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                                                                                                                                                                                                            JUNE 2004


LOGIS APS/SCM projects in the Czech Republic and Slovakia
Advanced production control                                     Implementation of i2 FP APS System                    Examples of APS/SCM                                      Course of Implementation
through advanced planning                                       through the Customer’s Eyes                           project improvements                                     and project schedules
(Jaromír Řepka, COO, UNEX, a.s.)                                (Roman Plaček, CIO, MSA, a.s.)                        (Experience from projects in TATRAVAGÓNKA, a.s. and Hayes Lemmerz Autokola a.s.)
                                             Page 2                                                   Page 3                                                                                                      Pages 1 - 3



Importance of the APS/SCM Technologies Grows                                                                              LOGIS Company Clients Benefit from In-
The society we live in is said to be the information society. The rhythm of life is faster and faster, the strong         creased Quality of Planning and Execution
grow fast stronger, the weak get pushed down and out of the game even faster. The environment of the                      The APS/SCM advanced planning technologies have contributed to the improvement of
information society provides more and more possibilities for taking advantage of competitive distinctions, and            operational parameters over the last few years in many companies throughout the world. These
still it is continuously more difficult to hide competitive gaps. Companies are experiencing an ever-increasing            technologies have enabled corporations to reduce their costs in addition to improving their
emphasis on the quality of management. The ability to find the best solutions carries a golden price.                      ability to fulfill clients’ needs, such as providing them with increased promptness, reliability
The quality of corporate management is limited by the imperfection of contemporary tools that companies                   and flexibility. APS/SCM has thus become a means of achieving results. These days these
are using. Contemporary methods simply do not allow companies to achieve better results; they do not pro-                 systems are clearly carried through within corporate information systems.
vide features needed for the achievement of higher efficiency and cost reduction. As the company Gartner                   Such technologies of advanced planning are mostly utilized in advanced economies. Many
Group states: “The changes of the entrepreneurial ambience shift the application requests far beyond the                  corporations from the USA, Japan or Western Europe already benefit from these technologies.
boundaries of what was intended by the ERP systems,” (“The Limits of ERP for Collaborative Manufacturing,                 Using the APS/SCM technologies often allows these companies to reduce inventory levels by
New Realities,” April 2001). In other words, ERP cannot manage certain issues. What is this all about?                    tens of percent, to shorten lead times, and to improve on-time performance. Thus the basic
The quality of management is mainly determined by the quality of planning. It is planning that is actually one            limits and knowledge for achieving results in the field were shifted for the competition.
of the major soft spots of ERP systems. ERP systems were not able to provide companies with features that                 However, the use of APS/SCM systems in our domestic environment is implemented in
would allow for assembling plans with sufficient promptness and sensitivity - plans that could realistically               a slower manner as compared to our western neighbors. One reason for this is the low
be carried out, optimized and that provided an advantage for practical applications. Such possibilities were              availability of local and appropriate “know-how.” However, this is not the only reason. If there
offered later by advanced APS/SCM planning technologies.                                                                  is a difference between the implementation of advanced planning technologies and traditional
                                                                                            Continued on page 4           ERP systems, it is no doubt the qualification assumptions of the implementer. There are few
                                                                                                                          who are able to offer quality technologies including appropriate knowledge and “know-how,”
                                                                                                                          as well as experience and good results from successfully implemented projects.
                                                                                                                          LOGIS, an expert services and information systems supplier, chose planning and its
                                                                                                                          application in corporate management to be its main line of development. A LOGIS team
                                                                                                                          of experts in support and application of advanced corporate planning technologies was
                                                                                                                          established in 1998 and has been gradually growing. The members of the competence
                                                                                                                          centre of the LOGIS Company have carried out many successful projects in our country as
                                                                                                                          well as abroad.
                                                                                                                          Here we would like to provide the readers with information regarding some of the projects
                                                                                                                          carried out in our domestic environment. We would like to demonstrate that it is quite possible
                                                                                                                          for companies in our region to achieve similar or even better results than their western
                                                                                                                          competitors, that if they take the initiative, they can harness corporate processes and fine-tune
                                                                                                                          them for high performance, and that they are also capable of reducing supplies substantially
                                                                                                                          while increasing promptness, reliability and flexibility. Thanks to cooperation with our clients,
                                                                                                                          we are pleased to have proven that companies in our region can also work their way to the
                                                                                                                          cutting edge and stand among those who define “Best Practices” in their fields.




