Segezha Group moves to SAP S/4HANA

2020: Transition to SAP S/4HANA

On September 3, 2020, Segezha Group (AFK Sistema) announced the transition to productive operation of the enterprise management system based on SAP S/4HANA.

According to the company, according to the results of the implementation of SAP S/4HANA, Segezha Group expects an increase in the margin of sales of products by 1.5%, a twofold decrease in the number of unscheduled repairs, and a reduction in the duration of equipment downtime by 25%. In terms of financial accounting, unscheduled costs are expected to be reduced by 65%.

The contractor and implementation consultant was BearingPoint. The subcontractor was ADE Professional Solutions, which was responsible for developing the methodology for implementing SAP S/4HANA in the Segezha Group.

Exactly a year has passed since the start of the digital transformation project of the timber company. In 2019-20. the Management Company, the General Service Center (CSC) in Kirov and Vyatka Plywood Plant LLC were automated. In the fall of 2020, the system will start working at Segezhskaya Packaging LLC, Segezhsky Pulp and Paper Mill JSC and in forest resources branches of the SCBC.

The project covers more than 10 geographical locations and various types of production: logging, pulp and paper production, paper packaging, plywood and lumber. The architecture provides integration with many enterprise systems: human resources management, document management, MES at the workshop and production level.

The intensive development in recent years has led to a significant complication of the Group's business model, production chains and transport networks, and an increase in the volume and assortment of products. Under existing conditions, SAP S/4HANA helps the company plan and model business scenarios and make important management decisions in a timely manner. As of September 2020, the processes of production, quality, supply and inventory management, warehouses, repair, sales and transportation in Segezha Group are combined on the basis of a single platform. Information from all manufacturing sites is accessed through a user-friendly interface available on any device, including tablets and smartphones.

At the management level of Segezha Group, thanks to SAP, a solution has been created for financial planning and budgeting, consolidated management and IFRS reporting, as well as for centralized cash management for all enterprises of the Group. The key element for finance is SAP Central Finance, which allows you to receive all primary information in real time.

The production management system based on SAP solutions will allow you to solve the tasks of scheduling and optimizing the production of paper and packaging, calculate future costs and cost of production by rework in advance, and assess the profitability of the product portfolio. The sales management process is integrated with business and production planning. A general reference book of semi-finished products and finished products has been developed for an individual order. A single customer base, an NSI base for equipment and maintenance regulations, including the range of spare parts, have been formed.

We are implementing a multi-stage project, we were able to launch a management system for a geographically distributed holding clearly according to the plan, without shifting the deadlines. It is extremely important for our project to withstand the deadlines, since most enterprises have a continuous production cycle, and any failures lead to serious losses. We expect that the SAP S/4HANA management system will increase the economic stability of our company, will increase production, logistics capacity, volume and range of products. noted Pavel Vakhnin, VP Information Technology and Process Automation, Segezha Group

Segezha Group plans to replicate the solution to all enterprises of the group, digital transformation in the field of integrated business planning and e-commerce, the development of a system for personnel management, industrial safety, labor protection and the environment.

2019: Start of digital transformation and implementation of SAP S/4HANA and SAP Central Finance-based PMS

On July 17, 2019, the companies, SAP, and Segezha Group MTS BearingPoint announced the start digital transformation and implementation of integrated on the enterprise management systems basis of and SAP SAP S/4HANA Central Finance. The project is designed for 1.5 years, the transformation will unite four enterprises for the production of paper, packaging, plywood and lumber, as well as five logging sites. Among the expected business effects are improving the accuracy of production planning and execution, reducing emergency equipment and inventory downtime warehouse , optimizing costs transport , and speeding up the preparation of various plans financial and scenarios. The implementation partner will be BearingPoint. The technological basis of the project will become. infrastructure cloudy provider #CloudMTS

It is planned that the platform being implemented will replace more than 100 production and management systems and will create a digital core of the company that will support growth and high requirements for cost management. The created system will support the business functions of five different types of production activities.

During the project, the processes of production, quality, supply and inventory management, warehouses, repair, sales and distribution and transportation will be combined on the basis of a single platform. Information from all manufacturing sites will be accessed through a convenient, intuitive interface available on any device, including tablets and smartphones.

At the level of the Segezha Group management company, a solution will be created for financial planning and budgeting management, consolidated management and IFRS reporting, as well as for centralized cash management for all enterprises of the group. A key element of this solution will be the SAP Central Finance system, which allows you to receive all initial information from all enterprises of the group in real time. The ability to work with data in real time will significantly reduce the period-end closing period.

The digital management platform for Segezha Group will be located in, private cloud created in its own data center MTS - "." The# Avantage CloudMTS provider will ensure the implementation, operation and maintenance of the project infrastructure at both the level and clouds IT equipment. The Provider will also administer and support the SAP system suite in the cloud, including the implementation and maintenance of the platform's technical basis. The reliability and continuity of business systems will be ensured by the high fault tolerance of the# CloudMTS infrastructure: placement in its own data center, certified according to the standard, Tier-III using MTS channels communications and full of all backup data.

"The SAP S/4HANA platform is a system that allows you to use current business models, speeds up application development, and provides real-time analytics that you need to make informed decisions. This will allow our company to significantly increase the efficiency of business processes, which in turn will ensure faster growth and development of the company. The effects of the project will be comprehensive and as a result will become the basis for increasing the competitiveness of the Segezha Group and entering the company into new markets, " noted Pavel Vakhnin, VP Information Technology and Process Automation, Segezha Group

"As of July 2019, the Segezha Group includes more than 30 production assets in the forest and pulp and paper industry. In order to achieve centralized data collection on the performance of enterprises, control the validity of costs and maintain supply chain management, a serious IT support is needed. SAP S/4HANA is the digital core of the business. This is both a system for high-quality business restructuring and a platform for further digital initiatives of the company, " noted' Dmitry Pilipenko, Deputy CEO of SAP CIS '

"Clouds are becoming the foundation of business digitalization, allowing for faster implementation of comprehensive IT projects such as the Segezha Group. The use of cloud technologies will ensure faster implementation and further scaling of the company's digital platform, " noted Oleg Motovilov, director of cloud provider# CloudMTS

In the future, it is planned to circulate the created template solutions to the rest of the Segezha Group enterprises. The scalability of the system will allow you to start new business processes as needed. In particular, it is planned to implement the process of integrated business planning and reliability management, forecast systems and machine learning in various functional areas and many different innovative scenarios.