Kaluga Turbine Plant replaced Baan with SAP ERP in six months

The SAP company and JSC Kaluga Turbine Plant (KTP) which is a part of JSC Power Machines began the project on the implementing solution SAP ERP in April, 2011.

The created information system will allow KTZ to reach industrial automations new level, to upgrade the business processes on the basis of best practices of world leaders of the machine-building industry, to increase the accuracy and efficiency of management decisions and efficiency of interaction with head office JSC Power Machines.

Till April, 2011 for management of production processes on KTZ the Baan system was used. However taking into account need of carrying out business transformation there was a question of implementation of a new information system which not only is capable to solve a problem of automation of all key processes of the enterprise, but already comprises the best practices of world leaders of the machine-building industry. As such system the system of SAP especially as JSC Power Machines use the SAP solution ERP as the corporate standard for business process management was selected. Created within the project on JSC Power Machines, the solution will become a prototype of new information system KTZ. It will reduce project terms by KTZ, will increase effective management of risks and will allow to make use of the experience accumulated by specialists of a project team of JSC Power Machines.

Within the project at the enterprise key business processes — production management, by purchases, stocks, personnel and also management of finance and accounting will be automated.

The main objectives of the implementing solution SAP ERP are:

• Ensuring accurate accounting of needs for purchases of inventory items, reduction of warehouse stocks;
• Transition to end-to-end production planning, increase in accuracy of planning of loading of production resources;
• Reduction of duration of a production cycle;
• Increase in accuracy of the analysis of product cost by different parameters (divisions, resources), profitability of transactions;
• Decrease in labor input of routine transactions;
• Ensuring reliability and completeness of the business data used in activity of the enterprise due to transition from paper carriers and local storages to a centralized system of collecting, storage and data management.

"Experience of implementation and operation of the SAP solution in JSC Power Machines shows that SAP ERP — the most effective tool for management of large enterprises with complex structure of production processes and business processes of industrial holding. Having implemented SAP, we will be able to use the best practices of leaders of mechanical engineering for increase in efficiency, an exit to the new quality level and labor productivity" — Alexander Vasilyevich Ziborov, the CEO of JSC Kaluga Turbine Plant noted.

"Creation of the SAP solution for KTZ on the basis of the working prototype of an information system which is successfully used in JSC Power Machines? is feature of implementation as allows to reduce the terms of the project and risks connected with transition to a new system. An additional factor of risk reduction — high qualification and experience of the specialists of JSC Power Machines participating in implementing solution of SAP in head enterprise of holding. We are sure that the project on KTZ will continue practice of successful implementing solutions of SAP in large engineering enterprises of Russia" — Kazinyan Ishkhan, the deputy CEO of SAP CIS noted.

According to the plan the information system will be put into commercial operation in January, 2012.

In the fall of 2012 of JSC Kaluga Turbine Plant received the new management tool production based on SAP solutions. Allowed implement the project in short terms – six months the principle of replication of the solutions which are successfully implemented in the head company by specialists of SAP Consulting.

Creation of a single system of management of JSC KTZ became the major task aimed at the development of the enterprise and fixing of its competitive advantages including due to increase in transparency of planning and cost optimization, transition to a planning method and accounting of production based on detale-assembly unit. The SAP solution integrated divisions of the enterprise in a common information space, gave opportunities of control and change of key business processes according to the best practices of SAP implementation.

The implementation project of SAP ERP is executed according to the program of unification of processes of the enterprises of JSC Power Machines by means of replication of the SAP solutions used in the head company. It allowed to reduce project implementation time to six months and also its cost.

"Project deadlines were put very compressed that complicated a task, but changes such should be carried out quickly. Moreover, SAP is not only the information, but also disciplining system. Having started it, we understood that it does not allow to break statutory rules and regulations any more, to deviate from the set scheme of business processes", – Yankovsky Alexander, the CIO of JSC Power Machines emphasized.

"This project is demonstrative for the Russian power plant engineering for a number of reasons. First, the solution created at implementation in JSC Power Machines became the corporate standard for JSC Kaluga Turbine Plant. It allowed to implement assigned tasks for short term: transition to productive operation happened in six months from the moment of start of the project. Secondly, we applied the process approach to formation of functional volume and implementation that promoted increase in efficiency of business processes at the enterprise and orientation of employees and a project team on achievement of business results", – Roman Zhuravlev, the director of consulting and training of SAP CIS so commented on the project.