Success Story – “Kalina”
Short review Company name
“Kalina Ltd.” concern Location Russia, Yekaterinburg Industry Fast-Moving Consumer Goods (FMCG) Web Site www.kalina.org IT landscape before the project
Concorde Project goals - To increase the competitive advantages of the concern;
- To provide the possibility of prompt control of the concern economic activity for its administration;
- To provide the effectiveness of manufacture and logistic chains as well as analysis (plan/fact);
- To provide the effective realization of plan and sales support;
- The effective management of financial flows by means of managerial control instruments usage;
- To increase the efficiency and accuracy of accounting and taxation control;
- To create a flexible and scalable information system, allowing to keep the high effectiveness of the concern operations.
Implementation partner ALPE Consulting Used solutions and services SAP ERP based on the preset SAP Business All-in-One scenarios as accelerators, ASAP Focus methodology being used. - FI, CO, MM, SD, PP, QM modules
- ALPE Consulting services – conceptual projecting, implementation and postproductive support.
SAP ERP based on the preset SAP Business All-in-One scenarios was chosen after six months of thorough analysis of different information systems as the solution which most fully meets the company needs. The 9-moths period of implementation offered by ALPE Consulting (in other companies – 18-24 months) became the main reason to choose the company for the project implementation. Implementation peculiarities - Because of the usage of SAP Business All-in-One as accelerators and ASAP Focus methodology, the implementation was completed in a short period of time – 9 months;
- Highly qualified team on both sides of the project.
Results - standardized, duly organized processes in accordance with the latest demands;
- a clear understanding of the production cost, price formation and the product profitability;
- fullness of the operative information on manufacturing and the state of warehouses;
- assistance with the organization of business processes and making strategic decisions due to the fast and fully received information.
Sortware and Hardware - server on base - 2 Intel Xeon E5440 2,83 GHz with 32 GB RAM and Sun Solaris 10 OS (x86-64)
- number of users - about 600
ALPE Consulting uses SAP Best Practices and ASAP Focus methodology for the faster implementation of SAP solutions. "Kalina" concern “Kalina” concern is a major manufacturer of perfumery, cosmetics and household chemical goods with such leading brands as: “Black pearl”, “Pure line”, “One Hundred Beauty Recipes”, “Silky Hands”, “Forest Balm” etc. Nowadays “Kalina” concern has the manufacture equipment, which corresponds to the highest international standards. Major world manufacturers of raw materials for perfumery are “Kalina” concern suppliers. “Kalina” concern includes: a factory in Saint Petersburg, an affiliated company – “Pallada Ukraine” (Ukraine), Kalina Overseas Holding B.V. (The Netherlands). Regional trading network of the concern in Russia and CIS countries consists of 200 dealer companies. Some additional information abour the concern can be found at: http://www.kalina.org “Kalina” concern has been actively extending in the last several years. But the support of the company competitiveness with the dynamically increasing income is impossible without the possibility to receive true and accurate information fast which would provide the transparency and effectiveness of management of business processes. The concern administration has made a decision to implement the information system which would fully satisfy all the company needs, at that the business solution implementation period should not exceed 12 months. The current situation “Kalina” concern includes enterprises in Russia, Switzerland, Ukraine, the Netherlands with the total personnel number above 2500. As a result of the impetuous business growth, the concern has faced the following problems – the insufficient coverage of business processes and difficulties in the support of Concorde – the information system already used by the company. In spite of all the additional works on the system, it was still unable to cover even major business processes, there were also considerable difficulties with the system support. The system lacked managerial control function, as well as data consistency (accounting and warehouse control systems had different information concerning remains of materials as well as raw materials) partly for the reason that the system allowed to make direct changes in tables. At that, the system lacked the sufficient fail safety – once or twice a week it went out of order, the production process stopped. Obviously, creating the unified information system became one of necessary conditions in order to provide further growth of the company preserving its competitive advantages. Solution choice The main demands to the expected functionality were figured out on the first stage of the implementation. The system should provide the following: - financial control
- material flows control
- manufacture management
- realization management
- cost value calculation
- logistics management
- fixed assets control
- on-line integration with WMS system with the tasks of material flows management
