Cost management program. Cost management program at the Ryazan hydroelectric power station. Production cost management systems

Control, in the broad sense of the word, is understood as a purposeful influence on any controlled object. Consequently, the concept of “management” is a complex category that acts as a category of the system. If “management” is applied to such an object as the economy, then in principle it can be identified with the concept of “economic mechanism” (“economic management mechanism”), because managing the economy without using all the structural elements of the latter (planning, economic levers and incentives) , organizational structures), impossible. According to the theory of management of social production, there are three groups of management methods, called organizational and administrative, economic, moral and psychological. It is more intelligible to call them methods of coercion, inducement and persuasion. Cost management is a means for an enterprise to achieve high economic results. It is not limited to cost reduction only, but extends to all control elements. Cost management is based on the theory of enterprise economics, technology and organization of production, planning, accounting, personnel management, product quality management, technical and economic analysis of enterprise activity and other areas of knowledge. Production costs represent the valuation of natural resources, raw materials, supplies, energy of all types, fixed assets, labor resources, and other costs of production used in the production process. The process of changing costs can be controlled, since they depend on the volume of consumed labor and material resources, technology, level of technology, organization of production and other factors. The production cost management system includes the following activities: 1. Analysis of the cost of main types of products. The analysis is aimed at determining changes in production costs over time for the enterprise as a whole and for each main area of ​​economic activity, types of work, dividing them into elements and cost items, identifying changes in each element or each item, establishing their connection in a single whole and the degree of their significance in the overall change in production costs. Here the main factors influencing individual elements and cost items as a whole, production costs and production costs are identified. First of all, the impact on costs and unit cost of production of effective indicators of economic activity, the system of factors that form these indicators, as well as such a combination of factors that leads to an increase in production at the lowest cost per unit of output are determined. 2. Determination of the standard level of costs for the production of main types of products. Calculations of standard costs allow you to visualize the required amount of production resources in comparison with those actually used. The development of cost standards for an enterprise, especially when drawing up a business plan, should be carried out according to options that characterize different levels of production. 3. Determination of actual costs for the production of main types of products. To calculate cost, various methods are used, such as process-by-process, distribution-by-production, custom-made and normative. The method used by the enterprise must be reflected in the accounting policies of the enterprise. The process of forming the actual cost of production can consist of several stages: - primary accounting of production costs. - assignment of direct costs to specific costing objects; - accumulation and distribution of overhead costs by type of product, such as general production and general business expenses. 4. Calculation of the forecast of production and total cost of production. Forecasting allows, based on studying trends in changes in production costs, identifying patterns and quantitative relationships between the main factors, to establish quantitative parameters of cost indicators for the future. Enterprises most often use the following methods of production cost planning: standard, calculation and analytical, direct accounting. The normative method is a planning method based on the use of production cost norms and standards to justify planning, program and forecast documents. The essence of the calculation and analytical method is that based on the analysis of the achieved value of the cost of production, taken as the base, and the indices of its change in the planning period, the planned value of this indicator is calculated. The simplest and least accurate is the direct counting method. With this planning method, production costs per unit of output are determined by dividing the total costs by the number of products manufactured. 5. Development of measures to minimize production costs for the future. The main measures to reduce production costs include: compliance with the savings regime in all areas; saving resources; reducing the cost of maintaining the administrative apparatus; reduction of losses from marriage; increasing labor productivity; introduction of modern technology, improvement of technology, automation of all work processes; correct selection of suppliers and contractors; market research, etc. Priority areas for cost minimization are developed on the basis of actual costs and calculations of cost standards. Moreover, special attention should be paid to increasing the level of costs of using the existing production and technical potential.

Concept of production costs

Any economic activity involves the production of any product (material or spiritual) or the provision of any services. In commodity production, the purpose of economic activity is to make a profit. And the greater this profit is, the more profitable it is for the entrepreneur (manufacturer).

The concept of profit is also easy to define. To do this, it is necessary to take into account not only revenue from the sale of goods and services, but also all costs associated with production.

Costs are generated by the purchase and consumption of raw materials, energy, components and semi-finished products. In addition, it is necessary to take into account the costs of purchasing means of production, their wear and tear, and workers’ wages.

Definition 2

The amount of costs for producing a unit of output is called the cost of goods.