APS at Hayes Lemmerz Autokola: TAT R AVAG Ó N K A B e n e f i t s F ro m t h e
Quickly and Efficiently         Combination of APS and ERP Technologies
The company of Hayes Lemmerz Autokola has implemented and uses the i2 Factory
                                                                                         Last year the TATRAVAGÓNKA Company implemented the FACTORY ES ERP system as well as the i2 Factory Planner APS
Planner APS system. The LOGIS Company was chosen as the project implementer.
                                                                                         system. Implementation of this large scale project took approximately one year. The current phase consists of fine tuning and
The project was implemented at a quick pace and has produced very good results
                                                                                         today, only a few months since the implementation was completed, the TATRAVAGÓNKA Company is already achieving higher
such as inventory reduction and improved customer satisfaction.
                                                                                         efficiencies and better performance.
The company of Hayes Lemmerz Au-           necessary to improve the operational
tokola, a.s., a member of Hayes Lem-       excellence of the business. These are          TATRAVAGÓNKA, a.s., the leading              know how to exploit. We feel that we              Company came up with a new ap-
merz International, Inc., is a leading     today’s imperatives. To support the            manufacturer of railway chasses              do not perform efficiently enough.                 proach to how to apply information
car wheel manufacturer and supplier.       fulfilment thereof, we have decided to          and cargo railway wagons, presents           Therefore we decided to find a part-               technologies for the sake of the
At the end of 2002, the company of                                                        a tradition of outstanding Slovakian         ner, who is very experienced and                  company. The aim of the prepared
Hayes Lemmerz Autokola decided                                                            machine industry. The company has            has produced positive results in this             project is the improvement of corpo-
to implement the i2 Factory Planner                                                       joined the ranks of leading European         field. And that is why we decided to               rate processes, in particular, includ-
system for Advanced Planning and                                                          manufacturers that successfully de-          cooperate with the                                              ing added value rather
Scheduling. Erich Zipser, the Chair-                                                      liver results to the highly demanding        LOGIS Company.                                                  than simply the delivery
man of the Board of Directors and                                                         EU market. The company’s success             They offered solu-                                              or the implementation
General Director of Hayes Lemmerz                                                         is the result of its sustained level         tions that are very                                             of the software itself.
Autokola, comments upon the reasons                                                       of quality – a level which has been          comprehensive and                                               The individual goals of
why the company is implementing the                                                       confirmed by the re-certifying audit          that guarantee re-                                              the project aim to im-
project: “The automobile industry is                                                      performed by Det Norske Veritas              sults.”                                                         prove our operational
very demanding and uncompromising.                                                        in the beginning of 2002, the ISO            At first the choice                                             excellence; the inven-
Its suppliers are gradually increasing                                                    9001/2000 certificate, and many              of a solution was                                               tory turnover ratio will
the demands they lay upon each of the                                                     other successful suppliers´ audits           only ERP-oriented;                                              be reduced during the
links in the supply chain. Businesses                                                     (DB, SNCF, TUV Bayern, Alstom,               h o w eve r d u r i n g                                         project, the invento-
that want to succeed cannot rely           Ing. Erich Zipser - CEO                        Rolls-Royce, CFL, etc.).                     the implementation                                              ries will be reduced as
merely on their ability to produce prod-   Hayes Lemmerz Autokola, a.s.                   The decision to undertake major in-          phase, it became                                                well, and the produc-
ucts with excellent technical properties                                                  novations in the corporate manage-           apparent that the                                               tion lead times will be
and high quality – they must be able to    apply advanced planning technologies                                                                                                                        cut. The improvement
                                                                                          ment system, by utilizing Information        best value for the
offer more. In the past several years,     and use them to the benefit of more                                                                                                                           of operational excel-
                                                                                          technologies, was made in 2002. Mr.          c o m p a ny wa s a
demands for flexibility, speed, preci-      successful company management. “                                                                                     Ing. Peter Pribylinec,                  lence will be used to
                                                                                          Ing. Štefan Mesároš summarizes the           combination of the Chairman of the Board
sion and on-time performance, i.e. the     ”The LOGIS company, our time-hon-                                                                                                                            improve customer ser-
                                                                                          reasons for the decision: “To succeed        ERP and APS sys- TATRAVAGÓNKA, a.s.
level of customer service, have been       oured partner, has been chosen as a                                                                                                                          vices (shorter reaction
                                                                                          and maintain our position among so-          tems. Therefore that
increasing. A number of customer ser-      technology supplier and implementer.                                                                                                                         time for demand and
                                                                                          phisticated competition and to ensure        is what the LOGIS
vice parameters are strongly affected      We have jointly (with LOGIS) prepared                                                                                                         shorter delivery terms, increased
                                                                                          the sustainable development of the           Company offered to us and they
by how precisely, smoothly and with        a relatively demanding schedule to                                                                                                            reliability and precision of deliver-
                                                                                          company, we must learn how to make           won. Ing. Peter Prybylinec charac-
what performance the order fulfilment       implement the APS system of i2 Fac-                                                                                                           ies, etc.).”
                                                                                          better products than are called for by       terizes the competition outweighing
processes are running. Thus, with          tory Planner.                                  our field’s standards. We feel there          the value of this offer: “The LOGIS                              Continued on page 2
improved customer service, it is also
                                                                   Continued on page 2    is redundancy that we simply do not

 LOGIS, s.r.o., U Nového světa 286, 744 01 Frenštát p.R., Czech Republic                                                                                     Phone: +420-556-841100, Fax: +420-556-841117
  Page 2


