Speedy steel solution

A Saudi steel producer found that following best practice allowed it to implement its new ERP solution ahead of time and well within budget. Its CIO spoke to ACN.

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By  Daniel Stanton Published  September 3, 2006

|~|casesteel200.jpg|~|Unicoil: The SAP implementation completed rapidly and well under budget. |~|When Saudi-based Unicoil decided to implement an ERP solution across its organisation, the company did not take any half measures.

Having decided it needed greater control over its processes, the manufacturer, one of the leading producers of pre-painted steel products in the Middle East, took measures to implement SAP enterprise resource planning solutions in accordance with established best practices, and was able to deploy in record time.

Ahmad Shaaban, CIO of Unicoil, which is based in Saudi Arabia, says: “We were among the first [in the region] to use this best practice. We wanted a quick implementation of SAP because we had, at the same time, another system being deployed in the plant for production. We wanted to synchronise the implementation, to go live at the same time.”

Work began in November 2005 and was completed at the start of June this year. Unicoil implemented the SAP Netweaver solution with eight modules: management reporting, financial, project system, materials management, plant maintenance, production planning, and sales and distribution.

The company set itself a tough challenge to complete implementation with a tight deadline and an equally tight budget. “Our resources were very low and time for implementation was very aggressive,” says Shaaban. “We started in November and our actual implementation date announced was July. We managed to bring it forward one month and this was a challenge.

“We used one third of our budget, and the budget we got from the company was almost half of the equivalent implementation in the region. So we used one third of half of the equivalent budget. This is because of the efficiency of the team, and the high knowledge we have from implementing SAP for the other business.”

Unicoil is massively increasing its output of pre-painted steel products in the coming years, meaning that it needs a better view of what is happening within its supply chain.

“The company’s expanding from 300,000 tonnes per year to two million tonnes per year so the company’s getting very big and it’s a complicated business environment,” says Shaaban. “SAP was the proper solution for the business, mainly for the current business requirements, and for the future business needs.”

The company had a version of Microsoft Great Plains in place, but was looking for a full ERP solution. Shaaban says that the main reason for choosing SAP was the integration between the modules.

“Our business is manufacturing and SAP will provide us with a product costing application for our business so we can sell products based on market value and at a far better cost at the same time.”

Shaaban was involved in a SAP implementation at his previous employer and had seen the system in action, so he was aware of the benefits. “From our past experience we know that this is the best product for manufacturing,” he says.||**|||~|casemoresteel200.jpg|~|Unicoil: SAP deployment targeted to save 20% on production costs.|~|“This was something that will save us about 20% of our production time and it was something we also wanted to implement as a pilot for other areas.”

Unicoil is part of a larger group of manufacturing companies, which will also be implementing SAP and following the same implementation procedure, now that the process has been proven to be successful.

Shaaban says: “We did not actually do a full calculation of return on investment but we did a study on the extra functionality we’re going to be getting from the system and a calculation based on the product-costing: how much the product could contribute to the profit of the business.” On both scores, SAP looked like a good investment, offering functionality that could give tangible business benefits.

Despite the fast pace of delivery, Unicoil has no plans to slow down. It is looking to the future and finding other areas that could be improved through automation and integration with SAP. Now, Shaaban is looking to use the ERP to improve supply chain management further. “We’re implementing a barcoding system, and full integration with SAP, so that will give us good control over the warehouse and dispatch,” he says.

Before SAP was implemented, Unicoil found it difficult to know how many products it had in stock and their location. “Control of the warehouse was not fully in hand.
“With the integration between the barcoding system and SAP it will become easier to control the dispatch, speed up the dispatch and improve the warehousing of our products,” Shaaban says.

“We are working on an interface between the production system and SAP. The completion date of this project will be September 1, so everything will be fully automated between them.

“We need full integration between the security system and the attendance system, and we implemented an overtime system using .net. We don’t print the pay slips any more. It produces a payslip automatically and publishes it over the internet.

“On the legacy system, it took 10 days to do the payroll. Right now, the payroll takes only three days.”

With such results already evident, the company is now planning to extend the SAP implementation to other areas.
“By the end of the year we’re planning to implement workflow for all forms in the company so no more paper will be used,” says Shaaban. “I hope we will become more efficient and give return on investment. It’s going to be a workflow solution to automate all of the forms within the company.”

Eventually, Unicoil will also allow its customers to view the status of their orders remotely via the company’s CRM system, improving transparency and hopefully making procedures more efficient.

“We’re going to give all the customers access to our systems, so people can actually look at their credit limit, they can look at the invoice information and they can look at dispatch and delivery, everything, over the internet.”

Shaaban adds that he is confident that SAP is the right choice to help to move Unicoil forward and meet its business objectives for the future.

“We know exactly where we’re heading and everything is moving at the same speed using internet and SAP,” he says.||**||

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