Gennady Gatsko: The Galaktika ERP allows to save usual schemes of work if they are effective

TAdviser: What functionality and what advantages of ERP systems are the most demanded in the domestic machine-building industry today? What it is possible to tell about dynamics of requirements/expectations of customers, say, for the last five years?

Gennady Gatsko: The key trend of development of engineering enterprises which we see on the example of our clients for the last years is the aspiration to increase production to order. Accomplishment of individual orders allows the enterprise to expand significantly sales market of the traditional products in the conditions of the competition to products of world leading manufacturers.

Production of products taking into account individual requirements of customers causes the necessity to reduce terms of design and production of products with simultaneous increase in its quality, as much as possible to load the available production capacities.

Therefore in mechanical engineering of tasks it is possible to carry to number of the most relevant for automation problems of design management of products, production preparation, operational planning of production at the enterprise level, dispatching of production in workshops now.

The tendency to reduction of number of a managerial personnel at simultaneous increase in management efficiency at most the enterprises does demanded such advantage of ERP systems as an exception of duplication of information, instant access for all specialists to information registered in a system, maintaining the single database on production resources, control of free resources (material, labor, the equipment), efficiency of work planning on accomplishment of orders taking into account loading of resources.

Demanded are a budgeting task and operational management of finance, calculations of product cost, maintenance and repair of the equipment. Interest in tasks of product quality control and tasks of the analysis of activity of the enterprise grows.

Speaking about tendencies of requirements of customers to functionality of a system in the machine-building industry it should be noted growth of relevance of problems of planning. If five years ago most the enterprises of mechanical engineering tried to automate first of all the tasks connected with preparation of the fiscal reporting and targeting of an elementary order in an inventory control and supplying and sales logistics, then queue of problems of operational production management, budgeting came now.

It would also be desirable to note growth of number of projects on implementation of ERP systems at the enterprises machine and instrument making, belonging to defense industry complex. Several years ago such enterprises had a need for control automation, but there were no sufficient resources for accomplishment of the similar project. Frequent situation: comes to us to office heads of the enterprises of the industry, get acquainted with our solutions, say that everything simply super and is suitable for them for 100%. And all. The lack of means could stop the project at a stage of negotiations. Now situation cardinally other: there is also a need for automation, and an opportunity for its implementation. Due to the state support representatives of defense and industrial mechanical engineering had additional resources, and they are ready to invest them in improvement of a management system to achieve growth of competitiveness.

TAdviser: What problems of automation of industrial enterprises (including machine-building) are considered as key in Galaktika? Whether priorities of corporation how developer, with priorities of customers and why match in the matter?

Gennady Gatsko: Naturally, when developing the solutions we first of all are guided by needs of the customer which are relevant today and interest to which grows and they will be demanded tomorrow. If we create the solutions in a separation of reality, on the basis of own theoretical reflections, then to whom they will be necessary?

Key tasks in automation of engineering enterprises are problems of process management of preparation of production and operational production management now. Customers first of all pay attention to these functions during tenders for the choice of a system. The need for automation of these processes most is particularly acute at the enterprises in modern conditions of business development as here first of all reserves of cost reduction of production and performance improvement of the enterprise are put.

Therefore not so long ago we unrolled development of the special solution for the enterprises prioborough-and mechanical engineering with job order production organization, applying the project principle of planning and coordination of works design-technology, production and other services of the enterprise for execution of orders. The new solution was received by the name "Galaktika Project Production".

TAdviser: What in practice has bigger weight: instrumental process optimization of management (reduction of manual transactions, single data entry in a system, visualization of initial and result-based data, etc.) or mathematical (the solution of optimization tasks of management by means of economic-mathematical methods)?

Gennady Gatsko: The best effect will be reached at a combination of both directions of automation. But practice shows that after all instrumental optimization is more demanded now. At least because results from it are quicker notable as well as in scales of all enterprise, and end users – the ergonomics of work increases, a number of unnecessary transactions is eliminated, business processes all the same become more "correct" in terms of efficiency of their organization.

Problems of optimization become on the agenda when manual work, routine problems of processing of accounting information and preparation of the periodic reporting is automated.

