Academy of Better Business

Zakłady Chemiczne Zachem SA: SAP system implementation

Efficient management of multi-plant company

The basic condition in the management of such a complex, multi-plant business organization as Zachem is a the management’s and key person’s access to full, reliable and up-to-date information on processes in the company. Such were also the expectations of the anagement toward the future IT system.

At the same time integration of business processes, resulting from system implementation, should not involve limiting the independence of particular plants.

Why SAP and BCC?

Preparing the implementation and a choice of ERP system took about a year. During that time the then Petrochemia Płock executed SAP implementation. At the same time the implementations were being carried out in other chemical enterprises in Poland, also at Zachem’s competitors. All this confirmed the assumption that the implementation of the best ERP solutions was a necessity for the company.

The most important advantages of SAP were considered its integration and wide functionality. With SAP it was certain that the system would keep up with the company’s development. The decision to choose SAP was taken at the end of 1998.

The most important criterion in the choice of the company to carry out the implementation was expertise in Polish implementations of SAP, the number of consultants specializing in SAP and the guarantee of the project success within time limit and budget included in the contract.

The board of Zachem chose BCC. And additional argument was a certificate ISO 9001, as BCC was the only implementation company in Poland to have a certificate in SAP implementation services.

Implementation course

The works started in February 1999. They were more efficient thanks to the commitment of the board members of Zachem, namely production and trade director, Tadeusza Wilusz and finance director, Jerzy Porczyk, who often on the spot took difficult decisions on organizational changes in the company, allocated resources and supervised the status of the project works.

The project involved over 70 people, members of implementation teams, representatives of all Zachem plants. The coordination of such an immense task, whose range covered 8 separate units with separate projects, required creating a large project management team that included Zachem employees and  BCC consultants.

In January 2000 the following SAP modules were started: FI (finance accounting), FI-AA (fixed assets accounting) and CO-OM/PC (overhead costs controlling with elements of production controlling). Also a part of MM functionality (materials management) and SD (sales and distribution) were started. In next months the functionalities CO-PA and other functions of MM and SD modules, as planned, were started.

To meet the specific needs and requirements of Zachem, BCC specialists created some solutions developing the standard SAP functionality SAP and  integrating it with other systems in the company. 

SAP advantages

SAP implementation in Zachem meant on-line availability, in one central system, of up-to-date information on processes in all units of the company. SAP integrates separate units in one organization, at the same time allowing to carry out autonomic supply, marketing and trade policies.

Thanks to one information flow in all plants  internal and external accounting are reliable, coherent and complement each other. The processes are closely supervised from the beginning of a production cycle in the supply area. Every purchase of materials and raw materials requires authorization by a responsible person, available data allow to analyze the price of purchase and suppliers. 

Every operation in logistics (supply, production, sale) results in automatic posting on accounts. Every posting in accounting module is reflected in the controlling module, where it is interpreted in categories such as cost center, product or result objectin the  CO module. 

The information delivered by SAP concerning the cost centers and structure constitute the basis for improving the efficiency and of cost planning – in shorter time, wider range and in simpler way than it was possible in the systems used previously.

In comparison with the systems used before the availability of information on production costs is much better. Now Zachem can control the manufacture costs of every product or a group of products. An analysis of technical production cost is possible down to the level of single elements costs e.g. the cost of raw materials, supplementary materials, payroll costs. Also analyses of deviations between planned and actual costs are available.

Thanks to working with SAP the employees are more aware of the costs they generate.

Marketing and sales departments use reports that enable to analyze some market segments in terms of products or services, customers, distribution channels or geographical regions. 

The results are used in resources allocation, price policy, stopping production of unprofitable goods or providing services and focus more on most profitable products and services.

The information flow so far, more traditional, in a company of 13 km² area was rather time-consuming. Now information is available for all authorized people immediately upon its creating.

The board of Zachemu estimates that the work of implementation teams, consisting of the company’s employees and BCC consultants, added a lot to the organization’s management culture. The experience gained during the creation of the system are often used in other areas of the company’s operations.

The configuration and hardware solutions influence the increase in the speed and security of the system users’ work. The hardware platform, based on a cluster of two HP servers, ensures security and stability of the system work. Thanks to the best hardware and optimum system configuration the system reaction time to user’s commands does not exceed 0.1 second.

Thanks to SAP implementation Zachem is now viewed by the market as a company with modern management methods, using the latest IT technology. SAP implementation can be thus considered as a way of increasing the company’s market value.