Academy of Better Business

Kamax SA: mySAP ERP implementation

Company on a new track

Kamax, a leader in producing shock absorbers for rail cars, has been using SAP system since January 2005 in many areas. We are discussing the novelties brought by SAP into management with Witold Rymarz, SAP project manager, a member of the Steering Committee in Kamax.

What made the company feel it needed to implement an ERP system? What was lacking?

First of all management information which would be on time and of proper quality. Additional factors were the need to implement a system of production control and to ensure an appropriate level of data safety.

You had a choice between different ERP systems, at the final stage there were two competitors: Axapta by Microsoft and SAP. What made you choose SAP?

One of the criteria of our choice of ERP system was the condition that the software producer should have an appropriate financial backing, which would allow to develop the system in next years. This criterion was met by the companies you mentioned.

However, the basic condition was our requirement of the implementation scope, particularly production planning and controlling functions.

Here the functionalities of mySAP ERP system were in our opinion much better than those of the competitor’s. The functionalities we expect are included in mySAP ERP standard, they were only to be configured in a proper way during implementation.

Why did you decide on SAP implementation with BCC? Poznań is 500 km away from Kańczuga. Was the distance not a problem in cooperation?

The basic criterion of a choice of an implementation company was the level of service provided and consultants’ skills.

Despite such a distance the works were carried out as scheduled, in the planned scope and budget. Consultations were never delayed or cancelled due to logistic reasons. Thanks to the most modern technologies some works were carried out remotely.
 
During the implementation in Kamax you used a preconfigured SPRINT package. What did it help? How would you comment on the opinion that using such a solution makes it more difficult to develop the system in future?

A preconfigured system allows to shorten implementation time, and consequently, reduce spending. The ready solutions defined in SPRINT package also reduce the workload that must be executed by the members of implementation teams.

In middle-sized businesses, where the number of employees handling a given area is small, it is possible to conduct the implementation without much disturbance in the company’s operations. Our employees, members of work teams, focused on processes and not on their implementation in SAP system.

Of course, every company has its specific business processes and the implementation scope should be respectively widened for them. I do not agree that it will be more difficult to develop the system in future.

What was the reaction of the company’s management, the system’s users, to the new solution? It is said that starting an ERP system is a real revolution…

The previous IT system covered most areas in the company and the employees had experience in using an IT system.

New solutions in many cases required at first additional work and getting rid of old habits. However, as time went by and the users became more experienced, they started noticing advantages of using the new system.

The rules of the implemented processes facilitate and speed up process management and reduce the possibility of errors. This makes employees feel more confident when performing everyday duties.

The new system gives the management much more possibilities of access to the data in the system. I would call revolution the change in the executives’ work, as they now may use the knowledge gathered the analysis of those data.

Support in planning is like a heart for the system. What differences can you see in the planning model before SAP implementation and now?

Planning is really a vital element, but also one of the more difficult ones to implement. Due to the specificity of our production we had to get to know planning mechanisms available in SAP in every detail. This required more time.

However, now this knowledge helps us create production processes and their data, which enables to generate material need notifications automatically and create planned orders. Before implementing SAP all those actions were done manually.

What new opportunities in supply did managers obtain?

Material needs notifications, automatically created in SAP and those created manually, are converted in the Supply Office into respective orders. The bought raw materials are received in a warehouse on the basis of a previously created order.

The system takes care that the data entered are appropriate at each stage. In terms of organization the system has tidied the purchase process, minimizing the possibility of errors.

A measurable advantage is the possibility to use reports which help manage supply processes in a way that helps minimize stock and identify the sources of unjustified costs.

What does system support for production processes look like? What improvements could you indicate here?

These are first of all full management of production process, from the stage of master data defining to creating routes and material specifications, to passing a ready product to the warehouse. All the processes are integrated, which helps decrease the amount of data entered.

Implementing mySAP ERP system has changed previous work manner during implementing new articles in production, by forcing appropriate order of data preparation. Integrating all production processes enables to control and settle the production easily. This in turn helps to easily notice all differences in manufacturing costs.

How does the detailed knowledge on costs help in supply and sale decisions, which influence the company’s profitability?

