JPRS ID: 9723 USSR REPORT CONSTRUCTION AND EQUIPMENT

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• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000400010019-6
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 50
• Document Creation Date: November 1, 2016
• Sequence Number: 19
• Content Type: REPORTS

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' JPRS L/9723
- 11 May 1981
~
= lJSSR R~ ort
= p
' COi~STRUC~ION AND EQUIPMENT
= i (FOUO 3/81)
_ ' ~BIS FOREIG~J B~UADCAST IN~ORMATIQN SERi/ICE
i.
� FOR OFFICIAL USE ONLY
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JPRS Lj 9723
- 11 May 1981
, \
USSR RE�ORT
CONTRUCTION AND EQUF.rMENT
(FOUO 3/81)
i CO[~TENTS
CONSTRUCTION
I
j Production c:apacities Ma.thematically i;alculated
' (N. V. Karpukhin, S. A. Al.ekseyev; ENERCETICHESKOYE
~ STRC~7TEL'STVO, Jan 81) 1
_ , CONSTRUCTIOTI MACHINERY
I~ew Approaches To Organizing Construc~ion Recommetxded
(P. Podshivalenko; VOPROSY Ei{ONOMIKI, No 1, 1981) 11
P4anagerial, Organizational Steps To Reduce Materials Intensivene~s
= Analyzed
(A. Polyak; VOPROSY EKONOMIKI, No 12, 1980) 24
; Suggestions Made for Assessing Metal Savings in Metallurgy,
rfachinebuilding
_ (N. riorozov; VC~PROSY EKONOMIKI, No 12, 13$0) 36
~
I .
:
i' .
I
I
-1 .
i~
- a - [III - U~SF - 36a FOUO]
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CONSTRUCTION
PRODUCTION CAPACITIES MATHEM.'~TICALLY CALCULATED
Moscow ENERGETICHESKOYE STROITEL'STVO in Russian No 1, Jan 81 pp 50-53
~ Cr`,rticle by N. V. Karpukhin, Candidate of Economics Science and S, A, Alekseyev,
engineer: "Economics and Management< Determining the Capacities of Canstruction
O rganizations"]
CText7 insuring high, steady rates of expanded re~.~roducti.on based on technological
pi~ogress and further building ~p the country's produ,:tion potential depend to a
great degree on accomplishment of the capital canstruction program that has been
prescribed. A most important condition for successful fulfillment of the capital
- construction plan is achievement of a balance between. the volume of construction and
installation projects ~eing planned and the production capa~;ities of construction
and installation organizations.
~ The pressing natuxe of the problem of balancing the volume of construction and i.n-
srallation projects being planned with the production cgFacities of const~:~uction and
- installation organizationa i~ evident from the fact that, due to the zbsence of. com-
monly accepted accounting methoda for productien capacity and insufficient attention
. being devo.*_ed to determining and planning the cspacities of cunstruction organiza-
tions, many of their production capabilities are not fully utilized, ar, on the con-
trary, quotaF are established for censtruction an3 installation organixa~tions that
f ail t.o take into account th~ir p~oduction capacities, wr~ich leads to rion-fu~f~ll-
ment of ttie plan for construction and inatallation work and failure t:o put projects
- ' ~_nto operation.
~ In accorda;~ce with the 12 July 1979 resolution of the CC CPSU and the USSR Council
of Ministers "On Improving P]anning and Increasing the Influence of the Ecunomic
Mechat?ism on Erhancement oi Prudur_tion Efficiency and Work Quality," beginning with
- the llth Five-Year Pl~n, a s tabile, five-year plan for capital construction (with
ann~!al quota distribution) will be prescribed f~r the USSR minisrries and depart�-
ments and for the union republic councils of ministers, which wi11 have achieved a
; balance of material resources and technira~ and ~ower engineering equipment witt?
~ manpa4:er and financial resources, and with the capacities of construction and in-
stallation organiza*_ions. L'GSR,mir,.istries and depart:nents and union republic coun-
~ils of ministers a�re obliged to work out measures aimed at speedir.g up realization
_ oE proc~uction capacities and the commissioning of projects for consltruct~r~n jobs ~1-
ready begun, and measures t~ effect a sharp drop in the number of rer~ewed-construc-
. ~ tion prnjects, in order to get the volume of unfimished coi~struction down tc~ levels
af establiRhed norms in the next few years.
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Accordingly, a well-founded determination of the capacities of construction and in-
stallation organizations and sound planning with regard to these capacities today
constitute an important undertaking which must be taken into account in developing _
plans for capital construction.
A great number of ways of calculating the production capacity of construction and
installation organizations (1-4, bibliography) have lately been approved, but at-
tempts to formulate common recommendations in making these calculations for various
management levels (trust, aesociation, main administration, etc.) have not as yet
- yielded the desired results.
In order to achieve this aim, specialized literature (bibliography entry 1 in par- -
ticular) proposes deve~oping a set of inethods that would permit defining all types
' and varieties of conatruction and installation organizations and planning their pro- ~
gressive development independent of technical orientation or specialization. Only _
if this is accomplished will it be possible to insure that balance calculations of
production capacities b;~ oblast, region and area of concentrated construction con-
- ~orm vo p'lans for capital investments. In this regard it is necessary to tie in .*.he
methods of defining and planning the production capacity of a construction and in-
stall�tion ~rganization taith the methods and practical aspects of planning the basic
technical indicators of its production operations.
A!~ody of specialists from the All-Union Institute fAr the Planning of Electric Pow-
er Projects is currently working on foL-mulaCing and introducing syste:^atic recammen- _
dation:; f.~r determining ~tnd planning produc~ion capacities that take into account ~
the volume of construction and installation projects being planned, r.esources, 3nd
- the technical and economic indicatora o� construction and installation organizations.
'I'~,c first step towards establishing common industrial methods for determining pro- `
ductio~ capacities of construction and installation organizat~ons of the USSR Minis-
try of Power Engineering was the drafting of recommendations foi calculating produc-
tion capacity of the construction and installation trus`.
According to accepted concept, by production capacity of a general-construction or-
ganization that accomplishes constructbon and installati~n work and enga;es in di-
- verse constructio~z projects is meant the maximum volume per calendar period (year)
of ~.onstruction and insttz~..la~ion work which can ba ~ccomplished by the organiza;ion
on consLruction jobs included in the engineering support plan for projects underway.
"This assuni~s full utilization of ~what means of ~~oduction and la~or force the orga-
nization has at its di~posal (includir.g externally solici~ed) and also the use of.
- advanced technology and the most efficient organization of production and labor. It
follows from thib definition that produ~tion capacity depends on the availabilit~ *_o
- the construction and itistallation organization of an active portion of construction-
related fixed preduction ca~ital (including production capital brought in from meeh-
- anization admini.strations and trusts, machine-rolling facilities, clients, and other
outside organi~ations) as well as on the quali.fications of the labor force.
" :The average annual producti.~n capacity for a construction and installation organiza- -
rion,llMcr ~in thousand~ rubles) may be calcc.lated ty cne of the following formulas'
- :1Mer=�'crE'r~ac;
- /1/Ner=Br~"o~/cn ~2~
_ 2
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where represents ~he average annual cosC of the active portion c~f construction-
related fixed production capital in thoueands of rubles;.E�r.�~ is the computed index
of maximur~ (upper limit) capital yield per ruble cost of the acti~ve portion of con-
aCruction-related fixed production capita2; B~~~~ is the computed index of maximum
(upper limif~3 average annual output per emploqee measured in rubles per peraon; y~~
denotes the average annual number of employees.
One would abree with the opi.nion of the author of the first work (biblioga~aphy) that
there are no fundamental ditferences in determining the product;on capacity of a
construction organization according to ~ormulas (1) and (2). The problem comes down
- to finding the variance in the output index (or in the yield index) which a.dequately
reflects the actual influence of production factors on it. In ~ur view, the second
formula for calculating the production ca~acity of a c~nstruction and installation
arganization is preferable, since the factors that determine the index for a single
- workc:r's output, and the dynamics of its change i.n light of growth in the tiechnolog-
ical level of construati.on ar,d improvem~ent of the organization and management of the
conatruction process have been studied in sufficiec~t depth. There is a natural ten-
denc}r for constant growth in the ot:tput index, a fact which illustrates the develop-
ment of technological progress in constructioii. Being a generalizing indicator of
the production economics of a construction and installation organization, the output
index has long been applied in practical planning and can therefore be used in cal-
culating and evaluatin~ other technical and economic indicators. Along with output,
the index �or yield per ruble cost of fixed production capital is also a generaliz-
ing indicator of the production econonnics o� a construction and installation organi-
zation, and reflects the degree of utilization of resources in this regard (both
technological ancl manpower), but insufficient study has been conducted as to how
this index var.ies.
The output index depends on the F=~,ultaneous influence of a great nsmt,er of factors,
~ all of which must be taken into account in ita calculation.
In its general form, the aependence of the output index upon the factors that deter-
mine it is characterized by the expression
~ B�f lXlr Xxi X~r Xn)~ ~'3)
where X,, Xz, a,, X� represent the factors which determine level of output.
. It follows from formula (3) thaf:, with t?ne help of t~~e index �or labor productivity
(output), one u?ay conduct a comparati~ve analysis and appraisal of the production ca-
~ pacity of construction and installation org~aizations t:zat accomplish various kinds
of construction and installation proje~ts and have different levela of 13bor mecha-
niz?tion.
d:. In order to build an economic-mathemati~:al mcdel for the output index and calcLlate
the production capacity of a constructioi: and installation organization, ox~e must
know the nature and degree of infl~ence of certain factors on this in~ex.
; In our npinion, all thoea factors wnich ir?fluence the production capac,ity of a con--
struc~ion and installation organization and their usage level may be con3itionally
broken down into groupa that characterize the following:
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(a) the technical level of praduction, the composition and structure of fixed pro-
duction capitai, the mechanization level of canatruction-rela~ted processes, the tech-
~~ical condition af ineane of production being utilized, and pow~er availability per
worker;
(b) the level of organi.zation for c~nstruction production and labor, the utilization
oE construction machinery and equipment as r~lated to time and productivity, tn~
rhythm with which cor.struction and installation projecta are accomplished, ~:ie orga-
nization of labor and salaries of vaorkers and other employees, the skill lEVel of the
~abor force (wu~ners and engineerxn~ and technica~ peraonnel), the di~fusion of ad- _
vanced labor techniques and methods;
.
- (c) the pattern of construction being accompliahed, the proportion by type of con-
struction underway, the level of prefabrication in structures;
' (d) the supply of resources (labor force, building mdterials, products, strisctural r-
parts);
~ (ei geographical, climatic and hydrome~eorological conditions under which construc-
tion takes place, the territorial diatribution of pro;jects, the concentration of
construction production, tiie presence and condition of road networks.
' The value of B~�"� in farmula (2) is dependent on the maximum infZuence of +_~hese fac-
tors on the production capacity of a construction and installatio�~~ flrganization.
~
- g"a"` is determined .`.rom the base output B, and from the sum of Che incremerats for
n
each "i-th" factor ~ oBr relative t~ the base year (fixed): ~
;-o
. n ,
a Br~aKC = ~o ~ ~Bt; (4)
~
ic1
ea~ _ e;v+� e� (5)
- where aBt81C is the output from maximum effect of the "i-th" factor entered into the
, e~onomic-mathematic n:~del.
Substituting expression (5) inCo forn:ula (4), we obtain: -
~ .
BY~KC = B' ~ tBMiRC ~ B~\ '
!
!r{
or '
^ r waKc
BMaxc _ B~ ~ ~ l B B~ ~ , (6) .
` o /
i=)
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~ If we uae li to represer~t (Bi�K`-B.)/B� , then
- n ~
B~eRe ~ B~ 1 ~ !t , (7'1
t=1
where i.=1, 2, 3,..., n.
Subatituting expreesic~n (7) into ~ormula we obtain:
~ . _ � n . - _
/7~Ncr = B~ ! Fj lt ~lcr� ~8)
t=~ ~
The base output is determined from reporting and accounting daCa under conditions of
~ organization and management of construction production in existen~e for thP given
~ period; it is derermir.ed by building the muli:i-factor correlati.on model
' BO=fIAi~ X1. XOr Xir � Xn~.
To determine B~x~ , correlation functions of output B,for the "~-tl~" factor are for-
~ mulated while eliminating the effect of the remaining factors. The extreme output
value selected in the model which has beEn built will represent ~;"a"`,
II
TABLE I
Information Source
No. Indicator
Form Line Column
~ 1 Nuraber (average listing) of employ- 3t 001 2
ees [rabotnik] engaged in construc- f_expansion
' tion and iustallation projectE (CIP) unknown]
' and auxiliary production (AP)
! 2 Number (average listing) of workers 3t 002 2
~ [rabochiy] engaged in CIP and AP
. 3 Wage fund for workers engaged in CIP 3t 002 4
' and AP (thousands of rubles)
4 Number (average listing) of workers 3t 033 2
~ engaged in CIP
5 Number of man-days worked by all CIP ~t 100 -
~ and AP workers
6 CIP volume, taking into account 3t 102 2
projects not completed (thousands of
_ rubles)
5
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- TABLE I (cont'd) _
- Information Source
h~, Indicator
Form Line Column
~ 7 Output per employee (rubles) 3t 104 2 `
- 8 Salary of workers who are on the 3t 392+393 - -
lump wage payment system (thousands
of rubles)
9 Salary of workers who are on piece- 3t 502 - _
~ rate valuation (thousands of rubles) -
1C Ttme rate wages by wage scale (thou�-' ~t -
sands of rubles)
- 11 Wage increment for workers in the 3t 512 -
~ extreme northern regions and areas ~
that equate to them (tlnousands of
- rubles) ,
12 Same ~s above by ruyon coefficient 3t 513 -
(thousands of rubles)
. 13 Volume of CIP accomplished by gener- lks 10 2
al contracting (thousands of rubles) C~expansion
unknown]
14 Volume of CIP accompl~.shed by inter- lks 30 2 =
~ nal resources
15 Actu~l expenditures on basic materi- 2s 031 2
als (thousands of rubles) Cexpansion
unknown7 `
- 16 Actual expenditures for operation of 2s 033 2-3 _
- ~sachiner~ and equipment
17 Total aggregate power capar_ity (at 12s 39 - _
year's end) of all building ma~chin- _
. ery (kilowatts) _
_ 18 Average annual cost of constructi~n- lls 080 ~2 `
- related fixed ptoduction capital
(thousands of rubles)
- 19 Average annua? cost of machines an~ lls 090 2
e~uipment in aperation (thousands of =
- rub].es ) -
= 6
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TABLE I (cont'd) ,
Information Source `
No. Indicator _
Form Line olumn
20 Value of power mgchinery and equipmeut at lls 170 2
' the beginniag of the year (thousands of -
rubles)
21 Value of po~~er machinery and equipment at lls 170 2 -
the end of the year _
22 Cost of auxiliary production output at 3pp-p conclusion 7
wholesale price~ (thousands of rubles) [expansion
unknown]
, 23 Time of opera~ion for machines and equipment lpt or " 5
(machine-hours) xplanatory note -
24 Number of machine-days (present in the econ- qame as above " 2
omy )
25 Number of machine-days (operational) " " 3 -
26 Average p~rcentage fulfillment of output 4t or O1 6
norms xplanatory note ~
27 Average ~aorker pay grade xplanatory note "Labor" -
- section -
; 28 Number of Ceam workers (those working by the same as above ame as above - -
~ "N. Zlobin method")
- 29 Number of workers released by virtue of vi~-- 3t or 'Labor Force" - _
l:~ti.on of labor discipline or o� their own xplanatory note section
, accord
30 Number of unau*~iorized or unexcused work same as above 120�119 -
. absences ~?n,n-days)
31 CIP val+ame ~f industrial (power engineering) explanatory r_ote - -
constr�,~ction ~thousands of rubles) -
- 32 C'tP �~olume of residential ;onstruction same as above - -
33 C~P volume of social and cultural construc- " - - -
- tion, everyday facilities -
� 34 Capital repaix, etc. " - -
~ 35 Numbar of trust subunits " - -
36 Number of annual work days " - - _
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TABLE II -
Forn?ula for
gym- Factor Calct~latior.
bol Using Initial Data
n. IT
X1 Power-to-worker ratio (kilowatts per person) n.4
n. 19+ n. ZI
2
X2 Mechanization-wnrker ratio (rubles per person) n.4
X3 Utilization of the inventory of building machinery and equip- rt.23
n.24�8,Z
ment with respect to time
n. 3�10-~ n.9�100 +
X4 Labor-intensiveness pattern F` n� ~
+n. 10�n. 5� 10'~
e a. 15 100
= XS Materials-intensiveness pattern ~,-s
_ n. 13�10'~
_ X6 Level of production concentration (millions of rubles) n.ss
s�ioo
_ X~ Time-at-work utilization 2�". ~
n. 29 100
n.
