IT Management Solutions Help Sto AG Reduce Costs, Improve Reliability and Productivity

by Melisa Dizdarević and Meri Dubreta

Company profile

• Founded in 1835.

• 20 countries, across Western Europe, Northern/Eastern Europe and America/Asia.

• Sto AG group is one of the most significant and innovative manufacturers of building facade products and systems.

Mission statement

STO AG has become a market leader on the back of its belief in innovation and competence in its core business area of facade renders. The basis for this success is provided by STO's guiding principle their mission statement:

"Building with a conscience"

STO AG Vision

We are committed to playing a leading role in ensuring that the world in which we live is designed in line with environmental

requirements and our needs as human beings.

Objectives

• Intensification of research and development efforts;• Strengthening the competence of the STO Group;• Continuation of the internationalization process; • Further development of their second distribution channel;• Consolidation of the sustainability principle.

Objectives

Competitors

• ROFIX AG is the main competitor and an eternal rival of STO AG;• As basic systems, this company uses specially developed ERP software, standard bookkeeping with cost accounting and payroll accounting and a CRM system.

• Other competitors are also present on our market, and the one that stands out the most is JUB Colors.

Market position

• STO AG has positioned itself as a supplier of quality products, systems and complementary services incorporating a high level of technological expertise.

• Targeted at professional users such as trades people, architects and building development companies.

Current IT system

• STO AG use TehniData technology.

Benefits:• Creates safety data sheets for dangerous substances and dangerous goods and dispatches them automatically.• Allows use of automatic product composition calculation, rule-based material safety data sheets (MSDS) authoring, automatic MSDS generation, global label management and MSDS shipping.

IT risks

• Serious disruptions such as system outages or loss of data, for example, can severely hamper the ability to supply.

• Risk by implementing redundant IT systems.

• Loss of confidential data.

IT Strategic impact grid

• STO AG belongs in the “Factory” sector. • As a manufacturer unit, the company might grind to a halt if the IT systems were to fail.• Innovative application developments, although important, are not crucial to the organization’s ability to stay competitive.

Business situation

The main challenges are:

• To assure compliance with local, state and federal EHS regulatory and permitting requirements.

• Optimize work processes to maximize efficiency and minimize risks/costs.

• Ensure the dispatchment of safety data sheets for dangerous goods.

• PPG EH&S Management system• Essential chemical inventory software • ProSteward®

Possible IT systems

Benefits:• Appropriate systems for EHS management are established, communicated

and supported at every level in the organization.• Risk will be managed by identifying hazards, assessing consequences and

probabilities, and implementing appropriate preventive and mitigation measures.

• A combined, central, multilingual database will be created from witch employees can benefit from.

• We will be able to store and manage regulatory data, classify dangerous goods, perform checks during packaging and transport, compile and update dangerous goods documentation, and automatically supply data to other applications.

PPG EH&S Management system

Benefits:• Tracks locations and amounts of hazardous materials on-site.• Centralizes materials data.• Standardizes nomenclature and processes by using verifiable data.• Leverages and complements the existing ERP systems.• Saves time, money and resources.• MSDS master database will eliminate redundant work at multiple locations,

cut material safety management’s time costs by 90%.

Essential chemical inventory software

Benefits:• Supports process harmonization across wide geographies and many diverse lines of

business. • Streamlines access to information from manufacturing to the head office.• Sustains current and future product stewardship needs from product development

through customer end use.• Reduces duplication of services and systems.• Improves data quality and consistency.• Reduces cycle time to market through regulatory modeling.• Provides better information and faster response to customers. • • •

ProSteward®

Company solution

Costs of purchase How IT conforms the company profile

Offered services

PPG EH&S Management system

3 2 3

Essential chemical software

1 1 2

ProSteward® 2 3 1

Range: 1-good; 2-better; 3-best

Company solution

• PPG EH&S Management system • This system has properties that are and in line with the company profile,

vision and strategy. • It also provides us with the opportunity to ensure effective incident

investigation, reporting, and follow-ups which are necessary to assure the opportunity to learn from reported incidents.

• Has better system support than the current system (In case of IT system failures).

Cost-Benefit Analysis

Description Price €

Purchase of software (includes intersest and taxes) 28.000

Software configuration and customization 2.000

Integration with other systems 600

Antivirus & Antispam 15.000

Training (core software and business process contex training) 5.500

Hardware and software maintanance 9.000

Local-area and/or wide-area network 11.000

TOTAL 71.1000

• Costs

Cost-Benefit Analysis

• BenefitsINFORMATION SYSTEM

BENEFIT Asset management

Work management

Mobile workforce

management

Distribution management

Planning & Analysis

Labor efficiency

Capital savings

Customer sevice

Service reliability

Compliance

= Significantly enables benefit= Somewhat enables benefit

Cost-Benefit Analysis

Costs / Years 1 2 3 4 5Hardware 19Software 28Personnel 5 7 9 11 13Maintenance 0 9 11 13 15Costs of year end 52 16 20 24 28Cumulative costs 52 68 88 112 140

Benefits / Years 1 2 3 4 5

From finished reports 10 10 10 10 10

Increase in sales 15 20 25 30 35

Benefits of year end 25 30 35 40 45

Cumulative benefits 35 55 85 125 170

• Costs/Benefits of the proposed system for the next five years are depicted below:

Key data (in € thousands)

Cost-Benefit Analysis

Profit = Benefits-Costs

• Profit= 170.000€-140.000€=30.000€• Since we are gaining, the project is feasible.

Implementation schedule

Month Alternative analysis

Software purchase

Software application

Implementation Evaluation

January

February

March

April

May

June

July

August

September

October

November

December

Conclusion

• New IT system will be effective in dealing with current malfunctions.• Customer service and service reliability will be improved.• Turnover will rise by between 5% and 6%.

STO AG 09.10 09.11 Difference

Turnover- of which domestic- of which international

708.1 756.2340.4 378.4367.7 377.8

6.8%11.2%2.7%

Investments 11.3 10.1 -10.6%

Number of employees- of which domestic- of which international

4.236 4.3322.364 2.3921.872 1.940

2.3%1.2%3.6%

Key data (in €m)

Thank you!