We already had the knowledge on costs and their structure in the old system, but accessing it required a lot of work and it was not always available on time.

The current cost structure reflects all expenditure sources vital for the company, and the data are mostly at hand. Controllers may focus on data analysis, and not their preparation.

Information about costs helps calculate prices on the basis of reliable and current information concerning both supply and production costs. Before SAP implementation, cost calculation was done only on the basis of general indications. Now every calculation may be treated individually, with consideration for detailed information about costs created at every stage of production.

Kamax uses SAP. What does it mean for your customers, has the implementation in Kamax brought them any profits?

A successful SAP implementation is a proof of a very good company organization. One of the profits for customers is the certainty that production and service processes are supervised by the system, which guarantees deliveries which are punctual and comply with specifications.

Additionally, our implementation covers a unique solution, which is consigning, i.e. managing our goods delivered to a customer. The solution helps us regularly check our stocks at a customer’s, and gives him assurance that the stock meets his needs and the contract we signed.

From the board’s point of view, how can we summarize the advantages of implementing SAP?

I believe that the fundamental advantages of SAP implementation, complying with the objectives we had set, is management and financial information, which is now available on time for the authorised users, and implementing process management.

Additional benefits are handling business processes according to rules configured in SAP system, which reduces the possible sources of errors.

I can quote a member of the board, the chief accountant, Bogusław Zybura: ”Creating financial reports is definitely easier and quicker.”

Let’s go on to IT aspects of the implementation. Which technical tasks during preparation for the system start were most work-consuming and demanding?

The company was alredy equipped with relevant IT structure, covering the fibre-optic network, the e-mail server and safe access to the Internet, based on the firewall by CheckPoint. For the needs of SAP implementation we only had to develop it slightly.

We changed some computer workstations and, obviously, we bought a server platform for the needs of the new system. We also implemented a comprehensive system of making backup copies.

The costs of infrastructure development were a small part of overall implementation costs. The most time-consuming was training the IT specialists who now manage SAP system and the servers it is installed on.

What does everyday system administration look like in your company?

Everyday diagnosis of system condition enables to discover potential threats early. The data are analysed and in case of problems that exceed the knowledge of our employees they are referred to supporting consultants.

Consultants’ support consists not only in indicating the solution to the problem but also helping to remove it. Most works are carried out on the remote basis. I may add that the number of problems with system administration is very low.

Additionally, once a month BCC competence center provides a comprehensive monitoring of the system’s functioning with a view of identifying potential problems. The results of the monitoring are also a basis for possible corrections in the system.

You also receive application service from BCC’s competence center. What does it consist in and where does it help?

In the system use there always occur problems or questions. If they cannot be solved by employees themselves, they are passed on by the manager of a working team to the application service.

BCC has given access to an application managed from an Internet browser, which helps notify and check the status of execution by the Internet.

Service consultants remotely recognize the problem and give answers or remotely prepare changes in system configuration. Those changes, after testing, are transferred by system administrators onto the productive server.
 
If the solution to the problem is satisfying for a customer, he accepts it. If not, the consultants carry on working until they achieve the expected result.

Such form of cooperation helps us use the knowledge of experienced consultants when we most need it. Six months’ use of the application service proved that it is a very good form of cooperation.

What is SAP implementation and development in your opinion, as professional experience?

When starting the implementation I realized that it was such a challenge, both for Kamax employees and for myself. By entrusting me the position of project management, the board showed their trust in me and their support, while I took it as a personal challenge.

During the implementation, as project manager I had an opportunity of cooperation with every working team and participating in module and inter-module consultations. We often solved together problems that occurred during the implementation.

I got to know most business processes in the company and their implementation in SAP system. Such experience one can obtain only by taking part in an implementation project. The knowledge I have now helps me analyse and perfect business processes, and through them - develop SAP system.

For all the members of implementation teams it was also a great opportunity to gain new skills and new knowledge on processes they use.

It is thanks to them that the project has been executed within the planned scope, schedule and costs. Here I would like to thank them and all others who participated in the project.

Thank you very much.

Interviewer: Grzegorz Grupiński