4
X8 Labor force turnover
n. B 100
- X9 Application of the lump wage payment (and bonus) syatem ~;g .
X10 That proportion of the overall number of employees who are ioo
workers engaged in basic production
~ ioo
ri.
5
X11 Time-at-work luas
u. 2z ,
n.
6
X12 Auxiliary production ratio
n. 18
� X13 Expenditures for ~achinery axad equipment r,peration per z
- worker (rubles pE_ person)
� n. 13--n.14 lOJ
X14 Level of s~ecialization ~
n. 2-n. ~ 100
= X15 That proportion of basic production workers who are engaged
- in auxiliary production i%)
- n. 31
= X16 Ratio of industrial construction to overall volume of ~,-13
~ general-cor~tracted CIP
X17 Ratio of residentia~l construction to overall vole~me of (~-30 13 10�
= general-contracted CIP
n. 34 ~~0
= X18 Ratio of capital reFair e::nenditures to overall volume of o,-13
general-contracted CIP t~~,~~ in this col.
denotes the cor.re-
- sponding indicator
f.rom TABLE I.
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A most important element in making a true calculation of the value o� pxoduction ca- ~
pacity for a construction and inatallation organixation is the determination of
those factors on which the valuea uf B, and B!�1M depend. _
It must be noted that computer programming of the problent of determining production ~
capacity for construction and installation organizations wauld permit the building
, of multi-factor, predictive models for labor groductivity (output) and provide a ba- _
sis for long-range calculations of production capacities.l In reaching a decision
, for the period under planning, long-range developmen~ trer.ds are determined for the
technical and economic indi.~ators of an organization, objective principles for mea-
_ surint~ the indicators come to light that took shape ovQr the previous period, ten- _
dencies for c:hange in the factors are ascertained, and calcui~3ted values of the ca-
pacity indicator are substantirited for the future period.
. With this in consideration, the fo ~~ula for ralculating future [subscript fl] produc-
tion capacity of a construction and installation organization will laok Zike this: _
� Il~yD = Bnaxc Yn ~ � ~9~
where B~exc and Y,represent the planning values for maximum (upp~x limit) output per
employee, and number of workers engaged in basic and auxiliary production, respec-
~ tively~ -
Bo�1~ is determined in the same manner as B"ax~ , However, here the tendency for _
~ change in the value of each "i-th" factor that enters the predictive output model is -
taken into account, i.e., we have an approximation function which reflects the eco-
nomic essence of the phenomenon and the principles of its development in time.
The methods that have been developed have become the basis for building a static r~-
= port '~alance of production capacities for construction and installation pr~ject vol-
umes of a number of trusts in the USSR Ministry of Power Engineering for 1979. This _
, balance should be an important element in developing a prog�-am for contract work, and
should reflect a link between production capacities and the CIP program. It should _
also show the level of -ttilization of resources (capacity) both according to the -
; plan and in actuality. The final result of compiling a report balance of production
' capacities will be reaching objective decisions as to the advisability of redistrib-
uting the capacities of construction and installation organizations and contract
work programs being planned. In this regard, the program for construction an~ in- -
~ stallation projects should not exceed an or~anization's production capacity.
_ As a check of the methods used in calculating CIP production capacitiea and compil-
- r ing a static report balance of pro3uction capacities for the 1979 CIP volumes, 36
technical and economic indicaCors (Table I) were collected and processed. These re- _
flected data pertaining to 98 trusts of 11 main construction and installation admin-
istrations in the USSR Ministry of Power Engineering. Included in the initial data -
were only those statistical reporting indicators that were in effect over tT~e seven- .
year period 19;0 through 1977. ~'!':~e factors listed in Table II, which hypothetically -
influence the production capacit~ of contracting organizations, were calculated ~
. ~ased on these indicators.
1. Such a computer program has been developed at the Qdessa bidnc:h of the All-Union
Institute tor the P lanning of Electric Power Projects under the directorship of
V. Ya. Braverman.
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~ Predictive mod~ls for. output were built using methods of economic and mathematical
modeling, based on which production capacities ~f trusts were calculated according
to formula (9). Factors entared into th~ models were those that were most influen- ,
tial. 197,' was taken as the base year. _
Using the values calculateo., a static report balance was r_ompiled for prodvcti~n ca- ~
pacities with CIP volumes �or contracting organizations (98 trust3) of the USSR Min- P
= istry of Power Engineering for 1979.
Results of the ~heoretical calculations agree favorably with the ~rue data for trust _
= capacities. It shuuld be stre3sed that deviation from calculated capacities in
= planning wi11 sharply incre3se the probability of f$i~.ure to mee.t plan quotas. For ~
- exa~?ple, a program was established for the Northern Power Engineering Construction _
Trust in 197a for projects to be accomplished using their internal assets. The pro- o-
graxn exceeded the organiza*ion's calculated capacity by three milli~n rubles, a f.ac-
tor that turned out to be one of the rea~ons for non-fulfillment of the 1979 plan
, (87.5 percent). For the Central Power r~:~gineexin~g Construction Trust, the 1979 pro-
_ gram exceeded the trust's capacity by 3.5 mill.ion rubles; as a result the plan was
fu?iilled only to the extent oi 93.1 per~~ent.
~ Naturally, the ~ethods being proposed require more rigorous analysis and further
study, but the results already achieved are indicative of their viability.
BIBLIOGRAPHY
- 1. Serov, V. M. "Proizvodstvennaya moshchnost', stroitel'no-montazhnoy organiza- -
- tsii" [Production Capacity of the Co~struction and Installation Organization],
- Moscow, Stroyizdat, 1979. _
2. Zadorozhnaya, V. K. "Proizvodstvennaya moshchnost' stroitel'nykh organizatsiy" _
[Production Capacity of Constructiot: Organizations], Lvov, "Vishcha shkola,"
1979.
- 3. Danilyuk, V. A.; Neyman, M. C.; Pal'ma, I. S.; and El'gort, L. G. "Perspektiv-
noye ptanirovaniye stroitel'no-montazhnykh rabot v usloviyakh ASUS" [Long-Range
Plann:.ng of Construction and Installation Projects Under ASUS Conditions] Cex-
pansion unknownJ, Moscow, Stroyizdat, 1977.
4. Borisov, A. V.; Drozdova, N. T.; Kastorin, V. P.; and Basova, K. I. "Me~ody -
opredeleniya proizvodstvennoy moahchnosti stroitel'noy organizatsii" CMethods
of Determinin~ Production Capacity of the Construction Organi.zation7, Moscow,
Stroyizdat, 1976.
COPYBIGHT: Energoizdat, "Energetichesroye stroitel'stvo", 1981
~ 9768
CSO: 1821/55
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- CONS~'RUCTION MACHINERY
~
NEW APPROACHES T~ ORGANIZING CONSTRUCTION RECOMbIENDED
Moscow VOPROSY EKONOMIKI in Russian No 1, 19$1 pp 23-33 ,
- [Article by P. Podshivalenko: "Way~ to Reduce the Cost of Construction"]
' TextJ 1'he CPSU Central Committe~'s draft for the 26th congress, "The Main Direc-
tions for the Economic and Social Development of the USSR During 1981-1985 and Dur-
- 1 ing i;he Period up to 1990," set tasks for improving design and budget-estimati.ng
- matters and for executing constructian in acc4rdance with more progressive and eco-
nomiczl designs; for requiring increased capital-investment effectiveness iii de-
signs, bas~d upon use ~f the achievements of scientific and technical progress and
- advanced experience and a sav~.ng of material and labor expenditures; for reducing
, costs for constructing buildings and structures; and for .reducing specific capital
investment p~r unit of capacity introduced in~o operation.
Many large facilities that meet the highest a~equirements for scientific and techni-
cal progress have been built according to designs by Soviet specialists. Thus, the
assembly complex of the Plant ime~i I. A. Likhachev and ths diesel building of the
- Bryansk Machinebuilding Plant, which were introduced ahead of schedule, greatly
; raised the capacity of these enterprises. Labor intensiveness of vehicle assembly
was reduced ~ne-third to one-half below the industry average. Comprehensive recon-
si.ruction of the rolling mills of the Pervoural'sk New-Pipe Plant enabled thei.r
capacity to be increased by 200,000 tons of s~eel pipe per year. The reconstruc-
tion cost ~5 million rubles but 100 million rubles would have oeen required to
build a new shop of the same capacity..
I The creation of the Takhiatash hydraulic-engiiieering c~mplex on the Amu-Dar'ya
River enabled more t;han 1.5 million hectares o~ arid land to be used effectively.
- After it was pui: inL-o operation the water suppl.y of the river's lower courses im-
proved considerably, and ,yields of cotton and rice--the principal agricultural
: crops of Central Asia--rose, As a result, annual state income was increased by more
than 50 million rubles. Construction of the hydraulic engineering complex enabled
elimination of inechanized water intakes and, correspondingly, expenditures (up to
~ 35 million rubles per year) for regulatory work on the riverbed and for cleaning
settling tanks. The costs were recouped in 3 years.
At the same time ther.e are still deficiencies in the work of design organizati.ons,
- primarily the long time taken to make up designs and low design quality. k'or axam-
, ple, the cost c,f a blast furnace that was built at Lipetsk in 1973 turned out to ba
13.4 million rubles more than initially planned. The volume and production area of
- ~ 11
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ox~~~c:n-converter departments designed by Gipromez [State All-Union Institute for _
tlic Uesign of Metallurgical Plants] uf USSR Minchermet [Minist~~y of Ferrous Metal-
lur~gy~ exceed 1.5-f'old to 2-fold those of departments built iri some other coun-
tries. This leads to delays in and greater costs for construction. -
Desi_gn institutes often develop and send to construction organizatior.s documenta- -
Lion that is based on solutions that are far from being the most progressive from
the scientific, technical and industrial standpoints. Thus, seven blast furnaces -
that were ir~troduced during t;~e Ninth Five-Year Plan were not equipped with ir:te- _
~ grai~ed automation systems. Even designs for rural construction projects often pro- !
voke rebukes. Modern machinery eannot be used at many livestock buildings. As a
result, manual labor is reta:ii:ed wh~re the work could have been me;,hanized.
'1'he proportions that now exist between the budget-estimated cost of all the fa-
cilities that are under construction (it exceeds 4-5 annua~l plans) the time spent
erecting them (5.7 years versus the standard of 3.5) and the amounts of uncompleted "
construction (91 percent of the annual amount of capital investment instead of the
- approximate 65 percent under t:ie norms) are irrational. All this is the conse- -
quence of the dispersion of capital investment over numerous jobs, the number of _
which now reaches 300,000 (for facilities for production purposes). HowevPr, a de- _
crease in the nwnber of jobs under construction does not in and of itself complete- '
ly solve the problem of reducing constructio~ time. -
_ The interdependence of the prolongatien of construction time and increase in con-
struction eosts is traced in the data of an analysis that embraces about 50
~ercent (by annual amount of capital investment) of construction projects far
production purposes (in percent of the total):1 -
Residue of
- Full budget- budget-esti- Capi.tal
estimated mated cost at investmeiit
cost the start of plan, 1975
1975
Cunstruction projects started:
Prior to t966 4& 34 29
. 1966-1970 25 24 23
- 1971-1975 29 42 48
Total.. 100 100 100
Fifty-two percent of' the total capital inve~tment, 71 percent of the total budget-
estimated cost and 58 percent of the residue of ~the budget-estimated ceilings were
at facilities start~:d prior to 1971, with construction periods of 6 to 10 years or
more. At the same time, 48 percent of the total capital investment, 29 percent of
the total cost, and 42 percent of the residue of the budget-estimated ceiling -
were at facilities that were started in 1971 or later. _
The budget-estimated cost of construction during the period being analyzed rose by
more than 20 percent. In so doing, 77 percent of the total increase in budget
- estimated cost was at facilities whose con~truction was undertaken prior to 1966,
1. See "Faktor vremeni v planovoy ekonomike" [The Time Factor in a Planned
Economy]. Izdatel'stvo "Ekonomika", 1978, page 86.
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21 percen~: at facilities included in the 1966-1970 plan, and about 2 percent at fa-
cilil:ies ~started during the Ninth Fivc.-Year~ Plan.
ConS~~quently, as thP time spent erecting facilities increases, construction becomes
costlier. As a result, the annual growth in capital investment goss mainiy to mak- -
ing up the difference in the budget-estimated cos~t, which causes a shortage of re-
sources for carrying out the program for facilities due for startup. In 1975-1979 -
the increase in construction costs was about 40 billion rubles. ~
It must be noted that sometimes the press advances arguments to the effect that a _
- reduction in cnnstruction time makes construction work cheaper, whioh should com- =
y~ pensate constr~ction organizations. It is true that recently the defenders of this
concept have been remarking that this refers to compeiisation not for all actual ex- _
_ penditures but only Tor the "socially normal" ones that are needed for reducing ~
_ construction time. Obviously, they have in mind "new principles and relation- -
_ ships" that are in the background, outside the sphere of economic analysis. These
- include, for example, nonuniformity in the workload of construction organizations,
- especially when their work program is reduced; structural shifts in the program, -
including changes ii~ the ratios between the to�al amount of the work and the intro-
duction of f~.xed cap.ital; the connection of the contractors' capacity with previ-
ously started jobs, and so on2. In our opinion, none of this has any foundation
- in principle but is just a consequence of miscalculations in plans andin deploy-
ment of construction organizations, violations of proportions in the development of
- their capaci~y, and so on. Therefore, it is necessary to eliminate deficiencies in
planning, to improve economic activity, to intensify the influenee of the econom-
, ic mechanism on the work results of construction organizations, and to refrain ~
from planning, as has been suggested, for compensation for construction becoming
costlie~~.
