SAP in other companies of Żywiec Group
The first companies now owned by the Żywiec Group started using SAP solutions as early as 1998 (EB –implementation supported by BCC and others). In 2000 BCC also supported starting SAP in the Trade Group (trade-marketing unit of the Żywiec Group).
Next phase started with the preparation to move and adjust to the Żywiec Group units a SAP-based corporate solution with numerous functional developments. The solution already works in the concern that is a majority shareholder in the Żywiec Group.
With this view, at the beginning of 2001, the board of Żywiec Group decided to start the implementation of SAP in the biggest unit, namely in Żywiec Brewery.
The assumption was that the system would be started in a wide range so that the solutions worked out during the implementation in Żywiec Brewery could become a model for all other units of the group and, consequently, to increase the efficiency of the whole Żywiec Group.
The description below presents in detail the project in Żywiec Brewery (it also included Bracki Brewery in Cieszyn and the company Żywiec Trade Holding), as it was interesting both in terms of methods used (using a corporate standard, realized parallel changes in the functioning of business processes), and in the range (very wide functionality, innovative functions like IS-Beverages).
Business objectives of SAP implementation in Żywiec Group and, finally, also in other units of the group, included:
- Including all key company’s areas into one integrated system: finance, logistics, production, plant maintenance. So far production planning and maintenance management have been carried out without the support of an integrated system
- Standardizing of business processes in all units and, consequently, spreading the best solutions worked out on the corporate level (best practices), making management and organization development more efficient (an operational model common for all units), standard reporting and interpreting results
- Standardizing of IT solutions, and consequently reducing use and system development costs (multiple companies use common solutions)
The project was named Copernicus, after a Polish scientist who changed the way of our thinking about rules that drive the universe with his innovative discoveries. In May 2001 the management of the Copernicus project decided to commission the implementation support to BCC.
Tomasz Staszelis, IT director in Żywiec Group in that time and a member of the steering committee of the Copernicus project, said: ‘Success of an IT project of such a wide range depends to a great extent on cooperation between the internal implementation team and a competent external partner. We have chosen BCC because of their experienced team of consultants and our successful, several-year cooperation in some IT projects executed in Żywiec Group’.
Implementation range was defined on the basis of a ‘big bang’ philosophy, namely a simultaneous start of a new system in a very wide functional range. The main advantage of such approach is no transition periods during which temporarily interfaces must function (e.g. between finance area and an external logistics system). Since the very beginning of a new system all the business areas of the company are fully integrated, as they should finally be.
On the other hand, the wider the range the higher involvement of the employees and the board. And then competent support from implementation company becomes all the more important.
Implementation in both breweries (Żywiec i Cieszyn) included the following areas (SAP modules): financial accounting (FI), controlling (CO), treasury (TR), fixed assets accounting (FI-AA), investment management (IM), material management (MM), sales and distribution (SD), production planning (PP) with production planning for process industries (PP-PI), quality management (QM), plant maintenance (PM). In a non-production company, like Żywiec Trade Holding, the above range was also implemented with the exception of production and maintenance.
A vital element of the implemented functionality was an industrial solution for beverages manufacturers: IS-Beverages. It was the first in Poland and one of the first world-wide SAP implementations to use this solution. IS-Beverages includes developed functionalities in calculating the excise tax, planning transport and recording returnable packaging.
SAP implementation in Żywiec Group was planned as a business project, with the view to optimizing the structure and progress of the processes.
The timetable of the project was planned with the consideration for seasonal operations of the breweries.
Summer 2001 was devoted to preparing the project, which was done by IT section of the Żywiec Group, with partial involvement on the part of implementation teams. Between June and August they examined business processes included into corporate standards of the owner of Żywiec Group, selected the processes that needed to be implement in the breweries and defined the degree of their compliance with the Group requirements.
Out of 387 processes describing the operations of a brewery in a standard corporate model, over 330 were included into the defined implementation range.
If there occurred discrepancies between local and standard processes in a corporate model, the standard model was the priority. Only when the operations depended on specific Polish legal requirements, e.g. taxes, or vital requirements of the customers of the Polish companies, it was possible not to follow the corporate model of operations.
The need to consider corporate standards means a bigger challenge for implementation teams. Apart from technical and system layers it is necessary to manage organizational changes. Such approach, however, allows to achieve an ambitious aim of organizational and IT adjustments to the corporate model in a relatively short time within one project.
Thanks to remarkable consistency of the project management the realized solution was to highly compliant with the corporate model. Only 6% processes had to be designed from scratch (as they had no counterparts in the corporate model) and about 20% business scenarios had to have their parameters adjusted without changing vital process elements.
The proper implementation works lasted from September 2001 to February 2002.
In the SAP implementation in Żywiec Breweries the team used SAP methods enriched by experience from implementations in other countries in breweries of the corporation owning Żywiec Group. The tools, specimen and examples of methods, tailored to the characteristics of the industry (e.g. ready scripts for tests in the production module deal with various processes related to brewing beer), enabled to save time and work in consecutive phases of the implementation.