The ratio of revenue volumes to production costs is an indicator of production efficiency. After all, the lower the cost, the higher the profit. But not all profits remain with the enterprise. Part of the profit as taxes goes to the disposal of state budgets of different levels (local, regional, federal).

The essence of entrepreneurship and a market economy lies in determining and comparing costs and outputs of production.

Definition 3

The costs of production and sales of products are the valuation of the resources used in the production process (raw materials, energy, labor, etc.), as well as other costs associated with the production and sale of products.

Costs must be taken into account when planning production. This will help avoid financial risk. Production costs underlie the formation of the lower price limit.

Types of production costs

Production today is a complex economic mechanism. Therefore, there are many types of costs. Today in economics there are the following types:

  • external; ;
  • internal;
  • are common;
  • permanent;
  • variables;
  • average;
  • specific, etc.

The classification of types of costs depends on certain criteria. After all, the costs are very complex in their structure. It is this that determines the nature and conditions of production.

Definition 4

External costs are costs associated with payments for resources that do not belong to the firm (enterprise).

Definition 5

Internal costs are the costs of own (unpaid) resources.

Internal costs include depreciation of fixed assets, salaries of enterprise owners, etc.

Definition 6

Total production costs are the totality of external and internal costs that ensure the operation of the enterprise.

Production Cost Management

To optimize production costs, cost management methods are used. In economics, there are such cost management methods as:

  • direct account;
  • normative;
  • calculation and analytical;
  • parametric.

Note 1

Each of these methods has its own advantages. Therefore, their complex (systemic) application is assumed.

The direct counting method is the simplest, but at the same time the least accurate. It is advisable to use it in the production of homogeneous products. The essence of the method is to divide the total cost by the number of units of manufactured products.

The most accurate is the calculation and analytical method. It consists of a comprehensive analysis of production and possible changes in the production process, taking into account the technical, economic and organizational conditions of work in the expected production period.

As is known from economic theory, enterprise cost management is:

  • understanding where, when and in what volumes the company’s resources are spent, including control of these processes;
  • forecasting where, for what and in what volumes the company will need additional financial and other resources;
  • the ability to optimally allocate available resources and ensure the maximum possible return from them.

In practice, an alternative to the cost management system is the idea of ​​extensive business development of the enterprise, expressed, in particular, in increasing sales volumes of products and services with the same intensive component (profitability, specific consumption of material and labor resources, etc.).

Meanwhile, Figure 1 below for illustration shows that the same increase in profit in absolute terms (from 4000 to 4800 tr) can be achieved both through increase sales volume by 20%(from 20,000 to 24,000 tr.), and due to reduce costs by only 5%(from 16,000 to 15,200 tr.).

Figure 1 - Company development: alternative tactics

To increase sales volume, additional financing of the company’s current activities is often necessary, which is often problematic (due to the diversion of financial resources from other areas of the enterprise’s business) or associated with additional costs (for example, due to the use of bank loans). In addition, the sale of an additional quantity (volume) of manufactured products (rendered services) may create difficulties due to limited demand (especially understandable in the current difficult economic situation), as well as lead to additional costs associated with the promotion of products (services) and sales.

What is cost management? and for what purpose should it be carried out?

Cost management is carried out in order to maximize company profits and consists of:

  • Applying a systematic approach to determine actual costs,
  • Understanding the reasons for their occurrence,
  • Taking action to improve the company's cost structure based on analysis and understanding:
    • Drastic measures to reform the company’s business processes;
    • Strategies and tactics for achieving company goals in the current situation;
    • Methods for reducing costs and assessing the possibilities of their implementation.

What benefits does cost management provide to a company?

In the process of analyzing and measuring costs, this is an opportunity to:

  • Assess the overall efficiency of the company’s financial and economic activities;
  • Assess the effectiveness of individual types (directions) of activity;
  • Assess the effectiveness of management decisions made by the company's management.

In the process of controlling and reducing costs, this is an opportunity to:

  • increase the profitability of activities;
  • ensure competitive pricing to increase sales;
  • improve the distribution of financial and other resources;
  • increase the transparency of the company’s activities and understanding of the effectiveness of management measures taken.

