Tomago Aluminium: SAP Integrated Management Solutions

By using IT as a strategic enabler, Tomago expects to save $28.5 million over the next decade and equip itself to achieve high performance.

Based in Newcastle, New South Wales, Tomago Aluminium is the second-largest aluminum smelter in Australia and contributes significantly to Australia's position as the world's third-largest aluminum exporter. With annual sales of some $800 million and more than 1,000 employees, Tomago has a reputation as one of the world's most efficient and low-cost aluminum producers. The company, owned by a consortium of Alcan, CSR and Norske Hydro—the aluminum industry's major players—produces aluminum mold ingots, rolling slabs and extrusion billets, used in industries as diverse as building and construction, transportation, consumer durables, packaging, electrical supplies, and machinery and equipment.

Tomago strives to continuously improve production and IT capabilities to ensure that it can serve a growing global demand. Particularly, the company wanted to empower its entire organization to be proactive about achieving its ambitious production target of 517,000 tons of aluminum each year—an increase of 14 percent from the previous level.

Given the intensity of competition in the aluminum marketplace, Tomago decided to partner with Accenture to enhance key business processes as well as design and implement a scalable, state-of-the-art, SAP-based, integrated management system. The SAP-based solution would include three components: an employee portal as a single internal and external resource to give staff easy access to and retrieval of important business information; the latest SAP applications, including human resources, document management, knowledge management and business reporting tools; and a real-time plant information capability to better report on areas such as metal flow, casting and production.

Tomago and Accenture expected these new capabilities to enable maximum production, reduce losses and improve employee engagement. Tomago's plant managers and employees would have complete access to appropriate information for each respective area of responsibility. Likewise, corporate executive management would gain the deep insight into production volumes, efficiency, product quality and environmental emissions required for faster, more effective decision making. The solution would also provide for multimillion dollar cost reductions along with significant return on investment.

Tomago chose Accenture for our extensive industry expertise, proven experience and deep multidisciplinary business and technology capabilities—key attributes endorsed by our award-winning implementation at QAL Alumina Ltd, a major supplier to Tomago of alumina, which is the key raw material used to make aluminum.

Working collaboratively with Tomago, Accenture worked to first reengineer and design processes around key functions such as materials and service management, warehouse management and plant maintenance. The team then designed the software configuration for SAP R/3 and key components of SAP NetWeaver, and custom developed required interfaces and functions. Accenture provided extensive know-how in a template form, customized specifically for Tomago. The employee self-service portal, built using SAP NetWeaver Portal, integrated 10 separate SAP modules—including SAP NetWeaver Portal, SAP Document Management, SAP Knowledge Management and SAP NetWeaver Business Intelligence—as well as a number of legacy applications. The team also built a third-party warehouse management system to help Tomago employees manage key warehouse functions, using iris scanners to manage the warehouse down to the individual bin. Additionally, Tomago and Accenture built a range of online support tools, based on SAP Tutor and SAP InfoPak, that are accessible through an interface called TOM, or Tomago Online Magician.

Along with overall project management support, Accenture provided system testing, technology infrastructure and architecture, and user training. The system's custom architectures will support and accommodate targeted efficiency gains, consistent growth and future market expansion—balancing the needs of today and tomorrow, a trait of high-performance businesses.

Phil Hughes, project manager for the Tomago Integrated Management System, said: "The new system is simple to use and easy to manage and run. It provides both managers and employees opportunities to reduce the time spent on administration and be more efficient and effective on the job, while improving customer satisfaction and providing long-term cost reductions to the business."

With the new integrated management system, Tomago is continuing to take steps to extend its high-performance business capabilities by using IT as a strategic enabler. Tomago's chief financial officer, Roy Gellweiler, said: "Our integrated management system, TIMS, is a key factor in our effort to drive improved performance from our operations, ensure the longevity of our manufacturing plants and maximize the value of our industry know-how."

Today, Tomago's people can access precisely the information required to do their jobs effectively, whether in the management suite, administrative offices or the manufacturing plant. For example, Tomago employees can now access selected suppliers' websites via the new system and purchase goods through the Internet with appropriate purchasing information automatically imported to SAP R/3. The new system also makes it possible for Tomago to use innovative document and knowledge management tools to manage and control sensitive and critical business information, such as quality and safety, throughout the plant.

Over the next 10 years, Tomago estimates that its new integrated management system will save the company $28.5 million and help sustain its leading position in the aluminum industry using the tripartite approach of excellence in business leadership, business process effectiveness and technology-driven competitive advantage.