How automation helped the Lviv Company with a history of a century and a half
Lviv Locomotive Repair Plant (LLRZ) – one of the oldest enterprises in Ukraine – was considered a strategically important object of the state since the times of the Austro-Hungarian Empire, is so and now
The first repair shops for locomotives were built in Lviv in 1861. The plant was twice destroyed during the First and Second World Wars and was rebuilt twice. Subsequently, LRRZ appeared on this base, which for all these years has never changed its profile. Yes, it is not necessary. The demand for the services of the enterprise is great today.
But here’s what the Lviv plant had to do in the struggle for efficiency, so it’s to introduce an automated management system. The result did not take long to wait: today, LRRZ services were interested not only in Ukrzaliznytsia, but also in the world engineering grants.
Locomotives for Ukraine
The work of the Lviv plant is extremely important for the operation of the Ukrainian railway. The main customer for LRRZ is Ukrzaliznytsya – today it badly needs to update the rolling stock, which is worn out by 90%. Here, LRRZ comes to the rescue, which repairs and modernizes electric locomotives of the VL series, traction engines of locomotives and wheel pairs of trains
It is advantageous for the railway to repair locomotives in Lviv, and not to buy new ones. Here, the figures speak for themselves: a new locomotive of Ukrainian production today costs about 100 million UAH, and a major overhaul, which extends the life of the car for 15 years, is only 5 million UAH.
The beginning of change
But the crisis of 2008 affected both Ukrzaliznytsia and the locomotive repair plant. In order to survive, the plant had to dramatically improve its efficiency, and in 2009, at the height of the crisis, a new team of managers came to Lviv Locomotive Repair Plant to modernize the enterprise.
The new board decided to automate many functions at once at the plant, implementing the system of planning, accounting and analysis of business processes ERP (Enterprise Resource Planning – English.). At LLRZ they say that the idea of automating the work of the plant came when the management studied the foreign experience and the principles of the work of other companies.
Prior to the introduction of ERP, the plant’s work resembled a “black box”
The use of ERP-system is quite common in the West. It allows you to improve the various directions of work of any enterprise, and the point about the implementation of ERP can be found in the strategy of even such a giant as Ukrzaliznytsya. To develop ERP, the Ukrainian company IT-Enterprise was invited.
“Before the introduction of ERP, the plant’s operation resembled a” black box “, in which something comes and something comes out, but what happens at each stage of production, the management was difficult to find out,” says Roman Yarema, chairman of the board of LLRZ. Now everything is different.
The most important goal of the new IT system was to make the fast and modern main operation of the plant – repairs. If once the repair plan of each received locomotive was made by the master manually – which node is to be repaired for repair – now the system does this: the program builds a so-called network schedule for each repair. As a result, less time is spent on each repair, and the capacity of the enterprise is higher.
Locomotive must be sent for repair on time – before it goes out of order. The new system makes it possible to predict, much more accurately than before, when this time will come. Precise forecasting of repair work is also necessary for the purchase of components.
Previously, the company compiled voluminous calendar plans on the basis of which it was forecasted how many electric locomotives would be repaired in a year and how much it would take to purchase materials and components for this. However, the error was very high – often bought excess, and for some positions, there was a deficit.
The new system helps to more accurately predict repairs, and therefore, and plan the purchase of components. Only at the expense of reducing warehouse balances, the plant saved about 800 thousand UAN.
Roman Yarema, Chairman of the Board of LRRR, says that automation made impossible the fraud or theft at the plant: “We made our accounting department transparent. If, suppose, some unscrupulous employee decides to write off additional costs at the end of the month for shipped products that did not actually exist, he will not get anything done. All costs are calculated on the basis of primary production documents, which are controlled in our electronic document management system “За счёт уменьшения складских остатков, завод сэкономил около 800 тыс. грн.
Thanks to the automation of accounting, the number of claims of inspection bodies was reduced by 50%. In addition, at LLRZ note that automation of management has allowed to reduce to zero abuses in the personnel sector. Earlier, due to the separate work of personnel officers, there were situations when some employees did not comply with their posts. Now thanks to the automation of the system of selection and evaluation of the work of cadres, these violations are completely eliminated.
If to speak in the dry balance, then the implementation of ERP-system allowed the enterprise to increase its production capacity by 2 times in comparison with the pre-crisis year. At the same time, it was not necessary to purchase new machines and increase staff.
“It was enough to make business processes transparent at the expense of the IT system. The ERP implementation project helped to optimize the management of the enterprise, “say LLRZ.
Modernization of the Lviv plant was noticed both in Ukraine and abroad. Now the world leaders in railway engineering – Bombardier, Alstom and Siemens – are interested in cooperation with LLRZ. In 2016, the Ministry of Infrastructure and Ukrzaliznytsia signed memorandums of cooperation with these companies, after which delegations of machine-building giants visited the plant and discussed the possibility of joint production of traction.
“Today, we are negotiating and, probably, will soon open together with these companies a site for the production of rolling stock based on LRRZ,” Yarema said. Recently, the company of Ferrexpo was also approached to the company in Lviv, and offered LLRZ to repair electric locomotives for Poltava Mining and Processing Plant. However, modernization is far from over, says the chairman of the board of the enterprise: “In this industry we can not say: we have done everything and can rest on our laurels. Modern technologies open unlimited opportunities for development. “