APS at Hayes Lemmerz Autokola: Quickly and Efficiently                                                                                                                      TATRAVAGÓNKA Benefits From the
Continued from page 1                                                                                                                                                      Combination of APS and ERP Technologies
We are pleased that it was confirmed                                                    some of our impor-          General Director, Mr.Erich Zipser,
that our plans were not overly optimis-                                                tant capacities. For        again:                                                  Continued from page 1
tic, “says Ludmila Fonioková, Director                                                 example, avoid po-          “We are glad we have found courage
of Informatics. “We used the LOGIS                                                     tential bottlenecks         ‘to go at it.’ The project results have                                            We have evaluat-                just part-time and lacked a clear
Fast Track implementation methodol-                                                    in production be-           unambiguously met our expecta-                                                     ed various ways                 perspective of the future afterwards.
ogy that led us in a clear direction: it                                               fore they occur and         tions. Although it may seem, when                                                  to implement the                Still, I believed in the importance of
did not allow us to enter blind alleys,                                                take appropriate            looking back, that everything went                                                 project. We de-                 the project and I felt that I could pro-
take on too much, or tread water. This                                                 measures in time,           well and everything was easy, I am                                                 cided on a paral-               vide the company with good quality
allowed us to make significant achieve-                                                 or the ability to plan      aware that a lot of obstacles had to                                               lel implementa-                 service.”
ments very quickly. We devoted our               Ing. Jiří Adámek- Executive Director, material require-           be overcome and many changes had                                                   tion of the ERP
capacity to the first implementation              Hayes Lemmerz Autokola, a.s.          ments with greater                                                                                                                             A proper schedule was to be designed
                                                                                                                   to be implemented during the project.                                              and APS sys-                    before the project started. Ing. Dušan
stage (BR1) for nine working weeks                                                     precision and with          I appreciate the proactive approach of                                             tems, taking into
and achieved surprising results. Having         a longer time horizon. It also allowed                                                                                                                                                Mláka talks about its structure: “Both
                                                                                                                   the implementation team, procedures,                    Ing. Dušan Mláka,          consideration
completed the BR1 stage, we obtained            us to sensitively respond to changing                                                                                      Quality Assurance Director
                                                                                                                                                                                                                                      we and the supplier intended to ensure
                                                                                                                   methodologies and technologies                                                     the vast extent of              the fastest possible implementation
the following results:                          situations. It has reflected favourably                             undertaken. We now work more ef-                        TATRAVAGÓNKA, a.s.
                                                                                                                                                                                                      the work and the                phase, right from the beginning. We
 • Better understanding of the ability                                                                                                                                                                goal of improving               knew this would bring a lot of sweat
   to meet customer demands and                                                                                                                                                                       the processes                   and tears, but the faster we finished
                                                          Base Planning Model                                        Advanced Planning Model With a Closed Loop
   identify related issues with greater                    • Global overview of abilities to satisfy customer                                                              as soon as possible. Both parties                          this stage, the earlier we could work
                                                                                                                     • Ability to globally optimize plan
   time in advance and precision                             requirements and identification of related               • Fast reaction to customer inquiry                   were aware of the high demands on                          on our own goals of the project such
                                                             problems                                                • What-if simulations – creation of various           the project teams and also on the
 • Improved general visibility through                     • Interconnection of processes sales-produc-                scenarios                                                                                                      as increasing operational excellence.
   connecting Sales-Production-Pur-                          tion-purchasing                                         • Financial evaluation of plans                       Project Manager who was supposed                           Despite the generally high demands,
   chasing processes                                       • Ability to plan material requirements                   • Fast re-planning as a reaction to a new situation   to be named by the client. Today it is                     we extended the implementation
                                                                                                                                                                           proven that it has really paid off to find                  phase with a new functionality that the
 • Improved ability to plan material
                                                                                                                                                                           a highly qualified manager with expe-                       LOGIS Company was currently add-
   requirements
                                                                Preparation Phase                                                                                          rience from several other significant                       ing to their standard ERP solution. It
 • Improved planning of capacity re-                                                                                                                                       assignments and to devote him full-
                                                                                1st Phase - Fast-track                                                                                                                                was not details, but a comprehensive
   quirements                                                                                                               2nd Phase                                      time to the needs of the project.                          set of corporate management issues
Also in the next three-month BR2                                                                                                                                           Ing. Dušan Mláka summarizes his                            such as Maintenance Planning, Weld
stage, we managed to achieve our                                                                                                                                           feelings from his assignment: “The                         Joint Quality Control, cost of changes
planned objectives – both in timing                           Start     SW+HW installation        Implementation BR1                        Implementation BR2             fact that I was assigned to this posi-                     and discrepancies in the Order and
and results:                                                                                                                                                               tion must have been a surprise for                         Common Data, etc.. This was why
 • Ability to globally optimise plan                                                                                                                                       many people. I had no IT managerial                        we prolonged the schedule by one
 • Prompt response to customer de-                                                                       Project Schedule                                                  experience, except for common IT                           month.”
   mands                                                                                                                                                                   use. It also was not easy for me to                        Finishing the implementation phase
                                                                                                                                                                           leave the managerial position at the                       (X/2003) did not mean finishing all
 • What-if plan simulation – plan vari-                                                                            ficiently and with better perspective.                   TPV Department. My participation
   ants creation                                in our stock levels – we see here, of                              We are now able to identify many is-                                                                               work on the project. Based on the
                                                course, when measuring in more detail,                                                                                     at the beginning of the project was
 • Financial assessment of plan vari-                                                                              sues that we faced before - but do so
                                                continuing variations but the long-term                            more quickly and in advance, and find
   ants                                         stock level has dropped by about 30                                solutions for avoiding them. We are                        Financials and Accounting,     Production Logistics,            Payrole and HR
 • Prompt plan updating in response             percent. Even this result is worth men-                            able to respond much more quickly
                                                                                                                                                                              Asset and Inventory            Costing and Slaes and
                                                                                                                                                                              Management, Purchasing,        Distribution
   to changing situations                       tioning. “                                                         and precisely to any change related                        Basic data

I think we definitely can state that the         The final assessment was given by the                               to the fulfilling orders. Our cooperation                       Base Planning            Advanced Planning         Advanced Planning
results achieved meet our expecta-                                                                                                      with LOGIS helps                          Model                    Model                     model with Closed
                                                                                                                                                                                                                                     Loop
                                                                                                                                                                                                                                                               Ongoing improvements
tions.“                                                                                                                                 us develop our abili-                                                                                                  • Inventory Reduction
                                                                                                                                                                                                                                                               • Average Delivery Delay
“Thanks to the advance planning tech-                                                                                                  ties and improve. It                                                                                                     Reduction
nologies application, the Sales-Produc-                                                                                                allows us not only                                                                                                      • Carriages Delivery
                                                                                                                                                                                                                                                                Performance Improvement
tion-Purchasing process has become                                                                                                     to reduce costs but
more transparent and consistent“,                                                                                                      also strengthen our
comments Jiří Adámek, a company                                                                                                        position as a flex-
Executive Director, and adds: “At the                                                                                                  ible and reliable link
same time, the project strengthened                                                                                                    in production chain
                                                                                                                                       in the automobile                          installation                                   Implementation                  Improvement
                                                                                                                                       industry. “