Usually at the initial stage of implementation of ERP systems of the enterprise do not want to rebuild considerably the business management processes, are afraid to destroy that procedure of management which works. Begin to start reorganization of business processes after system learning and preliminary modeling in the system of new business logic. Therefore a system should have considerable flexibility and capability to adaptation as to the existing business processes of the customer without their cardinal reorganization, and to new projectible management processes.

The Galaktika ERP system was always developed in the conditions of need of adaptation to different business protsesam managements as to the existing traditional, and new modern technologies.

TAdviser: What methodological base is used in your corporation when developing the control software by production? What methods and approaches of production management are implemented in the Galaktika ERP system: MRPII, APS, kanban, Just-in-Time and what it is caused by?

Gennady Gatsko: In the Galaktika ERP requirements of the MRPII standard are implemented. In the field of production planning algorithms of expanded planning and regulation (Advanced Planning and Scheduling - APS) are implemented as it is demanded by our clients. A system allows to include quickly new orders in the current network diagram of works, placing transactions on free resources and not allowing their overload.

At the same time use of this functionality at the enterprise requires big preparatory work on formation and setup of the regulatory base, establishing order in accounting of all types of production resources. So so far for most the enterprises it is after all a problem of the near future. When they are ready to its accomplishment, we will offer them the corresponding functionality. For example, in a new solution – "Galaktika Project production", addressed just to the enterprises of instrument making and mechanical engineering, - means of support of APS planning are developed.

Implementation of functionality of MRP planning and APS planning just will also provide to the enterprise mathematical means of support for implementation in practice of the concept "precisely in time" (Just-in-Time) as will allow to specify quickly production schedules and to calculate resource requirement in the necessary volumes to certain terms. It will be necessary to provide to the enterprise organizationally and technically these requirements.

TAdviser: There is quite large number of examples when domestic customers just do not use (and do not implement) function of ERP systems on planning and cost optimization on production (for the ERP system of any developers). By what reasons it can be caused: uniqueness of production planning; on the contrary, its primitiveness; incompatibility of methodology of MRPII with the Russian realities; conservatism of customers; need at first to arrange all other business processes or something else?

Gennady Gatsko: Problems of planning and cost analysis on production stand at the end of a functional chain of management and require the provisional solution means of a system of many other tasks providing these tasks with data for calculations.

Therefore it seems to me that here time factor matters. After all many enterprises of instrument making and mechanical engineering which are especially relating to a MIC could not invest resources in project implementation of automation of production business processes until recently. Therefore in the overwhelming number of projects it was talked of use of information technologies only for those processes which automation can be carried out to absolutely short terms and without serious costs – accounting functions, logistics management, personnel management. It brought a certain economic effect and in principle is justified – it is impossible to solve serious managerial problems, without having brought order to accounting. Now growth of volumes of the state support of a domestic MIC gives for this purpose necessary resources. Besides the competition to the western and gradually gaining power east companies (first of all, it is about the Chinese producers) requires cost reduction and causes the necessity to plan and optimize production costs.

Say about incompatibility of application of methodology of MRP-II to the Russian realities – it is all the same what to claim that it is impossible to go by foreign cars on the Russian roads. A large number of our clients quite successfully uses the Galaktika ERP system for implementation of production planning on the basis of the MRP-II standard.

And here that some customers have a certain conservatism in relation to application of information technologies, I will agree with a statement. More it is characteristic besides of some defense enterprises of mechanical engineering where heads are skeptical about opportunities of ERP systems a little. Demonstration of successful experience of use of the Galaktika ERP at the enterprises of a similar field of activity helps to overpersuade them, first, (and we actively use it). Secondly, the fact that the Galaktika ERP is a domestic product which was developed taking into account all requirements and restrictions of domestic manufacturing enterprises which is certified by State Technical Commission of the Russian Federation regarding data protection (that is very important for a MIC) helps to overpersuade many sceptics. Strangely enough, but to some extent the scepticism even helps successful project implementation. The ERP system is not a panacea from all problems of the enterprise, and one of tools (let and powerful) for increase in efficiency of its activity. And the healthy scepticism allows to avoid risk of disappointment owing to initially overestimated expectations.

