MMC Norilsk Nickel, major producer of base, precious and rare earth metals, has completed the implementation of a standardized industry informational system (TOIS) based on SAP solutions. The company has successfully commissioned the system in two Group enterprises – OJSC Polar Construction Co and OJSC Norilsknickelremont, and also said that the system would be implemented in all enterprises of the Norilsk Nickel Group.

The company’s unique geographical position and related specific character of business as well as long-established production, logistics and management processes required careful approach to the development of
corporate standards for SAP implementation. A decision was made to implement the first complex info system in these two subsidiaries.

Taking into account that MMC Norilsk Nickel had used SAP software since 2003 to solve individual business tasks like, for instance, procurement management, one of the main goals of the TOIS project implementation was the development of an optimal template for further distribution throughout the company. Important drivers were also the requirements to increase manageability of individual units and the company in general, identification and distribution of best business processes, increase of planning efficiency and improvement of reporting quality.

TOIS solutions will allow cutting the costs of further distribution of the system, while expanding its area of application. The following SAP solutions were implemented as part of TOIS program:

• SAP FI (Accounts with contractors and staff payments, tax accounting, main funds accounting, bank operations, reporting)
• SAP CO (Cost planning and accounting by cost types; planning and accounting with the breakdown by cost-generating items, profit-generating items;  internal orders)
• SAP SD (Orders, client offers, shipping, invoicing, general logistics)
• SAP IM-PS (Planning of capital construction and capital repairs projects)
• SAP  (Material requirements planning, purchases, inventory management and invoice registration)
• SAP BW (Flexible analytic reporting).

Phased implementation of the project took 19 months. In January 2008 full-scale production tests were started in the enterprises of Norilsk Nickel group: OJSC Polar Construction Co and OJSC Norilsknickelremont.  Over that period TOIS functionality was expanded and system reliability checked.

As the result of the implementation and launch of TOIS, annual reporting preparation terms were reduced; standard solutions were developed, making possible further efficient distribution throughout the company. Currently, about 1500 employees use the system.

“By implementing SAP products in our company, we solve a number of tasks including the use (where possible) of the valuable experience in business management accumulated by global industry leaders, while maintaining investments in earlier implemented projects and purchased SAP software. We believe that by implementing this system at our enterprises, we will significantly improve operational efficiency, transparency, manageability and as a result, total efficiency of our processes,” said Gennady Bauman, Director IT of MMC Norilsk Nickel.

“In the first place, the implementation of a system of SAP ERP caliber will influence the structure and logic of main internal business processes. We are positive that these solutions will in future allow the management of such a successful company as MMC Norilsk Nickel to significantly improve manageability, which will have a positive effect on employees, shareholders and investors”, said Deputy General Director of SAP CIS, Roman Zhuravlev.