                                                                                                                                                                                                                           Project Schedule




                                                                                                                    We adapted the organization to the                                                                                  nearly-finished production, the flow
Advanced Production Control                                                                                         needs of individual product groups                                                                                  of materials and so on. One of the
                                                                                                                    to get the whole production pro-                                                                                    key conditions of successful and
through Advanced Planning                                                                                           cess under control. We transferred                                                                                  high quality planning is to keep
                                                                                                                                                                                                                                        discipline when fulfilling the plan
                                                                                                                    the responsibility for execution of
UNEX, a.s. has recently implemented a number of changes resulting in reinforced                                                                                            what is known as “dispatching con-
                                                                                                                    individual business cases to prod-                                                                                  that provides feedback. We monitor
stability and improved company position. Changes have also been made in                                                                                                    trol” – a system that is responsible
                                                                                                                    uct teams, i.e. representatives of                                                                                  this within a staff “motivating and
production control. Therefore we asked the Director of Operations of UNEX a.s.,                                                                                            for promptly responding to urgent
                                                                                                                    specialized departments such as                                                                                     appraisal” system. We update the
Mr. Jaromír Řepka, about his experience in the application of advance production                                                                                           issues for which there is no time to
                                                                                                                    Sales, Engineering, R&D, Purchas-                                                                                   plan daily based on new require-
planning.                                                                                                                                                                  find optimal solutions. Thus, now we
                                                                                                                    ing, Planning and, of course, Quality                                                                               ments and feedback. When setting
                                                                                                                                                                           can promptly respond to customer
The company of UNEX,                                                ments for produc-                               Control.                                                                                                            the plan, we use what are known as
                                                                                                                                                                           demands, material supply shortfall
a.s., is a machinery-                                               tion planning and                               From the standpoint of organization                                                                                 “optimizing algorithms,” which take
                                                                                                                                                                           or delays in production.
foundry complex with                                                execution. For ex-                              and production control, we have                                                                                     into account the capacity-load cri-
                                                                                                                                                                           It is also very important to have the                        teria. Then, the updated, optimized
extensive experience                                                ample, they must                                established production teams. They
                                                                                                                                                                           ability to create plans that are actu-                       plan is distributed both to product
in implementing large,                                              assure not only high                            have clearly defined worksites,
                                                                                                                                                                           ally feasible and that can be utilized                       and production teams as a base for
comprehensive orders                                                promptness and re-                              which were mainly located within
                                                                                                                                                                           for operative control. Of course,                            productions and purchasing.
in the field of raw mate-                                            liability of deliveries,                        the production line. This supports
                                                                                                                                                                           such a high level of planning neces-
rial mining equipment                                               but also be able to                             the allocation of resources for in-                                                                                 Thus, Advanced Production Plan-
                                                                                                                                                                           sitates a high standard for fulfilling
and heavy machinery.                                                flexibly respond to                              dividual products. Input materials                                                                                  ning is a precondition for Advanced
                                                                                                                                                                           plans and ensuring quality feedback
At present, we are im-                                              changes resulting                               and subassemblies are supplied for                                                                                  Production Control. At the same
                                                                                                                                                                           from Operations and Purchasing,
plementing a new type                                               from modifications                               these lines using JIT.                                                                                              time, it is critical to clearly state
                                                                                                                                                                           i.e. the provision of up-to-date
of order, which for us                                              in customer require-                            We used i2 Factory Planner - a                                                                                      that the application would lose its
                                                                                                                                                                           and precise information regarding
represents a significant                                             ments, unexpected                               software tool for advanced                                                                                                 effect if people’s thinking
opportunity for further                                             supply shortfalls,                              production planning - to                                                                                                   were to remain unchanged
                            Jaromír Řepka - Director of Operations
development. In con- UNEX, a.s.                                     possible lack of pro-                           ensure maximum preci-                                                                                                      and if permanent pressure
trast to the past, these                                            duction capacities,                             sion and speed when                                                                                                        to stay disciplined were not
orders feature a higher                                             etc. When fulfilling                             planning within individual                                                                                                 developed.
level of serial production capability             requirements and customers’ de-                                   production teams. This                                                                                                         Through Advanced Planning,
and, at the same time, substantially              mands for promptness and reli-                                    provided us with some                                                                                                          with permanent improvement
higher requirements for speed and                 ability of deliveries, we must control                            capacity without which we                                                                                                      of process control, improved
reliability of deliveries. These or-              manufacturing costs as well. We                                   would not have been able                                                                                                       reliability and performance,
ders include key subassemblies                    could label this level of production                              to achieve our advanced                                                                                                        we have strengthened our
such as transportation equipment,                 control - that can balance these new                              production planning vision.                                                                                                    ability to successfully fulfill
construction and mining machin-                   and highly demanding requirements                                 The first important aspect                                                                                                      the needs and demands of
ery or forklifts. Customers include               and can handle emerging risks and                                 of this capacity was that                                                                                                      our customers and to rein-
such companies as Hitachi, Nacco,                 achieve good results - as “advanced                               we were able to identify                                                                                                       force our own position in the
Fuchs, Liebherr and others.                       production execution.”                                            and resolve potential is-                                                                                                      market.
Such a change to the production                  We started from company organiza-                                  sues with sufficient time
schedule has resulted, of course,                tion and management, by separat-                                   in advance. This allowed
in much more demanding require-                  ing the product from the production.                               us to reduce the extent of



  LOGIS, s.r.o., U Nového světa 286, 744 01 Frenštát p.R., Czech Republic                                                                                                                                                                                      WWW.LOGIS.CZ
                                                                                                                                                                                                                           Page 3

