At the end of the 19th century August Faller established a small lithographic printing house in the German town of Waldkirch. In the mid-20th century, the company expanded its product range with printed cardboard packaging and in the 1990s, it focused on the market of packaging and packaging materials for the pharmaceutical industry. The decision to specialise hit the bull’s eye. Over the next dozen or so years, the company expanded with several new production plants, initially in Germany, and then also in Denmark. In 2013, another new factory was opened, this time in Łódź.
The Łódź plant produces standard cardboard packaging for the pharmaceutical industry.
In addition to production lines and employees, a modern factory also needs an IT system that supports business operations in key areas and enables the flow of business information for managers at local and central level.
SAP Rollout to Łódź
As part of the project to unify business processes, in Faller Packaging a project of rolling out a corporate SAP ERP ECC solution from the German headquarters to the plant in Łódź was implemented. The project work was carried out from March to December 2017. The go-live took place in early November 2017.
The scope of the project covered the following areas: finance and controlling, materials management, sales and distribution, production planning, as well as Advanced Planning and Optimization (APO) and Manufacturing Integration and Intelligence (MII).
The organisation and implementation of the project was the responsibility of the IT department of Faller Packaging headquarters in Germany. In the case of PP, APO and MII modules, Faller Packaging employees carried out the implementation on their own. However, for the FI/CO, MM and SD areas it was decided to use the support of SNP Poland (formerly BCC).
This division of tasks between the company’s employees and Polish SNP consultants is quite characteristic for SAP rollouts. Even companies that have their own extensive system competence usually decide to engage a partner with experience in SAP implementation in Poland. This is due to the strong correlation of FI, MM and SD areas with legal regulations, which are quite complex in Poland (e.g. settlements with tax authorities, reporting and accounting rules and requirements).
The project support provided by SNP Poland to Faller Packaging Polska consisted mainly in adjusting the system in the finance and controlling, materials management, sales and distribution areas to Polish law (e.g. fixed assets, integration with banks, a special economic zone, parallel postings, intrastat reporting). The quick adaptation of the rolled-out system to the financial and accounting legislation in force in Poland was possible thanks to the experience gained by SNP consultants in over a hundred similar rollout projects. Their work was positively verified by the first postings and month-end closing processes carried out in SAP. SNP also supported the customer in carrying out data migration to the new system.
Integration within the group
The decision to implement SAP ERP at our plant was one of the most important moments in the development of Faller Packaging Łódź.
Our goal was to integrate the SAP system, which had already been used within the group for several years. It was equally important to do it on time and in a way that would not disturb the continuity of our production. Thanks to the full professionalism and commitment of the whole project team, we managed to achieve the assumed goals in 100%.
In hindsight, I can say that the implementation of SAP ERP has significantly supported our decision-making processes, providing us with better and faster access to information from such important areas as finance, production, materials or sales management.
With the implementation of SAP, we have become an integral part of the whole group.
The ability to generate and then analyse consistent data in a comprehensive way has contributed to greater planning flexibility not only at our plant but also at the level of the entire Faller Packaging.
The new tools have also allowed us to expand controlling and optimally adapt it to the corporate reporting model. During the rollout, SNP Poland consultants very efficiently and professionally supported our project team in adapting the SAP system to the requirements of Polish law, especially in such demanding areas as finance and accounting.
Ilona Wzgarda, Managing Director Administration and Business, Faller Packaging Polska
Fit & Gap Analysis
The project work was preceded by a fit & gap analysis performed in January 2017. This type of analysis is a standard element of SNP’s Go Forward methodology for SAP rollout projects.
The aim of the analysis is to find a balance between the best fit of a local company to corporate processes and the best possible identification of the gaps occurring locally and taking them into account.
Usually, the head office aims to unify processes according to the best practices applied in the organisation and implemented in the system template. Gaps may result from legal conditions (then their implementation is obligatory) or may be a consequence of business processes used locally and not included in the central template. In this case, it is necessary to decide whether a given process should be implemented in the system or supported in an external system, or whether an organsational change should be made to eliminate this process. A reliably conducted fit & gap analysis enables the optimisation of the system implementation process and, consequently, its costs.
Knowledge transfer and communication
Another element of the Go Forward methodology used in the project was the introductory training. For many employees of the Łódź factory, future users of the SAP system, the rollout project was the first contact with the ERP system. The introduction to the terminology and navigation in the system allowed the employees to smoothly move on to the project tasks, understand the essence of the work being carried out, expectations towards them at particular stages of the project, as well as the way of working with SAP – both from the perspective of the position held and the whole company.
The training was conducted in Polish. Enabling contact with SAP consultants in their native language is one of the important and often underestimated aspects of projects conducted in companies in different countries.
The high professional level of the project participants, the consultants’ experience in their areas and the use of SNP project best practices, including a strong emphasis on effective communication of all project participants, contributed to the completion of the work within the budget and schedule.
Reasonable scope, team performance
The implementation of SAP at our site in Łódź was a very intensive and successful nine months project. Right from the beginning, we defined two key success factors. The first one was the rollout scope. This meant that we had to limit enhancements and the implementation of new functionalities to a minimum. The second factor was team performance. With the rollout scope, the main task was the training and qualification of the key users and employees in Łódź. Therefore, we focused a lot on team building activities for the project team to bring and keep the team on a high-performance level.
As we had been using SAP already for some years within our organisation, we had a lot of internal know-how when it came to process understanding, appropriate data setup, data migration and customising. However, we lacked the experience of legal requirements and the appropriate SAP setups to fulfil them regarding Polish regulations. That is exactly where SNP supported us with their experience and know-how. The project was structured in five work-packages that all – as we strongly focused on the two key success factors above – perfectly linked into each other as we executed them: Fit & Gap data and process analysis, key user qualification and training, end-to-end tests, data migration and finally go-live preparation and execution.
Looking back what stayed in mind when thinking about the project: the go-live days. Even though we had everything well prepared and tested we were facing several problems on the first day, but the project team was always able to identify and solve problems before they affected our production. I will always remember that great atmosphere in the project room in Łódź.
Nils Hoepker, Head of Logistic & Demand Management, Faller Packaging
Outside the SAP standard
SNP Poland offers several of ready-made products extending the standard of SAP systems and enabling their adaptation – including corporate templates – to current legal regulations in Poland. One of them is the Standard Audit File in SAP (SNP JPK).
Proven in over 150 companies, the solution preparing the SAP system for generating tax and accounting data in accordance with current regulations (JPK V7M/JPK VDEK structure) was also implemented in Faller Packaging.
An additional value is the solution maintenance provided by the manufacturer, including free updates and new versions of the application, considering changes in law.
August Faller GmbH & Co. KG is one of the European leaders in the pharmaceutical packaging industry. At four plants in Germany, one in Denmark, Hungary and one in Poland, it produces 2.5 billion printed boxes, 1.0 billion package leaflets, 1.0 billion self-adhesive labels and multi-part products annually. Faller Packaging also offers a service of developing products that consider individual customer needs. Its services for the pharmaceutical industry include logistics services, packaging and delivery of supply chain systems. The company employs over 1,300 people, including nearly 200 in the production plant in Łódź.