Ferroni LLC

Ferroni LLC is the largest manufacturer of metal entrance doors in Europe. With over 15 years in the market, the company operates 3 manufacturing plants and employs more than 5,000 people. It has over 25 offices across Russia and exports its products to 42 countries worldwide.

In 2019, the company initiated a digital transformation to expand its international business and enhance e-commerce operations. At that time, the company operated 2 plants and 30 regional warehouses, already trading internationally and planning further expansion. 
 
The third newly built plant in Tolyatti, which was central to their expansion strategy, was ready to begin its operations. It was set to be powered by SAP solutions, and the implementation was entrusted to TeamIdea Group.



The goal was to ensure that no more than 2 weeks would pass between goods arriving at the warehouse and their sale. 

“We aim to reduce the overall imports of doors into Russia by more than $23.08 million per year while increasing export volumes from $15.38 million to $123.08 million, thanks to the additional capacity in Tolyatti, which will be producing between 1.5 and 2 million doors annually. Our key focus is on improving demand forecasting accuracy and inventory turnover.” 
Ferroni’s Annual Report, 2019

Ferroni’s top management planned that this approach would reduce their need for borrowed funds, lower component stock levels, and minimize the risk of dead stock. 

Additionally, Ferroni planned to expand its network of warehouses from 30 to 150 by 2025. Thus, the company wanted to achieve full visibility into the warehouse operations and inventory.  


Ferroni’s Annual Report, 2019 

Project Scope: 

Geographic Coverage: 3 manufacturing plants, 1 trading company, 20 branches.
Customer’s Product Portfolio: 5,000 active SKUs, 5 sales channels, over 10,000 customers.
IT Solutions: Implementation of SAP S/4HANA, SAP EWM, SAP TM, SAP IBP, SAP FSM, SAP Sales & Service Cloud, and SAP C4C.
Project Start: 2019
Duration: 12 months

Functional Scope: 

• Implementation of end-to-end business processes based on SAP S/4HANA best practices .
• SAP S/4HANA modules: Financial Accounting (FI), Asset Accounting (FI-AA), Fund Management (FI-FM), Controlling (CO), Sales and Distribution (SD), Materials Management (MM), and Production Planning (PP)..
• To increase the efficiency of sales planning by balancing plans with production capacity constraints, optimizing supply planning, and managing safety stock levels.
• To streamline production planning using a mixed strategy (MTO/MTS) that accommodates various manufacturing methods and product characteristics.
• To digitize warehouse processes and transportation management by implementing SAP EWM and SAP TM for greater efficiency.
• To improve the management of lead generation, sales, contracts, and service orders.
• To enable effective management of service specialists through a mobile application.

Project Results:

KPIs achieved in numbers 

Ferroni increased turnover for imported components from 3 months to 1 month, and for domestic raw materials – from 1 month to 2 weeks. 
The optimal routing of deliveries and accurate cost calculations allowed to reduce transportation costs by 5%. 

The order return rate from the SAP-managed Tolyatti plant was 34% lower compared to other production sites. 

With the implementation of SAP S/4HANA, a process for tracking warehouse inventory was established, allowing for a 50% reduction in stock levels. The movement of material and technical resources is controlled in real-time. 

The system allows to calculate the actual cost of produced goods, monitor contract fulfillment and analyze warehouse capacity utilization. The workload on personnel involved in order processing has also been reduced by 50%. 

Company management now makes decisions based on transparent, integrated information across key business processes. They can create a production program and evaluate the execution of plans for any given period. 

The successful completion of the initial stages of the digital transformation program has enabled Ferroni to begin implementing other SAP systems aimed at increasing customer loyalty and boosting online sales. 

Moreover, the company's image of being among the pioneers of digital transformation has enhanced its attractiveness as an employer and improved its credit rating.


Ferroni's 2021 Annual Report.

All of these developments together contribute to higher service levels and increased customer satisfaction. This, in turn, allows Ferroni to invest more resources into business development, expanding its product line globally.

Testimonials

"The SAP platform has allowed us to create a new transparent management system based on the best global practices, shift our focus to customer-centric operations, reduce production costs, and unlock new growth opportunities. 

We are already seeing positive changes in achieving our strategic goals, including increasing our market share globally. Moreover, the implementation of SAP technologies has accelerated the time-to-market for new models. We will continue to build our target IT architecture based on the landscape and broad capabilities of SAP products," said Marina Pavlova, General Director of Ferroni LLC.

"Ferroni’s example clearly demonstrates how comprehensive IT transformation and a holistic approach to enterprise operations can elevate business to a new level. It is difficult to execute large-scale strategic plans without a clear understanding of how all processes work. 

A unified IT landscape, the ability to quickly implement innovative technologies, and mature business processes create the necessary infrastructure to maintain high market positions and remain competitive," noted Alexander Metechko, Managing Director of SAP for Partner Engagements and Rapidly Growing Companies in Russia and the CIS.

Awards and Recognition

The project of digital transformation by Ferroni and by TeamIdea was awarded at the SAP Value Award 2021 with Silver in the category of "Digital Transformation Leader".  

This nomination recognizes projects of IT implementation that have demonstrated recognized and proven value. Cases when the transformation of business processes significantly improves both quantitative and qualitative KPIs of a company and allows it to reach a fundamentally new level of business operations.  

Ferroni was also listed among the top 50 companies in the CIS demonstrating rapidly growing financial performance. 

Ferroni's 2021 Annual Report.

"The success of the project at Ferroni largely depended on the chosen implementation methodology – SAP Activate, which allowed us to launch basic operations into productive operation just two months after the project began. 
It's worth noting that the initial releases were executed with almost no customization or modifications. Despite the rapid development and large-scale changes in the client's business, the methodology proved to be highly effective.," Nikolai Pakhomov, Business Development Director at TeamIdea.