Implementation of Microsoft Dynamics AX at Zaporizhtransformator
Zaporozhtransformator Private Joint Stock Company is the largest in Europe enterprise, which produces powerful electric power transformers and electric reactors. ZTR’s main feature is manufacturing of transformers in accordance to customer’s needs. Today ZTR is a modern, dynamically developing enterprise with clients in 88 countries all over world.
Organizational and market prerequisites
In 2000, the plant became a part of “Energy Standard” group and the enterprise management strategy was changed – the goals were set for a complete restructuring of the company, which consisted of both updating the production technology and equipment, and implementing a modern enterprise management system, which had to become a single information environment for all divisions of the plant and became the center of their interaction. The consequence of such measures had to be a significant increase in the efficiency of ZTR activities both in the number of produced products and in the profitability of the enterprise (sales volume growth, reduction in production costs due to the development of optimal manufacturing processes and supply chain; development of an optimal organizational structure, etc).
At the same time, it was necessary to ensure that throughout the entire period of changes, the plant should be working not-stop and provide job for more than 6,000 workers.
In 2003, the plant management completed the diagnostics phase and, having analyzed various alternatives in the ERP-systems market, chose Microsoft Dynamics AX software.
The main requirements to ERP-system were comprehensiveness, productivity and flexibility.
When choosing a partner for implementation, preference was given to companies that recommended making emphasis on the standard Microsoft Dynamics AX functionality, thereby reducing the cost of system ownership, since a large number of modifications in the future would create difficulties in supporting and upgrading to new versions of the product. That is why Innoware, a consulting company with many years of experience in implementing ERP, offering an innovative implementation methodology, became a partner of the implementation project.
Because of the implementation of Microsoft Dynamics AX at ZTR, a unified information environment was created for all divisions of the plant, and that is why the following had become possible:
- effective sales management;
- precise planning and adherence to production dates
- control of production costs and products prices
- quality control in different stages of production;
- operational analysis of payables, receivables, delivery times;
- optimization of expenses, including reorganization of the enterprise (the number of administrative staff decreased).
Maksym Guzhva, CIO of ZTR: “One of the main tasks was to ensure that all specialists work in a single digital space, which would have positive effect on the efficiency of their work and optimization would be reached. For example, we had had 70 accountants, while 30 remained after the project completion, ande the bookkeeping quality level had increased due to the ERP system, and the terms of reports preparation had shortened. At the production, the number of technologists was reduced in about three times. Another positive effect was observed in the field of inventory control, which is considered to be a sore spot for large manufacturing enterprises.
I also want to note, that thanks to the ERP system, we have more analytical data and, accordingly, the ability to make more rational management decisions. As for the assessment of the return on investment, based on the observations of positive changes at the enterprise, I think that the money were paid off in two years. Even if we take only the reduction in the salary fund, the payback would be fast enough».