accounting and timeliness of decision making.

The enterprise of Metalloinvest is JSC Ural Steel. Photo:

During program implementation the multifunction general service center (MF OTsO) which integrated finance and accounting, personnel management, treasurer functions, the centralized purchases and other services is created.

Digital transformation concerned all key enterprises of Metalloinvest: Lebedinsky Mining and Processing Integrated Works, Mikhailovsky Mining and Processing Integrated Works, Oskol Electric Steel Works (OEMK), Ural Steel and also Metalloinvest management company.

Implementation of the uniform integrated management system for financial and economic activity of the enterprises based on SAP S/4HANA became the next stage of digital transformation. It unifies key business processes, allows to increase significantly efficiency and efficiency of acceptance of management decisions and also to reduce time for information processing and preparation of the reporting. A system was designed with assistance of a command of SAP Consulting. The productive start of a system at the enterprises of the first wave (Lebedinsky GOK, Mikhailovsky GOK, Metalloinvest Management Company) is planned for summer of 2018.

"Program implementation of transformation will allow us to increase the level of a maturity of all business processes, to accurately systematize work of divisions and employees and to create the infrastructure necessary for preserving of high positions". Andrey Varichev, CEO of Metalloinvest Management Company

Notes