And, conversely, as a result of ineffective cost management:

  • Unjustifiably, it is unclear where and why funds are spent;
  • Prices for products and/or services that are not properly justified are set, which affects sales volume;
  • Resources are not allocated optimally to activities, products and services;
  • Management does not understand how the company can reduce its costs;
  • Costs are rising, profitability is falling, but the reasons for this dynamics are not visible.

Figure 2 shows the company's cost management system as it is presented by the authors of this article.

Figure 2 - Cost management system in the company

Block 1. Measuring costs: - Localization (distribution) of costs
- Cost calculation
- Determining the break-even point
Block 2. Current control and cost reduction
2.1. Current control (monitoring) of costs
2.2. Methods and techniques used: - Setting priorities in spending in accordance with company goals and current tasks
- Conversion of fixed costs into variable costs
- Vertical integration: revision of terms of supply, sales
- Horizontal integration: joint procurement, division of fixed costs (rent, utilities)
- Checking the main suppliers and other counterparties, monitoring their activities
Block 3. Optimization of business processes and technologies - Analysis and restructuring of business processes and business functions of the company
- Optimization of organizational structure
- Transfer of business processes to outsourcing
- Setting up budgeting
- Setting up current and long-term planning
- Optimization of investment plans

In this system, we distinguish three interconnected, but functionally different blocks:

  1. cost measurements
  2. ongoing control and cost reduction and
  3. optimization of the business environment and applied technologies.

The first block in practice is quite successfully supported in all companies, since it is partially regulated by various instructions and internal documents. At the same time, it makes sense, in our opinion, to pay attention to the following circumstance.

In the process of allocating costs, it is necessary to attribute direct and indirect costs (also called overhead costs) to specific products. Allocation of direct costs is a fairly straightforward process, the implementation of which is sufficient to establish a correspondence between the products produced and the direct costs incurred. However, difficulties arise here too if several types of products using the same materials are produced at the same site, on the same equipment. The problem can be solved if the company has developed and, as necessary, adjusted (in accordance with actual consumption, changes in production technology, and other factors) norms for the consumption of material, labor and other resources.

The situation with the distribution of overhead costs is much more complicated. Since all the methods used here are subjective and controversial, you need to remember the main goal of cost distribution - to achieve not absolute accuracy, but fairness in the distribution of costs to ensure an increase in the efficiency of the company as a whole. At the same time, the distribution of indirect costs should not require excessive efforts and involve the use of complex schemes. And one more thing: no distribution method is neutral - each has its own impact on the way the company's financial responsibility centers are managed.

When choosing a cost distribution base, it is necessary to take into account that the selected base should:

  • ensure the closest connection with the costs in question (resources actually used);
  • comply with normal operating conditions (for example, the distribution of costs in proportion to the number of personnel may be unjustified if there is a temporary surplus or shortage of employees in the department);
  • provide managers responsible for making management decisions with the opportunity to participate in choosing a cost distribution base.

Economically correct distribution of costs allows company specialists to obtain objective results when performing other functions of this block of cost management tasks: calculating costs by type of product and determining the break-even point.

Generally speaking, the problem considered does not exist for those companies that already use automated ERP systems such as BAAN, P-3, Galaktika, Axapta and others. But this is about large companies. But even where management accounting of income and expenses has already been organized in given sections, based on the use of simple software products such as Excel or Access, special problems with measuring costs should no longer arise.

The functions of the second block “Current control and cost reduction” in companies are, as a rule, not fully implemented and, most importantly, are not of a permanent, continuous nature.

In Figure 2, in conditions of a generally tense economic situation, the main emphasis is placed on the use of various methods and techniques. We have listed some of them that may be suitable for most companies. The specifics and applicability of these methods can only be provided by immersion in the specifics of the organization’s activities and its analysis, even if preliminary. At the same time, you need to keep at least three basic things in mind:

  • It is necessary to consider for reduction only those costs (using, among other things, retrospective analysis) that constitute a significant part; Traditionally, in this case it is proposed to use the well-known Pareto principle;
  • It is necessary to understand the main factors (processes) that determine the appearance and magnitude of this type of costs - the so-called analysis of cost drivers; It should be noted that the analysis of cost drivers also provides feedback when assessing the effectiveness and feasibility of the company’s efforts aimed at reducing costs;
  • It is advisable to conduct a comparative analysis of unit costs (if possible and correct) with companies selected as analogues. Possible discrepancies provide food for additional conclusions and recommendations addressed to you.

