A stable solution

The implementation of Microsoft Dynamics AX at Südzucker Polska SA theoretically consisted in updating version 3.0 to 4.0. In practice however, it proved to be a much taller order as the system had an unusual installation and several modifications.

Südzucker Polska SA, part of the Südzucker Group, is a leader in the sugar industry in Poland and Europe. In 2009 the company produced 374,000 tons of sugar with “Cukier Królewski” being its flagship brand. The company employs approximately 700 employees and its revenues for 1 March 2009 to 28 February 2010 reached PLN 1.1 billion.

The headquarters of SüdzuckerPolskaand its management board are located in Wrocław. A Sales Office based in Kraków is in charge of sales and product marketing in cooperation with two regional offices located next to the Cerekiew sugar factory in Ciężkowice and the Ropczyce sugar factory. Production takes place in four plants located in Silesia and south-eastern Poland.


Pre-implementation status

The described organizational structure was in place as of 2008 when consolidation of 18 independent sugar companies – started in 2004 – was completed. Already at the beginning of the consolidation process a decision was made to purchase a management system for better control over production plant processes. The AX 3.0 system was chosen for this. – That implementation – or rather a series of implementations that changed as Südzucker acquired successive sugar companies – was a business and IT challenge. You could say that we were all learning back then. We were introducing practically all the time various functional and structural changes, adjusting them to our needs – says Marek Witkowski, IT Director at Südzucker Polska. As a result of such actions the system had many modifications and unusual functions and not many standard solutions. This situation caused it to become slow and not very productive. In addition, the modifications were often poorly described and missing any kind of documentation. That’s why a decision was made to put everything in order together with migration to version 4.0.

Application of standard solutions

One of the most important migration assumptions was standardization of the system and resignation from most custom-made solutions that were developed in AX 3.0.

Implementation benefits

  • a much more stable and predictable system
  • use of standard functions and modules instead of creating modifications
  • significant improvement in how fast the system works
  • lower license costs thanks to reorganization of how the AX system is used

It was decided to implement the system in the most standard version and to adjust the company’s internal processes as much as possible to the system’s functions. As our company became more established, we no longer needed solutions on demand. -We became more interested in the creation of a stable rather than a flexible system. We preferred to change certain internal company systems and to adjust them to standard system functions than to write thousands of additional code lines, unless naturally a given solution made sense businesswise, in which case we left it as was. We decided to conduct the migration as if it were an implementation – from scratch – to get rid of all errors and past problems. – says Marek Witkowski.

Four companies took part in the tender to carry out the migration with Bonair being the ultimate winner. – We were looking for a stable partner that could ensure continuity of work even in the event of the departure of some IT personnel. We did not want any delays in the implementation. We chose Bonair because it’s a relatively large company with clear procedures and an established position on the market. They convinced us that we would like working with them... and they were right – says Marek Witkowski.

First an audit

Bonair commenced working for Südzucker in the Fall of 2008 by first carrying out a productivity and functionality audit on the Microsoft Dynamics AX 3.0 system that had already been in place for a few years. The client then requested Bonair to carry out a migration to version 4.0, taking into consideration the audit results.

It became apparent in practice that an update of the system would require a similar amount of work as a new implementation. Firstly, it turned out that most of the AX 3.0 modifications needed to be also implemented in the new version. Secondly, the client possessed virtually no documentation on the operating system and therefore all processes needed to be analyzed very closely to how it is done when implementing projects from the very beginning.

Business analysis – the most important phase

- Everyone agrees that analysis of business processes and modifications was the most time-consuming phase.This phase was quite long, it lasted almost 3 months, mainly because we had practically no descriptions of the system’s functional modifications. We had to rely on interviews with the users who often could not tell us much because they themselves didn’t know what was standard and what was modified in the system – says Krzysztof Jasek, Deputy Director at the Business Solutions Department at Bonair and the project coordinator.

- In total 15 people were involved in the implementation project: 5 Bonair consultants and 10 Südzucker employees. Everything was overseen by the project coordinator. The work was done by 3-person teams with each one in charge of a given system module: Finances, Purchases, Sales, Warehouse and Projects. Each team included a Bonair consultant plus a key user from Südzucker who was responsible for the team’s work and all system modifications. Bonair consultants interviewed implementation team members to try to identify processes. Those that were carried out in a way that was not standard were discussed on an ongoing basis and we often chose to change the existent solutions – tells us Tomasz Kokoszka, Project Manager and Finance/ Treasury Director at Südzucker Polska. – We placed great emphasis on business analysis since we knew that if we got it right then it would significantly facilitate the implementation –asserts Tomasz Kokoszka.

The analysis was instrumental in the creation of the System Implementation Concept Study, namely a detailed description of processes as well as the necessary modifications in the system. – We now have all the processes specified and well described – adds Marek Witkowski.

Implementation facts

What:

Microsoft Dynamics AX 4.0 in the areas of: Finances, Warehouse, Sales, Purchases and Projects; 120 licenses. Implementation of Warehouse Management System (WMS), working directly with the Warehouse module and integrated with mobile bar code readers.

Where:

Südzucker Polska SA, a leader in the sugar industry in Poland and Europe with approx. 700 employees and a turnover for 2009/2010 of PLN 1.1 billion. Company headquarters – Wroclaw, Sales Office – Krakow, two regional offices in Cerekw and Ropczyce; production takes place in five plants located in the Silesian region and south-eastern Poland.

