Myllykoski’s SAP well under control
Myllykoski Group’s CIO, Vesa Erolainen, is proud of how well the international paper manufacturer’s SAP project has progressed in the company's seven factories in Finland, Germany and North America.
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Tieto’s Risto Poutiainen, Myllykoski's Vesa Erolainen |
“We are at a very good stage because the implementation is complete and now it is time to redeem planned benefits.
On the other hand, the real work only starts when we begin utilising SAP for business models and management.”
According to Erolainen, it is an operational prerequisite that the data produced by SAP can first be converted into information and then into competitive competencies.
Tieto has been involved in Myllykoski's five-year SAP project at several different stages: it has transferred the paper factories’ material management and maintenance management onto the new, centralised ERP system and integrated the German factories’ systems into it.
Tieto’s mill system TIPS (Tieto Integrated Paper Solution) has been operating in Myllykoski’s German factories for a decade.
The project stayed well under control
“When a company changes its business strategy from decentralised to centralised, the systems have to go along with the change. Previously, we had five regional systems; now we only have one: SAP,” says Erolainen.
The CIOcringes at the old platitudes about system projects always being late or invariably exceeding budgets.
“Budget overruns are often caused by the company not knowing in the initial phase what their want the project outcome to be. The project easily gets out of control if many individual tunings are included during the course of the project.”
Tieto became involved in Myllykoski's SAP project in late 2007.
“We stayed on schedule and kept to our cost estimates. The proposal and the basic work stood out positively from the competitors,” says Erolainen.
One mill at a time
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Myllykoski Group implemented the critical sections |
The material procurement SAP project, which Tieto was responsible for, was implemented one mill at a time. “In addition, Tieto was responsible for the standardisation of the German mills’ systems. Previously it was thought that there must be an individual mill system connected to every paper machine. We changed the service concept – now, two mills are attached to one German system and three mills to another. In our view, this is cost-efficient and makes sense.”
SAP’s critical sections, financial management and supply chain management, were taken into the new system with the big bang principle: all the mills and all the markets at the same time.
“The big bang implementation was not painless, but in retrospect, it was worth it,” states Erolainen.
Change management – specifically, the human mind adapting to a new ERP system – will take its time. We are heading in the right direction now.
SAP expanding outside the factory
Tieto is the world’s leading supplier of forest industry information technology solutions and services.
Ari Vanhanen, Head of Industry Group at Tieto, says that in today’s SAP projects, the system must be integrated into the surrounding world, such as suppliers and customers.
“Increasingly, information technology is being looked at to bring benefits to business operations, to the management of the supply chain and the integration of the ecosystem servicing it.”
Timing of investments difficult
Myllykoski lives off magazine paper, which accounts for 88 per cent of the Group’s production.
The forest industry market situation is totally dependent on economic cycles. On the other hand, the industry should be able to make long-term investments at the right time. “ The timing of investments is a very difficult matter. It is reflected in all business projects, in which we also include IT projects.”
The company’s strength is in its entrepreneurial spirit. “As a family company we are fast, agile and customer-oriented,” says Erolainen.