Some economists in the USSR and abroad observe that the optimal norm for the con-
_ struction of average-sized enterprises is 12 months. Ir_ Japan, for example, it is
considered that it is unsuitable to build most facilities over a period of more
than 2 years because of the rapid obsolescence of equipment and technology. _
In accordance with the decree of the CPSU Central Committee and the USSR Council of
69inis~,ers of 12 July 1979, design-and-survey, design-development and other
organizations of a si.milar type are being converted to full cost accounting. They -
should plan the output of a finished product; they will obtain funds for a
finished design and prior to this they will use bank credit; they wi11 be granted '
the right to form economic incentive funds through profit.3 This wil1. undoubtedl;~ -
2. For example, R. M. Merkin, "Ekonomicheskiye problemy sokrashcheniya prodolzhi-
tel.'nost.i s~;ro i te.l'stva"'[Economic P~oblems of Reducing Construction Time]
(Izdatel's~vo "Ekuriomika", 1978); and'~roblemy sovershenstvovaniya planiro- _
~ vdniya tekhniko-ekonomicheskikh pokazateley stroitel'nogo proizvodstva" [Prob-
iems of Improving Planning of �the Technical and Economic Indicators of Con- -
, struction Work],(STROITEL'STVO I ARKHITEKTURA [Construction and Architecture],
~ No 10, 1980).
3. The decree called for settlemen~s between clients and design and survey organi- -
~ zacions for designs that are completely finished and accepted by the client.
In accordance with the Standard Practice Instructions of USSR Gosplan cn Plan-
ning for llesign and Survey Work (1980), designs for which the client has made :
no comments in 45 days, that is, independently of approval of the design, are -
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crcaLe a basis for res~ructuring work in the areas of the design of construction
and the development of equipment and in seeking out and using reserves ror rec".u- _
ci.ng cons�ruction timc anci costs. _
_ Acr.ording to the indicated decree, USSR ministries and agencies and Ur.ion-republic ~
- i:uuncils of ministers a=e obligated to design and build new en'terprises and to ex-
nand and rebuild existing enterprises on the basis of highly effective technology =
_ fuc~ production and the use of new equipment that will provide at the newly intro-
- duce;.i capaci~ies for the output of products that will correspond in thF~ir teehnical
- leve~ and quality to the best domestic and foreign models or will exceed them. It =
- is impoi�tant here to increase the share of the active portion of fixed productive
= capital, for the growth of capacity of any enterprise depends upon the degreE to -
- which it has been provided wit'.i modern machinery and equipment.
_ For example, the installation of high-powered turbines at new electric-power sta- -
- tions decreases the specific cost of the construction of thermal electric-power
stations by ~~n estimated 25-30 percent per kilowatt of power generated. Growth in
~he capaci�y of installations that produce lew-density polyethylene from 50,000 _
tons in 1975 to ?0,000-75,000 tons in 1930 provides for a reduction in specific
- capital investment by 50 percent, metals intensiveness by 40-50 percent and prime
- cost by 10 percent, and for a 1.4-fold to 1.5-fold increase in labor
- productivity.4
The use of more m2chinery and equipment of higher capacity or power improves the
= technological structure of capital investmer.t and, ~s a rule, does not lead to an
expansion of produ~tion space, reduce~ the time required for introducing capacity
into operation, an.i yields great national-economic benefit. Meanwhile, the November .
1978 CFSU Central Committee Plenum noted a definite lag of machinebuilding behind -
the national economy's requirements. In confirmation of this is the fact that the
average period for creating new models of machines, equipment, apparatus and in- _
struments during the Ninth Five-Year Plan was 2.6 years, wh~.le for 21 percent of
the models the average was more than 4 years. In particular, a modern complex of
machines with an annual output of 1.6 million toris of I-beams was planned for the
sl;art of the Ninth Five-Year Plan but was put into operation at the end of 1977.
The lon~ delay in introducing the complex at the Nizhnyy Tagil Metallurgical Com-
- bine led to an overco5sumption of almost half a million t4ns of expensive metal in
- the national econamy.
Obsolete machinery is still being produced, modern machinery is being manufactured
slowly, and equipment (including serially prc~duced Pquipment~ is being delivered to -
construction sites without preliminary adjustment and te~ting, and at times the _
- cquipment has not been fully outfitted. As a result, construction takes longer and -
becomes costlier, �he technical and economic indicators of the enterprises and fa-
cilities being introduced are degra~ed, and there is obsolescence of the new ~
equi pmen t .
considered to be. adoptec3. Such a design can scarcely be considered complete
and accepted. It cannot be transmitted to the builders for implementation.
Obviously, the USSR Gosplan instructions need revision. _
4. See PLANOVOYE KHOZYAYSTVO No 4, 1977, pp 93-103.
- 5. See IZVESTIYA, 17 Oetober 1978.
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Lquipment and machinery that are being supplied Ly new or exist;ing ente~~prises _
_ should be di~tin~uished not only by innovation and high productivity but alao ~y a
reduction in the costs of acquiring t}iem. K. Marx wr~te: "The production cr ma- -
_ chines by machin~s reduces their cost in comparison with their ~izzs and their per-
' formance."6 He further emphasized that "the purpose of in~roducing machines is... -
~ to reduce the costs and, therefore, also the ~r;ce of a co~r,:.;odity, making it lPss _
costly, that; is, to reduce the work time necessary for producing a i:nit of the _
- commodity. . . . ~~7
The ~tudies of a number of economists ix~dicate that equipment is bee~oming more ex- -
~ pensive. In order to evaluate the dyna~-nics of ~:he ca}-iital intensiveness of con- -
struction of hot-roliing pla~~e mills, a comparison was made of the "17U0" mills of _
= the Karaganda Metallurgical Combine (introduced in 1967) and the Metallurgical -
- Plan~: imeni I1'ich (introduced in 1960), and of the "2000" mills of the Novolipetsk -
~ MetalJ.urgical Plant (introduced into operation in 1970} and the Cherepovets Metal-
lurgical Plant (the first phase was turned over for aperation in 1975). The com- ~
- parison indicated that capital intensiveness per ton of the designed annual capaci- -
_ ty of the wide-strip mi11 of the Plani; imeni I1'ich was 15.1 rubles, while for the
- nearly similar mill of the Karaganda combine it was 21.8 rubles, that is, it had
` riscn 44 percent; correspondingly, the weight of t!'Ze industrial equipment had in-
; creased from an estimated 5,600 tons ~~er 1,000 tons of design capacity to 9,500
,i tons, that is, almost 1~7-fold. The increase in cost per ton of design capacity of
_ the Cherepovets Plant in comgarison with that of Novolipetsk was 11 percent, the
! cost of the industrial equipment was 32 percent ~igher, and the cost of t;he ele-
vating and transp~rting eqt;ipment was 43 percent higher. Capital intensiveness per
unit of production capacity for specific departments was about 8-10 rubles per ton
in 1966-1970, but it rose to 14-16 rubles per ton in 1971-1975.~ _
According to existing computations, during the Lighth and Ninth five-year plans the
~ average cost oer unit of capacity of p~wer-ex~gineering equipment (boilers and tur-
; bines of all types) rose by 25 percent, while thP cost ~er kilowatt of the capacity =
of electrical-engineering equipment rose by 2? percent. Similar computations for -
1976-1978 indicated that the rate of increase in cost per unit cf capacity of this
equipment during ~;he Tenth Five-Year Plan not only did not decrease but it
increased.l0
,
- Computational data testifies that growth in individual productivity or capacity of
_ new machines by 1 percent over the uld, previously mastered machinery causes the
upper limit of the price of machine-tool equipment, for example, to iricrease by
, 14-15 percent (on the average). Design developments cannot be Gonsidered as effec-
tive if the,y yield an insignificant growth in productivity (or capacity) but cost -
much more as a result of the improvement of various operating parameters of a given
group of' equipment for some sphere of its application.
6. Karl Marx and F. F;ngels. Soch. [Works], Vol 23, page 401. -
7. Ibid., Vol 47, page 351.
8. See P. A. Shiryayev and V. A. Shtanskiy, "Effektivnost' kapital'nykh vlozheniy
v chernoy metallurgiya" [Effectiveness of Capital Investment in Ferrous Metal- -
lurgyJ. Izdatel'stvo Metallurgiya, pages 184 -185.
i 9. See VOPROSY EKON0~4IKI [Questions of Economics] No 3, 1979, page 28. -
10. See V. Fal'tsman, "The Capanity Equivalent of Fixed Capital" (VOPROSY
EKONU~IIKI, No 8, 1980).
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Ari analysis oF comparable parameters of useful effer,t of new machine-tool equip-
ment and c~i' productiur: ~~.ciiities assimilated in recent years indicates that, on
the average, tne share of growth in the equipment's pr~ductivity is only about 3J
- p e rcer.t. Other operational improvemer~ts make up the remaining part of the useful
= e.ffe::t. For examplc:, the total sei~vice life of vario~~s machine tools is being
raised to 10 years or m~re, while the tim~ t;aken ~o become obsolete becomss sub-
stantially shorter.
Tlzus, t}~e problem of.' computing the obsolescence of machinerj~ remains unsolved. In
a etermining the norms for amortization of the tools of labor, it must be eonsidered
that, given today's service lives for them, the requirement for overhaul disappears
- c ompletely or is gr�eatly restricted. It follows frum this that an artificial leng-
thening of the se_rvice lives of machines, including obsolete or.es, incY,eases the
p rime cost of the output and stimulates the necessity for costly and poorly effec-
t ive overhaul. The r~epair of machines often costs two to three times as much as
n ew machines. In industry, amortization for overhaul is 20-22 percent gr~eater than
the entire total of capital investment in machinebuilding. In mar~y cases recon-
s truction, reequipping and the replacement of obsolete equipment by new equipment
is performed instead of overhaul. It can be said that "viol~itions" of such a
n ature reflect the process of replacing moribund methods of rejuvenation and, part-
1 y, the modernization of equipment by other, more rational and ec;onomically advan-
tageous methods .
I n budget estimates for construction, equipment prices are often established
- a ccording to calculatians of the supplier plants, and they exceed the budget-
estirnated assumptions. Meanwiiile, machinebuilding plants, using their~ weakest
c apabilities and deviating from the standard terms adopted in thr� price
- 1 ists, strive to increase the cost of the equipment. The more so since equipment
p rices called for by the price lists often are oriented to equipment already being
manufactured and do not cover new equipmen~ which is required in the modern era
of scientific and technical progress. From 20 to 70 percent (in terms of cost) of
' the equipment is manufactured in accordance with individual orders in some indus-
tries. All tl~ais emphasi.zes the importance of the principles advanced in the draft
of the "Main Directions" about raising the unit capacity or power of machines and
equipmen~; iii the optimal amount with a simultaneous decrease in their dimensions,
met~ils intensiveness and energy cor.sumption and a reduction in cost per unit of
Fina1 useful benefit.
The speci'ric shure of outlays for transportation in the final cost of cement is
- 14.4 percen~, wall materials 30.1 percent, refractories 10.7 percent, of other ma-
L-erials 37.7 percent, and of sand, grave]., crushed rock and other quarried materi-
als more thari 70 percent. The hauling distance for wall materials was 731 km in
1978 and 751 km in 1979, for brick it was 352 and 364 km,respectively, and for
prefabr~icated reinforced-concrete structure it was, respectively, 679 and ?27 km.
A similar situatio� also prevails in relation to other resources. For example,
reinforced-concrete output is widely developed ir. the USSR. In some oblasts, krays
and [;nion repu'plics thex~e is even a surplus. About 1 million tons of reinforced
concrete are exported over the Northern Railroad and simultane~usly almost 2 mil-
- lion tons oi' the same products from other cities arrivc iri regions served by
this railroad. In this case, materials and articles of the very same products mix,
with identical characteristics, are impurted and exported. Thus, nonpressure rein-
forced-concrete pige, wall panels, ceiling floors and so on, are . transported ta
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- Centi�al Asia. Similar products go from Central Asia to the Nonchernozem Zone [of
the RSFSlt]. All this results from the fact that all construction ministries and
agencies, and also local organs, have their own reinforced-concrete production
- facilities.
= One of t.he most impc~rtant reserves for reducing construction tin?~ and c~sts is that
of causing the service lives of facilities that are being erected f;~r the siting of =
equipment to be coincident with the service lives of the eqaipment. IVot so long =
ago the ~ervice lives of indus~rial equipment ~aas 20-?.5 years. Right now, :ecause ~
- of the more rapid obsolescence that occurs because of scientific a.nd t~chnical -
progress, it has been cut by one-hal.f or two--thirds. At the s~e time, the tradi- ~
tion of creating production facilities often in the form of large monumental build-
i.ngs of several stories or with 1.5 to 2 rows of windows, which require the cor-
responding axchitec~ural shaping and ~which are intended, as a rul~ for 80-100 years
~ of service, still has not been overcome. It is considered that there should be a
- reserve of area and loads ~n such buildings. The retention of this tradi.tion -
_ causes high capital investment, mainly fo r construction and installing work. -
YlacinK new machinery in such buildings inevitably necessitates, after the machine- _
ry has served out ~tspreviously established service life,the reconstruction and -
~ construction of buildings and structures_ This requires time and considerahle
additional expenditure. For the national economy as a whole, only 9 percent of thP _
total amount of capital investment aimed at reconstruction and expansion is for
reconstruction without the construetion of buildings and structures.11 Therefore,
� over a number of years, the reconstruction and expansion of many existing enter-
prises doc~ not yield the 3e.sired growth in the share of equigment in the techno-
logical structure of capital investment. Thus, according to a USSR stroybank cheok _
~f ,jobs included in the capital construction plan f'or.1976, the share of expenditures _
for equipmentin the total budget-estimated cost was28.7 percent, including 25.9 per-
- cci~i. ['or new construction projects, but only 31.2 percent for existing enterprises.12
Tn the USA, during 1955-1973, the cost of machinery and equipinent in the total vol-
- ume of capital investment in the processing industries was at least 71-72 percent, -
in motor-vehicle plants 84 percent, in the chemical industry 86 percent, and in the
buildi.ng-mai;erials industry 75 percent. At leading USSR enterprises, the share of
~ equipment in the capital investment structure after technical reequippi.n~ was
' 50-60 percent.
The current stage oP thc scientific and technical revolution is marked by conver-
:ior~ to thc erection of lightweight, inexpensive, rapidly disassembled buildings,
and, in some cases, movable buildings, primarily one-story. Domestic and foreign _
experi ~~~icc itidicate the high effectiveness of such an approach to the crea{:ion of
~rc~duct.i.rni space.
The consolidation uf production cannot be endless, and it does not always promote
improvement in technical and economic indicators. As the volume of production
, grows at individual enterprises, the share of capital investment and the prime cost
- 11. See V. K. Faltsman, "Intensifir.ati~n of the Development of Production Equip-
ment" ( VOPROSY GKONOh1IfCI , No 1, 1978
12. See D9. S. Zotov, "The Effectiveness of Capital Investment and Credit Relation-
ships in Construction (VOPROSY EKONOMIKI, No 4, 1977).
