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Press Release

MMK launches JDA SCP based productive-economic planning system

MOSCOW - 9 August 2011 - Magnitogorsk Iron and Steel Works OJSC ("MMK"), and GMCS Company today announced the pilot commissioning of a productive-economic planning system based on the JDA® Supply Chain Planner.

The project is intended to optimize production and economic operations, which is a key component of MMK's long-term strategy to consolidate its leading position in the Russian and global steel markets. The main objective of the project is to increase the efficiency of sales and production planning processes by implementing innovative mathematical simulation tools that have been widely recognised both in the Russian steel industry and internationally.

Prior to commencing the project, a pilot project was designed based on the Supply Chain Planner enabling MMK to test the system's effectiveness. GMCS, an IT consulting company and the official partner of JDA Software in Russia, was a contractor for this project and presented the results of the simulation as required by the relevant tender process.

The productive-economic planning system was built step-by-step. At the design stage, the most efficient way of simulating the plant's production facility was determined, and key organizational aspects of the simulation were also discussed. In doing so, the combined team comprising experts from MMK and GMCS considered both the experience of Russian steel companies as well as international best practices in terms of the application of Supply Chain Planner. While the project was being designed, a model of the plant's production cycle was implemented in the system, from sintering and blast-furnace processes to advanced ferrous metal processing workshops, including toll manufacturing. For the purpose of medium-term planning a different set of reference data was developed.

The system should enable MMK to improve significantly the quality of sales and production planning as well as the entire production chain, to assess production costs, and also to optimize the portfolio of orders and product mix, given the existing and long-term production and market opportunities. After the system was launched, the plant switched to an integrated approach to medium-term planning: today all of the plant's operations are in a single model based on the Supply Chain Planner. This approach gives the Company a more comprehensive understanding of key factors which can have a positive impact on the plant's performance, including by increasing greatly the efficiency of the decision-making process.

Mr. Andrey Yeremin, MMK's Director on Economics, said: "Our use of this innovative tool will take our planning process to a new level and will allow for the closer integration of MMK's business units. At this stage, the system has already generated its first results for us, which, as early as at the testing stage, enabled us to improve the accuracy and quality of our planning processes."

Ms. Yekaterina Voropayeva, President of GMCS, added: "We discovered the SCM practice during the crisis, and since then this business line has enjoyed significant growth, reflecting strong demand by Russian companies for SCM solutions. Today, we have several solutions in our portfolio from leading suppliers in this sector. We are glad that MMK chose us as a partner to implement this project. We believe that the results achieved will give a new powerful impetus to the Russian SCM market."

Mr. Razat Gaurav, Senior Vice-President for EMEA at JDA Software noted: "JDA is proud to help many of the world's leading steel companies better manage their supply chains and key business processes. We look forward to continuing our work with MMK as the company moves forward with its supply chain transformation and business process improvement initiatives.

About GMCS
GMCS is a leading consulting company in the IT sector, carrying out comprehensive projects aimed at improving business efficiency. GMCS is a partner of the leading suppliers of software products: IBM Cognos, Infor, JDA, Microsoft Dynamics, Oracle, SAP, BOSS HR Systems, etc. GMCS was founded in 1997, and now the company has significant experience in working with major businesses in various sectors of the economy and in different countries. Since 2005, GMCS has been a member of the Compulink group of companies. The GMCS head office is located in Moscow, and regional representative office is in St. Petersburg.

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About JDA Software Group, Inc.
JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company®, is the leading provider of innovative supply chain management, merchandising and pricing excellence solutions worldwide. JDA empowers more than 6,000 companies of all sizes to make optimal decisions that improve profitability and achieve real results in the discrete and process manufacturing, wholesale distribution, transportation, retail and services industries. With an integrated solutions offering that spans the entire supply chain from materials to the consumer, JDA leverages the powerful heritage and knowledge capital of acquired market leaders including i2 Technologies®, Manugistics®, E3®, Intactix® and Arthur®. JDA's multiple service options, delivered via the JDA® Private Cloud, provide customers with flexible configurations, rapid time-to-value, lower total cost of ownership and 24/7 functional and technical support and expertise.

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