                                                                  chase more pre-        able to move from process                                                                                         “TATRAVAGÓNKA is a
               Average Delivery Delay                             cisely than ever       changes in Purchasing to                                                                                          company with high ambi-
                                                                  before. Recom-         the TPV departments and to
                                                                                                                                  Development of the Wagon Walk-offs Reliability                           tions,” adds the Chairman
                                                                  mendations are         take into consideration the                                                                                       of the Board of Directors
                                                                  made based on          extent of unlimited license                                                                                       Ing. Peter Pribyliniec. “That
                                                                  the current plan       rights, we can also start to                                                                                      is why the project aimed
                                                                  (new purchases,        use such functions as Form                                                                                        to increase our competi-
                                                                  call-offs or post-     Numbering with graphic                                                                                            tiveness was given so
                                                                  poning of placed       support of parametric sort-                                                                                       much attention from the
                                                                  orders) that are a     ing of entries.”                                                                                                  beginning. The extent and
                                                                  basis for the pur-     The reduction of inventories                                                                                      demand factors of a proj-
                                                                  chasers. Thus we       itself is very important. But                                                                                     ect with parallel implemen-
                                                                  managed to elimi-      what the customer is more                                                                                         tation of ERP and APS
                                                                  nate purchasing        interested in is the quality                                                                                      solutions were very high.
                                                                  of items that we       and accuracy of the deliv-                                                                                        There is no other company
                                                                  actually did not       eries. Regarding this issue,                                                                                      in our surroundings that
agreement, the completed imple-                                   need and situa-        Ing. Dušan Mláka adds: “In                                                                                        would have such experi-
mentation phase was followed by              tions, such as when we forget to order      spite of the fact that we have                                                                                    ence. Those who want to
the phase of improving corporate             items that we really need. We have          gone through a period of                                                                                          be the best cannot rely on
processes. This phase is still running.      achieved a 31% reduction of our inven-                                                      “The project activities                                           copying from others, but
                                                                                         parallel approaches on several new
Even though the phase is still not fin-       tories since we finished the implemen-                                                       were highly demand-                                              need to follow their own
                                                                                         products, we managed not only to
ished, we can see the clear influence         tation phase. I expect that due to the                                                      ing for all of the par-                                          path. That is why we put it
                                                                                         reduce inventories but also increased
of the project on key corporate perfor-      establishment of the Planning Depart-                                                       ticipants. Both parties                                          all on ourselves.
                                                                                         the accuracy of the daily walk-off plan
mance parameters. Ing. Dušan Mláka           ment with direct responsibility to the                                                      had to cope with a
                                                                                         of the wagons from the assembly line                                                                               We must say that the LO-
adds: “You can find many people that          Executive                                                                                   number of tasks that
                                                                                                                                                                                                            GIS Company produced
doubt the importance of high-demand          Director, the                                                                               had to be properly
                                                                                                                                                                                                            a highly demanding, but
projects. I have to say that thanks to       accepted                                                                                    planned and man-
                                                                                                                                                                                                            realistic project which they
unique support from our manage-              d i s c i p l i n e,                                                                        aged. The issues
                                                                                                                                                                                                            managed to run efficiently.
ment, no one can dodge out of the            reducing                                                                                    emerging on both
                                                                                                                                                                                                            They did not let us exhale
way. This attitude brings us excellent       the number                                                                                  sides during the proj-
                                                                                                                                                                                                            as I think we did not let
results. As an example, we managed           of entries                                                                                  ect had to be solved
                                                                                                                                                                                                            them exhale. Even though
to improve the quality of system data        and the in-                                                                                 very quickly. It was
                                                                                                                                                                 Ing. Štefan Mesároš,                       the last phase of the proj-
so that the information in the Planning      creased                                                                                     highly important that Vice-Chairman of the Board and CEO
                                                                                                                                                                                                           e c t , t h e I m p r ove m e n t
Model resembles reality and is a valid       level of                                                                                    both teams managed TATRAVAGÓNKA, a.s.
                                                                                                                                                                                                           phase, is not yet finished,
basis for management. The index of           standard-                                                                                   to concentrate even
                                                                                                                                                                                                           the positive influence of the
the average delivery delay is a good         ization, we                                                                                 in the most crucial
                                                                                                                                                                                                           changes they made in our
example for all. Our next goal is to         will be able                                                                                situations such that they did not lose
                                                                                                                                                                                                operations is already visible. We do
achieve a two-day float of deliveries         to continue                                                                                 sight of the main goals of the project.
                                                                                                                                                                                                not doubt that the final results of the
at the nearest event horizon.”               this trend for                                                                              Thanks to this fact, all goals were
                                                                                         to our customers. The steadiness of                                                                    project will be even more attractive.”
                                             a long time.”                                                                               achieved very well. I have to thank ev-
Another significant trend today is the                                                    production always has a good influ-
                                         “We had to do a lot to ensure the qual-                                                         eryone who contributed, for their work
reduction of inventories on stock. Mr.                                                   ence on quality and today our clients
                                         ity of the data – it must correspond                                                            and the resulting success of the proj-
Ing. Dušan Mláka explains: “Our pur-                                                     can experience both in working with
                                         to what is realistic in the Company.                                                            ect,” said the co-chairman of the Board
chasing department had to cope with                                                      our company. For your information,
                                         Otherwise we would not be able to fully                                                         of Directors and the Chief Executive
many changes. Until very recently, the                                                   since we finished the implementation
                                         utilize the system. At present, we are                                                          Officer Ing. Štefan Mesároš.
purchasers worked mainly with paper                                                      stage, walk-offs accuracy increased by
documents. To-                                                                           20% and thus we avoided accumula-
day all the de-                                                                          tion of work during the last days of
mands, orders,                       Inventory Reduction                                 each month.”
suppliers´ in-                                                                           Summary of KPI improvements in the
formation and                                                                            period from X/03 (completion of imple-
many other                                                                               mentation) to IV/04:
types of infor-
                                                                                            • Reduction of the average delivery
mation are in
                                                                                              delay from 60 to less than 20 days
the Information
                                                                                              (improved by 66%)
system. The
purchasing de-                                                                              • Reduction of inventories by 31%
partment thus                                                                               • Wagon walk-offs and on-time
can react to the                                                                              delivery improvement of 20%
development                                                                              And what is the opinion of the com-
of needs for                                                                             pany executives about the results of
material pur-                                                                            the project?




Implementation of i2 FP APS System through the Customer’s Eyes
An IT manager’s experience from the implementation phase of the i2 Factory Planner APS system in the MSA a.s. company


