Billions of Balloons in SAP
Belbal: SAP SPRINT ERP implementation
Dynamic development and a long-term strategy aiming at further expansion are the main drivers for implementing an integrated management system in Belbal, a leader in the manufacturing of balloons. The condition was to launch a tried and tested solution in a short timeframe to get a quick return on the investment. The company 7milowy, offering the SAP SPRINT ERP solution, came to fulfil Belbal’s expectations.
Belbal’s (MBF) plant in Tczew produces about half a billion balloons per year, in a broad range of colours and sizes. Belbal’s balloons decorate family celebrations, add colour to anniversaries, galas and sports events, and promote popular supermarket and restaurant chains. They are valued for their high quality, interesting design, their broad range of options, and meeting requirements of demanding clients worldwide.
The need to implement a tool for comprehensive management of the company, as well as improving the efficiency of the process of organising production and distribution are the main reasons for implementing an integrated system. 7milowy, offering SAP SPRINT ERP – the most popular SAP Business All-in-One solution in Poland – was selected.
The implementation project started in July 2011 and after a mere six months – in January 2012 – the system was launched into production.
The scope of implementation of SAP SPRINT ERP in Belbal included the following areas:
- Financial accounting (SAP FI),
- Fixed assets accounting (FI-AA),
- Financial liquidity management (SAP TR),
- Controlling (SAP CO),
- Sales and distribution (SAP SD),
- Materials management and purchasing (SAP MM),
- Production planning (SAP PP).
The system is used by over 30 of the company’s employees.
SAP FI versus outsourced accounting
The standard scope of functionalities was implemented in the finance area, allowing for full bookkeeping of economic events (chart of accounts, drawing up financial reports for statutory purposes, managing settlements, managing till and bank accounts).
It is worth mentioning that Belbal has no finance/accounting department in its organisational structure. Those processes are outsourced to a specialised company. The basic benefit of such a model is a significant reduction in the costs associated with that area and eliminating issues related to organising the operations of accounting (cost of jobs, maintaining a relevant level of skills, training, ensuring stand-in employees etc.).
The business assumption from the outset of the project was that implementing SAP FI should not require any organisational changes in that area. Belbal acquired a separate SAP license for the needs of its accounting services provider, which allowed for the inclusion of this third party in the scope of the system’s operation. Employees of the accounting firm were provided with SAP FI module training and, since the production launch of the system, they have been performing the same scope of finance/accounting services, but using the new tool.
The implemented SAP controlling tools support recording, planning, settlement and analysis of costs and income in the company for management purposes.
Apart from the standard SAP CO tools, the company’s needs are supported by a report for the Belgian owner specially developed by 7milowy’s consultants, making it easier to analyse the distribution processes. Belbal Polska uses two main distribution channels: the company conducts active sales domestically and internationally; additionally, the Belgian parent company is a significant buyer, with its own sales channels. The report collects information on the individual amounts sent to the Belgian parent. Feeding that data to the system operated in Belgium allows significant simplification of the process of accepting goods at the warehouse. The process is implemented in logistics modules of SAP.
Production – printing – packing
The production of balloons is quite a specific and varied process consisting of three basic steps: balloon production, printing and packing. In addition to the basic functionalities for production management, at each of these steps the implemented system had to be adjusted to the requirements of the company, including the expectations regarding the monitoring of quality and labor productivity parameters.
For purposes of quality monitoring in the SAP system, a number of the production process flow parameters (such as a detailed breakdown of temperature, humidity or frequency of specific technological operations) is recorded. 7milowy developed a dedicated transaction to facilitate the entry and detailed recording of large amounts of data, integrated with the standard process of production confirmation and consumption of materials.
As a result, with no significant interference with the SPRINT solution standard, on the one hand, it is possible to record industry-specific parameters and events, on the other hand – the system is fed with all the information necessary for the proper production accounting. The data collected in the database enables the analysis of the influence of the production process flow on manufacturing costs. In addition, information about the tasks and activities of individual employees is collected. These enhanced performance and quality parameters are used in the bonus system, among other places.
Every day, millions of produced balloons (in many sizes, colors and production batches) are recorded in the system. For rational reasons, the receipt unit is a kilogram. Ultimately, however, the settlement of the demonstrated inventory must be based on an item, which is a trading unit. In such situations, even with the most accurate weighing devices, switching to a different unit results in differences (the so-called remainders) – often very small ones, but from the point of view of the program algorithm they are always important to be disclosed. For obvious reasons, no roundings are allowed in the inventory turnover. Therefore, the solution has been prepared to enable the quick settlement of inventory in accordance with the actual quantities, while maintaining the consistency of operations in financial and accounting terms.