It should be noted that the procedures for ongoing cost reduction, provided for in the “ongoing control and cost reduction” block, can only be effectively implemented when the company has created an adequate business environment and uses progressive management technologies, including labor motivation models for employees of the main groups. Otherwise, the desire to reduce costs will encounter hidden sabotage from staff, rely on unreliable data, be based on unfounded plans and forecasts, and be based not on internal regulations, norms and regulations, but on “concepts and assumptions.”

Consulting solutions

  • Leadership and Management

Keywords:

1 -1

Enterprise cost management is about rationalizing the cost structure and identifying ways to reduce it in order to maximize profits, as well as increase production efficiency.

As a rule, reducing the costs of production and sales of products is possible subject to the rational use of resources (raw materials, materials, equipment, finance) and maximizing the return on them.

Within the framework of enterprise cost management goals, there is a need to solve the following problems:

1. Analysis of the structure and dynamics of product costs:

A) by cost elements;

B) by cost item;

B) depending on the volume of production.

2. Assessing the possibility of reducing costs.

3. Conducting operational analysis.

4. Development of measures to reduce costs.

5. Evaluating the effectiveness of the developed measures.

In general, the process of enterprise cost management, in which cost structure analysis and operational analysis occupy an important place, can be represented in the form of a diagram (Fig. 7).

Enterprise cost management methodology.

All enterprise costs are divided into two categories:

1. Costs, which, as a rule, are of a current nature and are completely transferred to the profit of the current period (Fig. 8).

2. Capital investments that are one-time in nature and affect the profit of several subsequent periods. In turn, costs are divided into fixed and variable, as well as direct and indirect.

Direct costs can be attributed to the cost of a unit of production (for example, material costs) and are variable.

Fixed costs change little when production volume changes and are indirect.

Cost accounting is the performance of many functions, including cost measurement, decision making, and reporting. The basis of cost accounting is the methodology for determining the cost of production.

In practice, 3 main cost accounting methods are used:

1) accounting for absorbed costs (accounting at full cost);

2) accounting at truncated (marginal) cost;

3) accounting by type of activity.

Operational analysis in a crisis is used to assess the dependence of the financial results of a business on the volume and costs of production and allows you to solve the problem of maximizing mass and profit growth by reducing certain costs and judging the degree of cost recovery.

The preliminary stage of operational analysis is the division of the total costs of the enterprise - both production and non-production, regardless of whether they relate to cost or financial results - into constant and variable.

Key terms and indicators used in operational analysis:

Break-even is a state when a firm makes neither profit nor loss.

Break-even is the revenue that is needed for the company to start making a profit, or the number of units of product that the company needs to sell for the company to start making a profit.

The basis of break-even analysis is the cost accounting method at truncated cost.

In break-even analysis, it is assumed that variable costs change in direct proportion to changes in the volume of production and sales of products. Fixed costs do not change when the volume of production and sales changes.

One of the tasks of operational analysis is to assess the margin of financial safety, showing the maximum reduction in sales volume, which allows maintaining break-even production. Thus, there is a need to determine the break-even point (TB), i.e., the volume of production at which the enterprise’s profit is zero (see formula 1).

The break-even point is calculated both in rubles and in pieces:

Where Zpost - fixed costs;

VM - gross margin;

If Q is the volume of production.

If Q > TB, then the enterprise has a profit;

If Q
Let's look at an example of calculating the break-even point.

The price is 10 rubles/piece. Variable costs 8 RUR/piece. Fixed costs 100 rub.

Graphs of the functions of revenue, costs and profit depending on production volume are presented in Fig. 9.

If x is the quantity of products sold, then at the required sales volume, revenue will be equal to total costs, i.e. 10x = 8x + 100. Hence x = 50 pieces, and the formula for calculating the break-even point looks like x = fixed costs / (price - unit variable costs).

To determine the amount of revenue at which break-even production is ensured, i.e., all costs are covered, the profitability threshold is calculated.

The profitability threshold (PR) is such sales revenue at which the enterprise no longer has losses, but does not yet have a profit. It is determined by formula (2):

PR = TBxR, (2)

Where P is the price per unit of production.