17
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~ ol' t.h~ product are increased. One of the causes oi this is the increased cost of' ,
raw m;?teria:ls :~na of the processing thereof as a result of the decrease in the pro-
_ pc~rtion of the useful element. The extraction of raw m~t~~rial reqLiires increasing- _
- ly lar~~,erexpenditures (for example, because of the depth of depcsits), and -
transport expenditures rise because of the need to im~ort raw materials ~nd other _
- resc~urces from distar.t regions. A~~ this requires aduitional ~xpenditw-~s for the
beneficiation of' raw material, the ~onstruction of underg~ound and strig mines, oil
and gas wells, rai.lroads, highways, and so on. As a result, specific capital in-
vestment, both at a given enterprise and at interdependent branches of the economy,
is raised.
c~rowth in specific capital investment and the prim~ cost of output at enterprises -
. that operate on na~ure's raw material is often explained as an inevitable conse-
quence of scientific and technical progress. Meanwhile, a rise in the productivity
- of machinery often occurs thr~ugh a reduction in the sizes and weights of assem- -
- blies and machines. The use of high-strength, plastic and durable materials,
which possess the necessary electrical, magnetic and other properties and which
require small outlays For production, changes the structure o� the raw materials
- and of the items made from them.
In some countries basically new solutions have appeared that change the nature of _
the mutualc�oexistence of large and small plants. Thus, along with modern metallur-
_ gical giants, plants that possess a small fraction of their capacity (in production
_ volume) become compl.etely profi.table.
In 1976 about 240 miniplants that produced more than 36 million tons of steel per
- year~ were operating in 3~ countries of the world. The miniplants were designed and
~ built in 14-18 months. This reduces by far the potential of their obsolescence
during introduction into operation. The profits of the miniplants (per unit of
_ output) are h~gher than for the large enterprises, by virtue of the insignificant =
capital intensiveness, simplicity of the productiQn process, small transport costs,
o~timal use of highly productive mcdern equipment, and flexibility of industrial
schemes.
In considering the main factors that make the construction of small-capacity
metallur�gical conversion plants desirable, it can be affirmed that in some parts of
tlie Soviet Union (the Volga Region, Central Asia, Siberia, the Far East, the North
of' the European portion of the country, Belorussia, the Baltic, Moldavia ar.d the
Western Ukraine) the construction of such plants will be extremely effective.l3
In thc: Soviet Union preparations are~now being made to convert metallurgical output
as a?vhole to the mdnufacture only of high-quality steels. The replacement of
ordina?�y structural steel by high-quality steel will enable metal consumption to ~e -
- cut 5-f'old to 10-fold. Apparatus for ore ~reparation, for smelting steel and
for manufacturing rolled steel are being created for this purpose. It is planned
to autom~xte the whole industrial process completely. The capacity of an installa-
= ti~~r~ will be 50,000-100,000 tons of inetal products per year.
Designs for miniplants at which all industria~ operations will be carried out by
one unit are being developed. A movable plant also is being designed: either on
wheels or on a barge, or on a ground-effects ship.
13. See V. Zimin, "Prospects for the Construction of Small i~lovable Metallurgical
Pla:.ts" (PLANOVOYE KHOZY~IYSTVO No 1~, 1978) . -
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! In recent years, industrial production associations that are located in large cen-
ters have been striving to create branche~ in small towns and urbar~-tyge settle-
ments (for example, the Tutayev Branch ox the Yareslavl'Motor Plant). The transfer
- of production t~ a satellite town has enabled the supplying of products to custo-
= mers of the nearest oblasts to }ae greatly improved at minimal capital expense.
= The organizatic~n of collapsible movable enterprises _can yield a major saving of
ti.me. In the constr~iction industry, mobile cnllapsible plants for housing con-
- struction that are easily assPmbled and disassemble:d (the framework consists of
~ knockdo~vn arches) have already appeared. They can be hauled by raii to any part
of the country.14 This trend is also being spread to other producing industries.
~ For ekample, movable installations.for the primary processing of agricultural prod-
, ucts have been established. Unfortunately, not enough attention is being paid yet
- to the open placement of equipment or to the installation thereof under lightweight
' broach roofs. Meanwhile, such a procedure for~ siting it will enable construction
costs to be reduced by 10-25 percent. Of course we are not speaking of convert-
ing ev..rywhere to the erection only of small or movabl~ enterprises. They must be
established where it is technically justified and economically feasible.
~xperience indicates that constructional structure, semifinished items and other
~ artzcles should be lightweight, inexpensive, without unnecessary strength reserves,
interchangeable, and, tc~ a certain extent, collapsible,for use at other facilities.
As for heavy produc:ts m~~de of concrete and reinfQrced concrete, metal and stone,
they can be used only wr~ere this is dictated by the technical norms and the rules
' for erecting produetion buildings.
Rai.ionalization of the structure and a rise in the quality of building materials
will enable the weight thereof per u:iit of operations to be reduced by about 25-30
percent, and, therefore, the weight of buildings to be decreased. A reduction in the
weight of materials per unit of operations, even on such a comparatively small
- scale, wiil affect considerably the duration, labor intensiveness and cost of con-
struction. Reduction of the weight of buildings in turn enables the mechaniza-
' tion of construction operations and the quaiity thzreof to be increased and the
- organization of construc~ion work to be improved. As a result, labor productivity
; grows sharply, and the consumption of materiat resources and of monetary resources
per unit of increase in capacity is reduced.
Ovcr~hcad costs in construction are still great. Their share in the structure of
. expenditures for construction and installing work was 15.9 percent in 1965, 16.2
~ percerit in 1970, 16.3 percent in 1975 and 17.1 percent in 1979. Some of the causes:
a mulli~licity of control levels, the existence of a large number of small
~ subunits, and inadequate attention to the introduci:ion oF new and more progressive
; f'c~rms for organizing construction.
; Thc CPSU Central Committee and the USSR Council of Ministers decree of 12 July 1979
- requires miiiistries and agencies to work out and to take measures to improve the
management of capi~al coilstruction and to convert io the two-level or three-level
system of control. The basic cost-accounting elements of construction operations
are the production construction and installing assoeiations, and, only in certain
' 14. Minenergo [Ministry of Power and Electrification~, ~Nhich first created such a
- plant, did not succeed, however, in propagating such a useful experience.
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cases, the trusts. The draft of the "Main Directions" orients the construction in- '
- dustr,y to compZeting the conversion of the middle link of cons'~ruction ma;lagement -
. to cost accounti.n~; in the near future. _
- ~x~crience has been gained that indicates that praduction associations do up to 75- ~
80 mi L1ic~~? rubles' worth o~ ~onstruct~on and installir?g work per ;~ear, i"~ir mor�e
Lhan thc trusts of the highest capacity. Nowadays, Lhe value of the minimal annual
amount of contracting work ror associatians has been set at ~0 million rubles, ~
while the maximum amount can reach 150 million rubles. The associations include
construction and ir?stalling subunits, mechanization trusts, motor-vehicle transport
pools, trusts and administrations for operational-equipment outfitting, and other
- units.
The CPSI( Central Committee and USSR Council of Ministers decree of 1? July 1979 _
- puinted out that the assembly of outfitting equipment can be carried out by the ma-
chinebuilding supplier plants. This will provide for acceleration of the introduc-
tion of equipment into operation, a reduction in expenditures for assembly, ar~d
increased supplier responsibility for equipment quality. It is known that the _
elimination of deficiencies in manufactured equipment engenders additional expendi-
" tures which, as a rule, occur not at the machinebuilding plants but during
co:~struction and installing operations.
The plant-construction combines that were established at one time produced con-
structional structure and parts for a facility as a whole, transported the output _
to the construction site, and assembled it, creating finished production space.
Nosv they have all been transformed into reinfored-concrete products plants. Mean- _
while, combining their worlc to prepare space with the work of general suppliers of =
the equipment to execut:e the delivery of complete sets of equipment and _
the assembly thereof reduces construction time and construction costs.
~ Modulaz~ construction is an effective method. An association organized in Tyumen'
by Minneftegazstroy [Ministry of Construction of Petroleutt? and Gas Industry EntEr-
prises] produces modules, assembles the equipment in them and delivers them to _
the construction site, assembles the finished product and turns it over to the
- client. The time spent erecting the facilities is reduced by 25-30 percent,
labor expenditures at the construction site are cut to half or two-fifths, and the
weight of the building materials is two-thirds to three-fourths less.l5 For more
than 15 years this association has been the only one in the country. The creation
of design-and-construction organizations, which combine design, construction, in- _
stalling and other subunits in their makeup and turn their output over turnkey
style, help~ to reduce consl;ruction time and costs. The CPSU Central Committee's
draft pointed out the desirability of building facilities more widely through bank
credit, which is granted to construction organizations in the full amount of the
~ budgeted cost of the enterprise until it is introdueed into operation. It is pro- ~
posed tocreate conditions for spreading everywhere the start-to-finish flow-line
bri.~ade contract. The introduction of more progressive organizational forms for
consl,ruction ~vill reduce its expensiveness by at least 10 percent.
_ 15. See N. ~hcherbina, "Industrialized Me~edauthorFreemarksuthat theitotalssum _
(PLANOVOYE KHOZYAYSTVO No 3, 1980).
- of the national economic effect from introducing the modular method of
c~nstruction duriag the period 1973-1978 exceeded 500 million rublesa
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~
The term "assimilation" of capacity introduced into operation usually means the
_ achi.evement primarily of the desi.gn capacity, and, later, ~ther technical and eco-
_ nomic zndicators. T~;ffectiveness in creating fixed productive capital is manifested
mainly in the ratio between the yield from th~ growth of labor productivity
_ ~chieved and what has be~n spent on it, and ip indicators that n~ark the relation-
- ships of yield on capital and capital intensivenes~. As a consequer.ce of ~che
lengthy periods of design, construction and assimilation of enterprises introduced
into operation and of a low shiftwork utilization factor, the time of productive
use of the capacity that has been creatsd is reduoed, innovation in the machinery
and~technology is lost, and cnnstruction becomes more expensive (exceeding the
standard construction time by 10 percent raises costs by at least 1 percent). The
average period o~ assimilation of ne~v ~nt~rprises and capaca.ty according to the
norms is 1.5-2 years, but actually it reaches 3-4 years, and often more than 5.
The lengthy assimil.ation of capacity, as sometimes proves to be tl:e case, is caused
by unfinish~d construction and installing work. The results of an investie,ation of
_ enterprises turned over for operation indicate that during the assimilation period
more than half of them (in percents of the total number of enterprises) experience
- shurtages oC raw materia].s, electricity, water and other material resources, 29
percent lack ski}.led-worker per~onnel, 19 percent of them are eliminating design
= errors, 2~ are climinating equipment defects, and 21 percent are eliminating
mismatching oi capacity (or throughput) of departmerits and facilities and of some
groups (or lines) of machines and equipment that process identical parts or carry
. out the very same operation..
Because of the indicated factors, yield on capital during the Ninth Five-Year Plan
was reduced 5.2 percent. Out ~f 200 billion rubles in gr~wth of national income
during the five-year plan, about 100 billion rubles were used to compensate for a
reduetion in yield on capital (that is, mainly through additional capital invest-
ment).16 In 1978 yield on capital in industry was 11 kopecks less than in 1975.
If the yield on capital achi.eved in 1975 had been maintained in 1978, the national
economy could have obtained about 55 billion rubles' worth of additional output.
The question arises: How smoothly was the "assimilation" stage introduced in the
investment cycle? World practice indicates that only a brief startup period is re-
quired, which, as a rule, is contemporaneous with completion of the construction
stage. The causes of lengthy assimilatior, of eapacity enumerated above deny the
riecessity for an "assimilation" stage, corroborating the fact that deficiencies
exist in design, c~nstruction, the manufacture of equipment, and preparation for
pracluction (providing a work force, raw materials and ather items, and so on),
' which in and of themselves are impermissible. These cannot be the subjects of
either design or planning. On the contrary, the prol~lem consists in stopping
their appea:ance.
, The though~s pt�esenLed enable the conalusion to be drawn that it is obviously nec-
; essary to define the scale of introduction of the newest types of equipment,
structure and materials and of the expansion of th~~r production; to convert to the
erection of lightweight, modern types of industrial buildings, to the wide use of
experience in building minipiants and mobile enterprises and installations, to the
16. V. Krasovskiy, "Economic Problems of Yield on Capital" (VOPROSY EKONOMIKI
[Questions of Economics], No 1, 1980). About 30 nercent of the production
~ capital of industry still does not yield the designed output (PLANOVOYE
~ KHOZYAYSTVO [The Planning Activity], No 4, 1978).
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outduor placement of producl:ion facilities, providing thereby the prerequisites
- t'or improving the technological structure of capital investment and of the org.anic _
structure of fixed productive capital; to create, in addition to construc~~;~.1
- and installing production associations, design-and-construction, plant-construc- _
- tion, and housing-construction associations and enterprises; and to transfer the
assembly of equipment to the supplying plznts, organizing specialized installing _
subunits that are subordinated to them. It is required that design-organization .
activity be restructured and that design norms be refined, as is now called for in
- the case of buc~get-estimating norms.
= Zn our opinion, it is desirable to dispense with the so-called period of "assimila- ~
i tion." It is important that new organizai;ional forms of construction be more
effective in the sense of achi.eving the final result (the introduction of capacity
and facili.ties into operation). Right now the client, that is, the organ fer which
the newly created capacity was built (or rebuilt, exp:inded or reequipped) turns
-J the capacity ~~ver for operation (to state commissions). Obviously, this should be
done by the executors--the producing construction and installing associations,
design-and-construction associationsy plant-construction combin~es, equipment su~-
, pliers, and othGr organizations that take on the role of contractors, with the
obligatory participation of the clients. .
A stead~ rise in yisld on capital and reducticn in expenditures for producing the
tools uf' ~abor make up the n~~tural pxocess of growth in the productivity of ma- ~
chines and equipment that outpaces the growth in iheir cost. Therefore, plans
for economic and social development should assign task~ for raising yield on cap- _
ital to ministries, agencies and production associations (or entei�prises). Recom- @
mendatians fo.r reducing prices for machi.nery per estimated unit of .capacity or
other useful effect should be worked out, as well as a scale that determines the _
effeci;iveness of increase in the capacity of a unit of equipment and, corre- `
spondingly, of the price, with an obligatory and simultaneous reduetion of the
price per estimated unit of capacity. -
- It is just as important to solve the ques~tion of regularizing transport schemes for _
= hauliilg building materials, providir.g construction projects with local materials
and eliminating the long-outdated practice of creating so-called in-house construc-
tion-industry bases, paying greater a'ttention to developing the building-~materials
industx�y and guiding its efforts toward organizing in each economic region the pro-
duction of materials ii? the amount required for supplying ~the construction proj-
ec;ts l~~cated in a given region with the basic building materials. Contractors
shoul.d have only the most necessary implements, systems, accessories and mobile _
in.stallations.
The task ~I' rest;ructuring the formstion and organizing the use of the amortization
~ fund is imperative. The allocation of a portion of it for renovation and overhaul .
loses its meaning. Right now it is authorized that this fund be used to modernize
equipmcnt, acquire new machinery and exPcute technical reequipping (by entering a
portioii of the amortization fund into the production development fund). The amor-
tizati.on fund should be a single fund and, obviously, of small size (at present it
exceeds 67.7 bil].ion rubles). Overhaul must gradually be replaced by merely an ex-
change of worn parts of equipment; it must be permitted only in various cases for
certain types of fixed productive capital, and the overhaul bases transformed into
enterprises that supply spare parts.