Additional prints are made on a significant portion of Belbal balloons. These are both one- and multicolor, occasional, advertising prints, for example ordered by large chains of stores and restaurants, or for promotional campaigns of various companies.
It is interesting that prints are made on inflated balloons! The production process at this stage is subject to a thorough inspection and its results are recorded in the system. For this purpose, additional mechanisms to support the monitoring of the amounts of scrap generated in the subsequent operations performed in the printing department were developed. The specification also enables the creation of employee-related statistics, allowing for the evaluation of labor productivity.
The final stage of the production process is packaging. A large variety of packaging designs is typical for this industry. They are both large packages of homogeneous products (e.g. 500, 1000 items), as well as smaller packages with a diverse range of products, intended primarily for sales in retail chains (e.g. 3 multi-color balloons with various prints for special occasions). As a result, the number of indexes of finished products – corresponding to a combination of a size, a color, a print design and a packaging method – reaches the level of a few thousand and is still growing.
Some packaging (this applies especially to large packages of homogeneous products) takes place in the plant, while the preparation of smaller, diversified packages according to specific guidelines is subcontracted. The SAP system provides the support of this process, including the settlement of provided materials and the recording of the amount and quality of work. On this basis, the rates for subcontractors are also calculated. All of the processes were modeled using standard functionalities offered in the SPRINT package.
According to European Union law, balloons are classified as toys and, because of that, are subject to specific rules on safety and certificates of approval applicable in that industry sector. One of such requirements is the ability to identify and withdraw the lot in which a product was released. The requirement of tracking a production lot is related to the need to ensure an indication can be made as to when (and of which raw material) a given product was made, where it was sent, and where it currently is.
Management of this process in SAP SPRINT ERP and experience in this regard were one of the main criteria for selecting 7milowy as the system provider.
Warehouse and sales
The work of the warehouse is supported by the functionalities available in the module for materials management and purchasing of the SAP SPRINT ERP solution. In addition, the solutions that enable the use of barcodes and wireless scanning terminals were implemented during the project. For this purpose, the processes such as intra-warehouse transfers and external issues were simplified and adapted to handle terminal transactions.
The SD module made the sales and invoicing process easy and pleasant. Each customer and product is assigned sales and pricing conditions. The successful preparation of price lists with such a diverse range of products was enabled by the so-called product hierarchy. The order processing method was simplified. At the same time, the ease of tracking the whole path of a product improves and accelerates the distribution planning and setting of priorities.
The SD module solutions allow also for quick analyses of the sales quantity and value oriented on a distribution channel, a customer as well as a specific product. A combination of the MM and SD modules enables a very helpful analysis of costs.
As pointed out by Mirosław Ciapalski, Managing Director, Belbal Poland: "During the partner selection process, the comprehensiveness of the offer was also important. 7milowy proved to be the optimal partner – it provided licenses for the system, implemented it, trained users, and took care of the technical facilities required for the installation of SAP."
A strategic decision connected with the selection of the system provider was also a choice of the system maintenance model. 7milowy is a member of the BCC Group, which offers a full range of IT/SAP outsourcing services. Belbal decided for full outsourcing – hosting and administration of the SAP SPRINT ERP is provided by the BCC Group Outsourcing Center. The user support is, in turn, a responsibility of 7milowy.
The main task of 7milowy consultants is a remote support of Belbal employees in everyday operation of the SAP system. The application support service covers all areas of the system implemented in the company: financial accounting, controlling, materials management, sales and distribution, and production planning. Under the signed agreement, 7milowy provides also system development and organization of comprehensive SAP training.
7milowy proved to be the optimal partner – it provided licenses for the system, implemented it, trained users, and took care of the technical facilities required for the installation of SAP
Quality parameters in the system
Belbal requirements related to quality control at every stage of production, as well as a considerable degree of dependence of the bonus system on the performance and quality of work during the SAP SPRINT ERP implementation project resulted in the need to record a large amount of master data in the system. Together with several system extensions that were developed, this allows for precise tracking of quality parameters at each stage of production, and assignment of individual activities in the process to employees.
Additional work required by the customer did not affect the duration of the project significantly. The system – implemented with the full functional scope available in SAP SPRINT ERP – was launched after just six months.
Belbal Polska (MBF Sp. z o.o.) is a European leader in the production and printing of high-quality latex balloons. It belongs to the Belbal Group, for which it is the main manufacturer. The company provides direct services in eight countries and exports products to 60 countries on all continents. It employs over 200 people. More information: www.belbal.pl