’Besides guaranteeing that the solution complies with corporate standards, the audits had other beneficial effects’. said Tomasz Staszelis. ‘Thanks to regular visits from people not involved in the everyday project works we had an impartial view of the situation and hints as to the areas that should be paid attention to. However, the transfer of knowledge was in both directions, as quite often the breweries of the Żywiec Group were set as an example to companies in other countries and some solutions worked out in the Copernicus project became part of a standard corporate solution’.
For most configuration settings strict coding and recording rules were defined (e.g. numerical ranges). In order to ensure that the rules are not only theoretical, the project was audited on a regular basis by consultants from the corporate headquarters. Besides making a detailed overview of the configuration and documents, the consultants also evaluated project management processes, data migration and the works on local system development.
In the final phase integration tests were of the highest importance. Gradually the tests covered wider and wider functional areas and longer chains of business processes from planning and supply with raw material through production to sale of ready goods.
The last test, so-called ‘stress test’, was done with the participation of about a hundred users who for two days performed operations responding to the tasks they perform every day, at their own work places.
The test helped check the efficiency of the IT infrastructure (servers, LAN and WAN nets) in conditions similar to real load as well as preparation of workstations (PC, printers) and the ability of the users to work independently.
As scheduled, all functionalities of SAP within defined range were started in Żywiec Breweries on 1 March 2002.
The users from the whole country work on one IT system, located in an IT center in Elbląg. The servers are operated on a remote and outsourcing basis, by an external company, while end user support is provided by Help Desk organized by Żywiec Group.
SAP implementation in Żywiec enabled to gain the following profits:
- Implementation of a corporate standard of business processes with special emphasis on adjusting a local organization to common best practices
- obtaining a standard model of recording and reporting business events, within common chart of accounts, a structure of cost centers and other areas of accounting and controlling
- obtaining a homogenous centralized hardware and system platform that finally will cover all units reducing costs of infrastructure maintenance and development
- taking full control over the system by IT team of the Żywiec Group that supports end users and designs further development of functionalities of the system as new business needs arise
On the operational level the profits in everyday work with the new system are the following:
- consistency of data that are entered into the system once, e.g. any material moves related to supply, production and sales are automatically shown in quantity and value records
- the possibility of precise cost evaluation of products and their sales profitability in various market segments
- access to full and up-to-date information about all areas of operation of a company, also those that previously were not supported by IT solutions (e.g. planning maintenance works)
Tomasz Staszelis: „Copernicus is another project in the Żywiec Group confirming that effective IT projects are closely connected to business objectives and are supported by the board and team managers. Business objectives have been achieved thanks to the commitment of all team members who knew that within the implementation they create solutions they would improve the efficiency of their own work which is also reflected in an efficiency of the whole company”.
With BCC support
BCC was a partner of Żywiec IT department in all stages of the project. The participation of BCC consultants was particularly important when checking the corporate SAP concept and configuring the system during the first implementation in Żywiec brewery. Specialists from Żywiec Group, on the other hand, dealt with data migration, system tests, user training, ongoing support, ABAP development.
Ireneusz Kubalewski, IT Director in Żywiec Group, estimates: ‘BCC consultants provided us with expert knowledge on SAP and the specificity of SAP implementations in Polish environment, which was very helpful while adjusting the standard corporate solution. Thanks to knowledge transfer to the employees of Żywiec Group in next stages we could carry out more and more work by ourselves, which resulted in significant cost reduction of all the project’.
Next stages of the project
Starting SAP in Żywiec Brewery in March 2002 marked the start of implementing similar standard solutions that include best corporate business practices in further units of the group.
Therefore in January 2003 the project to move those solutions to the company Trade Group was finished and then similar projects were carried out in other breweries (Leżajsk, Warka, EB, Kujawiak). All the implementations were executed with BCC support.
The SAP roll-out in each unit was a big challenge, as it required close cooperation with a parallel process of companies consolidation, as they were incorporated into Żywiec Group SA along with productive starts of SAP system.
Moreover, incorporating a company into another organization forced many business changes, especially in cooperation with business partners (e.g. taking over previous contracts by a new entity, Żywiec Group SA).
Regardless the changes, in 2004 two other projects were carried out: implementing SAP developments resulting from the accession to the EU and introducing international accounting standards. Merger with Brau Union Polska was another factor making the project more complicated.
SAP system implementations in next Żywiec Group units were all the time audited by corporate consultants. It was evaluated as one of the best organized SAP implementations in Heineken corporation
Ireneusz Kubalewski sums up:
‘BCC consultants provided us with expert knowledge on SAP and the specificity of SAP implementations in Polish environment, which was very helpful while adjusting the standard corporate solution. Thanks to knowledge transfer to the employees of Żywiec Group in next stages we could carry out more and more work by ourselves, which resulted in significant cost reduction of all the project’.
The Żywiec Group is the leader in beer industry, owning over 30% share in the Polish beer market. The group, which is founded on Żywiec Breweries, includes also Elbrewery Co. Ltd., Warka Breweries and Leżajsk Brewery.
The breweries owned by the group produce about a dozen beer brands, the most popular being: Żywiec, Warka Jasne Pełne, Leżajsk Pełne, Warka Strong and Tatra.