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Y
Norms for construction time s~iould be worked out in conjunctior. with the norms that
define periods of development, and consultation for~ approval of design and bud- _
get-estimating papers shauld be worked ~ut with an eye to a reduction of these per- -
, iods and mutual coordination (or integration) of norms. Bec~.use oF the recompu- -
~ tation of the budget-estimated cost of construGtion in accordance with the new btzd-
get-estimating nor~ms that are forthc~n;~ng in 1984, it is desirable i~o give thaught =
~ also ~o the considerations that have been examined above with a view to providing
for a substan~ial reduction ~n the cost both of carryover and of newly s~:~r.t~d =
construction. -
COPYRIGHT: Izdatel'stvo "Pravda", "Vop ~sy ekonomzk_~'', 1981 _
11409 -
, C30: 1821 -
_ ~
I .
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_ i
J i
CONSTRUCTION MACHINGRY
! ~
~
MANAGERIAL, ORGANIZATIONAL STEPS TO REDUCE MATERIALS INTENSIVENESS ANALYZED
Moscow VOP}tOSY EKONOMIKI in Russian No 12, 1980 pp 38-48 -
~
[Article by A. Polyak: "Ways to Reduce Materials Intensiveness"]
i=
(Text] L. I. Brezhnev stated at the July 1980 CPSU Central Committee Plenum: "We j
have set ourselves such a fundacr~ental task as raising productior~ effectiveness and
wark qL~~.lity. It should be kept in mind constantly." The CPSU Cantral C ommittee ,
and USSR Council of Ministers decree of 12 July 1979 called for the introd~action of
. an indicator for standa:d nei: product. One of i~~ pasic purposes is to p rovide the
best conditions for reducing thP materials intensiveness of production work. The
significance of reducir.g materials inteilsiveness with a view to raising the effec-
~ tiveness of social production is occasioned by the rising share of the expenditure
- of embodied labor in overall production inputs and by the inerea:~ing production
and consumption of ma.terial resources. The share of material expenditure (raw ma-
terials, basic a.nd auxiliary materials, and fuel and energy) in industri al ~~roduc-
tion expenses rose almost 30 percent durin~; 1930-1980.
Outwardly it seems that a net output indicator that is completely "clean " of ma- -
terials expenditures will not cause a change in materials intensiveness. ~ut it is
this which is its most important feature: by not stimulating an artifi c ial over- -
stai;ing of material expenditures, it thereby "works" in the direction of reducing
them, since, on the one hand, where the given indic;ator is used, an incre ase in ma-
terials intensiveness of articles does not allow an increase in the output of pro- _
duction work, and, on the other har~d, the experiditure of materials that are f.unded
and for which norms are set increases, which is unprofitable for enterpri ses and ~
associations.
jVide ini;roduction of the standard net output indicator into economic prac ti:� pre- _
vents the use of �total material production expenditures in grosS social output for
purposes of eva_.uati.ng trends in the materials intensiveness of the national econ-
omy. The indicator of the natiunal econumy's materials intensiven~ss, wh ich is de-
i'ined as the ratio of material production expenditures to the amount of the gross
- social product or of national income, is easily computed. It could answe r i~:s pur-
pose if the repeat counting of material expenditures that is introduced i nto the
gross product, primarily by such industries as machinebuilding, light industry and
others, were not included.1 An increase in repeat counting is inevitabl e as the
1. We do not examine the influence of structural shifts in the economy's branch
structure and of the value factor on the materials intensiveness of the gross
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division of social labor, which is reflected in the development of specialization _
and cooperation in pr~oduction work, intensifies. An expansion i.n co~~peration can
al.so lead to distartion of the actual indicators of production ac�tivity in some in- `
~ dustries if the,y are determined by gross (commodity) autput ~r~icators, with the
inclusion therein of the cost of the outfitting articles a~?d semifinished goods ob- ~
i tained outside.
_ Criticism of the gross o~ltput indicator as a basis for computing production work,
labor productivit;;~, yield on capital and other basic economic indicators also is
_ a criticism of the "gross" ?nethod of determining materials intensiveness--through
the whole sum of material expenditures in gross social output, which often includes -
the r~peatedly iterated cost of subjects of labor that are actually manufactured
once. .
~ For a full evaluation of treiids in materials intensiveness in the national econ-
' omy, a system of indicators that reflect the use of inetal, fuel, energy, chemicals,
' building materials, ~vood and certain other mos+. important material resources must
be used. At the same time, the annual consumption of the main types of raw materi-
als (primary materials), fuel and energy, which are applied to an increase in net
output (or national income) can, from our point of view, be an important indicator
; of the materials intensiveness of social production work. The numerator of the
- given formula should include the annual conswnption of iron ore, nonferrous metal
ores, fuel of all types, nuclear energy and water power computed in standard fuel
equivalents, the main building materials, wood, and chemical raw materials.
~ '
In a first approximation this amount can be transformed ini;o the total consumption `
of finished metal output of ferrous (finished rolled products plus pig iron and
steel castings, plus forgings and pipe made of ste~l ingots) and of nonferrous
metal~ (rolled products plus casi:ings),fuel and energy resources in standard fuel
- equivalents, logged wood (commercial timber), cement (used for building mortar),
building brick, prefabricated and monolithic concrete, plastics, synthetic fiber,
mineral fertilizers, sulfuric acid, varnishes, paints, soda and a number of other
chemical products. Preducts of animal and vegetative origin (except for wood and _
~ certain industrial materials) should not be included in th~e final sum of primary
_ naterial resources (that is, raw materials that undergo initial stages of process-
ing) and fuel and energy, ap~ropriate consumption indicators.being computed indi-
vidually for them, since consumption of these material resources is not proportion-
- al to change in the amounts of social production but depends directly upon the
population's requirements., The growth of the people's requirements for subjects of -
consixmption should not be reflected in an increase of the total indica~or of the "
materials intensiveness of social production. Total consumption of the indicated
primary material resources should be adjusted by the amount of the foreign-trade
balance of these resources. -
The indicator for materials intensiveness of net output that is obtained in accord-
ance with this method is used to compare various time periods in the economy of a
countr,y with a comparatively stable structure of primary-materials eonsumption. -
However, the tentative nature of the indicator being exan,ined should be kept in
4 mind. In the first place, a different amount of labor is included in a unit of
equal weight for each of the primary ;naterials. Therefore, it is p~ssible to
social product, considering that this effect can be eliminated at least theoreti -
cally by change of the appropriate ir~dexes and adjustments.
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convert from an in-kind computation of the numerator of this materials intensive-
' ness indicator to a cost computation (in prices). Although existing defects in
price-setting also affect the precision of the computations, an indicator deter-
mined in accordance with the proposed procedure is, on the whole, free from the
main deficiency: the repeat counting of material expenditures. I
In the second place, in computing materials intensiveness accor~ling to the ^.on-
swnpiion of primary materials (but not raw materials), tha in-kind consumption of
some resources, primarily metals, differs sharply from the amo~:~nt of original ore
mined. Thus, the annual consumption of finished metal outpv~ of i26 million tons
corresponds to tne total constunption ~f about 1 billicn toi~s of the original ore
- and the scrap and waste of ferrous and nonferruus metals (the expenditures for ore
and scrap and waste are apportioned in the ration of 9:1). The consumption of or- ,
- iginal raw materials in nonferrous metallurgy is higher. For example, more than ~
3,000 tons of ore are required to obtain 1 ton of vanadium, more than 300 tons of
ore per ton of tin, ;~bout 200 tons of ore per ton of nickel, an~ 100 tons of
per ton of capper.
The labor methud can be used to obtain theoretically "pure" data about the compara-
tive amount of ~�arious material resources in the ecnnomy. It permits comparison of
the materials-intensiveness level of heterogenous products in accordance with labor
- expenditures, that is, accordi.ng to the amaunt of labor embodied in the original
material resources, plus the expenditures of live labor in the producti.on itself of
this output. For example, the full labor intensiveness of production (including
expPnditures for raw materials, fuel, energy, transport and in-housP blast-furnace
_ con�~ersion) is, for 1 ton of pig iron, about 38 man-hours, in which the labor ex-
pend.i.ture f`or the iron-ore part of the charge (agglomerate) is about 19 man-haurs;
for coke and natural gas 9 man-hours; and, consequently, the materials intensive-
ness of the basic material elements for 1 ton of pig iron is 28 man-hours. The
- ].abar used for 1 ton of steel averages about 48 man-hours; for comparison, Zet us
point out that the labor intensiveness for 1 ton of such structural plastics as
polystyrene and polyethylene averages 250 man-hours. It is true that in this case
there is an excess of labor intensiveness of plastics over steel, which is caused
not so much by differences in the levels of materials intensiveness of th~ o.riginal
- products as by the higher labor expenditure for ~he production of the plastic it-
scLf. But, as a rule, materials intensiveness levels in the con~~.unption of the
ariginal raw materials are reflected directly in the labor-intensiveness indica-
_ tors. 'Phus, in the copper industry, where ores that a�~erage 0.7 -1 percent of the
mai.n component are processed, the labor intensiveness for 1 ton of ~xiginal raw ma-
terial is about 5 man-hours, while the labor intensiveness for 1 ton of refined
copper is about 500 man-hours (or more than 100-fold). In the aluminum industry,
wliich processes raw material with up to 40 percent content of the useful compon-
- ent--alumina, labor consumption for Z ton of the original raw materials (bauxites)
i.s equal to 15 man-hours, but for 1 ton of aluminum it is about 300 man-hours (that
- is, the gap is mueh less).
_ The pramise of the.labor metnod for measuring materials intensiveness and the
availability of the baseline information should be noted. The data on start-to-
finish labor expenditure for producing output exist right now for most of the main
industries and types of products. At the same time, this method still is not being
used practically at all. Therefore, in our opinion, its introduction as a supple-
mentary indicator, and in some cases, even the main indicator, for measuring mater-
ials-intensiveness levels of diverse products is an important and urgent task.
Y
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The CPSU Central Committee and USSR Council of Ministers decrec of 12 July 1979 re- -
corded some specific measures that ~re aimed at raising the .level of planning work
in the national economy. These mea~ures have a direct relationship with purposeful
~etic~n to reduce the materials intensiveness of production work. The development
of an int;egrated program of scientific and tei;hnical progress fur 'LO years (by
' five-year periods) will enaqle both the near-tcrm and the more remote consequences
- of introducing the achievements of ~cientific and technical prugress in the area of
changing materials intensiveness to be foreseen and will enable these achievements
~ to be considered in long-range planning.
; Because of this, it is necessary to intensify the scientific approach to the solu- -
; tion of economic problems in the use of materials and to make computations to sub-
stan{;iate the economically effective intei~change of material resources, especially
- within the framework of the production and use of struc~:ural materials. Such com-
putations are still b~:ing conducted tentatively, for they are based upon full data
~ about the production of camparable materials, on partial data about their process-
- ing into articles, and on the most approximate data about the economic indicators
' of the operation of the finished articles. Meanwhile, the stages of operation are, -
in many cases (the introduction of aluminum instead of ferrous metals, the re- ,
' placement of steel pige by plastic pipe, and others), decisive for an integrated
economic assessment of the effectiveness of using the materials being compared.
I'or example, the prime cost of 1 con of flat rulled aluminum is 7-fold to 8-~old
that of steel, ~ut its capital intensiveness (cor.sidering the investment in power-
engineering) is 6-fold higher. In particular, the start-to-finish specific cun- _
sumption of electricity for producing 1 ton of rolled electric steel is about 600 -
: kw-hr and for 1 ton of flat rolled aluminum it is 15,000-20,000 k.w-hr. NeveY`he-
1ess, the use of rolled aluminum sheet instead of steel in the national ecor.omy,
when it is technologically ~ossible, provides an anr~ual economic benefit of about
500 rubles per ton, precisely through savings of. op~rating expenditures during the
service life of the corresponding articles. -
The indicated decree notes that responsibility for satisfying the national econo- �
my's and the popalace's needs for output of the necessary variety and quality
rests upon the ministry that is the head ministry for production of the given
, product. This situation has special importance for products that are marked by
universality and wideness of demand. Thus, for ferrous metals, which are used by =
~ practically all branches of the economy, it has been recommendEd repea~edly that
~ long-range demand be determined by the efforts of some sort of interagency organ
under USSR Gosplan, USSR Gossnab or the Academy of Sciences. It is obvious now
! that this task should be solved within the USSR Ministry of Ferrous Metallurgy sys-
~ tem, on the basis of all the needed data, which are transmitted to it by central
- planning organs. Specializ~d Minchermet [Ministry of Ferrous Metallurgy] organs
will get a real opportunity to intensify anQ deepen work on the scientific validity
~ of the national economy's requirements for metal products. _
, Thus, the indicator for gross output of machinebuilding, purged of repeat counting =
- (the final product),was used back in the 1960's as a method for the consolidated
' long-term determination of demand for ferrous metals. However, this indicator was
~ calculated extremel,y roughly, on the basis of the consolidated assessments of plan-
ning organs. Now, while reviewing indicators of the economic activity of machine-
buildinb and while computing standard net output, the amount of repeat c~unti~lg of
the cosi: of semifin.ished articles and of outfitting items within material
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expenditures is refined for various branches of macliinebuilding productiun. This
wi11 enable precision in the consolidated determinatxon of requi..rements of the most
important customers for metals--branches of machinebuilding a:1d metalworking--to be
J
increased.
= With i.mprovemen~; of the economic mechanism, improvement of the system of in-kind -
indicators for accounting for and planning the output of material resources is of
special significance in reducing materials intensiveness. The decree calls for in-
troduction of the necessary changes to the system of in-kind measures for the out-
' ~ut pruduced (for metallurgy, machinebuilding and o+her branches of industry) and
conversion to planning of the production of equipmet?t according to an expanded
products list in units of ineasurement that reflect morP completely the equipment's
productivity and other customer ck~aracteristics.
A number of indicai~ors that have more limited application than net output can nev-
ertheless effecti~ely influence the reduction of materials intensiveness. Such in- _
dicators, which replace or supplement in some cases the indicator of in-kind ton-
nage,are theoretical weight, adjusted (by coefficients of difficulty or labor
intensiveness af production) tonnage, meterage (linear, square or cubic), and so un.
- ~
� In machinebuilding, where metal output is turned over according to theoretieal
_ weight, expenditures are saved by reducing the formation of shavings. The metal-
lurgists record output produced ix~ terms of weight, which is determined in accord-
ance with the nominal size of the rolled product, without detriment to plan ful-
f illment. Accounting for the output of a number of types of inetallurgical output
in meters will stimulate a reduction of their materials intensiveness. This re- ~
lates primarily to reporting the production of various types of flat rolled prod-
ucts, es~ecially sheet iron.
The output of steel pipe is now counted in tons and linear meters. The latter in-
di.cator can reflect the final national-economic results and the actual resuits of _
the production activity of the eollectives more objectively. The Volzhskiy Pipe
P larit is among the country's leading enterprises. It produces lightweight pipe of
reduced wall thickness. However,.in so doing, certain of the enterprise's most
important economic indicators, for example, yield on capital, when it was account-
ed for in actual tons in-kind or commodi.ty output (at the existing price levels),
were degraded. Measuring production output in meters will in this case enabl.e a
more correct reflection of the ef~scts of progressive shifts in the variety of out- -
put produced and in the metals intensiveness of production en the yield on capital.
