LEAG and MCR Engineering Lausitz
Together with Orianda Solutions AG – a valantic company, LEAG and MCR Engineering Lausitz have implemented their own company code for the subsidiary based on SAP. A total of twelve order types were defined in the project – six of them for intra-group billing.
The company
45.7 billion kilowatt hours – that’s how much electricity the energy company LEAG generated with its four power plants in Brandenburg and Saxony in 2022. The company from Lusatia generates electricity from lignite, which is mined at its own four opencast mining sites very close to the power plants. At the same time, LEAG is making enormous efforts to remain a reliable energy producer and a major employer in the region in the future. The Gigawatt Factory, for example, is currently the largest renewable energy cluster in Germany, comprising a whole series of solar and wind parks. One really spectacular project is a 16-hectare photovoltaic park that will float on the future “Cottbuser Ostsee” – a flooded mining area. The park is expected to generate around 20,000 megawatt hours of electricity per year, enough to cover the electricity needs of around 5,700 households.
Independent subsidiary
In order for coal to be mined effectively and efficiently and for energy to be generated, all large-scale opencast mining equipment such as bucket wheel excavators and conveyor belts must always function perfectly. The same applies to the rail vehicles that transport the coal from the opencast mine to the power plants. And this requires excellent maintenance. This has been ensured since 1956 by the LEAG main workshop, which today covers 26,000 square meters (covered area) and in which around 300 employees prepare spare parts assemblies weighing up to 100 tons – for example gearboxes, excavator buckets or wheel sets. The main workshop also carries out mechanical engineering and steel construction tasks and provides services for rail vehicles. “In order to give the value-adding jobs a perspective after coal mining in Lusatia, LEAG is successively expanding new business areas,” says Michael Nobis, Head of the main workshop. “Among other things, we are also offering the services of the main workshop outside of LEAG on the open market. The MCR brand was first established in 2018 to create an independent market presence, followed by an independent company. MCR Engineering Lausitz GmbH has been entered in the commercial register and active on the market since September 2022.”
In the course of the transfer of operations, LEAG and the newly founded subsidiary had to overcome a number of legal and organizational challenges. The focus was on the need to clearly separate the commercial and logistical objects and processes of both companies
and logistics objects and processes of both companies and to map them independently of each other using IT. One concrete consequence of this separation was to divide the approximately 45,000 existing materials between the two companies – 7,681 were transferred to MCR – and then display them in two separate warehouse systems, even if they remained physically in one warehouse and were merely relabeled. In addition, the separation made it necessary for both companies to offset deliveries and services provided internally against each other. And with as little effort as possible and in the familiar IT environment. This is because MCR Engineering Lausitz GmbH currently generates around 80 – 90% of its total turnover with orders from LEAG.
The starting point for the project was that MCR Engineering Lausitz did not want to introduce its own ERP system. Instead, a separate company code was to be set up within the SAP ERP installation (SAP ECC 6.0), which LEAG had been using for years and with which the users were familiar. The high proportion of in-house developments proved to be a major challenge, as this made standardization in the system extremely demanding, and some of the in-house developments had to be adopted and developed for the new company. So LEAG employees and consultants from Orianda Solutions AG – a valantic company worked together to define the required processes and then map them in the new company code. In particular, the Customer Service (CS), Plant Maintenance (PM) and Sales and Distribution (SD) modules were adapted to the specific requirements. The Financial Accounting (FI) and Controlling (CO) modules could be used in the standard system.
Michael Nobis: “When we started preparing the transfer of operations at the beginning of 2022, we knew that it would be a very complex project. That’s why it was important for us to have a partner with extensive industry and SAP experience at our side.” So the managers put the project out to tender and got to know Orianda Solutions AG – a valantic company. “In our discussions with them, it immediately became clear that they not only had immense technical expertise, but also sound project management skills and sufficient resources.
Michael Nobis, Head of the main workshop “All three aspects were extremely relevant, especially because the timetable for our project was very ambitious – the transfer of operations was to take place on November 1 of the same year.”
The standard process mapped in SAP ERP for creating main orders and sub-orders was used for order processing and internal order invoicing. The special feature here is that main orders are mapped in the LEAG company code, sub-orders in the MCR Engineering company code – the main orders act as account assignment objects in the sub-order settlement rule. This design also made it possible to ensure a lean process for cross-company code material supply. For example, spare parts and consumable components can be taken from the warehouse managed in the company’s own company code and, above all, from the warehouse managed in the external company code. Depending on the process, services and materials are billed immediately or monthly in the CO module. The standard process, i.e. the commissioning of MCR Engineering Lausitz by LEAG, also works in the opposite direction. The project team introduced the SAP-based SAP RRICB Optimizer add-on from Pikon to enable convenient intra-group billing of service provision and cross-company code material supply. The tool extends the billed maintenance function (Customer Service) in SAP ERP to include Resource Related Intercompany Billing (SAP RRICB) and allows the services and materials provided by both companies to be billed semi-automatically on a monthly basis, the costs to be offset against each other and the difference to be invoiced. Invoicing is carried out using the master data stored at LEAG and MCR Engineering Lausitz in the SD module. A total of twelve order types were defined in the project – six of them for intra-group invoicing.
Cottbus, DE
Location
7.000
Employees
Mining, electricity and district heating
Portfolio
In a great team effort, the employees of LEAG and the consultants from Orianda Solutions AG – a valantic company managed to keep to the tight schedule and achieve the go-live on November 1, 2022. The fact that Orianda Solutions AG – a valantic company paid meticulous attention to deadlines and monitored progress closely helped a great deal. At the same time, the project team worked intensively on change management: the fundamental aim was to convey the motivation for the transfer of operations – especially as the positive effects will only become apparent in the future. The ambitious project goals were fully achieved thanks to the high level of technical expertise and good knowledge of SAP processes on the part of the MCR Engineering Lausitz project team. In detail, it was important to gain acceptance for the new process and its mapping in the SAP system.
Goal
Solution
Benefit
From November 2022, the project was in the hypercare phase, and the optimization phase has been taking place since February 2023: Further functions are now being implemented and individual improvements carried out according to a list of priorities. The optimization phase will also be used to anchor the knowledge built up in the project in both companies in a sustainable manner and make it systematically comprehensible for all employees. Additional features are planned for the future – for example, a consolidated cost evaluation. Then again with Orianda Solutions AG – a valantic company. Because the consulting company from Switzerland impressed LEAG and MCR Engineering Lausitz with its honesty, competence and reliability!
