Customer Information

Qilianshan Cement Group is a listed company established by restructuring the main state-owned large backbone enterprise Yongdeng Cement Plant, which is the largest cement enterprise in Gansu Province and the special cement production base in Northwest China. At present, the Group has six production bases, five sales branches, one grinding station and two mixing stations, mainly including six production bases in Yongdeng, Honggu, Minhe of Qinghai Province, Wushan of Tianshui, Gangu and Pingliang; five sales branches in Lhasa, Xining, Tianshui, Lanzhou and Wuwei, and a number of subsidiaries distributed in different regions, such as Yonggu grinding station and Hanbang concrete mixing station. The annual production capacity of cement is 6.8 million tons, and the annual production capacity of commercial concrete is 500,000 square meters.

Project Background

In order to further improve the management level and comprehensive competitiveness of the enterprise, the company signed a cooperation framework agreement with Microsoft (China) Ltd. and Construction Materials Industry Information Center to jointly develop a Microsoft ERP solution for cement enterprises. It was decided to develop a set of enterprise resource planning (ERP) solutions suitable for the characteristics of cement industry based on Microsoft Dynamics AX platform and the ERP solutions for cement enterprises developed by Construction Materials Industry Information Center, to further strengthen internal control, improve execution and enhance the management level of the company.

Business Income

Weighing management, sales management, shipping management, purchasing management, delta trade, payable management, receivable management, inventory management, general ledger management and other functional modules to complete cost accounting and system accounting.

Customer Feedback

"To accelerate the process of ERP construction, the company has achieved the stage results of the construction of ERP management system, on this basis to further optimize the process, as soon as possible to develop human resources, office automation and other modules to improve the overall management level, the successful implementation of Microsoft ERP is very significant. The successful implementation of Microsoft ERP is very significant. It closely integrates the enterprise's people, finance, materials, production, supply, marketing and the corresponding logistics, information flow, capital flow, etc. to achieve resource optimization and sharing, greatly enhancing the company's management capabilities and work efficiency, greatly improving the enterprise's core competitiveness, and laying a solid foundation for Qilianshan Cement's future high-speed development."

--De Li Cheng, Chairman of Qilianshan Cement Co.

Solution

Qilianshan Cement Group uses Microsoft Dynamics AX for group procurement management, intra-group triangular trade management, weighbridge management, sales and shipping management, payable management, receivable management, inventory management, general ledger management, asset management and other functional modules to complete cost accounting and system accounting group finance, internal company transactions, etc.

Group Procurement Management

Procurement mode:

A. For the procurement of bulk raw materials, the group unified bidding for procurement, signing contracts, according to the annual demand of each base to issue procurement plans, while each base to create purchase orders to suppliers for procurement and independent settlement.

B. The group makes purchase according to the demand provided by the bases and the centralized procurement center makes settlement and payment, that is to say, the group procurement center unifies the purchase settlement.

Group sales mode:

A. The group sales center makes purchases of cement products from each base and sells them to the final customer. The group sales center makes purchase settlements to the production bases and sales settlements to the customers, of which the group deducts a certain percentage of profit, generating two sales orders and one purchase order during this period.

B. The sales company of the group first purchases from the production base through inter-company transactions, and the sales company and the production base settle internally; the sales company sells directly to the customer, and settles and collects from the customer. The following two diagrams show:

Advantages:

Automatic processing of internal transactions and reduction of reconciliation: With the trend of group development of cement enterprises intensifying, group enterprises have a large number of internal transactions to be processed. ERP system for cement industry can realize automatic processing of internal transactions, save a lot of time for account processing, improve the efficiency of financial staff and reduce the error rate.

Weighing Management

1. car purchase weighing process 2. car sales and shipping weighing process 3. train sales and shipping weighing process

Support functions:

- Vehicle driver management: vehicle type, vehicle number, load capacity, registered load capacity, basic driver profile, etc..

- Carrier management.

- Integration with purchase orders sales orders.

- Overweight data replenishment function.

- Non-order weighing business functions.

- Sales operations bagged cement and bulk cement error handling function.

- Raw fuel water deduction function.

- Authorized data correction function.

- Raw fuel incoming summary and breakdown tables.

Advantages:

1) The procurement of bulk raw materials and the sales and shipping of products are the "two gateways" of cement enterprises, and a good management of the two gateways will greatly reduce the possible losses. On the other hand, adopting the weighing management sub-system integrated in ERP system can reduce the generation of information silos.

2) Integration of weighing system with other subsystems: The basic information of material information, product information, supplier information, customer information, etc. involved in weighing subsystem need not be maintained separately, but read directly from the basic master file; the weighing quantity of weighing subsystem will be used as the actual quantity of purchase inbound and sales outbound, which will be reflected to the purchase/payable and sales/receivable modules without secondary entry.

3) Unit conversion and error checking: The system can convert the weight of the weighed material directly into other units according to the conversion relationship of the weighed material. The number of tons of bagged cement can be directly converted to the number of bags of cement, which is convenient for the warehouse and finance departments to check and verify. Consider the error of weighing scales when converting, set the over-range to prevent losses.

4) Close connection with sales and shipping: Most of the cement companies require weighing of finished products from the factory, which requires the weighing system to be closely connected with sales and shipping. The weighing system supports two shipping modes: one is that the vehicle first weighs the tare weight, then opens the bill of lading, and weighs the gross weight after loading; the other case is that the driver first opens the bill of lading, then weighs the tare weight, and loads the vehicle to weigh the gross weight.

5) Function of anti-cheating: Through the connection of the system with hardware systems such as infrared or video monitoring, multiple anti-cheating measures are realized.

