“Ukrproduct Group” is a leading manufacturer of high-quality branded dairy products and kvass, successfully marketed in Ukraine and international markets for over 20 years.
In the Ukrainian market, the company is represented by brands such as “Nash Molochek”, “Molendam”, “Nash Syrok”, “Vershkovа Dolina”, “Farmerskiy”, as well as “Arseniyivsky”. The company ranks in the top 3 producers of processed cheeses, top 5 producers of butter and spreads, and is among the top five leaders in kvass production.
The “Ukrproduct Group” includes:
5 plants:
- A dairy plant in Stary Kostiantyniv, which collects and processes milk, produces packaged butter, spreads, hard cheese, and powdered milk.
- A dairy plant in Letychiv for milk processing and production of casein and whey.
- A separate production unit for processed cheese production in Zhytomyr.
- The “Zhiviy Kvas” plant for beverage production.
- The Krasyliv plant for beverage production.
- A central distribution center near Kyiv.
- A branch office in Dnipro.
- 5 regional distribution centers in different regions of the country.
- The central office in Kyiv.
The production capacity of the “Ukrproduct Group” allows for the production of up to 70,000 tons of dairy products per year. The production process adheres to quality management systems ISO 9001, ISO 22000, ISO/TS 22002, ensuring high product quality.
The prerequisites and goals:
One of the company’s priority directions for further development has become the expansion of a new information system. Previously, the regulated accounting and salary calculation in the company were carried out using a significantly modified “Enterprise Management” program, the functionality of which no longer met the needs of the enterprise. A new platform was needed that would correspond to the new scales of the company’s development and help to reach a new level of management.
Before starting the project, the following implementation tasks were outlined:
- Ensuring interaction between departments in a single information field.
- Standardization of accounting processes across all accounting areas and structural units.
- Serial tracking of finished products and raw materials in the system.
- Obtaining operational management reporting.
- Synchronization of all information systems involved in accounting.
- Planning and forecasting of enterprise performance results.
The project execution for automation was entrusted to the implementation center CONTO, following the results of the conducted tender. The company has a positive reputation in the market and has received good feedback from other domestic and foreign enterprises in Ukraine.
After a detailed study of our needs by CONTO experts, it was proposed to choose the BAS ERP solution as the basis for the new information system. BAS ERP is a next-generation solution with a wide range of standard functionality that largely meets the requirements of the company’s business processes. Additionally, it offers advanced functionality for operational management accounting, allowing for precise reflection of processes in the system and enabling planning and effective resource management for the enterprise.
Project implementation
During the phased project implementation, which consisted of conceptual design, refinement of the standard configuration, module development tailored to the company’s industry specialization, testing, user training, and industrial operation, the following subsystems were automated:
- Procurement management
- Sales management
- Marketing
- Milk procurement
- Production management
- Warehouse logistics (including inventory management)
- Regulatory and tax accounting
- Cash management
- Operational management reporting
- Contract and related document approval.
An important component of this project was the integration of the BAS ERP system with the BAS Document Workflow system.
During the project, modifications to the standard functionality of BAS ERP were implemented. Some of the adjustments were related to the industry-specific characteristics of the enterprise, while others reflected unique business processes.
Procurement Management:
- Enhancements were made regarding the quality control of goods received and their evaluation. Planning mechanisms for procurement were refined taking into account production plans to optimize warehouse stocks and laboratory inventory levels.
Sales Management:
- The self-service portal “Self-Service” was improved to allow for order placement, delivery requests, and analysis of distributor inventories, payment statuses, and recommendations for future purchases.
- Integration with “e-Commerce” systems enables compensation calculation for distributors based on the quantity of goods sold to network clients, obtaining real-time distributor inventory data, and analyzing sales forecasts from distributors.
Marketing and Trade Marketing Activities:
- Planning mechanisms for marketing campaigns were enhanced, with adjustments made to synchronize marketing activities with sales plans and budgets. Reporting was refined to facilitate variance analysis between planned and actual financial budgets, operational plans, and performance metrics.
- Automated calculation of promotions and price adjustments at the moment of customer order placement, considering the delivery date to customers.
