Russia has experienced a consumer boom in recent years, including an increased demand for chilled drinks of all kinds. Helkama Forste, a leading cold storage equipment manufacturer with several major customers in the soft drinks industry, has experienced general growth in its Russian business activities.
To deal with growing demands, the Finland-based company needed to improve its business systems, especially at its Russian factory in Vyborg, close to the Finnish border.
“We have been growing quite rapidly. Most of this growth has come from the Russian market,” says financial director Jari Kaunisto. This expansion has put demands on the company to improve its data and information systems, “because of the need to control both manufacturing, logistics and, of course, administration and reporting,” he says.
A complex need
The rapid growth in Russia has generated an urgent need to develop business information systems that suit the requirements of the local Russian market while supporting international operations. Considering Helkama Forste has other manufacturing plants in Finland, Norway and Hungary, the company wanted to be able to integrate the Russian system with the other operations, with the aim of supporting decision-making for the group as a whole.
Through its long-term relationship with Helkama Forste, IBS saw the opportunity to develop just that type of business software. But providing a system that could be used throughout the group required a strong partner in Russia who understood local financial reporting systems and the specific software requirements. For this expertise, IBS turned to its experienced partner in Moscow, Cinimex Informatica.
Cinimex general director Robert Mammaev says it is important to build expertise in enterprise resource planning (ERP) systems for medium-sized companies in Russia, something that has often been ignored by IT companies there because of lack of expertise and understanding.
Kaunisto says, “It has been one of our main priorities to connect Russia to our computer systems.” Integrating the Russian operations with the rest of Helkama Forste’s reporting system presented a number of challenges, not least differences in legal reporting requirements, as well as the Russian language and Cyrillic script.
Fruitful cooperation
The three companies teamed up to create a solution that would be at the heart of Helkama Forste’s resource planning in Vyborg and also fit in with the rest of the group’s business systems.
The results of implementing IBS software were dramatic, particularly affecting inventory and materials control. So much so that Helkama Forste has been able to almost double its production in its existing manufacturing facilities, says Kaunisto. “Before, it would have been impossible to increase production by more than a small percent.”
Cinimex has also benefited, says Mammaev. “We’ve got hands-on experience in implementing IBS software according to IBS methods and standards.”
Matti Lehtonen, project manager for IBS, explains the dynamics between Cinimex and IBS, a relationship that started in 2004. “IBS Finland’s role was to teach Cinimex the IBS standards and products, and to support Cinimex in projects as long as needed,” he says. “Inside Russia, Cinimex plans the special features for the Russian software versions, liaises with the customer and provides consultation.”
Customer perspective
From his viewpoint as the end-customer, Kauko Korko, head of quality and IT management at Helkama Forste, says, “The people at Cinimex were very professional, and they understand Russian law. They also understand how we use IBS software in our business.” He adds that in a rapidly changing market and legal framework, such as in Russia, it is important to work with companies that understand the implications of any changes.
Andrei Guriev, project manager at Cinimex, explains how the company works with the different modules of IBS enterprise software, ASW. “Because of the rather complicated and often changing official legislation in Russia, we have decided not to modify the Financials module of ASW to meet the legislation needs. Instead, we use local Russian accounting software to produce accounting transactions out of ASW Distribution documents.”
Guriev points out that Helkama Forste’s staff in Vyborg also received considerable training and support. “For every department, we created special instructions describing how to handle ordinary operations in the new localized version of ASW, such as how to receive goods from abroad, and what steps should be taken at what time,” he says.
Several benefits
By early 2006, the new system was up and running at Helkama Forste, and before the end of the year, the system is expected to have paid for itself. Kaunisto notes that there have been lots of benefits already. “Now our total business, reporting and control are transparent,” he says. This has resulted in better information to support planning across the group.
Kaunisto also says logistics and production planning are smoother than before. In particular, the new system has put a halt to production losses caused by problems with material availability. His colleague, Korko, explains, “We now have 97 percent availability of components, compared with losses running at 15 to 20 percent before the system was implemented.”
Korko says that the consequent improvements in ordering, inventory and supply chain management are enormous. Productivity improvements have taken such a leap forward that the company now has to consolidate what has been achieved. “I didn’t think that the results would come so quickly,” he adds.
The increased production helps to ensure that Helkama Forste can meet the enormous demand in the Russian market – running at six times the level of the total European markets – all while maintaining high quality.
