SLOVENSKÉ ENERGETICKÉ STROJÁRNE apply APS technologies to manage growth opportunities

The engineering company SLOVENSKÉ ENERGETICKÉ STROJÁRNE a.s. (SES a.s.), member of J&T group, faces considerable opportunities of order volume growth. The precondition for good management of these opportunities however consists in ensurance of higher quality of the management of order execution process. In order to ensure this requirement, advanced planning tools by i2 Technologies will be applied. The implementation partner of the project is the LOGIS Company.

Tlmače, 4/10/2007

SES a.s. with more than two thousand employees belongs to significant global suppliers of boilers for power plants, heat plants and incineration plants. Since 2006 it has been a part of consolidated entity titled J&T. The J&T group is an influential figure in the area of investments in the Czech and Slovak industrial businesses with central focus on power engineering and machinery. Extraordinary boom in the area of power engineering constitutes a good precondition for meeting one of the strategic goals of the company – to become the most important boiler-manufacturing company in Central Europe. Billion contracts concluded this year and last year realized for example in Chile, Brazil or Turkey almost doubled the revenues achieved in 2006 already during the following two years (from 3.6 billion SKK to a level of 7.5 billion. SKK in 2008). This rapid growth of sales brings about not only the radial increase of volume of production in the parent plant in Tlmače, but will also require reopening of the facility in adjacent Želiezovce, where up to 200 people should be gradually able to find employment. Another side-effect of the rapid growth of the company is the substantial increase of the scope of cooperation regarding especially the non-pressure components and also the increase of volume of purchased material. More complicated manufacturing logistics together with the customer requirements for shortening of delivery lead times impose much higher demands for tools used for support of production management and planning. Managing director of the SES a.s. Company and Ing. Martin Paštika, MBA describes the management expectations as follows: “ We could say in a single sentence that the main objective of the i2 Factory Planner tool implementation consists in essential improvement in quality of the production management. We are interested especially in the throughput improvement, as it could become a critical barrier in our way towards radical increase of turnover. Another important parameter we will monitor is the suppliers’ reliability, because this indicator in our field of expertise is extremely accentuated and the failure to meet deadlines has significant effect on the resulting price of delivery. Qualitative improvement in the area of production management should affect also the duration of production lead times and thus the inventory turnover. In terms of our business activities we acquire a tool that will provide us with important information about term possibilities of production for new businesses in link to actual utilization of capacities.” Supplier selection criteria are summarized by Ing. Jiří Paštika, MBA, financial manager of SES a.s.: “As we want to rank among the best world manufacturers in this field of expertise, we want the same also from our suppliers. Therefore our first requirement was to verify the function of the product on global scale – the product of the American company i2 Technologies complies with this condition completely. After all, their customers include companies like General Electric, Caterpillar, Honeywell and many others. Another condition of ours, direct support in the Czech and Slovak Republic, has also been complied with here – the supplier of this project, LOGIS, has been providing it for already ten years. Two reference visits in the businesses in the identical industrial enterprise of similar size and volume of production, which LOGIS, as the only one from the applicants was able to arrange for, in fact decided on the winner of tender proceedings. Furthermore the selected supplier meets the important criterion of acceptable ratio between the price and expected revenues. The approach of the supplier during the entire tender was highly professional.” “Planning functions of classic ERP type business information systems of even the biggest world producers by no means meet the requirements of the SES Company for complex and concurrently flexible system of planning and control of customized production”, as added by Mgr. Jakub Nosek, MBA, Managing Director of Atwave Consulting Company, which was encharged by the SES Company management with the organization of tender for supplier of production control and planning system. “Right in the beginning we also rejected the use of crutches like sophisticated macros in MS Excel, which can be used for management of a simple series production and only with many limits. After a profound analysis we came to a conclusion that the existing corporate information system includes a quality database, which can be used for application of sophisticated planning tool from APS category (Advanced Planning and Scheduling). Therefore we approached the biggest global figures in the area of APS, which operate on the Czech or the Slovak markets including the leader of this category in the Central and Easter European region, the LOGIS Company, supplying tools by i2 Technologies. After the initial presentations of the companies we had a heavy head as all of them were promising an elegant and simple solution. However, already the second round consisting in reference visits has shown a clear picture of the abilities and experience of the individual implementation companies. Except for LOGIS, which offered us two visits in companies with similar production characteristics, all of the applicants had problems to present any functional reference in a company, whose production would, though only partially, correspond to the production of SES, a.s. The validity of selection of the LOGIS company as the supplier of the APS project was also confirmed by prime pre-implementation study. This is how the Atwave Consulting Company managing director recapitulates the tender proceeding. Ing. Tomáš Vojtík, the executive director of LOGIS makes the following remark regarding the tender proceedings: “The entire process of selection was fast and transparent, as well as the contract negotiations. We appreciate the ability of our client to focus on important matters and not to scatter the energy by compiling and evaluating complicated questionnaires focused on detailed functionality of software, questionnaires that make an impression of conscientiousness and respectability in selection, but which often attempt to compare the incomparable and in which the view of those matters decisive for the resulting value of the project is usually lost. Our specialists will be operating intensively in the SES Company for a period of 10 months with the aim to create, after the completion of the project divided in three stages, premises for shortening of production lead time and significant improvement of timing reliability of deliveries. The contract that has just been signed covers also our support in further 18 months after the completion of the implementation project. The consulting in the prearranged extent will thus be focused on the use of the outlined expectations for improvement of the aforesaid output parameters of the SES Company.”

About SLOVENSKÉ ENERGETICKÉ STROJÁRNE

lovenské energetické strojárne, joint stock company (SES a.s.) is an engineering company with more than 55 year history and belongs to significant suppliers of boilers for power plants, heat plants and incineration plants on the global market. SES a.s. manufactures and supplies steam boilers for combustion of coal, oil, gas and biomass and other devices that meet the most demanding requirements for environmental protection with achieving high efficiency and long-term serviceability. The company provides for complex system of services in power engineering: development, designing, production, assembly, start-up, operator training and service.

About LOGIS

LOGIS is a supplier of expertise services and information technologies. The deliveries are executed in the form of projects aiming at improvement of management effectiveness and development of business success at the customers’ businesses. Within the framework of their solutions, LOGIS applies advanced managing and planning methods and procedures, including high-performance information technologies in the field of Supply Chain Management (SCM) and Advanced Planning and Scheduling (APS).