For the Ninth Five-Year Plan as a whole, yield on capital at the Volzhskiy Pipe
Plani:, ~vhen it was measured by tons in-kind and commodity output, was reduced, and
it was raised only with reporting of product output in meters, which corresponded
with the growth of effectiveness that actually occurred in the plant's work.
_ Another possibility for correct reflection of progressive shifts in a plant's _
work is associated with the perfecting of prices for what it produces.
In metallurgical machinebuilding, planning and reporting of the output of equipment -
~iii tons in-kind have promoted an overst~ting of the weight and an. increase in the =
" weight of the units produced. Upon conversion, at the suggestion uf VNIImetmash -
[A1.1-Union Scientific-Research and Design-Development Institute for Metallurgiaal ,
htachinebuilding] and the Elektrostal' Heavy Machinebuilding Plant,to a system of
reporting the output of equipment for individual units in components, sets and
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pieces, and in terms of cost for the whole subbranch of inetallurgical machinzbuild- -
- ing, the metals intensiveness of the articles produced was cut.
Improvement of the economic mechanism presupposes an examination of the problems of
- reduciiig materials intensiveness within the frame~vork of appropriate complexes of _
; metallurgical machinebuilding, cuel and power enginee~ing, agricultural industry
- and others. Of interest in this connection, in our opinion, is an analysis of the '
existing level of and reserves for raising metal utilization coefficients within
the framework of one of the main national-economie compiexes--metallurgical
machinebuilding.
In recent years, a trend toward raising the metal. utilizatien coefficient of pro-
~ duction processes has been noted in ferrous metal.lurgy. However, the pace of this
increase has been insignificant. Thus, the yield of annual output of inetallurgical
~ production (including castings) was 70.9 percent in 1958, 71.9 percent in 1y70 and
72.2 percent in 1975. The start-to-fini.sh coefficient of the consumption of ingots
j, and of cast billets for 1 ton of finished rolled metal in rolling departments im-
proved slowly: 1.30 tons in 1965, 1.29 tons in 1970, 1.28 tons in 1975 and 1.27 -
tons (planned)in 1980.
Improvement of the indicated coefficient, despite conduct af the appropriate mea- ~
- sures in ferrous metallurgy, was slowed by the following factors:
' --the necessity for a subsequent rise in the share of flat-rolled steel, including'
cold-rolled, in the assortment of finished rolled pi�oducts, in the interests of the
metal-consuming branches of the national economy. During the 1965-1980 period the
share of flat-rolled products increased from 37 to 41-42 percent. At the same -
time, the start-to-fix~ish consumption coefficient for ingots for 1~;on of ~inished
carbon bar section was 1.2-1.24 tons, for 1 ton of thick plate 1.3 tons, and for
1 ton of thin structural plate about 1.35-1.38 tons;
, --a constant rise in the degree of alloying of the assortment. In so doing, con- _
sumption cozfficientG f~r the production of alloyed plate were much higher than for
the rolling of carbon m~tal; and
, --the necessit,y for including new shapes and sizes in the assortment of rolled
' products, in order that the rolled products might approximate the configuration of
- the finished articles and parts, which also is associated with an atiditional ex-
penditure of inetal in the production process.
_ The use oF inachines for flame scarfing metal in the flow line exerted a definite
~ influence on .increase in the consumption coefficient. Under these circumstances, _
the priority directions for improving the start-to-finish coefficient of inetal con-
~ sumption are: substantial expanded use of the highly effective process of the con- ~
. tinuous casting of steel (its share is now 10-ii percent of all the metal poured);
~ on the average, the use of machines for the continuous casting of billets (MNLZ)
~ will enable at least 0.12 ton of inetal to be saved per 1 ton of rolled metal
(Prom 0.1 to 0.25 tons/ton); expansion of the use of semikilled steel instead of
� kill.ed steel, which provides an average reduction of 0.08 ton in metal consumption
per i ton of rolled metal (the amount of production of semikilled metal instead of
~ killed can reach 20 miilion tons in the modern era); an increase in the amour~t of
~ steel cast in ingot molds with the use of exothermic impurities, which raises
the yield of annual rulling output by 1-5 percent; chemical plugging of rimmed
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= st~c:l during casting,with an increase in yi~ld of annual rolling by an average of
_ 2 perrcr?t; the introduc�ion of low-oxidizing, high-frequency and indur,tion electri-
cal heating of rolled metal, which enables a reduction in metal losses; the intro-
duction of systems for wastefree layout of rolled metal with the use of a computer;
and the expansion noted above of the production of rolled metal with negative
a]lowances, turned over according to the theoretical weight, bringing the output
of r~olled metal with negative allowances and narrow tolerances up to 40-42 million
tons, saves about 80U,000 tons of inetal in absolute terms.
= Along with the above-enwnerated basic areas for saving metal in metallurgical con-
versions by the USSit's ferro~xs metallurgy, there are great reserves in the iron-ore
industry for reducing losses of iron by improving the designs For ~oncentra.ti~:g and
''lumping (pelletizing) the raw material. Development of tHe concentratin~ processes
has been linked with the later need to raise the iron eontent in technical-grade
ore (from 55 percent in 1950 to 60 percent in 1980), while its raw material content
was dropping (from 51 percent to 35 percent over the same time period).
ihere are substantial reserves in machinebuilding and meta].working for increasing
metal-utilization coefficients. This is obvious from data about the use of fin-
ished output made of ferrous metals--by type, yy branch anii by areas of processing
(see table on ~age 44).
Level of Metal Utilization in Machinebuil~.ing and Metalworking
by Type, Iiidustry and Area of Pr~cessing
Metal
Types o~ metal output and area of use of the metal utilization
coefficient
Production of parts made from forgings and hot stampings made from 0.55
rolled products
In forging and pressworking departments ~�82
- In machining 0.68
Production of parts made of steel ingots 0.3
Forgings made from steel ingots 0.6
- D.irect machining of rod metal:
Ordinary rolling........ 0.8 --0.82
Structural rolling 0.68--0.7
Tool stock and stainless stock 0.58--0.67
[>rocessing of sized stock 0.8
Stamping of articles made of flat rolled produets:
Ordinary 0.75--0.77
Structural, hot-rolled 0.69--0.7
Structural, cold-rol~ed 0.67--0.68
Stainless 0.7
Tool 0.56
llynamo 0.5
Transformer 0.75
Working of pig iron and steel ca~tings 0�$
�
Worlcing of steel pipe 0.77
Working o~ molded section 0�92
Average utilization coefficient of inetal output for machinebuilding 0.76--0.78
and met;alworking...........~
- For rolled steel roduets.. 0�72
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- in machinebuilding the utilization coefficient for all types of inetal products is -
unly 0.76-0.78, whiie for ralled steel it is 0.72. Many types of inetal products -
- that; come to machinebuilding are subject to almost no processing. In some billet-
processing facilities, the coefficient is still lower: in the production af parts -
made from steel ingots it is 0.3, in the production of parts made from forgings
and of hot stampings made from rolled products it is about 0.55. For machine-
buiZding and raetalworking as a whole, the metal utilization coefficient has not
risen for a long time. In the modern era increasing i�c by 0.01 would save about
600,000 tons of inetal. With respect to nonferrous metals, the utilization coeffi-
= cient of rolled brass products is about 0.6, for rolled bronze it is about 0.7
(in automaking, heavy machine building and machine toolmaking), for wire made of _
tungsten-rhenium alloys it is 0.26-0.36 (in the electrical-equipment industry), and
' for gallium semiconductor junctions it is 0.2-02 [sic].
~ In order to reduce the structural metals intensiveness of machines, expansion of -
the use of thermal hardening and of low-alloy rolled products play major roles (at -
present almost no thermally treated rolled section comes to machinebuilding). Of
the total amount of rolled metal subjected to thermal treatment in metallurgy in ~
1980, flat-rolled steel was 64 percent, rails 19 percent, railroad-car wheels
8 percent, and reinforcement steel and rolied section 9 percent. Meanwhile, as a ~
result of raising the s*.rength level of steel, the use of heat treatment yields a
~ metal saving (according tc, domestic and fo~eign data) of 10-50 percent (15-20 per-
cent on the average).
Right now the basic portion of rolled low-alloy steel (about 90 percent) is re-
~ quired in the production of pipe for oil and gas pipelines and of reinforcements
for reinforced conc~^ete and in shipbuilding. Only a little more than~l0 percent
of the total amount of low�-alloy steel is sent to machinebuilding, about half of
it to carmaking. Meanwhile, as experience indicates, the use of low-alloy metal
' yields great technical and economic benefit in many branches of machinebuilding, -
enabling an average of 20 percent of the metal to be saved.
Among the central areas for reducing the materials intensiveness of production are _
the reduction of waste and the nc,nproductive lusses of output. The start-to-finish
coefficient for the use of iron (from processing af the raw iron ore to the receipt
� of' finishe:i metal articles) is 0.43, and, taking into account re~eat use in metal-
l~rgicai production of a portion of the waste that is formed, it is 0.65. This is
~ higher than the corresponding figure for certain industrially developed capitalist
- countries, but,nevertheless, in the USSR current metal wasts and losses (not count-
- ing amortized scrap) consist of more �han 70 million tons per year (or more than
50 percent). A part of this waste can be eliminated (for example, losses during
the casting of inetal, the forming of shavings, and so on have been reduced) b,y
introducing new equipment an~ progressive technology, but as for the remaining por-
~ tion, it must be collected to the maximum and utilized. Capital expenditures for
the collection and preparation of 1 ton of scrap of ferrous metal is about one-
tenth ~,he capital i.ntensiveness of 1 ton of newly poured pig iron.
~ Despite constant improvement of nonferrous metallurgy's operating processes, about
20 percent of the basic metal and a large amount of the accompanying components are
; lost i.rrevocably in ore beneficiating and the later metallurgical conversion. In-
creasing the integration of the processing of the raw material used remains one of -
the chief px�oblems of nonferrous metallurgy. The significance of improving ore
beneficiation in the USSR's nonferrous metallurgy is defined by the fact that right ~
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nuw more than 95 percent of' all ore mined (about 85 percent in ferrous metallurgy) ~
is subjectcd to beneficiation. New, effective technologxca? processes for benefi- -
ciai.i.ng nonferrous-roetal ores enable the degree of inetal extraction to be raised.
- In the; metallurgy of heavy nonferrous metals, the use oi autogenous proceGSes,
which enable, along with other advantages, the extraction of copper, nickel, lead
and other metals t.o be inereased, is being greatly expanded. Tha improvements in
the pyrometallurgical treatment of widely distributed copper-sulfide and nickel i
ores, however, do not completely solve the problem of eliminating losses of the
iro?i and sulfur that these ores contain. Hydraulic metallurgy, rationally com- .
bined with pyrometallurgical processes, will enable metal extraction to be in- _
creased and sulfur extraction to become practically complete, ~ut in this case also
Lhe achiever~ents of technology should be combined with an effective economic mech-
anism that is aimed at maximwn elimination of losses.
_ 'The potential for reducing the formation of waste and for rationalizing its use can
be illustrated in the example of such a promising structural raaterial as ti~anium.
Its useful-utilization coefficient now is 20-25 percent. About 75-80 percent of
the titanium in the origitlal titanium sponge gets into the waste. Only 30 percent
of the waste i.s used effectively enough by return to the charge d~uring ingot pour-
ing. The remaining waste is used with poor effectivenes~. 4ccording to available ~
- analyses, titanium waste can be reduced by at least one-third and its use in the
; charge raised to 50-60 percent by improving the technology for obtaining and pro-
cessing titanium.
~roblems of saving and utilizing heat and energy also are exceptionally important.
In Common Market countries the efficiency factor of fuel and power reso~zrces aver- _
ab~s 30 percent, while in the Soviet Union it is about 43 percent. However, in 198d,
out of the 1.6 billion tons of standard fuel equivalent that the USSR allocated to
production and operating needs, about 900 million tons were consumed nonproductive-
~ ly. More than one-thir�d of the fuel and energy losses can be eliminated in t~e
next 10 years, and the expenditures required for this will be repaid rapidly.
The economy's major reserves for saving energy are associated with improvements of
the fuel and energy balance. At present the share of oil and natural gas is about
70 per~ent of the total output of all types of fue~ in the country. The accelerat-
= ecl development of oil and gas recovery was caused by growth in the national econo-
- my's requirements and by export shipments. The main growth in oil and gas recovery
is achieved in the country's eastern regions. This requires increased capital in-
vestment and, later, the transmission of high-capacity streams of these energy
bearers to the country's central regions. Under these circumstances, the structure
of L-he !'uel and energy balance should be further developed harmoniously, with
an inai~ease in the role or' coal. In the European part of the country, growth in
mir~iiig coal should be determined basically by the requirement for coal for coking:
iL is desirable that additional requirements for coal to generate heat and elec-
tricity be satisfied through the promotion of strip coal mining at deposits in the
eastern part of the USSR. The prime cost for mining Kansk-Achinsk hydrogenous coal
and Ekibastuz pit coal, including transport thereof to local power stations, is
- half that of Kuznetsk coal and one-fourth that of Donets coal. Specific capital
investment in mining coal at these places is lower than that of Kuznetsk coal by
about ~0 percent, and it is abotit one-third that of Donets coal. `
2. See G. Aleksyenko, L. Melent'yev and D. Vol'fberg, "Save Fuel and Energy,"
(PRAVDA, 26 May 1980).
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Among the most important unused reserves for red�4~cing energy consumption is the in-
troduction of energy-saving technology. Using it to save fuel consumption is espe-
cially urgent in ferrous metallurgy for pouring pig iron, and, in the building-
materials industry, for producing cement clinker,and so on. In order to save elec -
tricity, the improvement of technology opens up the greatest possibilities: in
- ferrous metallurgy, for smelting electric steel; in nonferrous metallurgy, for pro-
ducing titanium, aluminum, magnesium and nickel, where specific consumption of
electricity runs from 15,000 to 40,000 kw-hr/ton; and in the cher~ical industry, for
obtaining ammonia (1,500-2,300 kw-hr/ton), synthetic rubber (2,500-3,G00 kw-hr/ton),
chlorine (2,700-3,~00 kw-hr/ton) and phosphorus (15,000 kw-hr/ton).
It should be noted that a reduction in thP materials intensiveness of production
along the line of reducing the expenditure of raw and other materials simultane-
ously leads to corresponai?,~ savings in fuel and energy. Thus, a reduction of the
consumption of rol?~d metal in machinebuilding by 1 million tons will enable about
� 1 million tons of standard fuel equivalent to be saved, and a reduction in cement
consumption in construction work per 1 million tons will save 0.2-0.22 million tons
of standard fuel equivalent.
Considerable reserves for saving energy are associated with expansion in the use of
- waste heat and with reduction of losses of heat and of electricity. The level of
~ utilization of high-temperature waste heat in industry can be brought up to 55 per-
: cent in comparison with 30 percent at present. The development of a system of re-
:overy installations requires specific capital investment which is three to six
times less`tliat of building enterprises to mine coal and to recover oil.
' The main area for raising the utilization effectiveness of wood resources is expan-
- sion of the integrated processing of timber with maximum possible involvement in
circulation of the waste that is formed. Nowadays no more than 20 percent of all
wood waste is put to use, although 1 ton of wood waste or waste paper replaces
2-5 m2 of commercial timber in the production of wood fiber, particleboard and
pasteboard.