When:

December 2008 – signature of agreement

February – April 2009 – analysis and modeling

May – July 2009 – system construction: creation of new or transfer of old modifications to the new version and their simultaneous testing

August 2009 – training (short since the client already knew the system)

August 2009 – preparations for the launch (including transfer of data)

September – December 2009 – launch and support during the launch

April – August 2010 – implementation of goods tracking and bar code system

Unusual solutions and challenges

What types of modifications were required in version 4.0 in relation to version 3.0? – We made the most changes – almost half – in the Projects and Sales modules, and fewer in the Finances and Purchases modules. However, the AX system generally required big modifications to suit the specificity of our business – claims Tomasz Kokoszka. – Approximately 80% of the modifications were kept from version 3.0 and 20% of the functions had to be written. Additionally, some of the modifications from version 3.0 required slight changes – adds Tomasz Kokoszka.

One of such solutions was the so-called AX system portal created especially for Südzucker. The portal is a type of an interface that gives access to selected AX functions by an internet browser. It is used for data entry as well as for example for viewing or printing reports. Its use optimizes AX license costs since direct access to the system would be significantly more expensive. Many users rely on the portal, particularly from the warehouse section.

Another unusual solution was an Add-On human resources and payroll module, one of several available on the market that replaces the standard AX system module.

Since the said specialized programs were written by external companies, three partners took part in the implementation that were largely independent of one another. This proved to be a big challenge for Bonair as it was responsible for the overall outcome of the system migration yet it had no formal control over the partners. Fortunately, the client’s interest and success of the implementation were what counted most for everyone.

Order and good documentation

When conducting the migration to version 4.0 Bonair also optimized the system in terms of productivity by programming a large part of the AX code from the beginning and making the whole system uniform. It had to be done as various parts of the system were before coded by different programmers and did not always work well together. In version 4.0, a single programmer programmed a given algorithm from start to finish.

Bonair also introduced set implementation rules. – I think this was one of the reasons why the client chose us. We introduced order to a previously spontaneously developed system. It would have been much easier to take over the project after us because everything was documented and described – emphasizes Krzysztof Jasek.

Time frame

The implementation was carried out in stages. – We signed the agreement in December 2008, in March 2009 we completed the analysis stage, from April to June we conducted programming works and in July and August – tests. In accordance with the time frame, the launch was done on 1 September 2009, which however did not signify the end of implementation works as the system continued to be improved and fine-tuned until December 2009 – says Marek Witkowski. In April 2010, we started the implementation of the WMS (Warehouse Management System) module – he adds.

There was no stage at which data was entered simultaneously into the old and new system. The system launch was made on 1 September 2009, a month before the launch of the sugar campaign. This date was one of the key implementation parameters.

A specific feature of the food industry is its seasonal nature. In the sugar industry, the peak production period starts in September, following the launch of the sugar campaign, and lasts until January. The rest of the year constitutes preparation for production. As such, the implementation had to be finished by 1 September, before the start of the sugar campaign. – We wanted to avoid confusion caused by the opening balance sheet and start of book-keeping in version 4.0. We had to finish the implementation before the start of the season when many transaction arise related to the processing of beetroot – says Marek Witkowski. Missed deadlines would have meant a six month delay in the new system’s launch – until April 2010.

Additional functions

Upon completion of the AX system’s migration to version 4.0 Bonair implemented the WMS (Warehouse Management System). It works directly with the Warehouse module and is integrated with mobile bar code readers. This part of the implementation was carried out jointly with a sub-contractor – IT Piast – as part of a separate project that lasted from May to September 2010. New functions had to be quickly programmed and implemented as the date of 1 September once again became of crucial importance.

Who are the system users?

 The Microsoft Dynamics AX Management System works with the other systems in place at Südzucker: the production and SharePoint system that includes amongst others documentation workflow, HR management, car fleet management, phone management, etc. All sugar factories have access only to data that concerns them.

The AX system is currently used by the Sales, Purchases, Warehouse, Finance and Projects departments. Especially interesting is the application of the Projects module, which is used for budget planning and settlement of singular projects that are not reproducible, such as replacement of part of a technological installation, more substantial renovations or tracking of the effectiveness of various investments, i.e.: new machines.

Implementation benefits

- Above all, we currently have a more stable and effective system and concept of development. We sometimes caused some of the processes to stop working – says Marek Witkowski.have given our organization order. We ultimately designated four key system users with the highest competences. In a certain manner, previous AX versions were an experimental field on which we could learn. We now finally know what we can require and expect from the system. We also eliminated bottlenecks that

Marek Witkowski

IT Director

Südzucker Polska

- Above all, we currently have a more stable and effective system and concept of development. We now finally know what we can require and expect from the system. We also eliminated bottlenecks that sometimes caused some of the processes to stop working. At the same time, we introduced order to our organization.

- We were also able to reduce the number of licenses as we transferred some of the users, especially those using AX rather sporadically, to applications that work with the AX system, i.e.: Portal, SharePoint or OLAP. We currently use 100 licenses with an additional 20 for our suppliers – adds Tomasz Kokoszka.

Microsoft Dynamics AX 4.0 operates in the following areas: Finances, Warehouse, Sales, Purchases and Projects. 120 users have direct access to the system. The remainder use select AX functions (i.e.: viewing or printing reports) through a special portal enabling access to AX by an internet browser. External modules assure IT support for HR and payroll. Moreover, AX 4.0 works with the Warehouse Management System (WMS) which is integrated with mobile bar code readers.

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