TAdviser: How often, by experience of Galaktika, on domestic enterprises the Soviet planning methods of production than and whether they are always bad and how difficult transition from these methods to "modern" is are used? Whether there is an opportunity, having implemented the ERP system Galaktika, to uphold the planning methods which are already used at the enterprise and whether it is worth acting in general this way?

Gennady Gatsko: Considering this question, it is necessary to select three aspects: the organization of production management at the enterprises which developed in days of the Soviet power; the production planning methods implemented in practice in Soviet period; and the automation equipment of management created at that time.

Problems of automation were implemented on EC of a computer, and in process of aging of this equipment were reprogrammed for work on modern personal computers here and there. It should be noted that in the Soviet years the most worked were tasks of management at the shop level. As a rule, it is problems of scheduling and operational accounting of course of production. Problems of operational calculation of the nomenclature plan (production program) of the enterprise which are solved using a MRP algorithm now then were solved poorly. The reason – the poor performance of ADP equipment and the planned nature of supply of the enterprises with materials: the plan formed for a year, the need for operational replanning did not arise, was to execute volume calculation of materials requirements for the year ahead enough.

Considering that subsystems of intra shop planning and dispatching of production at many enterprises consider specifics of production of these enterprises, I consider that it is reasonable to integrate as far as possible these subsystems into the implemented ERP system as components of the bottom level of management.

The methods of operational planning and regulation of course of production developed in Soviet period generally showed the inefficiency and sank into oblivion. Each enterprise uses the almost developed methods of formation of the production program and its periodic refining now. Understanding their inefficiency and unreality of large volume of calculations with the available means, planners of the enterprises aim to implement the ERP system first of all for the solution of a problem of intershop production planning. Therefore we did not meet a problem of the choice of planning methods (old or new) anywhere. All agree that it is necessary to implement modern methods. The restraining factor is a big labor input of preparation of the regulatory base for work in a system: description of structure of products, process flows of production, regulations of labor input, calendar and planned standards. These data for crisis years at the enterprises became outdated and require updating.

As for the organization of management, i.e. separation of control functions between services and departments of plant management, it, in my opinion, showed the logicality. If the enterprise conducts successful performance, dynamically develops, despite the "Soviet" organization of management, then why it is necessary to change something? Especially, if to consider that change of production organization is always a hard and painful task.

Often before ERP system implementation consultants insist on change of the existing schemes of business processes as in the form in which they exist, they cannot be transferred to a system. In many western solutions the accurate business process models implemented at the western enterprises are put, and the step to the right-to the left from them is almost not admissible. As results in need of reorganization at the enterprise. Unlike them the Galaktika ERP, thanks to powerful tools of setup, allows the customer to save usual schemes of work if they are effective.

TAdviser: As far as, by your estimates, among domestic enterprises "piece" production when the order of some products means not just its production, and preliminary carrying out the Research and Development directed or on a serious binding to requirements of the customer, or in general on creation of a unique product is widespread? Whether always at the same time the project organization of management is applied? What features should the ERP system have to be capable to optimize project production?

Gennady Gatsko: Transition to job order production and planning, including single and small-scale, is one of sign trends of the current state of domestic economy. And such enterprises become more and more. In fact, that such job order production? It is an opportunity as much as possible to satisfy needs of the client, an opportunity for flexible maneuvring in the conditions of the changing market conditions, an opportunity for economy of resources and more exact cost management. It is worth noticing that about 90% of the enterprises machine and instrument making, shipbuilding, furniture production, polygraphy use job order production, including – piece and small-scale.

For management of project production Enterprise resource planning should have potential for automation of all stages of lifecycle of accomplishment of orders. Here precontractual preparation (value assessment of the order and possible terms of accomplishment), formation of data on structure of products by the order and technology of its production, production preparation, production planning and accounting of production of products, sales management of finished goods, management of installation of products at the customer, calculation and cost analysis on contract performance belong. All these tasks should be connected in the general project and works should be planned taking into account loading of resources on all network of the orders executed by the enterprise.