                          MSA a.s. is one of the leading industrial        grip“ on the sales-production-purchase process, and on management                contents. The causes of disproportions that you observe can then be
                          fittings manufacturers. Their products are        of inventories, timing, and reliability of deliveries etc.. What you might       easily and quickly identified. i2 Factory Planner offers a vast range
                          exported worldwide. The deliveries are used      not realize is, how powerful such a product can be, even during its              of analytic functions and thus it doesn’t take much time to find the
                          in the fields of oil transport and processing,    implementation phase. For example, it can help improve the quality               causes of any problems.
                          gas distribution and processing, the heat-       of your data or identify weak spots in the data. You are not normally
                          ing industry and heat distribution networks,     going to realize such issues in advance.                                         Is the APS not really just a fancy toy to play with? Are the dif-
                          remote distribution and water processing.                                                                                         ferences regarding planning possibilities between ERP and
                          MSA also ranks among the World’s leading         Would you like to discuss further the data quality issue?                        APS really significant? Would it not be sufficient just to take
                          manufacturers of low-emission fittings.                                                                                            better advantage of ERP’s planning possibilities?
                                                                           At the beginning of the project, we were persuaded, that the level
                          MSA carried out the implementation of the        of data quality in our ERP system was very high. At that time, we                I must say that besides the fact that we were proud of our data
Ing. Roman Plaček - CIO
                          i2 Factory Planner APS system during 2003.       were operating with the ERP system for many years, it was a well-                quality, we also had a good feeling because we were using an
MSA, a.s.
                          We asked the Project and IT manager, Mr.         established system. i2 Factory Planner made us change our minds                  ERP system to manage our company. Some visitors to our com-
                          Ing. Roman Plaček for an interview.              very quickly.                                                                    pany adored our former ERP system (FACTORY ES of LOGIS
                                                                                                                                                            company) saying “ERP is such a unique system, one doesn’t see
How do you perceive the advanced planning project in your                  The system implementation began with the creation of the initial                 that everyday“. Nonetheless, we changed our minds regarding this
company?                                                                   planning model. This model, that is being gradually developed dur-               opinion once we had implemented APS. I will try to summarize why
                                                                           ing the project, describes the process of carrying out an order and              we changed our opinions so quickly.
An APS system is implemented for the purpose of improving the              focuses on all major influences. The model is loaded with data and
quality of planning. Thus, we are able to improve the quality of in-       confronts reality. And here we go. The model shows you the real                  Planning within our ERP is based on the MRPII concept that is part
ternal corporate management such as how precisely, smoothly and            quality of your data in a protocol of loading the model with data.               of almost every significant ERP system today. The MRPII method
efficiently the individual processes are carried out in our company.        During the data provision, the i2 Factory Planner maintains consis-              plans the material needs as well as capacity needs, however it
We want to improve the operations mechanisms of our company so             tency control of the input data from the aspect                                                               contains several features that limit
that, in comparison with our competitors, we work with shorter transit     of planning needs. If there is a missing link,                                                                the extent of its practical application. I
times, lower inventory levels, shorter turnover ratio, higher production   you know it at once. We received an endless                                                                   would say there are two key problems
continuity, and more. Thus we have better potential to be faster, more     protocol containing information about our data                                                                regarding the MRPII. The first one is
reliable and precise for our clients. This also allows our distributors    problems during our first loading of the system                                                                the separate planning of materials
to acquire new customers more easily through lower prices.                 with data. Such a protocol is a unique tool for                                                               and capacities. Even if you do your
                                                                           the improvement of data quality – it can be                                                                   best, you will not manage to achieve
Did the project development surprise you or did everything turn            used as a basis for the dividing tasks among                                                                  any optimizing. The second problem
out the way you anticipated?                                               different departments.                                                                                        is that MRPII will plan as if there is
If you observe, let’s say at a presentation, the way that the i2 Factory                                                                                                                 unlimited capacity. This means that
                                                                           Another possibility is to assess the overall                                                                  your capacity might run at 300% in
Planner works, you get a clear image of how you will be able to use        quality of your data once you manage to load
it once you finish implementing it. You can see how rich the range                                                                                                                        a period and you have to direct your
                                                                           the planning model with the appropriate data;                                                                 efforts towards coping with this some-
of possibilities is when you are assembling your plan and how the          you make a plan and see that your orders were
features of the program will enable you to operate the planning model.                                                                                                                    how. The MRPII output is a plan that
                                                                           not able to be managed, according to the data
You can easily imagine the power of this tool for actually ”getting a                                                                                                                                            Continued on page 4


WWW.LOGIS.CZ                                                                                                                                                      Phone: +420-556-841100, Fax: +420-556-841117
   Page 4


