ERP system implementation "COMPASS" in JSC Tulamashzavod

Data on the customer

"The Tulamashzavod joint-stock company is one of the largest enterprises of military industrial complex of Russia which makes arms for ground forces and navy. The traditional sphere of its activity – release of artillery arms of the ships of different types: 30-mm AK-306, AK-630M art installations and also unique rocket and artillery Chestnut complex. Besides, the plant releases a broad spectrum of civil products: laser equipment, diesel engines, perforators, motor-cultivators and other products.

The staff of the company totals about 4000 people. Characteristic of the plant is the broad spectrum of the used equipment therefore the inventory card file includes about 100,000 units of fixed assets.

Prerequisites of the Project

JSC Tulamashzavod was one of the first domestic enterprises which became clients of the German company SAP AG. According to unconfirmed data, the first project of complex automation began here in 1994-1995 and was executed based on SAP R/2 system. Afterwards, about 2000, its updating and transfer to SAP R/3 platform was performed. At the same time the enterprise was among reference clients of SAP company in Russia and the CIS.

But, obviously, the German ERP system did not "get accustomed" in the company. According to the statements of project participants of system implementation Compass, for all the time of use of business applications of SAP on Tulamashzavod was not succeeded to automate many necessary functions. For example, registration of personnel was kept in R/3 system, but payroll was made using several programs developed by specialists of IT department of the enterprise.

By data, independently collected TAdviser, market participants state two possible reasons of change of SAP R/3 with the ERP system Compass. One of them – the SAP solution was too difficult for IT service of the enterprise, it was necessary to attract to its support and development constantly partners of SAP that attracted additional costs and contradicted approach of the company "implement and conduct everything". As other possible reason call the outlined tendency to failure from foreign software solutions in domestic military industrial complex. Supporters of this point of view believe that "JSC Tulamashzavod is in this sense only "first signs", and also other defense enterprises will follow the example of this company.

Perhaps, for making decision on implementation of the domestic solution was rather officially stated reason, and perhaps a role was played also two another called a factor.

Choosing a Solution

The customer company does not open data on the procedure of the choice of a specific ERP system for automation of the business processes, but it is possible to assume that the software solution was selected or as a result of expert evaluation, or as a result of the closed tender. According to TAdviser as alternative to the solution from Compass of options such solutions as Parus, "Galaktika ERP", "1C: Manufacturing Enterprise Management 8.0" and if not to be limited only to domestic developments, Microsoft Dynamics AX, SyteLine (now Infor ERP SL), QAD MFG/PRO (now QAD Enterprise Applications 2007), IFS Applications, SSA ERP LN (before BAAN ERP), quite could be considered by Oracle E-Business Suite.

According to representatives Compass the choice of the solution "COMPASS of MS of ELITE" (it was selected for the project on Tulamashzavod) was influenced by the following three features of the proposal of the domestic supplier:

• full compliance to functional requirements of the customer (a system "can" do everything that is necessary for the enterprise);
• simplicity of deployment, setup and administration of the ERP solution by own forces of the customer (many specific problems were solved and solved by forces of IT specialists of the plant by means of the powerful instrument of the visual setup "Masters of KOMPASA".);
• the KOMPAS company for six months granted to the Customer the right to free use of licenses for all subsystems (no more than from 5 computers at the same time) that allowed the Customer's IT specialists to be convinced completely of completeness of functionality and quality of the ERP system KOMPAS;

<p class="title">Implementation project course

Implementation began in December, 2005. At the end of January, 2006 the subsystem Personnel management using which HR records and payroll were performed was put in trial operation. For check and reinsurance the Customer within three months carried out parallel payrolls by means of an old product and the ERP system "COMPASS" for all 4000 employees.

Completely the first stage of the project which provided automation of all accounting functions was executed for eight calendar months, including the summer pause made at the request of the Customer (i.e., actually, in 5-6 months). High rates of implementation were caused, among other things, and the fact that the Customer made the decision on failure from transfer in the ERP system "COMPASS" of a set of small, usual visual solutions and printed forms for users from the operated earlier software products. Same provided also compliance to the initial project budget as no program completions of the ERP system for the solution of specific tasks of the Customer were required.

