Policka used to supply arms. Then it met Max: Tom Pullar-Strecker explains how a computer came to the rescue of a Czech arms manufacturer struggling to make a new life for itself (CORRECTED)

CORRECTION (PUBLISHED 19 SEPTEMBER 1994) APPENDED TO THIS ARTICLE

In the run-up to last year's Russian elections, Vladimir Zhirinovsky held a saucepan aloft and ridiculed arms conversion projects. In the Czech Republic, things are different. As the last orders for land mines and 73mm anti-tank shells dried up in 1991, the Policka Machine Works in southern Moravia was left to come to terms with an unwelcome inheritance. Then the local subsidiary of the British computer company ICL stepped in.

The plant's 100 manufacturing buildings were spread over 300 hectares of woodland, separated by mounds of dirt and linked by 40km of railway track. The company still has its own fire station, two power stations and 260 flats for present and former employees. It houses the only institute for explosives experts and firemen in the country.

After the company was privatised in 1992, the state was left with ownership of the forest, but the company is allowed to chop wood and sell it to staff. 'The workers can go mushroom hunting,' says Jaroslav Dobias, IT manager, 'but nobody else.'

Arms conversion hit the company hard. 'Over two years we lost 80 per cent of our turnover and had to diversify so we could save ourselves,' he says. 'The town of Policka and the surrounding area contain few chances for employment, so we have tried hard to save the establishment.'

Dozens of Western businessmen - mostly 'young adventurers' says Mr Dobias - quickly descended on the plant, offering to act as middlemen for new manufacturing contracts that rarely materialised. Despite the odds, the company has succeeded in cutting its own course. The Policka Machine Works now makes heavy industrial components for clients as far away as Argentina and Brazil.

The company also exports nozzles for petrol pumps to the British firm Balvin, among others, and fireworks for sale in Italy. While the firm's brochures previously boasted of the 800m range of its anti-tank shells and their ability to pierce 30cm of armourplating, today they advertise 'Silver Toms', rocket fireworks that 'go up to 50 metres to scatter approximately 20 intensively lighting little flares'.

The company decided to use a small grant given by the then Czechoslovak government in 1991 under its own arms conversion scheme to invest pounds 7,000 in a computer network supplied by ICL. Mr Dobias says: 'Our own hardware was old-fashioned; development stopped in 1978 and we bought our supply in 1982. The Czechoslovak manufacturers stopped production and we had to solve the updating problem.'

The company's handful of giant Czech-made computers could withstand nuclear radiation, but had the power of a personal computer, and the software that ran on them was not interactive. 'In the past,' Mr Dobias recalls, 'the workers worked in an isolated situation.' Scattered around the forest, many only knew 'a name' at company headquarters.

Now the firm's most important buildings are linked through X25 to a DRS/6000 Unix server running 'MAX', a comprehensive modular software solution for manufacturing and distribution firms which was developed by the Bristol-based company Manufacturing Control Systems and based on the MRPII methodology.

The software has been designed to automate everyday tasks, from processing sales orders and keeping a general ledger to monitoring work on the shop floor and calculating costs. With ICL's backing, the solution has become a popular option in the republic, netting more than pounds 112,500 for the two companies since its debut on the local market in 1991, according to Terry Anderson, ICL's professional services manager in the Czech Republic. This performance has resulted in the formation of its own Czech user group.

Mr Dobias says: 'The operation of this computer system requires more co-operation. Each worker has to see the connections: a worker in sales also has to understand a little bit of accounting; a worker in construction also has to understand his own work a little better; the individual professions are becoming more interconnected.

'Some workers were in contact with a computer for the first time,' he says, 'so they were basically scared of the work. But we are educating them and now more are asking when they are going to have a terminal.'

Mr Dobias, who is faced with managing 20,000 different types of components as they go through a combination of the 30,000 manufacturing operations on the company's 1,000 machines, says the system allowed the company to cut its inventory by 10 per cent last year. Soon, he hopes, it will help enable the firm to prepare for ISO/9000 certification, a vital step forward if its attempts to tap into markets in the European Union are going to get far.

This year, the Machine Works hopes to turn a small profit. 'We are roughly in the middle of implementation of the computer system,' Mr Dobias says. 'The company is changing itself, but most of our problems are connected with the fact that the speed of work is changing: shorter time periods are required for each job, even after the number of workers has come down. The real results will show in two or three years' time.'

CORRECTION

Because of a transmission error, Tom Pullar-Strecker's article 'Policka used to supply arms. Then it met Max' (5 September) contained inaccuracies. The value of the computer system supplied to Policka by ICL was pounds 300,000, not pounds 7,000. Sales of 'Max' in the Czech Republic were worth pounds 5m last year.

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