«1C:Manufacturing enterprise management 8 for Kazakhstan» ensures the transparency of finished product cost calculation at the «Ulba metallurgical plant» JSC
Date of publication: 19.07.2012
«Ulba Metallurgical Plant» JSC is a unique plant with over 60 years of experience in production and supply of high-tech products of the world level. Nowadays UMP JSC is:
- the largest nuclear fuel production in CIS;
- unique production on the Eurasian continent, manufacturing of all kinds of beryllium-containing products.
- unique tantalum production in CIS, outfitted with powerful and advanced equipment capable for processing of any tantalum-niobium containing raw;
- strong scientific research base;
- large design and development institute;
- developed infrastructure of auxiliary productions.
Management Reporting System (MRS) is developed by «Sovereign Wealth Fund «Samruk-Kazyna» JSC for national companies, including «Ulba Metallurgical Plant» JSC. The enterprise approved the 2010-2012 plan of activities for the MRS implementation.
Strict requirements to the data provision detail and deadlines and the inability to satisfy the declared requirements of the current information system became the main prerequisites for the transition to a new automation system within a specified time.
Major part of subsystems was developed and implemented by enterprise employees from the department of Centre of Information Technologies. «1C-Rating» company was outsourced as business partner for implementation of cost accounting, product costing and financial closing period accounting. «1C-Rating» company implemented the previous information system and proved to be a reliable partner in the development of complex corporate systems with maximum coverage of work places.
Following systems were chosen as basic automation tools: «1C:Manufacturing Enterprise Management for Kazakhstan» for general document management and «1C:Consolidation» for reporting development.
During the project following works were performed:
- Training of key employees;
- Schedule of additional works was developed and implemented on the basis of the provided conceptual scheme of prime cost and service calculation
- Trial closing on the basis of one financial period was performed. This reinforced the confidence in the selected software product and helped to determine the further plan of functionality development.
- Closing a period was performed in conditions of production operation, the necessary reporting was delivered within the allowable period. This confirms stability and correct operation of the implemented system.
Thus, following objectives completed within the project:
- Number of analytics for costs and prime cost extended to 12 levels:
· Organization, Department, Financial account, Cost item, OS service order, Nomenclature group, Cost, Cost characteristics. Cost series, Source department, Source group Nomenclature
Current solution allows the deeper cost analysis.
- Implemented 2 parallel methodologies for monitoring of costs and finished product cost calculation, considering the complex oncoming release of internal service of auxiliary manufactures:
· In terms of comprehensive cost items – for internal analysis by department of planning and economics;
· In terms of primary articles and cost elements – for delivery of reporting to the management company.
- Considering the comprehensive production structure, finished product prime cost calculation was organized with transcript of raw materials (level of transcript depth is set by users), contractors, cost contractors-suppliers, products contractors-buyers for monitoring the internal turnover and calculation of total margin income on the level of management company.
- In the «fast closing» task mainframe, the ability of economic operations reflection on accrual basis was implemented. This ability allows to proceed to the reporting closure period prior before its actual completion, and in order to the control of accounting data integrity, necessary tools were implemented for tracking and analyzing of such operations
- Organized collection of reporting, including:
· Ability to generate the "Gross profit" report ensured (up to departments, contractors and nomenclature items). This report allowed to solve the task of determination the profitability of sales of finished product and rendered services. Moreover, the report allows to implement corrective measures in:
· Revision of costs specifications and standards;
· Changes in methods of prime cost calculation;
· The profit-and-loss report with analytical transcripts of all indicators was created. Automatic determination of text encoding is considered during the formation of the report. Report implementation was performed within the "1C: Consolidation".
· The Comparative reports were created as a tool for accuracy controlling of the data reflection within storage registers for the data reflected in accounting. Thus, an accountant can rely on and use the benefits of management and accounting data.
· Convenient work with the tax monitoring reports was organized. These reports embrace the specifics of enterprise accounting
Since 1st of October 2011 the system is in product operation with 567 automated work places. On this stage the employees of all major enterprise departments are the users of the system. At present, the system is on the post-project maintenance.
Currently, the system bottleneck is high-speed performance of closing a financial period. This period has complex looping industrial Conversion scheme, big amount of analyses and 2 parallel methodologies.
According to Andrey A. Gorbatyuk, «UMP» JSC chief Accountant:
«Evidently, service became significantly more convenient, comparing to the previous information system. Universal reports, usability of data, convenient work with data sorting. Work scope of employees was not reduced, however reporting process became much more transparent, manageable and systematized. Moreover, the new software version has great potential to functionality extension. Regarding to the prime cost calculation, the task was implemented in full within the task objectives (the current method).
In my view, the most important and desired parameter of implemented system is the time of closing a financial period. In this purpose, the next project stage of “Extended Analytics of Cost Accounting” method implementation. This will allow to reduce the time of closing a financial period due to the using of linear equations system in the cost calculating. We look forward to the successful project development and for further cooperation with "1C-Rating" company».