Shipping Management

Support functions:

-Car and train shipment plan

- Credit Line Management

Advantages:

1) Shipping management and sales, weighing management module integration design, to ensure smooth flow of data information in a system, to eliminate the system outside the forged or counterfeit bill of lading, to avoid corporate losses.

2) Vehicle file management: In order to better manage vehicles and prevent individual carriers from modifying vehicles to cause losses to enterprises, vehicle management is specially added in the system. For new vehicles, the relevant information of the vehicle will be automatically saved according to the vehicle number entered, such as vehicle plate number, tare weight, etc. When the vehicle is weighed again, the saved information will be used for calibration and will prompt alarm information. In order to facilitate the operation of the scale operator, the vehicle code can be set in advance, and the complete vehicle plate number can be brought out by simply entering the code when inputting.

3) Customer credit limit control: Shipping management can check the credit limit and balance of customers, and the system will pop up warning messages for customers who do not meet the requirements, while not allowing the creation of bills of lading.

Inventory Management

Manage or control company resources such as raw fuels, raw materials, clinker, tools, accessories, packages and accessories, pyrotechnic products and other system methods and tools. It helps company to quickly identify problems in inventory management and improve them; and to design and establish a complete set of inventory management processes so as to increase inventory turnover, reduce working capital tied up, turn frozen assets into cash, and reduce additional costs due to inventory obsolescence.

Purchasing/Payable Management

It realizes the management of procurement process, supplier management, inventory transaction processing of all kinds of non-production materials such as raw fuel and production auxiliary materials, as well as new fixed assets, transportation materials, office supplies, and other non-production materials, and supports the management content of material base data and material classification definition of the whole logistics system.

• Requisition management

The general management mode of cement enterprises is that other than the primary fuel bulk materials, other auxiliary materials, spare parts, etc. need to be requisitioned by the use of the department. Firstly, the user department can check the existing quantity of materials they need through the inventory inquiry function, and if they can meet the requirements, they can create a material requisition to enter the material collection process. If the existing amount of inventory cannot be met, a requisition will be created in the system, and the purchasing department will make aggregate purchase after approval. Requisition management supports multi-level approval of requisition; supports application and approval of new material number; supports summary and splitting of requisitioned materials against suppliers; can turn requisition into purchase order to achieve seamless connection with order and receiving management.

Financial Cost Management

- Unified and centralized financial management system

By implementing the core systems of general ledger, receivables, payables, fixed assets and fund management, it supports not only the unified accounting of the cement enterprise as a whole, but also the independent accounting of its subordinate business entities, so that the financial data can accurately, timely and comprehensively reflect the overall status and business execution of the cement enterprise; and realize self-service expense reimbursement.

- Cost Accounting

The cost accounting of a cement enterprise mainly refers to: direct materials such as limestone and clay (sandstone); direct labor such as workers' wages and corresponding welfare costs; and the cost of manufacturing overhead, fuel and power such as coal and electricity carried forward between raw materials, clinker and cement. The collection and accounting of the above cost elements in the ERP system is seamlessly integrated with the business modules. At the same time, the cement industry solution provides a complete cost analysis tool for enterprises: you can analyze the relationship between the costs consumed by the department and the finished product; and also the basic cost components of the finished product, such as: the cost of limestone, labor, electricity, coal consumption and other inputs in cement. The ERP system of cement industry is tailored to the characteristics of cement enterprises for the end of the month inventory processing program. At the end of the month, the user only needs to feedback the inventory of the system cement warehouse, clinker warehouse, raw material warehouse and raw material warehouse. The system will calculate the exact incoming and outgoing quantity of each warehouse in order, and calculate the difference with the daily statistics of incoming and outgoing quantity, and finally, this difference will be automatically apportioned to the monthly production orders.

- Group Financial Management

The solution in cement industry solves the problem of multi-level accounting in the group by means of company + dimension. Firstly, we create separate sets of accounts for independent accounting companies (including group headquarters) and establish a parent-child relationship between companies. Secondly, create dimensional values for each department or accounting point under each independent accounting company, and establish hierarchical relationships between the dimensional values. Finally, create a consolidation suite of accounts specifically for consolidation purposes. Internal consolidation statements are created for each internal dimension level in the separate accounting company, and overall consolidation statements for the group are created in the consolidation company's suite of accounts. Both internal and overall consolidated reports can be set up for various purposes and perspectives, rather than being limited to four financial statements. The cement industry solution enables online consolidation in the system at any time, while providing access to data at any level of accounting within the group.

Mixing Plant Formula Management

After a concrete mixing plant receives a sales order, it can set the formula of concrete according to the data requested by the customer on the sales order. The recipe contains technical parameters such as concrete grade, aggregate, admixture, collapse degree, etc. The recipe can directly react to the production order corresponding to the sales order, and the production controller can get the content of the recipe at the first time.

Business Benefits

Qilianshan Cement Group underwent an upgrade of its ERP system in the second half of 2007. The company's financial, purchasing, sales, warehouse and storage, shipping and quality management work procedures were incorporated into the information system, the company's office automation system and dispatch management information system were improved, business process transformation was implemented to achieve the integration of corporate finance and business operations, the business processes of business operations were standardized, and information data from all branches were integrated; network resources were further built to improve the integration of management information data, the accuracy and processing response speed of management information data.

Degree of Benefits

- Increased accuracy and timeliness of financial reporting data to 99%.

- Reduction of the time for making quality statements to 1/8 of the original.

- Production time of financial statements reduced by almost 50%.

- Richer types of reports and more diverse dimensions of data analysis.

Summary

Seventeen companies under Qilianshan Cement Group were successfully launched simultaneously. The scope of implementation includes group finance, sales, logistics, transportation, inventory, production, procurement, financial business integration, production costs, group consolidated statements, etc.