"NIIK engineering company" controls construction objects using "1C:ERP Management of Construction Organization 2"

On December 13, 2018 "1C Company reported that the Nizhny Novgorod branch of 1C-Rarus company and "The research and design institute of a carbamide and products of organic synthesis" ("NIIK engineering company") completed the project on implementation of "1C:ERP Management of Construction Organization 2".

Prerequisites of the Project

Project implementation of construction under the EPC contract (engineering, procurement and construction is engineering, supply, construction) assumes "turnkey" commissioning of the object. The main objective of "NIIK" as general contractor of construction - to monitor accomplishment of plans, quality of works, budgets and terms of projects. At the same time the company can execute up to 6 construction projects which average duration about 5 years.

Earlier for project management of construction in the company spreadsheets were used, and for each project the file structure was created again, without the general rules for all projects. The estimate department, department of purchases and supplies of equipment and financial and economic department kept own account on each project that interfered with fast obtaining the consolidated statements. Also there was a problem of operational interaction of divisions of the organization, and information on stock balance was available only on paper carriers.

Project Objectives

A system which will be able to integrate work of all divisions of the company occupied in the project was necessary for start of the large project on construction of the company, to unify all corporate information, to optimize work of a warehouse and will give the chance of reservation of Inventories under certain construction projects taking into account specifics of each contract. Besides, it was necessary to provide the management of operational management information about each construction object and its stages.

Course and results of the project

The competition for the project of automation of management accounting of "NIIK" was won Nizhny Novgorod by branch of the company "1C-Rarus". For the solution of assigned tasks a system "was selected 1C:ERP Management of construction organization 2".

Implementation took 7 months that allowed to begin without delays works on the large-scale construction project on the EPC contract in an automated system. For December, 2018 "1C:ERP Management of Construction Organization 2" is used for management of works on several construction objects at once. It allows to control each of objects separately, to obtain complete and up-to-date information on stages of works and to quickly make management decisions. In total in a system 40 jobs are automated.

Key results of the project:

• The developed mechanisms of planning and reservation of Inventories by projects and construction objects allowed to refuse paper carriers, to keep account of purchases and to control a status of warehouse stocks at the enterprise. Operational inventory control and a possibility of reservation of warehouse stocks helped to lower material stocks by 30%.
• Automated management of purchases with the technology specification. Time from emergence of need for the equipment and materials before order placement to suppliers is reduced from 1 month to several days. The gap between preparation of technology specifications and planning of supplies of equipment and component parts is completely excluded.
• Obtaining the detailed management reporting allowed to analyze quickly financial and economic activity, to estimate risks and to timely adjust work of divisions. The term of preparation of managerial reports was reduced from 7 days till 1 o'clock. The variability of standard forms of the management reporting increased by 10 times. Risks assessment of construction projects at an early stage of their emergence reduces the probability of failure to meet time constraints of deliveries and accomplishment of installation and construction works.
• Financial planning is optimized. There was a possibility of receiving up-to-date information on payments. Implementation of such tools as the budget of cash flow, the schedule of money and the register of payments allowed to reduce cash gaps and, as a result, to reduce use of borrowing facilities for ensuring the current activities for installation and construction works and supply of equipment. On design data in the long term economy will make from 1 million to 10 million rubles.
• Management tools are implemented by tender procedures. It accelerated preparation of lots and considerably reduced costs on maintenance of biddings.
• Integration with the third-party systems allows to create in the automatic mode initial structure of works on the project, to reflect the actual volume of accomplishment of construction works and also to update the diagram of an aktirovaniye and financing of construction projects.

"Need for emergence of a single automated system arose on experience of the last project implemented under the EPC contract which lasted 5 years. System implementation of "1C:ERP Management of the Construction Organization" allowed us to organize operational interaction of services and divisions of the company which are engaged in construction project implementation and also to provide full control of execution of tasks, to lower costs and to minimize risks. For December, 2018 we keep in a system at the same time several construction projects, one of which – the large and long-term project under the EPC contract. We only at the beginning of a way, further we expect still big and best results". Lyudmila Kalinina, Deputy General Manager for Economics and to finance of JSC NIIK