CIB UNIGAS

Migration from 1C:UPP to 1C:ERP. Implementation of cost calculation and accounting for goods “in transit”

Line of business

Today, CIB Unigas brings more than 40 years of experience in improving the thermodynamic and mechanical properties of burners. CIB Unigas engineers continuously refine burner components, integrating the latest advances in electronics. CIB Unigas is a team of specialists committed to ongoing cooperation with its clients. Intelligence and an individual approach to each client’s needs are the foundation of CIB Unigas and the basis of its competitiveness and resilience to constantly changing external factors.

Base solution

1C:ERP

Project goals

1. Bring all business processes into a single system
2. Preserve existing practices and introduce new business processes

Project objectives and challenges

Migrate from the outdated 1C:UPP to 1C:ERP

• For a long time, the main automation system had been the 1C:UPP configuration, from which the company needed to migrate to 1C:ERP. All existing, well-established processes had to be preserved, and new processes added to the system. Alongside UPP, Excel spreadsheets were also used to cover missing functions. The old UPP schemes had to be retained and new ones implemented, moving everything over from Excel.

Tracking the serial number of every burner part

• Receipts of imported components were recorded using customized documents, in which only the serial numbers changed during the delivery process. The old serial number had to be kept in the supply history and linked, via the customs declaration number, to the new serial number assigned to the finished burner for shipment to the end customer. All of this was needed to trace the full movement history of components and finished burners from supplier to customer.

Burner cost calculation and procurement planning

• The company needed a mechanism for reserving components received at the warehouse for a specific customer order, with the option to use them in production orders. This mechanism was needed to track incoming components and then calculate burner cost correctly, since component prices depended on both exchange rates and the end supplier.

Modeling the new work process in 1C:ERP

• The production process had to be modeled in the new ERP system, taking all of its specifics into account. It was important to implement the resulting process without major changes to the company’s business processes, which worked perfectly well as they were. In the old version of UPP, the production process was heavily truncated (the platform lacked the functionality and no customization had been done), so most operations were handled in Excel. All the standard stages had to be covered, now in the ERP system: unpacking, disassembly, assembly, and testing. It also had to be possible to manually add new stages to the standard ones for non-standard situations.

How do you account for goods and components in transit?

• A business process had to be worked out for the “goods in transit” scheme. While components or the burners themselves are being delivered (especially from the foreign office), their cost may change, and supply requests start getting duplicated. In the old version of the software, such goods were recorded in a customized “Goods Reservation” document based on “Goods and Services Receipt” documents. Now this scheme had to be implemented in ERP, with all problem areas fully addressed.

Go-live on a tight schedule

• The timeline for the entire project was very tight. In just 6 months, all of the UPP functionality had to be reproduced in the new ERP system. Users were to go live in the system, with balances migrated, at the start of the next calendar year. This shaped the way the project was carried out.

Our approach

To handle the migration properly, the “1C:ERP Rapid Implementation Technology” project methodology was chosen (given the tight timeline). We carried out a business analysis of the company’s current processes, prepared a business analysis report, and agreed on the work plan with the client to confirm that the documented business processes were correct. We then decided to model the current processes in the new 1C:ERP system. Particular attention was paid to the production department, since 1C:UPP had no specific production scheme (only an assembly/disassembly scheme had been implemented, and all additional functions were handled in Excel spreadsheets). Modeling revealed the functionality the software was missing, and a specification for customizing the system was written.

We proposed the following plan of action to the client:

• Business analysis of the company’s current processes
• Modeling of the current processes in the new ERP system
• Specification for customizing reports and documents in the accounting system
• Customization of the infobase by the development team
• Demonstration of the modeled business process to confirm that it works, or adjustments to it as needed
• Preparation of user guides and handover of a ready-to-use system to the client
• Development of an end-to-end serial number tracking mechanism
• Development of a mechanism for tracking goods and components “in transit”
• Implementation of employee time tracking at each stage of assembly and sale
• Development of a costing system for complex multi-component products
• Modeling and implementation of processes in the ERP environment
• Migration of legacy data and integration with data from external spreadsheets
• Support during the company’s first 2 months of operation

Project results for the client

The client received a complete, working product that fully complies with Russian law and supports automated execution of the company’s business processes. The migration from UPP to ERP was completed successfully. The order-specific supply mechanism with serial tracking and reservation of goods for orders was enhanced. Employee time tracking was set up for production, making it possible to effectively account for labor costs as part of the cost of manufactured products using standard 1C:ERP tools.

Order-specific supply configured and enhanced

To control incoming components for specific orders, order-specific accounting was set up. This eliminated the risk of conflicts between departments, where a sales manager could reserve a component received for a particular order and disrupt the production chain.

Production subsystem implemented

A production mechanism was configured and customized for production staff. This made it possible to standardize production bills of materials that clearly specify the components for each burner, and to track the working time employees spend on production. Confusion over production stages was eliminated: stages are now clearly assigned to each burner, with the option to manually adjust the component list and labor input at each stage.

Serial tracking standardized

For incoming imported components and for burners that require re-kitting before sale to the customer, serial tracking was set up, making it possible to trace the entire supply chain precisely in combination with order-specific supply.

Conclusions

The successful project eliminated all of the company’s problem areas.

Profits and efficiency rose, while costs and accounting complexity decreased.

Thanks to accurate production cost calculation, the company was able to offer the lowest prices on the market for its products.

The logistics department was able to work precisely and eliminate losses of equipment and consumables.

Production was able to set clear timelines for the output and sale of finished goods.

The serial number control mechanism helped eliminate defects and fulfill warranty obligations to customers more thoroughly, which increased customer loyalty.