Like our health, there are some things we don’t often think about, as long as they are functioning. That goes for plumbing and heating systems and all the pipes, valves and connectors that make them run smoothly. When you turn on a tap or flush the toilet, you simply expect the water to flow and maintain the hygienic environment that is a cornerstone of our modern lives. But what goes on behind the scenes to keep our homes and buildings warm and clean?
Delivering plumbing and heating
SLOVARM a.s., a member of Energy Group specializes in the production of specialty brass and plastic fittings for buildings. It produces all the components needed for central heating and the distribution of air, steam, and hot and cold water. It also has a sleek, modern line of sanitary ceramics. The company, founded in the year 2000 as the successor of Slovenská armatúrka Myjava, is located in Slovakia, right at the center of Europe.
“The reason we decided on a new ERP system was to improve our response time to changing market needs,” said Peter Spak, member of the Supervisory Board of SLOVARM and member of the board of directors of SLOVARM’s parent company, speaking at the SAP Sapphire event in Barcelona. “Although we are a traditional engineering company, we’ve never worked with SAP before. Obviously, we are not IT specialists, so we were looking for a company that covers everything. Being able to access SAP best practices was a key factor.”
SLOVARM’s aim was to switch from reactive to proactive management with a sharp focus on efficiency. The company has two subsidiaries based in Serbia and Belarus, and works closely with partners in Slovakia and the Czech Republic. It exports its products to customers in a variety of industries in 24 countries.
One of the key priorities was to consolidate and simplify processes such as reporting. The other was to gain real-time information on financial and logistics processes across the group. An outdated ERP system meant the company lacked the flexibility to respond proactively. Materials requirement planning was cumbersome, and production planning on spreadsheets resulted in high work-in-progress and inventory levels.
Pioneering change
SLOVARM needed an ERP solution that could be implemented with minimal impact on its already stretched IT resources. That’s why it chose SAP S/4HANA Cloud to optimize production, planning and decision-making.
With the SAP S/4HANA Cloud implementation, SLOVARM achieved significant efficiency gains, enabled innovation and initiated a long-term digitalization process across the entire group. For example, it doubled throughput speed for production programs, achieved a 60% decrease in frozen working capital on work in progress, and increased client deliveries by 30% on existing production capabilities.
“Since we initiated the project, our employees already have a better understanding of how processes are interconnected and how their work affects other areas,” said Spak. “The SAP implementation helped shine a spotlight on those employees who were willing and capable of rising to another level.”
Previously, production, order-to-cash and procure-to-pay processes were separate. These key processes are now fully integrated. Managing the sales forecasts on spreadsheets has been replaced with comprehensive material requirements planning and input-provisioning processes. As a result, inventory levels are down, production is faster, and customer service has improved.
For Spak and the team at SLOVARM, the new technology enables a new approach which impacts the company’s business model.
“We see the new solution as a fundamental innovation in terms of the dimension of change,” Spak explained. “We purposely did not pursue a path of cautious waiting, but decided to take a pioneering step. Ours is the first implementation of SAP S/4HANA CLOUD within the Slovak market.”
Forging ahead
SLOVARM is now ready for thorough standardization and unification of back-office services and reporting. The scope covers all lines of business except professional services and the intent is to roll out the same product to other firms in the group.
“We are building on more than 80 years of tradition in the production of fittings, sanitary equipment and measurement technologies,” said Spak, referring to the company’s origins which date back to the 1930s. “We are now ready for more modern production processes and technologies.”
One of the new additions at SLOVARM includes the expansion of its stainless steel product portfolio. Working with this material which is free of lead means SLOVARM is delivering more environmentally friendly products, while keeping them appropriate for use in the chemical and food industries. By expanding its stainless steel offering, the company is using less brass and plastic and maintaining the same quality which has always been the foundation of its reputation.
With SAP S/4HANA Cloud in place to optimize production, planning and decision-making, the company is all set for the next decades of market leadership in the region.