In the modern era, the importanc:e of improving the use of material resources in
construction is growing. Capital construction uses 80 percent of the cement, more
- than 20 percent of the rolled ferrous metal, about 30 percent of the timber, more
; than 50 percent of the steel pipe, and sv on. An increase in factory manufacture
, of constructional structure and articles, a rise in the level of prefabrication of
buildi.ngs and structures, and the mechanization of construction aperations have
helped to increase the share of the cost of materials in the structure of expendi-
, tures for construetion and installing operations from 48.9 percent in 1940 to 53.8
percent in 1978. At the same time, the specific materials intensiveness of con-
sl;ruction (estimated per unit of the physical volume of buildings and structures)
. has been reduced for the most important resources. However, the pace of this re- ~
; duction can be inereased by making structural shifts i:~ the use of material
' resources.
' P'or construetion as a whole, the main area for reducing materials intensiveness i.s
expansion of the use of structure made of lightweight concrete and of structures
~ made with Lhe use of economical rolled seetion and pipe. At present, the share
of prefabricated reinforced-concrete structure made of lightweight concretes based
on porous aggregates in the total amount of prefabricated reinforced-concrete
structure and the share of constructional structure that uses economical metal
~ shapes in the total amount of constructional structure is 20-25 percent.
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ln order to incrcase the pace in reducing metals intensiveness in const.ruction, ex-
pansion of the introduction of high-strength reinforcemen~, H-beams, roll-formed ~
section, thin-walled electrically welded pipe, thin-walled tubular shapes and roll-
formed flooring wi~:h an anticorrosion coating is of great significance. Wider use -
of aluminum in construction, especially in the northern and eastern parts of the
couritry, is extremely promising. The consumption of wood in construction is ham-
- pered by the wide extent of the use of reinforced concrete and the limited devel-
opmen~; of low-rise housing construct~on. At the same time, given the existing ~
structure of construction work in the USSR, it is desirable to greatly increase the ;
consumption of many progressive materials and articles made of wood, particularly
glued-wood structure made at the factory, plywood, woodboard, and so on.
The use of plastic tivill enable the weight of constructional structure and the labor
- intensi_veness of its manufacture to be reduced. Plastics are used effectively to
~ manufacture enelosure structure, lightly loaded members of industrial and nonindus-
trial buildings and some sanitary-engineering products and small parts that are
usually ruade of inetal.
- The broad program of industrializing construc~:ion in our country has occasioned a
higher specific share of prefabricated reinforced concrete in total consumption of
the mair~ building materials than in some foreign countries. Monolithic reinforced
cor?crete is used basically for various types of footings and underground struc- .
i;ures, wh~~re water impermeability is to be provided and large amounts of concrete
are to be placed, with the use of small amounts of formwork operations, and also -
for structure that contains a small r.ixr^.ber of prefabricated or repeatedly used
members. However, as experience indicates, cast-in-place concrete can also be used
effectively in other cases. Data that has appeared in recent years testifies to
the effectiveness of increasing the share of building brick in the structure of
- wall materials, particularly for housing construction needs.
Improvement of the economic mechanism requires that planning organs give more com- `
plete consideration to material resources by region of the country and to cempiling
regional balances for the production and distribution of the most important types
of output. These circumstances raise the role of regional development and research
i.n saving material resources and in reducing the materials intensiveness of output.
Interesting experience in the conduct of organizational and technical measures
aimed at saving metal has been gained by Belorussian SSR machinebuilding, which has
worked systematically to reduce the materials intensiveness of the machines and =
equipment they produce. Improvement in the use of inetal is achieved primarily at
motor-vehicle enterprises and in the tractor industry and in machine toolmaking.
In particular, at the Minsk Motor-Vehicle Plant the specific conswnption of inetal
per 1 ton of load capacii;y is among the lowest in the country.
A Pactor analysis of possible metal savings is being made at Middle Urals machine-
building enterpr~ises. Strip-mining and walking excavators of Uralmashzavod fUxals
6lachinebuilding PlantJ, gas turbines of the Urals Turbomotor Plant, and some arti- .
cles made by Uralkhimmashzavod [Urals Chemical Machinery Plant] have lower specific
metals intensiveness than foreign and domestic models. As a whole, according to
the data of Urals organizai:ions, during the 10th Five-Year Plan 89 of 128, or 70
~ercent, of the most important machinebuilding articles of Mintyazhmash [Ministry
of Heavy and Transport Machine Building], Minelektrotekhprom [Ministry of Electri-
cal Equipment Industry] and Minkhimmash [Ministry of Chemical and Petroleum Machine
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Building] enterprises that are lqcated in the Middle Urals were marked by specif- ~
~ ic metals intensiveness that is lower than that of the best existing models. The
use of some Urals enterprises' machines in the national economy enables substantial ;
- metal savings to be made. Thus, use of ~he Uralmash EKG-4.6B excavator, with a
productivity of 1.85 million m3, instead of the EKG-4.6A, with a productivity of
~ 1 million m~, in ore mining enables rock excavation to be increased by 7 5 million -
; m3 per year. An additional ?5 EKG-4.6A excavators would have to be manufactured
to excavate this much rock. When a certain increase in the absolute wei ght of the _
. EKG-4.6B excavator is considered, i~s output an3 use saves the national economy -
more than 7,000 ~tons of ferrous metal each year.
" The country has in recent years taken a number of steps that are aimed at improving
norm-setting for the consumption of materials, which, while the economic mechanism
i.s being improved, remains the main diz�ection for purposeful control of material
resources consumption. However, right now we should be concerned not only about .
~ improving "direct" norm-setting but also about developing comprehensive norms that
, coordinate joint.ly the national-economic consequences of realization of the
three most important areas for intensifying production--the reduction of its inten-
siveness in materials, labor and capital. Deepening ar,d development of the scarce
; scientific and practical developments that exist in this area should enable deter-
~ mination of the extent to which labor and fixed capital expenditures are being
~ raised (or, in somE cases, reduced) per unit of output produced in a given indus-
' try and in allied industries while materials intensiveness is being reduced.
: Later, this can serve as a base for the mutually correlated determination of
trends in the intensiveness of materials and capital of production and of labor
' productivity, and for the establishment of agreed tasks and ceilings in the
indicated spheres.
'I
_ COPYRIGHT: Izdatel'stvo "Pravda", "Voprosy eKOnomiki", 1980
_~j -
11~09
CSO: 18'L1
i,i '
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_ ~
CONSTRUCTION MACHINERY ~
;
. ~
_ i
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~ SUGGESTIOIVS MADE FOR ASSESSING METAL SAVINGS IN METALLURGY, MACHINEBUILDING ,
1 Moscota VOPROSY EKONOMIKI in Russian No 12, 1980 pp 49-59
[Article by N. Morozov: "The Metals Intensiveness of Machines and the Norms"]
[Tex~t] The modern scientific and technical revolution is stimulating an ever- :
increasing updating of machinery and an increase in its power, energy and speed ;
characteristics, which make high demands on metal. The problem of the effective
use of materials, primarily of ferrous metals, is acquiring ever greater urgency. '
The potential for satisfying the national econ~my's growing requirements for metal
products is a function of many fuctors, primarily of radieal qualitative changes in
the output of such industries as metallurgy and machinebuilding. . -
Vast reserves for saving metal should be found during the design of machinery and
_ during the development of the technology for creating it. Analysis has shown that
the use of low-alloy steels, special types of rolled metal, lightweight alloys and
plastics can reduce truck weight by 5-? percent. At the annual output of the main
units (about fi00,000 of them), this is equivalent to increasing load capability by
200,000 tons or to using about 40,000 ZIL-130 trucks. Assimilation of the produc-
tion of spring strips with parabolic edges alone yields about a 9-percent saving
in metal. The use of welded bedplates and the manufacture of parts from precision
c:astings greatl,y facilitates the design of machine tools. In 1981-1985 Minstanko- ~
prom [Ministry of Machine Tools and Tool Building] plans to reduce tolerances and
allowances during machining by 10-15 percent through the use of precision ~org~ngs.
Deficiencies in production technology and in tooling lead to great losses of inetal
and additional labor expenditure. According to the data of NIEI [Scientific-
Research Institute of Economics] under UkSSR Gosplan, the removal of excess allow-
ances makes up 50 to 90 percent of the overall labor intensiveness of machining, at
a time when the share of finish machining is 4-12 percent in all.
h~Iat~y NII's [scientific-research institutes], KB's [design bureaus], enterprises and
associations do~sy~tematic work to improve machinery design and to rationalize pro-
duction. Thus, the metals intensiveness of KhPT-type pipe units that were devel-
oped by the Elektrostal' Heavy DIachinebuilding Plant's !:B over a period of 30 years
has been cut almost to one-fourth (from an estimated 0.07 to 0.02? per ton of out- _
put). The MTZ-~42 general-pizrpose row-crop tractor of the Minsk Tractor Plant
surpasses in materials intensiveness (26.7 kg per 1 hp) the American-made John
Deere 4630 counterpart (44.5 kg per 1 hp). As a whole, the share of savings of
- rolled ferrous metal products in machinebuilding by using improved-quality rolled ;
met21 and substitutes is constantly increasing: it was 21.6 percent during the
Eignth Five-Year Plan, 40.8 percent during the Ninth and 44.6 percent during the
_ lOth. 36
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However, along with these achievements, there are significant deficiencies. Thus,
waste of inetal in machinebuilding exceeds the annual saving of rolled metal sever-
alfold. Five year plaii tasks for the preduction of economical section are not be-
in~ met: out of 140 effective types of rolled metal, little more than half of them
_ are being produced, and only 60 percent of the planned metal saving through im-
= provement of inetal quality is being provided for. Certain types of rolled metal,
particularly grade 09G2S flat rolled steel 50-160 mm thick, which is used in making
bridges for heavy cranes, is delivered with a large number of internal discontinui-
ties, forcing large thicknesses of plate to be incorporated in designs. Many types
- of machines (loa~l-carrying, road-constru~tion and others) are not up to the best
domestic and foreign counterparts in weight characteristics.
- Metal losses are often caused by the fact that, because of unrinished design work,
, new models are not put into production for a long time, and the discontinuance of
heavy models is hindered. Thus, the service life to overhaul of the DP-2~ bulldoz-
_ er-ripper, which has been produced since 1965 by the Bryansk Road Machinery'Plant
� imeni 50-Leti~a Velikogo Oktyabrya, is half that of its counterparts, it is 20 per-
cent less productive, and it weighs 15 percent more. A. new bulldozer-ripper still
has not been placed into production, since it has some design defe~ts. Such mis-
calculations are especially sensitive when the production of a new item is being ~
mastered, since it oft�n leads to a lowering of its engineering level. For-example,
the SKGD-6 Kolos rice-harvesting combines and the VPS-2.8 planting and transplant-
ing machines, which were fir~st produced in 1980 by Minsel'khozmash [Ministry of
~ Tractor and Agricultural Machine Building], are '~-12 percent higherin specific met- ~
' als intensiveness, respectively, than their counterparts of identical productivity.
~ The output volume of inetal products and their qualitative indicatorsand the poten-
tial f'or saving metal are determined to a great extent by the technology of modern
_ machine production and the structure of fixed capital. The level of inetallurgical -
production technology is evaluated on the basis of the const~mption coefficient, which
reflects steel consumption per ton of rolled metal. In machinebuilding and metal-
working the metal utilization coefficient (Ki~), which is computed as the ratio of
- i:he weight of the part to the weight of the material or blank, is used. The actual ~
values of the consumption coefficient and the metal utilizatic~:i coefficient for
many ministries of machinebuilding and metallurgy do not meet modern demands. Ac- `
cording to the data of the 11 machinebuilding branches, the Ki~ averages 0.735, in
the automotive industry it is 0.68, and in machine toolmaking it is 0.61.
, When evaluatilig metal output, mainly individual technical parameters are considered,
wi~h orientation, as a rule, not to tl~' concrete requirement but to the requirement _
"in general." USSR Gossnab centers often issue material without considering the _
assoi~tment and multiplyin~ Factor. Enterprises turn over for scrap flat-rolled
metal I,}iai; is up to 0.5 meter wide and more than a meter long. Until recently not
, only rolled metal but also certain types of equipment were planned and calculated
in tons, without breakdowns by a5sortment and products mix. Such a method is a
i simplification that does not meet the goals for saving labor and materials. -
~ Analysis of the fa~tors and conditions that affect metal savings has shown that
;j econom~c factors are not given the consideration due them. The existing practice~
of planning the output of rnPtal products from the level achieved and also on the
- basis of the metal utilization coefficient do not meet modern demands. A new
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_ method tl~at incurpc~rates the multiple-factor nature of the causes (technological
and production factors, design-associa~:ed factors, and others) and the diversity ~
_ of e~�aluations and relationships is needed. A system of norms and standards that
- wuuld enable the chuice of inetal and met;hods for processing it to be optimized at '
tninimal cust her uriit of use{.il effect should be developed. ~
I
= The CPSU Central Committee decree, "On the Work of Nletallurgy, Machinebuilding and ~I
_ the Construction Ministries to Raise the Quality of Metal Products arid the Effec-
Live Use of Metal Based upon the Introduction of Low-Waste Techr.ology, in Light of
thc� Requirements of the November 1979 CPSU Central Committee Plenum," pointed out
dei'iciencies in the produc�ion, planning and use of inetal products. It follows
from the decree that the forming of the new conception signifies the development of
a system of scientifically substantiated technical and Pconomic norms and stand-
ards by type of' operation and 'Qy expenditures for labor, raw and other materials,
- and the conversion to the planning and distribution of inetal on the basis of _
standards.
~ State standards are tt~e engineering-standards base of production. They define the
indicators of the technical level and quality of production work, they establish
indicat-ors for the technical level and quality of the output, and they regulate
. Lhe industrial processes. Their further improvement, as defined by the decree, is
- associated continuously with the development and introduction of a system of scien- ~
tifically substantiated technical and economic norms, including those on the ra-
tional use of inetal. Weight indicators were included in the standards even earlier
buL- they often d;.d nut correspond with the best achievements.
_ Advanced economic methods are being disseminated increasingly, and enterprises and ~
- branches of machinebuilding are discovering and using reserves and eliminating ex- -
isting deficiencies on the basis of them. Thus the ZIL [Moscow Motor-Vehicle Plant
imeni I. A. Likhachev] Production Association, in executing a long-term program for
saving metal, p?_ans to prevent waste almost completely by introducing progressive
industrial processes, scientifically substantiated standards and an effective in- _
centive system. During the lOth Five -Year Plan the rolled-metal utilization coef-
ficient will rise frum 0.7 to 0.83. Laboring collectives are adopting increased
socialist commitments in response to the decisions of the July 1980 CPSU Central _
Cammittee Plenum. Thus the workers ~f the Cherepovets Metallurgical Plant imeni
- 50-Letiya SSSR, in competing for a worthy greeting to the 26th party congress, have ~
comma.tted themselves to the manufa~ture in 1980 of about 4,000 tons of high��quality -
metal above the task, including the first batch of rolled steel processed with
varnish, i~1etallurgi_sts of Liyepaya's Sarkanays Metalurgs plant have adopted a
commitment t.o produce 1.5-fold more rolled metal above the task than had beei~
planned at the start of the year, and one-third of this output is to be manufac-
tured from metal that has been saved. Having mounted a shockwork drive, the col-
lectivc of the Minsk Refrigerator Plant in August 1980 completed realization of a
- five year program for� the mechanization and automation of production with the
startup of a line for cutting coiled steel, which cuts the metal into strips of
strictly determined size. Enough metal is saved in a year .r.ow ~o produce almost
2,000 refrigerators.