- integration with e-banking system: uploading of tasks for payments and bank statements
- guaranteed 24*7 work capacity
During half a year the concern administration was analyzing different information systems. After the systems, which did not correspond to reliability criteria (or did not cover all processes) were rejected, the considered choice was made in favour of SAP company solution. The choice of the solution was mostly affected by the fact that the mentioned SAP solution corresponded to all international standards (which is important for the concern positioning itself as an international company) and the experience of FMCG industry leading companies – most of them have chosen a SAP solution. SAP solution implementation had to unite all company subdivisions into one informational space, to create the possibility of control and correction of key business processes, to provide with additional instruments for the company activity analysis. At that, the fact that the implementation term of the offered business solution should not exceed a 12-months period, was one of the main conditions. In the tender held ALPE Consulting was chosen. The terms of implementation of the business solution (offered by ALPE Consulting), based on SAP Business All-in-One preset scenarios due to the usage of ASAP Focus methodology, did not exceed 9 months and fully met the concern needs. Offers of other companies on implementation terms varied from 18 to 24 months. The key factor of the choice made became the fact that the solution, offered by ALPE Consulting: - meets current and future possible needs of the enterprise;
- is implemented in explained terms;
- does not exceed the provided budget;
- is easily scaled when needed.
Implementation The project realization was implemented on the basis of preset scenarios of SAP Business All-in-One as accelerators, using ASAP Focus methodology. The project consisted of the following stages: - conceptual projecting and forming a gap-list;
- adjusting the system;
- solution testing;
- data migration;
- commercial operation of the solution.
In the beginning of the process work on the project did not go that fast as it was supposed to while implementing FI module. That was caused by the fact that the team lacked FI key user (accountant). Besides, the position of Financial director was vacant back then. Work on the project has started dynamically moving after Oleg Lunin – a new Financial director (who already had the experience of SAP implementation in other companies) had come to the concern. He was in full charge of the project and since April the increased development of the project has started. He insisted on including of the concern Chief Accountant – T.G.Babina into the project. Mikhail Skundin – Head of the Project: “After Tatiana Babina - a professional with the experience of participation in the implementation of corporate information system projects - had joined the team, she worked through a great deal of information, which was a significant benefit for the company. The duty of project management – on the side of business users – Lunin transferred to Natalia Sigunina a couple of months before the start of the project. Natalia is extremely hard-working and has a talent to inspire her colleagues. The team leaded by Natalia worked for 18-20 hours a day and completed a huge amount of work. As a result we did not exceed the indicated terms and the whole work went smoothly – we had no serious problems that could stop the major processes. I could not but specifically mention the positive role of Alexei Solonkin – the Head of IT Department of “Kalina” concern. He already had the experience of other SAP projects. Initially Alexei had professionally evaluated risks of the short period of the project implementation and therefore played an immense role having organized the work on the project in such a way, that finally the project was completed in the planned period of time.” Due to the duly coordinated work of two teams – “Kalina” concern staff and ALPE Consulting specialists, the productive start of the project took place on August 1st, 2009. During the period of the productive operation no major problems arose. At present ALPE Consulting keeps providing the postproductive support. O.K.Lunin - Economy-and-Finance director. “We consider this project VERY SUCCESSFUL: all major models are implemented and are actively being used. The process of transfer went without any significant losses for the company (which is very important, as possible losses from…let’s say delays in unloads could cost the company twice more than the project itself does, but we managed to stick to the budget”. Results In a very short period of time - 9 months (from November 2008 to August 2009) the following modules: FI, CO, PP, MM, SD, QM, LE SAP ERP 6.03 were implemented. SAP Business All-in-One Baseline package solution was used as an accelerator. After the implementation “Kalina” concern has acquired: - new managerial reporting;
- all business processes were transformed into a unified consequent chain;
- transparency of the price formation of sales was increased;
- a possibility to receive an operative evaluation of all processes by the company administration;
- new level of planning and warehouse resources control.
