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«Severstal-Gold» management company improved management efficiency with «1C:Enterprise 8»

Date of publication: 27.10.2010

«1C-Rating» company implemented the comprehensive information system on the base of «1C:Manufacturing Enterprise Management for Kazakhstan» into the «SEVERSTAL-GOLD», the management company of 6 Kazakhstan companies. As result, unified accounting, cost management, prime cost formation and improved expenditure control were ensured in accordance with the shared methodology.

Now management company can monitor the production prime cost and cost accumulation within each industrial repartition.

Moreover, management company notes the reduction of closing period terms as part of the Fast Close holding program. This indicates well functioning and document circulation processes and allows to make opportune management decisions.

 «Severstal-Gold» management company is the part of «Severstal» group of companies. This company manages the gold mining assets located in Russia, Kazakhstan and West Africa. Currently "Severstal" group of companies is the second largest gold mining company among Russian companies. After the acquisition of six (3 production, 2 serving and 1 trade) Kazakhstan companies was necessary to unify the accounting and management processes. Existed accounting systems were scattered and could not provide the proper level of detailed business processes, such as cost accounting, inventory, human resources, cash and settlement management.

 

It was decided to create a unified information system on a high-tech platform that would satisfy the information needs of each company, and thus provide:

 

  • Interaction of management, accounting and tax reporting of all Kazakhstan companies.
  • Accounting in accordance with unified accounting framework of «Severstal» gold mining division. Accounting framework is represented by various elements of the accounting policy, methodological approaches, rules and procedures of accounting, as well as organizational and technical aspects.
  • Unification of the approaches to the regulated accounting in Kazakhstan companies. The areas of accounting are: VAT accounting, short- and long-term prepaid expenses, mining equipment amortization.
  • Transparent scheme of cost allocation, semi-finished and finished products value calculation and work scheme of Kazakhstan companies.
  • Reduction of terms of management reporting preparation for the management company.
  • Accounting in accordance with the legislation requirements.

According to the results of the tender for assistance in problem solving was invited "1C-Rating" company, proved to be a reliable partner in creation of complex corporate systems in large enterprises and offer the best combination of price, scope of work and terms of implementation.

«1C:Manufacturing Enterprise Management for Kazakhstan» business application was chosen  for the project implementation. This application allows to create complex information system for management and accounting, to provide  the accounting of financial and business activities  in accordance with regulated legislation of Kazakhstan and corporate standards.

 

During the project, the specialists of«1C-Rating» conducted the analysis of business processes, completed system design and customization of business application, trained the Customer’s employees and implemented designed system. Before the implementation the accounting of all companies was conducted in a separate info bases, regulatory and reference information was not unified. Moreover, management company set the task of basic classifiers alignment with general corporate classifiers. This task was completed by joint efforts of «Severstal-Gold» and «1C-Rating» companies specialists. As result, nomenclature and materials, contractors and contracts, cost items and items of cash flow, fixed assets, construction sites, etc. were aligned to the unified coding.

Data import from the previous systems to the new system was carried out in accordance with developed combined classifiers.

The Government carefully regulates all processes associated with gold production and trade, which entails special requirements to the accounting and the product cost calculation.

Before the implementation only accounting units were satisfied with the scheme of cost allocation and semi-finished, finished products value calculation.

During the project development the process method scheme was developed, which satisfied the needs of companies group’s economic planning and financial services, and the requirements of management company. As a result of its development the test case was modeled, which helped to ensure the correctness and reliability of the developed scheme.

 Due to the specifics of gold production turnover accounting, supplementary accounting and reporting (of gold content in all products) was added. As result, the goods balance is formed in information system.

 This allows to control gold accounting and far-sighted use of resources, in the other hand, previous system allowed to manage only the beginning and the end of production process.

accounting mechanism

«Scheduling Agreements for Component Suppliers» developed subsystem was implemented to provide an accounting mechanisms for accounting and control of debts to suppliers. This subsystem is developed on the base of existed «Customer Service Processing » and «Funds management» subsystems.  The relevant experts gained the opportunities to analyze the concluded contracts, to manage the schedules of contract payments and to manage payments taking into account the schedule stages. Thus, the control of funds expenditure was ensured at the Kazakhstan enterprises.

Integration of material, equipment suppliers and service providers was improved after the implementation of the purchase planning subsystem. At present, the system is used by all employees, workload of departments is optimized.

Implementation of the  «1C:Manufacturing Enterprise Management for Kazakhstan» solution gave new business opportunities:

  •   Cost allocation scheme, implemented in the «Production Management» subsystem. Allows to form a balance of raw materials and to control its rational use
  • Control of logistics cost management, due to features of «purchase management».
  • More operative inventory management, due to direct data input at the warehouses.
  • Reduced cost of regulated reporting, due to the features of accounting and tax accounting.
  • Automated funds management (of the formation of consumption requests prior to the actual effecting payments) and ensured interaction with several «bank-client» systems.
  • Automated accruals calculation for management personnel and shift personnel working in remote locations, due to the HR and payroll accounting subsystem.
  • Monitoring of accounts payable under contract stages and scheduling of payments deadlines, due to the implementation of «Scheduling Agreements for Component Suppliers » developed subsystem.
  • Monitoring of accounts payable/receivable accounting and its costs allocation (catering, mobile services, etc.), due to the implemented accounting of outsourced service.

As results of the project, the work of 6 companies is processed in the unified information space, reference data is unified and procedures of consolidation within the holding are accelerated.

Accounting unification within the Kazakhstan companies holding (unified accounting policy, working chart of accounts, document management and business processes) allows to eliminate duplication, to improve the information reliability and to organize system processes. Unified business solution ensures centralized maintenance under the legislation changes and the development of system functionality.

Nowadays the system works in production operation, with 68 automated work places.

 

Maksim Ravba, project manager form the management company concludes:

 «During the project development the «1C-Rating» project team showed coordinated work and drive for results. As result, main objectives completed: completely unified system implemented, which ensures the support of accounting policy, unified reference data, and consolidation within the holding. Moreover, terms of reporting were reduced by 2 days with well-organized business processes» 

 


«Severstal-Gold» management company is the part of «Severstal» group of companies. This company manages the gold mining assets located in Russia, Kazakhstan and West Africa. Currently "Severstal" group of companies is the second largest gold mining company among Russian companies.

The management company manages the following Kazakh enterprises:

  • «Alel» FIC JCS
  • «Zherek» LLP
  • «Semgeo» LLP
  • «Ken Kazgan» LLP
  • «Kentau Exploration and Mining» LLP
  • «Keltik Yeyzhn Gold» LLP

 

Contacts: 

«Severstal-Gold» management company address : 1 building, 2/3 Clara Zetkin street, Russian Federation, 127299

Addresses of few Kazakhstan companies:

  • «Alel» FIC JCS, «Zherek» LLP : 122 Frunze  street, Semey city, Kazakhstan, 071400;  Tel. (7222)56-49-94
  • «Keltik Yeyzhn Gold » LLP : 2B pavillion, 7 floor, 19 Al-Farabi street, Almaty, Kazakhstan, 050000

Project manager - Maksim Ravba

e-mail: mn.ravba@severstalresurs.ru


 




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