- However, not by far is this work systematic in. nature, nor is it marked by high ef-
- fectiveness. The causes are variect: deficiencies in planning, the overstatement
of norrus, an absence of economic incentives to reduce materials consumption, a low _
level of technical equipping for production work, and so on. As indicated by
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checks of consumption norms of the basic materials used in the production of house-
hold refrigerators which was conducted by the NII for Planning and Standards of
USSR Gosplan and the VNII [All-Union Scientific-Research Institute] for Normaliza-
tion in Machinebuildin~ under Gosstandart [State Committee for Standards], enter-
prises and manufacturing ministries overstat~ consumption norms. Thus the Arm-
elektromash association of Minelektrotekhprom [Ministry of Electrical Equipment In--
dustry], in producing the KSh-200 Aist model refrigerator, uses a compressor of ob-
solete design that is heavier than its cr~unterparts by 4.38 kg, �rrhich is ~7.7 per-
cent of the refrigerator's total weight. As a result of deficiencies in the indus-
trial process, the metal utilization coefficient in this association is overstated
by 3.5 percent, and in recomputing and converting to volume of refrigerator output,
metal loss per year is more than 1,000 tons. The norms for ralling ferrous metals
in this association were overstated by 6~4 percent, for seamless light-walled tub -
ing by 37.5 percent, and for rolled and drawn stoclz by 80 percent. The data cited
~ raises valid questions: what kind of nortns are thesP, and how are they estab-
lished? We shall try to answer these questions, relying upon the facts.
~
Planning for the level achieved covers ug many mistakes and sets a formal ap-
proach to the development of inetal consumption norms. The consequences of such a
practice is well known. Factual data by branch of machinebuilding and metalwork-
ing indicate that in most cases the norms are overstated by far and it is through
this that the metal "savings" are basically achieved. Such a technique is intend-
' ed, as a rule, for filling out reports and, in essence, bypasses solution of the
problem. It should be added that the situation is intensified by nonobservance
~ of the reqtiirEments of the standards and speciiications. A check made by Gos-
standart in 1979 f'ound that an average of 8-20 percent of the grinding and boring
machine tools were manufactured in violation of various standard norms for pre-
cision of machining, degree of automation and equipping, noise characteristics,
reliability of the various units, and weight.
Most technical characteristics of machines an3 equipment are directly or indirect-
ly associated with a saving or, on the contrary, an overexpenditure of materials
and labor resources, which, in the final analysis, affects the economic indicators.
In order to bring out the effect of the various factors on saving metal, let us
examine generalized data for the 11 machinebuildino ministries for 1976-1980:
Metal Savings (in Percent)
- Use of economical types of rolled metal produc.ts....... 15~40
Improvement of technology 25-60
Improvement of design 15-50
~ Use of substitutes 5-15
As we see, the mosi, savings are provided by the use of progressive industrial pro-
~ cesses. But the significance of design parameters is manifested fully only in op-
' eration. According to the experts' assessments, losses of inetal in the area of
equipment use exceeds losses in production severalfold. Therefore,it is necessary
- to develop indicators of the naterials intensiveness of output by means of which it
_ would be possible to take the operational characteristics of the articles into
account.
- In order to vali~ate appropriate norms for consuming metal, experience indicates
that it is desirable to unite into one system the indicators that characterize the
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pro~;rc55iveness of industrial processes (low-waste technology) and the indicators
that r~elate to the design development of products (specifxc metals intensiveness) .
Consequently, norms must be further re~ularized by the multiple-factor method,
- based upon consideration of technological materials intensiveness and design and
operational factors, and on the basis of standardization. ~
- Standardized norms are adopted as the bases for organizing production work and con-~
- trol and are called upon to regularize the circulation of inetal in the national
economy, including the use of secondary metals at all sta~es--from design to opera-
tiori. Ferrous metal Iurgy products are aff~�cted by 1,150 GOST's [ State All-Union
Standards], in accor~dance with which about 90 percent of its mass production for .
machinebuilding is p roduced. A comparison of domestic and foreign standards for
~ metal and of inethods for testing it indicate that identical amounts and levels of
- normed characteristi cs are established, as a rule, for metal products for definite
purposes. The requi rements of the GOST's for chemical composition, harmful impuri- '
ty content, composit ion range of the main elements, and specifications of inechani-
cal properties corre spond basically to the indicators shehm in standards of the
" U5A, the FRG and .Tap an for similar grades of steel, As for the assortment of
rolled products, our standards contain a lesser number of lightweight, light-walled
shapes and, especially, complicated intricate-shape section. Thus, the frac~:ional
- breakdown interval for the assortment is specified as 0.2 mm for rounds and
squares, wh=1e in the USA the figure is 1.6 mm. The USA's s~t;andards indicate
more rigid tolerance s for beams and channels ;maximum deviation in width and
height arid a smaller minimum thickness for flat-rollEd steel is called for.
In order to reduce metals intensiveness in,machinebuilding output and to raise ef-
fectiveness in the u se af supply and equipment resources, it is necessary, in our
= view, when developing new standards and specifications, or when reviewing existing
ones for metal outpu t, to consider both engineering and economic factors. An in-
crease in the preci s ion of rolled products is a~ubstantial reserve for saving
metal: on continu~us cold-rolling strip mills it is about 5 percent, and on con-
tinuous hot-rolling strip mills it is 3 percent. Calculations indicate that capi-
tal expenditures fo r introducing into operation new capacity for producing thin
sheet is recouped in 3 years through savings in operating expenditures.
The structure of the standards and of the mix of quality indicators for metal prod-
ucts, machines and equipment should be improved by introducing into the standards
and specifications indicators and norms that char.acterize customer properties more
_ adequately. The use of a method for differentiaiing metal strength and other oper-
ating properties can yield a substantial reserve for saving metal. Arranging for
rolled products with guaranteed characteristics enables an increase in the relia-
bility of inetal structure, and a reduction in the cross-section of the rolled prod-
- ucts used provides for a saving of inetal that averages 2.85 percent for killed and
semikilled steel.
_ In machinebuilding and instrumenC making the standardization system consists of
f'ive groups of engi neering-standards documents that regulate: 1) development of
and arrangements fo r the production of output; 2) industrial preparation for pro-
duction; 3) production work; 4) the conduct of testing; and 5) certification of the
product as to quali ty category and control of the product's quality. Lepending
upon the purposp of the articles, the grade composition of.metals and alloys and
the assortment of in e tal products are established in the standards, which set norms
for the sizes and to lerances during machining, indicators of the strength of parts
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and structLire, the relir~bility and service lives of articles in operation,
- approves requirements for anticorrosion treatment and for protection against
corrosion, and inc.roduces i�estrictions on weight. Production facilities have at
their disposal a set of standard methods anc::,~eans for computing and setting norms
_ for the basic and auxiliary materials. Requirements for the design developmeni, of
articles and for ~heir technological design and manufacture are made up to take the
- economical use of materials into account.
Tn their structure, construction flnd level of indicators, state standards corre-
spond in the main to the standards of industrially developed nations. However,
the standardizing part of the state standards are to be developed and strengthened,
the norms and requirements of the GOST's and of specifications (TU'~) are to be
' more closely coordinated with each other, the requirements for the final product
are to ref].ect more fully the technical standards documentation, and economic jus-
tification of newly introduced norms an3 requirements is to be improved.
Economic factors are decisive in developing standards and specifications. Along
with the well-mastered method--restricting the lower limit of the values of
' the various parameters--new met:~ods are coming into th~ir own with increasing per-
sistence--the establishment of degrees of quality and the development of programs
i for comprehensive standardization. The existence of degrees of quality and the
" incorporation of a priority in programs for the final output will enable the cor-
~ relation of technical level indicators with prices and ~he introduction of' para-
metric methods into price-setting on the basis of which price levels are set as a
~~3 definite function of the levels of the engineering parameters and product quality.
_ Such an approach will help to expand the scale of and t~ improve standards methods,
and it will make the conduct of calculations, incl~:aing tho~e for indicators of
~ metals intensiveness for standard production conditions, more realistic.
The technical level of new output is determined to a gre~t extent by scientific
; research and experimental design developments. GOST 15.001-73, which was intro-
' duced into design practice for the development and placement of output into pro-
duction, establishes a precise procedure for the development and approval of ex-
peri.mental engineering tasksn the conduct ~f expert review of design, the test-
; ing of experimental models, the issuance of authorization for assimilating the pro-
! duction ci new types of output, and the condttct of monitor~ing tests of serial
output. Output that is subject to development, assimilation and placement into
productian should correspond to the highest quality category at the time its pro-
duction is assimilated. At the stage when output is being placed into production,
- a final evaluation of the design in accordance with the criteria is conducted: for
; corr~espondenca with the hi~hest quality category, the cost of manufacture, the cost
of operation, and consideration of the requirements of work-safety practices and
prescrvation of the environment.
, An important role in saving metal has been assigned to methods fcr analyzing the
design of machines, for assuring strength uniformity of all parts, for reducing
~ dimensions, and for using new structural materials, particularly welded parts. All
this requires new design decisions and principles for building machines. Creating
a rational design .for a, product and imparting a desirable shape to it should be
combined with assurance of optimal reliability and durability. The reliability
of machines, units, instrtunents and complexes is one of the main criteria of their
perfection.
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'1'hc rcali.�r,ation of' ideas invested in designs and the embodiment of design-develop-
mcnt. :solutions are part uf the task of industrial preparation for production. The i
tcchnology of modern machincry production and the structu~~e of fixed capital deter- '
mine to a great extent the output volume of inetal products and their qualitative
indicators. In singling out the universality of its effect, technology exerts
- influencc not just on the final prociuct but also on the development of the support-
- ing production operations, including metallurgical. Thus, the design of the equip-
ment for castings and forgings production facilities of machinebuilding and metal-
wurking, where metal-cutting tools predominate, determines to a great extent the
~ variety of ferrous meta~.s. Many processes associated with setting norms for ma-
terials intensiveness are performed on the basis of standards that are included in
the Unified System of Industz~ial Preparation for Production (ESTPP), which includes
the following list: development of the design of articles on the basis of manu-
- facturability, cho i ce of manufacturability indicators, computation of the norms for `
materials consumpt i on, and choice of the main parameters for computinp materials
intensiveness.
However, a number of indicators for materials intensiveness and materials utiliza- _
tion that have been standardized do not have accurate definition and are inade-
quately systematiz e d, so their use is not always effective. Thus, a draft of a
standard for whee 1 ed tractors recommended that materials intensiveness within the
~ 41-64 kg/watt range be established. The introduction of a"bracket" with such a
- spread is unacceptable, the more so since a new modification of the tractor has a '
32 kg/watt level fo r this indicator. But the main thing is that basie criteria for
the clifferent type ~ of machines and industrial processes have not been established.
Much work is being done now to introduce order into norms and standards. In
ac,;ordance with the CPSU Central Committee and USSR Council of Ministers decree,
"On the Improvement of Planning and Strengthening of the Influence of the Economic ~
Mechanism on Increasing Production Efficiency and Work Quality," USSR Gosplan ha.s
approved a system of progressive technical and economic norms and standards by
type of operation and expenditure (or saving) of labor, raw and other materials,
and fuel and energy resources and of standards for the use of production capacity
and specific capital investment and norms and standards for determining the re- r
quirement for equipment and cable articles (the procedure for their development
- and approval). The system ca115 for the establishment of norms and standards for
consumption and re serves of raw and other materials _for each product being manufac- -
tured. This will p ave the way for comparing expenditures for the production of ar-
ticles and the technology of their production for the set of resources being used.
In ~tate plans fo r economic and social development, a running total in percents
of the level of norms of the base year (the last year of the five-year plan that
precedes the plan period) will be approved for tasks for USSR and Union-republic
ministries and agencies for the average reduction of norms for t.:� consumption of
raw and other mate rials du~ing the period being planned. Consumption of the normed
type of raw and o ther materials for the productian of a unit of output is estab-
lished on the basi s of individual norms in units of weight or volume and so on.
Crouped norms are figured as the weighted average amounts of the consumption of
raw and other materials for th~ products mi;, of the industry, for the planned -
amounts of produc t ion of like types of output or of operations, by USSR and Union-
- republic ministry and department, and, rvhen, necessary by association and
enterprise. -
~
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~ :~~tandards and indicators for the use of raw and other materials which have been
' recommended for use now include: the specific consump t ion of material resources
~ per unit of weight, area, volume and length during the execution of production
prvicesses (forging and pressworking, machining, welding and so on), and the
amounts of industrial waste and losses of material resources by type of production
' prooess.
i The effe~tiver.ess of use of material resources and the progressiveness of consump-
tion norms are evaluated by means of indicators. A coefficient of materials utili-
zation in production--the ratio of useful consumption (theoretical weight of con-
' sumption) to the norm for the consumption of material--has been eatablished. The
~ consumption of materials per unit of the article's spec ifications is established by
the application of the appropriate consumption norms per unit of the article to '
the chossn parameter. The yield of output (or semifini shed item) is determined as
i the ratio of the output (or semifinished item) produced to the amount of raw and
materials aotually expended.
~ The procedure for the development and approval of norms for the consumption of raw
~ and other materials, which is approved by USSR Gosplan, is common for ministries
, and associations (or enterprises) of aIl branches of industry and for the construc-
, tion industry, but it does not completely consider the specifics of each of them.
A differentiated approach that takes into account the operational properties of the
items and progressive trends in the development of ~qui pment and production tech- ~
nology is required for machinebuilding and instrumentmaking.
~
~ Gosstandart and the machinebuilding and instrumentmaking ministries are required to
review existing standards and to develop new standards and specifications for raw
� materials, stock, outfitting articles and final article s, after scientifically
sound norms for weight, reliability and durability have been established.
i It is necessary, in our view, to establish standards for specific metals intensive- -
ness in in-kii:~i indicators per unit of teehnical parameter of the output that
characterize more fully the output's consumer properti es. The coefficient of spe-
~ific materials intensiveness (K~), which characterize s the technical perfection
' of the output, as well as its economic merits at the s t ages of design, production
' and operation, and, consequently, detecmines decisive ly not only the articles F~
' engineering and economic level but also the accelerati on of scientific and techni-
~ cal progress, can be adopted in machinebuilding as the basic indicator. This
coefficient is determined by the formula:
L
~ _ M�Z
K~ - P~T,
w}iere M is the weight of the article; P is the value of the article's main techni-
ca] parameter (power or capacity, productivity, bucket capacity of an excavator,
~ height of centers of' a machine �ool, and so on); Z is the material expenditure for
; servicing and spare parts; and T is the service life of the article and its
reliability. -
~ The multiple-factor method for determining specific metals intensiveness (taking
' into account material expenditures in production and op eration, and applying them _
~ to the values of the main technical parameters) is used in analytical work in many -
branches of machinebuilding, al~hough the calculation does not always include _
43
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APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000400014419-6
FOR OFFICIAL USE ONLY
ind~c,xt.ors of reliability and longevity or expenditures for servicing. For exam-
ple, the specific metals intensivei~ess of a m