In parallel with accomplishment of the first stage technical specifications on implementation of a subsystem Cost management and the module "the COMPASS were made: Budgeting". These tasks are included in the second stage of project implementation. At present forces of staff of Tulamashzavod in "COMPASS" configure 90% of algorithms of formation of articles of budgeting. Test calculations are carried out.

Besides, in the second half of 2006 the KOMPAS company prepared for JSC Tulamashzavod a Control Example on Control Automation by Production. as a result of Implementation of a Control Example based on the Real Data Provided by the Customer Scales of This Part of the Project of Automation Were Determined. the Agreement on Acquisition of 15 Licenses Is Signed KOMPAS: Upravleniye proizvodstvom and implementation of this subsystem in the course of which joining with the PDM system working at the enterprise will be implemented. Control automation by production is going to be completed until the end of 2007.

Results of Implementation

Upon completion of the first stage based on the ERP system "the COMPASS of MS of ELITE" were automated: accounting; inventory and material accounting; accounting of fixed assets; accounting of special assets; registration of personnel; payroll; execution of orders; salary accrual on cash cards; delivery of individual data in PF and FTS in electronic form. It was reached as a result of implementation of modules: "Personnel management", Registration of personnel, "Human resource management", Management of finance, Budgeting, "Purchase management, stocks, sales" and" Accounting of special assets".

All functional units were put into commercial operation. Now a system at the enterprise of the customer, according to the license agreement, provides simultaneous access to any modules from 55 jobs (total number of the automated jobs is not limited).

This, necessary for functioning of all subsystems, arrive directly from places of emergence (workshops, departments, warehouses, etc.) and are brought in the ERP system once.

In the course of accomplishment of the second stage of the project test operation of a subsystem Production management is already conducted.

Among private results of the completed phases of an implementation project the ERP system it is possible to note the following. As a result of a large number of the checking accounts of the plant concentrated in different banks setup of communication with six systems like "client – bank" was made.

At implementation of a subsystem "COMPASS: Personnel management" the new kind of a dress on execution of works corresponding to historical traditions of the plant and using multiple-factor payroll distribution between workers was configured. The principles of distribution depend on such initial data as a kind of the performed work, the cipher and the cost account, category of personnel, etc. For implementation of a difficult algorithm different codes of charges were delivered to all works in the reference book in compliance. In general, salary to the staff of the plant is calculated more than by 150 codes of charges and deduction now.

During implementation of a subsystem "COMPASS: Purchase management, stocks and sales" in parallel with accounting by nomenclature number organized accounting on the qualifier of materials accepted at the plant.

Within implementation of a subsystem "COMPASS: Purchase management, stocks and sales" reorganized business processes of material accounting in workshops. If earlier all materials which are transferred to workshop were right there written off in production, then now they are transferred to virtual "shop storerooms" from where are written off in production in full accordance with real life. Thus, it was succeeded to achieve accurate accounting of unused balances of materials.

In the course of implementation of the ERP system several "subprojects" on data migration were executed. In particular, complex import of data from diverse software products to a subsystem "COMPASS: Personnel management" and "overload" in a DB "COMPASS" about 100,000 inventory cards of fixed assets for further use in a subsystem "the COMPASS: Asset management".

Project Features

First of all, it is the first widely known project during which implementation replacement of the implemented foreign SAP R/3 software product which is the world leader among ERP systems by a domestic ERP system was made.

Also, feature of the project is the efficiency of implementation which is already mentioned above – nine functional units of the ERP system were completely unrolled and implemented, actually, for half a year.

Besides, the project differs in both scales and complexity – by means of the solution "Compass" business activities of one of the largest enterprises of the Russian military industrial complex were automated.

Также, проект внедрения «КОМПАС MS ЭЛИТ» в ОАО «АК «Туламашзавод» был отмечен, как лучший проект года в номинации «Эффективная промышленность» конкурса CNews Awards 2007.