Milk Procurement Module:
- An operational accounting block for milk procurement was implemented, automating the entire chain: demand generation, supplier qualification, logistic route determination, quality assessment of milk batches, fat balance determination and control, settlement with suppliers for products and logistic services based on quality and quantity metrics.
- Reports on milk movement in warehouses were also refined to optimize the production cycle.
Production Management Module:
- The ability to account for semi-finished products and finished goods using additional units of measure was added, along with laboratory analysis in production routing sheets.
- Mechanisms for standardizing energy and human resources were refined. Reports were developed to determine raw material and semi-finished product requirements.
- Overall, preventive control of limits was implemented, enabling control of procurement of goods and services by all company departments before creating supplier orders and contracts. Based on regulatory information, documents for internal consumption are automatically generated after the receipt of previously ordered goods and services in the warehouse.
- Non-order production is fully implemented in the system, with the calculation of product cost per unit.
Quality Accounting Module:
- The developed functionality allows for quality control of materials, raw materials, semi-finished products, and finished goods at all stages of production, from procurement to final products. The ability to generate manufacturer declarations with BAS ERP has been created. Specialized reports such as “Stocks and availability of goods considering reception control” enable monitoring of the goods receiving process.
Cost Tracking and Transport Management:
- With the implementation of BAS ERP, the company can fully control all transportation costs, both with its own vehicles and with the vehicles of logistics companies. Analytical reports allow for the evaluation of transportation costs per kilogram of product and per kilometer traveled, depending on the type of transport, cargo, and planned route.
- The system tracks Petroleum, Oil, and Lubricants (POL), allowing for the standardization and tracking of fuel expenses for various types of transport and seasons.
- Transportation tasks and waybills are generated based on orders for the delivery of goods or orders for sales in the system, integrating logistic business processes into a unified production process.
Implementation of BAS Document Management:
- The procedure for creating new counterparties has been automated with automatic filling of details using the Pactum Counterparty service.
- The process of verifying new counterparts by the Company’s Security Service has been automated.
- Contractual activities have been optimized.
- The procedure for contract approval has been established, along with the integration of associated documents such as memorandums, specifications, and requests for expenditure.
- Seamless integration with BAS ERP allows for the approval process of expenditure requests.
The system was launched for industrial operation on January 1, 2021, across 190 workplaces.
During the preparation and launch of the system, user training was conducted on the workstations, data migration from old systems was performed, and workstation configurations were adjusted.
Results of the Project
As a result of the project, the enterprise obtained a comprehensive information system that integrated the management of key business processes into a unified information space.
The consolidation of current business operations in a single information environment enhanced control over the efficiency of financial and material resource utilization.
Increased efficiency in obtaining accurate information about the company’s current business activities is observed, facilitating business process management and informed decision-making.
Benefits from the implementation of the BAS ERP system are recognized by experts from various departments of the company, including:
Logistics Department:
- Obtaining real-time data on fuel consumption broken down by vehicles and drivers.
- Obtaining real-time data on transportation costs to make decisions regarding the choice of carrier.
- Optimization of delivery costs for finished products/raw materials.
- Obtaining data on the cost of delivery per 1 kg of goods, delivery costs broken down by product, supporting document, recipient, and route.
Expected reduction in logistics operation costs is approximately 10%.
Quality Control Department:
- Automation of processes for determining and controlling the quality of items from the procurement of raw materials and packaging to the release of own products.
Time for quality assessment and control in procurement has been reduced by 20%.
Financial Department and Accounting:
- Automation of processes for controlling and approving purchases of goods, materials, and services.
- Ability to allocate a portion of energy costs and wages to the produced goods, proportionally to the norms filled in the resource specifications, and considering the actual production output.
As a result, we anticipate an 18% reduction in operating expenses.
Marketing and Sales Department:
- Ability to analyze and control the compensation amount to distributors.
- Increased efficiency in processing orders from network clients due to integration with the Comarch EDI system.
According to our estimates, trading operations have accelerated by 12-15%.
Overall, we positively evaluate the results of the project and believe that the automation goals have been achieved. We are satisfied with the work done by the implementation center and continue our cooperation with them under the support agreement.
The management of the enterprise expresses gratitude to the team of CONTO company for implementing the system and preparing the enterprise staff for work in the software suite.