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VOLGABURMASH, JSC COMPLETES UP TO 100% ORDERS PER MONTH MEETING TARGET DATE BY USE OF 1С:ERP 2

01.07.2018

PROJECT OBJECTIVES

o    Optimize management of two plants by organizing and integrating the accounting of all key processes, by regulatory accounting, production process and operational accounting of inventory;

o    Increase workforce productivity, improve interaction and communication between divisions, introduce the systems of salary calculation and personnel record keeping;

o    Adjust efficent procurement processes, optimize warehouse operation, introduce the order of production planning;

o    Accelerate bit prod

SITUATION BEFORE 1С:ERP 2 WAS IMPLEMENTED

Volgaburmash JSC is the largest Russian producer of the advanced rock cutting tools for oil and gas, mining and construction industries. From its foundation day, the company, also including Uralburmash, JSC, has produced more than 20 million drill bits. Rock cutting tools by Volgaburmash are used in the main fields and pits of Russia and in more than 40 other countries. Volgaburmash plant receives up to 150 orders per month and makes up to 2500 bits. For their production, it is necessary to timely buy materials and components and deliver them to workshops from warehouse. Earlier, warehouse operation was not been automated, and paper registration books filled out manually were used. The system could not reveal up-to-date stock balance. Accounting mistakes occurred when allocating components. For example, two different managers could reserve the same product for implementation of different orders. A lot of time and effort was spent on "manual" calculation at all stages of production planning. Employees needed a written order by the management to start production; the delay of start-up of production could make up to a week. All this slowed down work of the companies and dragged out bit production process. The management put a 10 weeks deadline for processing each order. Actually, completion of one order took, on average, 10-16 weeks, 90% of orders failed to meet their target dates

PROJECT UNIQUENESS

Volgaburmash, JSC and Uralburmash, JSC have created an automated system of operational, regulatory and management accounting on the basis of "1C:ERP 2" which ensures high reliability, productivity and scalability of the system. New ERP-system has consolidated management of key processes, has allowed to control production costs of rock cutting tools and inventory movement more efficiently and to accelerate products release. The volume of orders completed in due time increased up to 100%. Today each order by the customer is fulfilled precisely according to the stated 8 weeks period that, certainly, improves customer confidence to the business.

Due to seamless integration of "1C:ERP" with "1C:Document management", coordination of orders, contracts, requisitions to payment and other documents - both internal (between the plants), and external (with partners and customers) has sped up.

Obtaining administrative and regulatory accounting has sped up by 20 days.

Volgaburmash is one of the first Russian companies in which experts of Samara office "1C-Rarus" have introduced DirectBank technology with Sberbank of Russia; and this allows sending payment documents to bank and receiving bank statements directly from "1C:ERP" without creating a file.

Production planning processes are automated. Pull ordering system is used for weekly production planning. It has helped to organize accurate and regular production of products: control over the completion and procurement of orders is improved.

● After receiving an order for production of products, each workshop can issue the application (order) for necessary materials in system; it goes directly to procurement managers. Procurement engineers use the commodity calendar from which they obtain accurate data on the current stock balance, demand and arising stock shortage. They quickly consolidate applications from workshops and order materials, and if necessary distribute the orders among suppliers choosing the best prices. Based on the available information, it is possible to predict receipt of materials and components and production start rather accurately.

● The system provides individual accounting of each material (about 10 000 items). Now it is possible to look through the balance of certain positions quickly without wasting time sending inquiries to shop warehouses. The inappropriate consumption of materials is excluded.

● The Company has stopped using central warehouses, now materials from suppliers directly arrive at specialized shop warehouses according to the applications issued in the system. This has simplified the logistics chain and has reduced time and labor costs for unnecessary material flow in the plant.

● Due to seamless integration of "1C:ERP" with "1C:Document management", coordination of orders, contracts, requisitions to payment and other documents - both internal (between the plants), and external (with partners and customers) has successfully sped up.

● Production start coordination is now organized by means of the system; and the speed of production start-up has considerably grown. Written management orders are cancelled.

● Accounting generated by the system that helps the management to control overall performance of employees better, according to the accepted indicators, such as number of the fulfilled orders, terms of their realization is automated. Now the report demonstrates the whole production process from an order receipt from the client to product release from the shop. It is possible to see at what stage a failure occurred and which division was the reason. This and automation of accounting of employee training, have sped up and have improved the quality of work of personnel.

● Time for completion of orders has been cut almost by half - on average up to 8 weeks. Now, 100% of orders are completed in time!

● Obtaining administrative and regulatory reporting has sped up by 20 days.

Implemented software products

1С:ERP Enterprise management


Solution architecture and scale of the project
The project is introduction of "1C:ERP Enterprise management 2.0" system with seamless integration with "1C:Document management 8 KORP". Two companies, Volgaburmash and Uralburmash plants work in the unified database connected by intercompany travel of materials, semi-finished products and finished goods of each other.

The functionality of ERP is used completely, all blocks of the solution are implemented, except for IFRS, are introduced; such blocks as an operational environment (sales, procurement, warehouse, production, maintenance management), financial environment (accounting department, calculation of salary and personnel record keeping, budgeting, administrative reporting), volumetric scheduling and document management are used.

Handling user appeals is fulfilled by means of Bitrix (Bitrix portal) functionality. In addition, together with the colleagues supporting vbm.ru website on Bitrix 24, exchange of information on customer orders (online shop) is implemented.

You can find detailed information about this implementation here >>>



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Volgaburmash and Uralburmash are Russia’s largest companies producing rock-cutting tools