Automation of business processes at the VCM production plant helped to reduce costs by 4 times

2024: Automation of operational accounting

On April 18, 2024, the System Business company shared with TAdviser the experience of automating the operational accounting of VXM, a Russian manufacturer of elevator equipment, on the basis of 1C: Our Enterprise Management in terms of formalizing business processes. As specified in the company, this is the first project of the company "System Business" using Russian-made software "Business Studio Business Modeling System" (hereinafter - Business Studio).

As reported, the VoronezhKhlebMontazh company (hereinafter referred to as VXM or the Customer) was founded in 1967. Using modern technologies in the production of both serial equipment and individual mechanisms, for more than 55 years VXM has been achieving optimal quality and accuracy indicators. VXM is engaged in the production sale metal and construction of enterprises whose activities include the storage and processing of grain crops. In production, equipment is manufactured to order, taking into account the various requirements of the customer. VCM takes part in installation, adjustment and delivery of equipment to elevators,, Voronezh, and Lipetsk Belgorod Kurskaya regions other regions, Russia as well as in international projects in,,,. Germany Iran Iraq Mongolia

The main assets of VKM are the presence of a fleet of equipment, its own fleet and warehouses. The fleet of equipment for metalworking includes various machines for cutting metal, bending metal products, welding areas and much more, which allows you to perform the entire cycle of work at one production site. Storage facilities make it possible to keep components and finished products in stock. This allows VCM to provide short production and delivery times.

At the beginning of 2021, the management of VXM was focused on operational tasks and no talk of process management, let alone raising the level of process maturity, was not conducted, exactly, as was the use of specialized tools to improve business efficiency. The business was recovering from the pandemic, and the task of finding a solution to how to minimize manual labor of employees with paper and excel documents acquired priority status. This was the reason for finding optimal practices and solutions in the market. On the recommendation of the partners, the managers of VCM turned to System Business (hereinafter referred to as the Contractor).

Previously, the Customer used two 1C: Enterprise Accounting bases to maintain operational and accounting records without the possibility of exchange with other information systems. The rest of the accounting was carried out on paper and through electronic documents in excel format. For production, some of the information was not displayed anywhere. The work speed was also negatively affected by the lack of relevant information about the remnants of raw materials, semi-finished products and finished products in the warehouse. As a result, there was no correct reporting on sales, purchases and cash, which was why there were difficulties in calculating margin income and in monitoring the timing of fulfillment of buyer orders and supplier orders. The customer needed such a system so that customer orders were registered in it, all specifications were taken into account, orders for workers were printed, components and metalware were ordered, information on the status of the order was available, etc.

With problems such as the lack of correct reporting on sales, purchases, cash and manual processing of documents, VXM entered the project, the main goal of which was to reduce the time for processing documents by automating operational accounting.

Before starting the selection and implementation of the updated 1C program, the specialists of the System Business company conducted a business survey.

At first, we did not understand why all these meetings, questions, how we work, and process diagrams with squares and circles. We needed a program where we could work tomorrow. And looking ahead a little, I note that we were not disappointed when the Contractor's team demonstrated the possibility of practical implementation of all our production processes using the example of a program, with a simple interface and at an affordable cost. told Vladislav Nokhrin, Director of VKM

The pre-project examination took approximately 2 months. The Contractor's team conducted a number of interviews, documented the Customer's requirements, described the business processes in the "as is" model and proposed for implementation the configuration of a 1C: Our Enterprise Management for 15 users, the typical functionality of which completely closed requirements of the Customer in operational accounting.

Further, the actual processes were superimposed on the functionality of the selected accounting system and presented to the Customer's attention complex business processes in the model "as it will be." This step was performed in Business Studio in BPMN 2.0 notation.