ERP system should provide import of data from PDM systems and configuring of structure of products to order.

At contract management the ERP system should provide planning in the form of projects, interface activities of all involved services of the enterprise and partners. Execute the approved planning of research, design-technology and production works taking into account loading of resources, provide contract management on delivery of products and agreements for subcontract works, to execute calculation of planned and actual costs and calculation of product cost by request. A system should provide role separation of powers and interrelation of all levels of management at the enterprise: enterprise level, service layer, level of workshops.

On management of the main production a system should support work planning by orders, reservation of materials and production capacities under the order, management of a complete set of the made products by serial numbers.

ERP system that it could be used effectively for control automation by job order production should support all listed tasks. Support of these tasks is provided in our solution "Galaktika Project Production".

TAdviser: It is well-known that existence of automated control systems for design documentation (PDM) is very important for industrial enterprises. In spite of the fact that the APICS standard requires existence in the ERP system of the corresponding built-in module, in practice many developers ERP prefer to integrate the systems with the solutions PDM of third-party developers. Customers too, as far as we know, prefer specialized solutions. What problems how decide should developers of ERP systems what problems at the same time arise and solve in this context?

Gennady Gatsko: Really, the vast majority of the enterprises uses ERP and the PDM solution of different developers and it is justified. Seldom what IT company can develop and improve equally successfully both an ERP product, and PDM – it requires huge resources, and at modern development of integration technologies not too effectively. At integration with a PDM system data on structure of products and production technologies come to ERP that already in the ERP system finds reflection in specifications of products and route charts. For correct data exchange it is necessary to provide existence of integration tools – and it is a task of both ERP developer, and PDM. In due time attempts to develop the uniform ISO regulating process of integration of ERP and PDM systems, however wide popularity were made it did not purchase.

We developed the format of data in which the structure of objects is approximate to structure of the documents provided by state standard specifications for exchange with PDM systems and developed rules of directory synchronization of systems.

As a rule, development of the procedure of unloading of data is executed by the company which implements a PDM system at the enterprise, using API technology. For example, in our practice we executed projects on integration of the Galaktika ERP with the Pilot PDM systems, T-FLEX DOCs, SmarTeam, Intermekh. Quite recently in JSC Electropult Plant our partner – EP-Audit company - completed integration of the Galaktika ERP and the WindChill-PDM system and results very good.

In the technical plan at accomplishment of the similar project in the presence of the qualified and experienced specialists of particular problems does not arise. The main factor of risk I would call the organization of project implementation as coordination among themselves of the systems of different developers requires the accurate solution of organizational problems of interaction. And to this work not to do without permanent attention of the management of the enterprise.

TAdviser: What fields of management industrial (including machine-building) still are the enterprises "not covered" functionality of ERP systems to what of them it is necessary to extend action of ERP systems and on what is not necessary? What plans of Galaktika corporation in this context?

Gennady Gatsko: There are many attempts to expand functionality of ERP systems in order that as much as possible problems at the enterprise were solved by means of one system (for example, sometimes try "drive" functionality of PDM or PLM into ERP). As a result the quality of implementation of those main objectives for which first of all wait from ERP (finance, logistics, personnel, production) suffers. It seems to me that you should not try to embrace the immensity – better to offer the customer high-quality implementation of that range of tasks which is the basic for ERP and to implement high-quality, "seamless" integration into customized applications, than "hook" also on the neighboring areas, but to the detriment of quality. "Galaktika" concentrates on deeper study today in the solutions of processes of production planning and management because this functionality is most demanded today and will not lose the relevance and in the near future.

The separate direction of development of our solutions is a reflection in them the innovative technologies. For example, solution development "Galaktika Project production" was conducted on the basis of advanced technologies - Microsoft.NET, the service-oriented architecture (SOA), web services, OLAP technology. As a result the customer receives several advantages in the field of creation of a common information space of the enterprise and expansion of basic opportunities of the solution due to development of proprietary applications. And it leads to reduction of time of projects implementation, rational distribution and protection of investments into IT, deeper adaptation of IT solutions to specifics of business processes of the enterprise. Thereby an opportunity for the most effective use of ERP systems is provided.