Academy of Better Business

Nordzucker: SAP implementation

In accordance with corporate standards

Nordzucker group, the leader in sugar production in Poland, uses SAP system. The implementation executed by BCC gave the management of the company a tool to increase the efficiency of its Polish units. At the same time thanks to a close cooperation with the headquarters in Germany, the implemented solutions are in accordance with corporate management standards used in Nordzucker AG group.

Why SAP and BCC?

At the end of 2001 the management of the company in Poland decided to start preparing to implement an IT system in Polish units of the group. The management expected that the future system, by providing reliable data about the processes in units, created conditions to take management decisions that would improve the operations of the whole Nordzucker group in Poland.

Nordzucker units in Germany have been successively using SAP for years, however, the concern did not impose the choice on Nordzucker Polska. The team that was preparing implementation in Poland had a choice among three ERP systems.
 
The arguments that decided on choosing SAP were the following: wide functionality that met all Nordzucker needs, flexibility in adjusting it to the changing needs of the company, a possibility of an easy and open development of the system (especially by interfaces to other systems).

A very favorable impression of German Nordzucker users, many successful SAP implementations in Poland by food companies and finally a good trade-off between the costs and profits of the implementation also played their part in decision taking.

In February 2002 the team preparing the implementation decided to commission executing the implementation works to BCC.

The range and course of implementation

The units of Nordzucker group operate in two separate, faraway areas: around Poznań and Toruń. The distance has also to be taken into consideration while implementing an IT system, which is a big project and involves a significant number of employees. That was the key argument in favor of splitting the project into two area-related phases: phase 1 was Poznań group, phase 2 – plants near Toruń.

The objective of phase 1 of the implementation was to work out a final solution that in future would be commonly used by all Nordzucker units in Poland. That’s why it also involved key people from Toruń group, as observers and commentators. In order to ensure compatibility with the system used by units in  Germany, the project also involved employees of Nordzucker AG.

The implementation, started in March 2003, covered the following management areas: financial accounting, fixed assets accounting, controlling, materials management, sales and distribution as well as human resources management.

As planned, in January 2003 the following units  in Poznań group started using SAP: Wielkopolski Cukier sp. z o.o., Nordzucker Polska Sp. z o.o., Nordzucker Polska Spółka Komandytowa and Cukrownia Opalenica SA.

In April 2003 the second phase of the implementation started, this time in the units near Toruń. (Pomorski Cukier, Cukrownia Chełmża). According to the schedule, in those units SAP started in September 2003. The project was also carried out by BCC.

SAP advantages

SAP financial accounting module gathers information from all the other system areas. Thanks to automatic registration of events the time-consuming accountancy and, consequently, the possibility of errors are reduced and the time to prepare reports for management and external offices gets shorter. Soon after starting the system the time necessary to close a month was reduced by half.

Updated, reliable information about liquidity and the results of companies in the group is priceless, as it helps to react quickly, for example, if there are many and considerable payments to make.
 
An estimation of fixed assets by different models – one for balance sheet, another for tax purposes and one more according to corporate requirements is no longer a problem SAP functionality for fixed assets is an efficient tool to define of depreciation for specific purposes, as the users need.

A balance sheet and profit and loss account significantly differ in their parts for fixed assets, for Polish objectives and for German corporate ones. Keeping parallel estimates and automatic booking of the three kinds of depreciation on the ledger are big advantages while creating reports.

SAP implementation in controlling was based on solutions used in Nordzucker AG in Germany. Some changes had to be introduced as the range of the implementation in Poland was different (no PM – plant maintenance functionality) as were the legal requirements in Poland, concerning technical production cost and investment assessment.

In all units a unified structure of cost centers and orders connected mainly with investments was introduced. In order to obtain a correct assessment of improvement works and investments the units started settling personnel cost on the basis of work time registered in the system.

Additionally fixed assets information is now updated automatically, after starting some functions from investment management area. In order to enable control over planned performance the project introduced costand investment planning functions. Reports used for a periodical analysis of budget spending for improvement works and investment were also defined in the system.
 
SAP implementation in sales and distribution allows all units of the group to use one database of customers and products. Thanks to the integration  invoiced sales and deliveries are automatically posted into accounts, so that it is possible to develop sale and profit analysis using various criteria.

Especially for Nordzucker the BCC consultants developed a standard system by a functionality that helps in selling sugar through a third party.

A big advantage of the implementation is the fact that it enables to control customer credit control that is a safeguard against overdraft of a merchant credit. Information registered during entering customers’ orders, dispatch and invoicing constitute the basis for creating analyses of multi-dimensional sale information system.

SAP implementation in Nordzucker units made the foundation for a thorough analysis of events in supply and stock management. All processes in this area are now standardized on the basis of a concept document, created during implementation. It is a set of procedures used by all units of the group.

The information on the quantity and value of stock in every unit, plant and warehouse is available all the time.  Reliable information is obtained thanks to recording events in real time, made on the basis  of unified product and product group indexes.

A centralized sale service was introduced. It allowed to carry out more effective trade negotiations, concerning materials and services of big value and rotation purchased by all units of the group.

Current recording of the use of post-production refuse is enabled by the interface between SAP and Plantator system that supports settlements with sugar beet suppliers. The interface was also created during the implementation.

The SAP implementation in human resources management in Nordzucker units covered the following functionalities: personnel administration, work time management, payroll settlement and organizational structure management. The system stores the history of all personnel events (employment, movements, detention etc.). The data on work time, registered currently are immediately evaluated in payrolls.

The information HR system, apart from reports required legally, enables to created reports at request (ad-hoc inquiries).