Implementation of i2 FP APS System Through the Customer’s Eyes                                                                                              TOKOZ Company Invests in the Development of
Continued from page 3                                                                                                                                       Operational Excellence and Customer Satisfaction
simply cannot be used for your corporate management                             we produce for this client by the end of the month?“, ”What
because it is impossible to work this way. Therefore if you                     are the reasons for the delay of the delivery?“, ”Which vari-               A leading manufacturer of safety mechanisms, furniture and construction mountings,
intend to make it useful, someone has to concentrate on                         ant of the plan is optimal given present conditions?“. Please               and components- such as for the automobile industry- the TOKOZ Company launched
the system. The only outcome of hours spent on adjusting                        make sure to note that these are not details. Answers to                    the implementation project of the Advanced Planning System (APS) i2 Factory Planner.
the system is a plan that might work. This plan is definitely                    such questions request a more comprehensive processing                      The LOGIS Company has been chosen as an implementing partner and the supplier
not optimal anyway. The complexity, labor- and time-con-                        from the APS system. Simple mathematic operations are
sumption needed for the design of an MRPII plan leads                           not enough in this case. APS systems engage optimizing,                     TOKOZ a.s. Company launched a proj-                    “The project of advanced planning
to the fact that MRPII and flexibility are two incompatible                      heuristics and other advanced applications in order to                      ect aim at improving production planning               is combined with the project of pro-
issues. It is very common in everyday corporate life that a                     perform their calculations. Such services can be powerful                   and execution. Based on                                              cess management which
special situation needs a special solution that is different                    in helping to find solutions.                                                the results of the selec-                                            is already in progress. We
from the plan. Backwardness of the MRPII does not allow                                                                                                     tion procedure, the LOGIS                                            suppose this is a suitable
reacting to an alternative development (capacity failure,                       In my personal opinion, the real power of the APS is a good                 Company was assigned                                                 combination“, adds Ing.
sub-delivery failure) and plan adjustment. Then, after some                     ability to look into the future. APS manages to promptly                    to deliver the project. The                                          Stanislav Havliš, Technical
time, the situation in the mills does not correspond to what                    and precisely model the future of a company. At least, this                 LOGIS Company is a sup-                                              and Production Director of
the plan contains. The plan does not correspond to reality                      is true for the i2 Factory Planner. This outlook gives us a                 plier of expert services and                                         the Company. “The purpose
and it is impossible to depend on it in                                                                good foundation for successful man-                  information technologies                                             of the project is not merely
everyday decision-making. You must                                                                     agement of a company. Managing a                     aimed at the improvement                                             to control technical aspects,
improvise in your common decision-                                                                     company without such an outlook                      of corporate competitive-                                            or just to tune-up production
making and such decisions made                                                                         would be like driving a car without a                ness.                                                                like a well-operating machine
in this way are not always the best                                                                    clean windshield.                                                                                                         for high performance and low
                                                                                                                                                            The CEO and vice-chair-
ones. Such an atmosphere does not                                                                         You mentioned a higher level of                                                     Ing. Vladimír Chládek,              consumption. Instead, we
                                                                                                                                                            man of the Board of Direc-
support system decision-making. On                                                                                                                                                            CEO and Vice-chairman of the Board perceive the project also as
                                                                                                          comprehensiveness regarding the                   tors of the TOKOZ Com- TOKOZ a.s.
the contrary, such an atmosphere                                                                          solutions to problems. Does it mean                                                                                     an opportunity to develop
                                                                                                                                                            pany, Ing. Vladimír Chládek,
supports “random shots“.                                                                                  that the APS is closer to managers                                                                                      our employees, especially
                                                                                                                                                            told us the following, regarding the
                                                                                                          than the ERP system?                                                                                     middle and high–levels of management.
An APS-created plan is more useful                                                                                                                          launched project: “In order to be able
                                                                                                                                                                                                                   There is no doubt that developing a
than an ERP-created plan for practi-                                                                                                                        to reliably, flexibly and promptly react to
                                                                                                      We became accustomed to the fact                                                                             team that manages to cope with high-
cal application. The APS system not                                                                                                                         the needs of our clients and better fulfil
                                                                                                      that the ERP system supports mainly                                                                          demanding goals of this project will rep-
only allows you to create an optimal                                                                                                                        our motto “We fulfil what we promise“,
                                                                                                      the elementary activities rather than                                                                        resent one of the most important steps
and performable plan, but allows                                                                                                                            we must learn how to manage our own
                                                                                                      the comprehensive managerial activi-                                                                         taken for the improvement of corporate
you to find quick solutions in response to changes as well.                                                                                                  activities more precisely and with a bet-
                                                                                ties. ERP does a good job of supporting activities such as                                                                         activities after the implementation is
Comparing the MRPII to the i2 Factory Planner means                                                                                                         ter understanding. One could say that
                                                                                calling off an operation, stock and supplies operations,                                                                           complete. I also believe that experience
comparing something of low serviceability to something of                                                                                                   the motto “We fulfil what we promise“ is
                                                                                booking, and so on. In other words, ERP is effective at sup-                                                                       and know-how will enrich everyone who
high managerial value. It is no wonder that today you can                                                                                                   already being fulfilled. It really is true, but
                                                                                porting the corporate administration. But the managers, at                                                                         takes part in the project.“
read in the newspapers that , for example, Caterpillar has                                                                                                  we still want to be even better, and first
                                                                                least those engaged in production logistics, discovered that                                                                       Ing. Jaroslav Sýkora, the Logistics
increased the reliability of its deliveries and cut its inven-                                                                                              of all – the price we are currently paying
                                                                                this system is not of much help – they found out that this                                                                         Manager, was assigned to the role of
tory levels down to half of their original levels at the same                                                                                               for the satisfaction of our clientelle is too
                                                                                system is of more help to their subordinates. They found out                                                                       Project Coordinator. “It will certainly be
time. Well, anyone engaged in production logistics knows                                                                                                    high. This is because inventory stocks
                                                                                their own ways to help themselves regarding management.                                                                            high-demanding work. The project must
that these people must have managed to do something                                                                                                         are too high, aggregate continuity of our
                                                                                They had to find them; otherwise the company would not                                                                              be delivered in quite a short period of
significant.                                                                                                                                                 production-logistics chain is insufficient,
                                                                                survive. They spent a lot of time identifying the problems,                                                                        seven months´ time. During the prepara-
                                                                                                                                                            and available resources are not always
This means you are experienced both in ERP and APS                              they had to create some MS Excel gadgets to be able to                                                                             tory phase, I had the opportunity to learn
                                                                                                                                                            optimally exploited. Our aim is to provide
systems. Is there anything more you would like to add                           find certain solutions and they often had to improvise and                                                                          about the implemented system, the
                                                                                                                                                            high-level, optimally efficient customer
to the comparison?                                                              make decisions without sufficient information.                                                                                      implementation plan and the goals of the
                                                                                                                                                            service, i.e at the lowest possible cost.
                                                                                If you are working on the development of a precise and                      The ability to improve planning with high              project. But my periodic “check-up“ visits
Another difference between i2 Factory Planner and ERP                                                                                                                                                              gave me various clues and persuaded
                                                                                useful planning model, you have a good image of how                         sensitivity to changes within any part of
is the level of the decision-making and management sup-                                                                                                                                                            me that such an implementation plan
                                                                                your work is connected to ways to better coordinate sales,                  the logistics chain can significantantly
port and something I would describe as the ”level of intel-                                                                                                                                                        can be realistic. Our role in the project
                                                                                purchasing and production activities of the company. You                    help in maintaining the above- men-
