About the company

OJSE Sarapulsky Likerovodochny Zavod (SLVZ) is the largest producer of strong liquors in the territory of Udmurtia. The enterprise's history goes back over 100 years. Currently the works produces over 250 product titles. 

The enterprise has 11 wholesale stores and a chain of retail shops in the territory of Udmurtia and neighbor regions. Number of employees is about 1000.

Client's objectives

A new team of managers who substituted the former managerial staff made the decision on commencement of implementation of the system in 2003. An analysis of the situation demonstrated that efficient management of the enterprise was impossible with then current level of information support:

There was no current information on material stock in the enterprise;

• Information from excise stores came once per month, after the month end, with much delay;
• There was no current and reliable information on accounts receivable, including overdue accounts;
• There were methodical problems with accounting; single rules of showing commercial operations in the accounting of isolated branches were missing;
• The single classification of products and raw materials was missing;

Lack of the single information space was the main reason of such a low level of information support. Different configurations of 1C and MS Excel were used for accounting in the works and in the excise stores. Accounts in retail shops were kept manually, without use of computers. Accounting systems in the excise stores and accounting systems in the works were not interconnected.

 Lack of telecommunication channels did not permit access to the central data base located directly at the works from all excise stores and retail shops.

In addition to that, a single management system was necessary in order to reduce impact of human factor in accounting of commercial operations and ensure consistency of accounting methods.

Top managers of Sarapulsky Liquor Works opted for comprehensive automation of the enterprise and determined the following objectives of the integrated enterprise management system for the works:

• Establish a single information space in order to improve manageability of the enterprise;
• Decrease effect of the human factor in accounting of commercial operations.
• Ensure accounting and checking of material flows with delay maximum one day for all excise stores of the company;
• Ensure efficient management of receivable accounts.

Solution

Managers of the company decided that comprehensive automation of the enterprise was necessary, and decided to create a single information system on the basis of ERP solution and local accounting systems established in the excise stores. Solution Microsoft Business Solutions - Axapta was chosen as a platform for building of the integrated management system. IBS was invited as a partner for implementation of the system. The company chose IBS because it had projects in food sector enterprises and extensive sectoral and technological expertise.  

The client demanded that local consultants from the Republic of Udmurtia were engaged in implementation of the project. Company Success.com from Izhevsk (http://www.npo-nit.ru/) was selected as a subcontractor for carrying out of the technical work.

The project started in July 2003. IBS consultants have developed the solution architecture, carried out overall management of the project, supervision functions and consulting on a number of aspects of implementation of the Microsoft Axapta system.

Result

As a result of the work done jointly by a team of IBS consultants, Success.com and the management of the works, the following project objectives were achieved:

A single information space, as a source of reference and regulatory information (suppliers, clients, contracts, nomenclature items, stock accounting locations, etc.) and current information on the active business processes and their indicators has been established. This enabled the management receiving current and reliable information for making of managerial decisions.

Accounting is done in compliance with the approved procedures. This gave the following results:

• Reliable indication of excise tax in the accounting and decrease of fines and penalties for incorrect calculation of excises;
• Decrease of the number of notes regarding the accounting from the supervision authorities;
• Decrease of the number of notes regarding the formed sectoral reports;

Release of monies due to elimination of overpaying of VAT and excise taxes; Accounting and supervision of value material flow is carried out with maximum delay 1 day in all excise stores of the company. This permitted:

• Decrease labor input for preparation of mandatory sectoral reports;
• Decrease breaches of the liquor beverage trade regulations by means of client license management and resulting decrease of penalties for the breaches;
• Decrease stock in the stores, increase turnaround by means of operative control of available stock. Decrease of receivable accounts due to availability of current information on the maturity terms and measures aimed at liquidation of overdue debts.  

Client's opinion

Galina Mukhamedshina, Financial Director of SLVZ: "The project delivered to the expectations. Managers of the enterprise could make operative decisions for management of receivable accounts, management of remaining stock in all stores, including remote ones, and control indirect costs on the basis of daily data and statistical data as soon as three month after commencement of the project. Prognostication of gaps in the payment schedule became possible. Fixed costs of the enterprise decreased by 12% in the first half of year 2004 compared to the same period in year 2003; the number of employees decreased by 20%. Mistakes in VAT and excise declarations have been eliminated. We appreciate professionalism of IBS staff and especially the project manager".