The implemented system allows reduce numeral staff of several subdivisions, to carry out professional reorientation of personnel. The period of time for receiving operative information was reduced considerably. Now the number of system users totals 600 persons. The result is as follows: all tasks and purposes of the customer in tender request were achieved. Natalia Sigunina – Head of the project team of “Kalina” concern. “The process of system replacement went smoothly, all previously automated processes are covered with SAP abilities. SAP solution implementation allowed broaden possibilities significantly, as well as make price formation in sales, purchasing process transparent. The corporate spirit of the concern grew for the reason that ERP system has a clear interconnection between the consistency and the content of all performed operations.” Alexei Solonkin – Head of IT Department. “SAP system implementation has considerably increased the stability and fail safety of the information system in comparison with the earlier installed Concorde system. SAP solution has provided the up-to-date and consistent information provided in directories on accounting and warehousing control and allowed receive an instrument for further development.” Andzhey Zholendziovsky – General Manager of Logistics of “Kalina” concern: “SAP system implementation: - has showed that the business is lagging behind similar ones working in GMP (good manufactured practice) international standard and the need to optimize business processes;
- allowed change for the system which is an international standard and as the result of all – the possessed skills permit to use all instruments of the information system more effectively;
- the accuracy of information increased considerably, its integrity and efficiency of receiving any time; at that the process of information receiving (as well as information received) is done without the participation of responsible persons;
- permitted to use powerful instruments for managerial reporting, thorough analysis and figuring out the ways for expenses optimization;
- allowed receive the instrument for further development and optimization of business.”
The following factors have contributed to the project success: - modification of business processes in accordance with better practices, reflected in SAP standards;
- fast taken decisions during the implementation period;
- loyal attitude of personnel towards the implementation of the new system;
- productive work of members of the project group.
Mikhail Skundin – Head of the Project from ALPE Consulting: “Speaking about definite advantages of ALPE Consulting as the system implementation partner, I believe that we – and those are not just nice words – are definitely very flexible in approach and considerate toward our Customer’s demands. We take into consideration all Customer’s problems, help to improve – also business processes. In the project we have readjusted a lot of things to SAP standards, but turned down some of the desirable changes of SAP standard. 300 developed products we have accepted for further manufacturing, 200 – declined. We have dissuaded the developers from further working on them. The advantage of ALPE consulting is also in its team of professionals - guys with rich experience and the perfect knowledge of the system and business processes. Their selfless work on the project is one of key factors of success”. Perspectives and plans Further development plans are: SAP BW, budgeting, the solution roll out to affiliated enterprises, APO, HR. About ALPE Consulting ALPE Consulting was founded in 2006, possesses SAP Channel and Service Partner statuses and works on Russian and foreign markets. The company is specializing on the implementation of IT solutions on the basis of SAP software (for its customers). ALPE Consulting provides business consulting services and holds special trainings for managers and sales managers. With the staff number above 40 persons, ALPE Consulting is the first company in Russia, which has tested and implemented SAP Business All-in-One for Retail package solution. In 2010 ALPE Consulting has implemented the project (at “Kalina” concern) which was nominated the best project of the year by SAP CIS company at “QUALITY AWARD 2010”. The story of ALPE successful projects includes such world leaders as Mazda, DeLonghi, Russian Railways, Metro Group, AstraZeneca etc. Company offices are located in Moscow and Saint Petersburg. Competence - SAP ERP (FI/CO/MM/SD/PP/PM/PS/HR)
- SAP All-In-One Baseline (Prepackaged Solution)
- SAP IS Retail All-In-One (Prepackaged Solution)
- SAP Russian Add-on (Roll-out Projects)
SAP implementation experience - finance
- manufacture
- warehousing
- budgeting
- distribution and sales
- human resources management
- relations with customers
Expertise in the following industries: - manufacture of consumer goods
- retail trade
- automotive
- pharmaceutical
- chemical
- transportation and logistics
- consulting etc.
Additional information You can find the information on other projects, realized by ALPE Consulting on the basis of SAP corporation technologies, here: www.alpeconsulting.ru
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