Schweizerhall Chemie AG produces additives for the process industry. For the trading company, based in Basel, Switzerland, “production” means the decanting and mixing of the products delivered loose. The 15,000 or so articles in the company’s range include solvents, acetone, caustic soda, citric acid, alcohols, salts, and colorings. The goods are provided in different packaging sizes, from one-liter bottles, cans, tanks and sacks right through to tank wagons weighing a ton or more, and are delivered to customers in the chemical, pharmaceutical, and food industries. Most of Schweizerhall’s suppliers are located in Europe, though some of the chemical and pharmaceutical base materials arrive in Basel from the US and Japan.
SAP R/3 in the standard system
The Swiss chemical wholesaler decided in favor of SAP’s ERP software solution, and opted for the Regensdorf-based implementation and consulting partner SLI – now SAP Systems Integration (Switzerland) – which has many years’ experience in the process industry. Christian Messmer, SAP project manager at Schweizerhall says, “With SLI, we could rest assured that the consultants understood our processes straight away.” That was also the case for the VOC charge and the handling of empties.
Solvents and alcohols are among the volatile organic compounds, known as “VOCs.” Any company handling these materials must pay tax on them, but only for the quantity actually delivered, since the materials evaporate to a certain extent. To avoid high costs, a company must record the loss accurately. Almost every week, a full shipload of acetone or toluol arrives for Schweizerhall in the Birsfeld harbor. For import into Switzerland, a VOC charge of three Swiss francs is levied per liter on 100% acetone, for example. The charge is calculated based on the percentage content of the VOC material.
Reducing the VOC charge with the SAP solution
When the ships are unloaded, a proportion of the VOC remains on the inside of the tanks and evaporates. If a tanker is loaded with 10,000 liters of liquid in the port of Hamburg, slightly less than this quantity will arrive in Basel. This loss is caused by the first runnings in the filling hoses or the sediment in the tank. Some of the material also evaporates while the containers are being filled and during the mixing process. A separate SAP add-on was developed together with SLI to avoid tax on this loss. The add-on had to take account of the fact that the charges often differ from canton to canton. “While the SAP standard system contains functionality for this, the huge amounts involved meant that it was not practical for us,” states Messmer.
In the add-on developed jointly with SLI, all goods movements, stock transfers, percentages, and VOC material losses are now recorded accurately. The system uses this information to create an invoice for the VOC charge at regular intervals, and at the same time generates a balance sheet for the authorities. A similar duty to the VOC charge must also be observed for alcohol. For this purpose, an alcohol list is maintained in the SAP solution. As a result, the authorities can be provided with proof at any time of what quantities of alcohol were imported, with what percentage, and to whom they were delivered. However, this process is considerably more straightforward than the procedure for the VOC charge: “A subsidiary ledger is not maintained here – instead, proof is only provided of where alcohol was delivered to, and in what quantities,” explains the SAP project manager.
Expensive empties batch-monitored
Another problem at Schweizerhall was a lack of monitoring for the often expensive empties. The empties delivered and returned could not be managed in the legacy system. “We never really knew exactly which customers had which containers, chrome steel tanks, or tank wagons,” states Messmer. After being emptied, the containers were often left at the customer premises for months at a time. “We wanted to educate our customers to return the expensive containers to us as quickly as possible,” continues Messmer. With SAP R/3, the first step towards this goal has already been taken. The expensive containers are assigned individual batch numbers, which enables them to be clearly tracked in the software.
For empties management, an additional data record, or “dummy container,” is generated in SAP during decanting and mixing. The actual container is included in production, and the dummy appears on the production BOM preceded by a minus sign. If Schweizerhall sells goods in a returnable container, the data for the dummy container is automatically moved from the production BOM to a sales BOM, and also appears as an extra item on the delivery note. When the empty container is returned to Schweizerhall in Basel, the dummy is posted back to the original container. As a result, Schweizerhall now knows at the touch of a button which empties have been returned to stock.
Added benefit for maintenance
The container batch number provides an added benefit for the legally required, cyclical maintenance of the containers, because the inspection dates for maintenance are also stored for the number. For example, if legislation dictates that a tank container used to deliver hydrochloric acid must be taken out of circulation after 10 years, and this 10-year period has expired, the system is able to recognize this fact from the information stored for the batch number, and automatically blocks the container from use.
The container batch number is also important for documenting customer validation. For example, Novartis wants deliveries of acetol to be made in the same tank container each time, so that the container does not have to be revalidated each time. While previously, only the employee responsible for filling knew that Novartis wanted to keep reusing a particular container, this information can now be accessed and evaluated at any time using the batch number.