After conducting a functional-cost analysis (at that time still through excel), it became obvious that the minimum cost of the end-to-end process (see Figure 1), according to preliminary estimates, decreased by 4 times. And to maintain regulated accounting, they left 1C: Accounting Department, synchronizing it subsequently with 1C: Small Business Management.

source = System Business

We started with a description of the top-level business processes, decomposing them into functional blocks and solving business problems:

• Task# 1. Formalize the sales management business process. Earlier, the sales manager of VXM turned to several information sources, prepared manual documents: contracts, specifications, delivery notes and rarely had operational information about the status of the order. This design took a lot of time, besides, the presence of the human factor did not exclude errors. The automation of the sales management business process has changed the situation: all information about the demand of the potential customer is consolidated in one system from the registration of the lead and the formation of the order (see Figure 2) to the complete shipment.

source = System Business

• Task No. 2: Optimization of the process of managing the purchase of goods, raw materials, materials, components, metalware. Previously, the purchasing process began with the collection and consolidation of raw materials and materials requirements in excel format and then sending the purchase order to the suppliers. It's been a long road. The introduction of the mandatory maintenance of the Nomenclature directory, and the number of stocks for April 2024 totals almost 8,000 units, made it possible to implement the process of calculating requirements directly in the accounting system by special processing provided for by the standard functionality, and then creating documents Order to the supplier and Production Order (see Figure 3). The further path of orders issued to suppliers in the unified accounting system is formalized in accordance with the following business process diagram for the purchase of goods, raw materials, materials, components, metalware (see Figure 4). This business process was designed as a roadmap for the Purchasing Manager and is designed to create a clear understanding of how to quickly carry out the procurement process, based on information about balances, monitor the timely replenishment of raw materials and materials in the warehouse, communicate with the supplier on payment and delivery issues. As a result, the Customer's management receives the information necessary for the work by pressing one button, and does not wait several days.

source = System Business

source = System Business

• Task# 3. Formalization of production processes. The scale of production processes that were to be organized and automated can be described by the following data: 15 operations, 9 stages, 5 workshops, 6 warehouses, 30 types of production and more than 2800 specifications. Start-up started with the process of moving materials from warehouse to production (see Figure 5). The main "supplier" of the material is the metal warehouse. In the manufacture of products (see Figure 6), in one version or another, nine stages of production are used, including laser cutting. The documentation process is the same for each option, which ensures the unity of the reporting principle.

source = System Business

source = System Business

The launch of the project into commercial operation was scheduled for August 2022. A year went by to this event and completely overlooked that almost all members of the Customer's project team from July to September are alternately on vacation. Dreams of a vacation could not be destroyed: vouchers and tickets to the sea and mountains were bought in advance. About canceling a speech project no one led. Delegation of powers, combination of duties, payment for rework and a great desire to work in a new way made it possible to cope with the threat of disrupting the launch of the project.

As of April 2024, every physically executed business process of VXM is described and automated. The set goals have been achieved:

• Business processes are formalized, their schemes serve as a tracker for cross-functional interaction of the company's divisions, and employees have a clear understanding of the company's work structure, their powers and areas of responsibility.
• Up-to-date information on orders, free balances, funds is available today.
• Manual labor is minimized and, with the exception of production workers, consists in reflecting operations in the accounting system.
• Production costs have been reduced by 4 times.

The goal of VCM is to continue the process of continuous automation and deal with all the so-called "bottlenecks." In the future, introduce waste accounting on a mandatory basis and management accounting in 1C: Small Business Management. As for the process development, the plans are to revise all the described business processes, upgrade the schemes taking into account the practical understanding that has developed over 1.5 years of work, and include a description of the functionality of process participants in the official instructions. Process diagrams not only "joined" users with the information system, structuring an understanding of the sequence of data entry to obtain results, but also found practical application in the introduction of new employees and their familiarization with duties.

The analysis of production activities through the prism of the process approach made it possible to structure the existing understanding in the heads of manufacturers and implement this through automation for the use of the entire team. Thus, out of nine production stages, 30 production types were configured for more than 2800 specifications.

{{quote 'author
= said Elena Logvinova, business analyst at System Business|This project was a pilot for System Business as part of an interaction with Russian-made software supplier Business Studio. With the help of Business Studio, the Customer's processes were formalized in a visually accessible graphical form. On further projects, the specialists of the "System Business" expanded the use of Business Studio in terms of simulation modeling and functional-cost analysis, put into practice the use of html publishing for Customers and Business Studio Portal for their own team. To ensure the maximum involvement of the Customer's team and practical application of the schemes of the developed processes, the document Legend of the main elements used on the schemes in the BPMN 2.0 notation was developed (see Fig. 7).}}

source = System Business