ligence“. Despite the fact that ERP´s coverage is wider – it                                                                                                                                                       cannot be played by anyone else, of
                                                                                can see that the good result of your work has a clear                       tioned service. We believe there are
covers in fact a very vast range of processes going on in                                                                                                                                                          course. Still, we chose a supplier that
                                                                                chance to cut transit times, reduce supply levels and                       several possibilities for improvement. If
a company – its level of intelligence is lower in compari-                                                                                                                                                         is experienced in such projects, that
                                                                                increase continuity of production. There has never been                     we succeed, we will increase the conti-
son with the APS. The ERP modules gather data. Data                                                                                                                                                                knows the field and whose results from
                                                                                such a clear connection of an IT project to the aims of                     nuity of production, transit times will be
provided by the users in an ERP system becomes part of                                                                                                                                                             projects that have already been carried
                                                                                the company. We tried to improve management before,                         reduced, the turnover ratio of supplies
the outputs. These outputs are processed based on the                                                                                                                                                              out persuaded us to choose them to be
                                                                                but the result was not a complex solution for corporate                     will be improved; in other words: we will
above-mentioned data. A typical question to ask an ERP                                                                                                                                                             our partner. We will do our best to make
                                                                                problems. The basis of a new approach is the optimizing                     improve the level of our operational ex-
system is ”How big are the current supplies of this kind of                                                                                                                                                        sure our project stands among the suc-
                                                                                of the sales-production-purchase process as a whole, not                    cellence. Thanks to this, we will be able
material?”, “Which operations were performed yesterday                                                                                                                                                             cessful ones.“
                                                                                just its individual parts.                                                  to fulfil what we promise in an continu-
regarding this order?“ or ”How much have we spent on
                                                                                                                                                            ously improving way and reduce related
this kind of material during the last month?“. Such outputs                                                      Thank you                                  costs simultaneously.“
are, however, a matter of trivial operations. APS is able to
                                                                                                                               LOGIS News Editor
answer more comprehensive questions: ”What are our
problems and how significant are they?“, ”What volume can
                                                                                                                                                            Information Technologies – a means to support
Importance of the APS/SCM Technologies Grows                                                                                                                restructuring in Hriňovské strojárne, a.s.
Continued from page 1                                                                                                                                       Management representatives of the company of Hriňovské strojárne and LOGIS, in their joint
At present, there is not a single major company in any field that lacks a management efficiency project in their strategic                                    meeting held on May 11, 2004 at Hriňová, officially completed the implementation of the FACTORY
development plan. Companies, such as Caterpillar, POSCO, Continental AG, General Motors, Whirlpool, AIRBUS, Matsushita,                                     ES information system in the manufacturing logistics area. At the same time, they started the next
DELL and many others, have been systematically developing such projects for many years. The advanced planning technologies                                  stage of cooperation within so-called Development Project aimed at improved order fulfillment process
are prominent in such companies´ frameworks. The results of such projects often have allowed these companies to achieve                                     effectiveness and higher throughput of the Hriňová Machine Works.
increased promptness, reliability and flexibility of deliveries to clients. Clients of these companies are therefore more satisfied
and enjoy cooperation with their suppliers.                                                                                                                                                The company          the first stage of company restructuring
                                                                                                                                                                                           of Hriňovské         – management team set-up, slimming
It is essential to mention that the price of the clients’ increased satisfaction is not related to the rise in operational costs (e.g.
                                                                                                                                                                                           strojárne,           down, relocation, order stabilizing, etc.
large supply levels allowing prompt and reliable deliveries). On the contrary, in addition to improved delivery parameters,
                                                                                                                                                                                           a.s, an inte-        The information system implementation
these companies are able to efficiently reduce their operational costs. Instead of amortizing their assets in oversupplies and
                                                                                                                                                                                           grated man-          - timed in such a manner - has produced
in operational solutions to many issues, that did not need to happen, these companies can concentrate on their logistical
                                                                                                                                                                                           ufacturer of         a number of positive changes in the
processes to meet the “right thing – right time – right place” requirement. These companies concentrate on making their
                                                                                                                                                                                           precise gear-        fulfillment of orders, that has helped
processes work like a well tuned-up machine with low consumption and high performance. These companies strive to schedule
                                                                                                                                                                                           boxes for            us overcome established stereotypes
the material needs in a sensible way, optimally use their capacity resources, eliminate dead time, and reduce transit times.
                                                                                                                                                                                           agricultural,        and discover many hidden reserves.
Overall, the aim is to increase the level of operational perfection. Improved operational perfection is exploited for the sake of
                                                                                                                                                                                           railway and          An example of this is the creation of
the speed of growth, reliability and flexibility in relation to clients.
                                                                                                                                                                                           construction         manufacturing documentation for mate-
The results achieved by the “best” raise respect. The lead times are reduced in a major way and the reliability of deliveries                                                              machines,            rial inputs and technological processes.
increases. Those who missed this opportunity fall out of the game and their position is overtaken by those who are more                                      Ing.Roman Václavík,           differentials,       Thanks to the application of standard
capable. APS/SCM systems of advanced planning therefore become a critical working tool for developing competitiveness                                        CEO and Chairman of the Board
                                                                                                                                                                                           axles and            information system functionality, we
                                                                                                                                                             Hriňovské strojárne, a.s.
and achieving corporate goals.                                                                                                                                                             related en-          have been forced to consider opportuni-
                                                                                                                                                             gineering products, has successfully               ties that we only considered marginally
                                                                                                                                                             completed the implementation of the                at that time, such as transport times
LOGIS Introduction                                                                                                                                           FACTORY ES information system that                 between centres, and quality of produc-
                                                                                                                                                             controls manufacturing logistics...                tion engineering in terms of standards,
LOGIS is an expert services and information technology supplier with focus on improving customer companies’ competitiveness. The deliveries assume
                                                                                                                                                             The project started last September, and            completeness, and precision.” In the end,
the form of projects aiming at increasing total effectiveness of customer organizations and at successfully developing their businesses. Currently, LOGIS
                                                                                                                                                             the final acceptance protocols, based               Mr. Václavík summarized the project
has more then 60 customers in 25 countries.
                                                                                                                                                             on which the system has been put into              benefits: “… the implementation of the
LOGIS solutions are mostly based on information technologies covering the following areas: Supply Chain Management (SCM), Customer Relationship                                                                 information system has enabled us to
                                                                                                                                                             routine use, were issued at the beginning
Management (CRM) and Supplier Relationship Management (SRM). The concept that underlies each solution is uncompromisingly focused on maximum                                                                    control and manage activities that we
                                                                                                                                                             of April this year. The demanding, seven-
added value. Developing its projects, LOGIS relies on i2 Technologies’ products (LOGIS is i2’s autorized distributor in Central Europe) as well as on its                                                       could hardly even monitor before. As a
                                                                                                                                                             month schedule has been met with no
own software solutions. In order to support project safety and project quality, LOGIS has set up a Center of Competence consisting, among others, of                                                            result, we have created preconditions
                                                                                                                                                             significant delays.
a strong team of SCM certified specialists, the first such team in the Czech Republic.                                                                                                                            to continue the restructuring process
                                                                                                                                                             The CEO and Chairman of the Board                  -- “the Development Project” -- aimed
Contact:                                                                                                                                                     of Hriňovské strojárne, Ing. Roman                 at the enhanced competitive strength of
Ivan Honzák, CEE Sales Manager                                                                                                                               Václavík, stated, when assessing the               Hriňovské strojárne.”
tel: +420-556-841100                                                                                                                                         project: “We approached the information
e-mail: ivan.honzak@logis.cz                                                                                                                                 system implementation after we finished

   LOGIS, s.r.o., U Nového světa 286, 744 01 Frenštát p.R., Czech Republic                                                                                                            Phone: +420-556-841100, Fax: +420-556-841117

				
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