The difference between the achieved actual sales revenue (B) and the profitability threshold (PR) constitutes the financial safety margin (FS) of the enterprise (3):

ZFP = V-PR. (3)

If sales revenue falls below the profitability threshold, then the financial condition of the enterprise worsens and a shortage of liquid funds arises. In addition, the margin of financial strength can be assessed as a percentage of sales revenue (4). In this case, the FFP shows how much the enterprise is able to withstand a percentage change in sales revenue without a serious threat to its financial position.

Measures to increase the profitability of a crisis enterprise.

If the diagnosed enterprise is unprofitable or unprofitable, then an analysis should be made of whether it can achieve break-even conditions (at least zero profitability on current operations) or how firmly the unprofitable enterprise has already achieved them.

The conditions for the feasibility analysis are analyzed taking into account (in combination):

The prices established in the market for the enterprise’s core products;

Demand for these products;

The cost structure of the enterprise and its share in them, as well as the total amount of fixed costs;

The presence of a reserve of production capacities and investment opportunities for their expansion at the enterprise;

The creditworthiness of the enterprise in terms of attracting additional borrowed working capital;

Solvency and reliability of the company's clients.

When the reserves for saving on fixed costs and reducing the profitability threshold have been exhausted, an analysis of the factors that most limit the company’s increase in sales and/or product output should be carried out:

A) demand for products (taking into account competition);

B) production (trading) capacity of the enterprise.

Four situations are possible:

1) insufficient demand with insufficient production (trading) capacity;

2) insufficient demand in the presence of an unused reserve of production (trading) capacity;

3) sufficient demand with insufficient production (trading) capacity;

4) sufficient demand in the presence of an unused reserve of production (trading) capacity.

In addition to reducing fixed transaction costs, a business's operational risks and operating leverage can be reduced by diversifying the firm's products (business activities).

Diversification of products (economic activities) can be conglomerate and horizontal.

Conglomerate diversification is only fully consistent with the goals set above.

Horizontal diversification is distinguished by the fact that so-called complementary types of products are selected as parallel developed types of goods and services, complementing the main (core) products in consumption, so that without them the consumption of the main products becomes less effective or impossible (for example, the main products are computers, complementary product - additional software).

Horizontal product diversification is good because it can also stabilize sales of core products if they are sold “in a package” with complementary products

Domestic enterprises recently experienced a financial crisis - some survived, others had a hard time. It is in conditions of unfavorable market conditions that the quality of management decisions becomes more noticeable, and all imperfections and flaws come to light. In this article we will look at the experience of Russian companies in strategic cost management. Today it is important for us to understand that measures in the above direction should not be limited to the notorious reduction of personnel, reduction in production volumes and the search for cheaper raw materials.

In order to purposefully reduce costs in an enterprise, it is necessary to take them into account correctly. Solve cost management problems, namely: determine the lower limit of the price of a product or order and the optimal program for the production and sale of products; conduct a comparative analysis of the profitability of various types of products; calculate the break-even point, determine the margin of financial strength of the enterprise, etc. - all this allows you to do accounting using the method Direct costing. The main advantage of this type of accounting can be considered the division of costs into fixed and variable. At the same time, accounting using the method Absorption costing can provide the company's top management with important information for making management decisions (the second type of accounting is more typical for international companies).

Strategically correct cost management at an enterprise allows you to take it to a qualitatively different level, cut off everything unnecessary, set priorities, and redistribute financial flows. Let us turn to the experience of a domestic enterprise acquired during difficult times for our country - from 1992 to 2004. This period is of particular interest, since it was then that the foundations of new economic relations were laid and a painful transition from a planned economy to a market economy was carried out. Later, similar anti-crisis developments were used during the financial crisis of 2008.

The top management of the Ryazan State District Power Plant developed and implemented a strategic cost management program. The development of this program was preceded by a detailed analysis of the causes of the financial crisis in the industry in general and the Ryazan State District Power Plant in particular.

For your information. The main activity of OJSC Ryazanskaya GRES is the production of electrical and thermal energy. In terms of installed capacity (2640 MW per year), the station is one of the largest in Russia. The power plant operates on three types of fuel: coal, gas and fuel oil. In 2002, the cost management program developed by the power plant managers was recognized by RAO UES of Russia as the best among all power plants in the country and was recommended to other enterprises in the industry as a model.

The management of the Ryazan State District Power Plant believed that the transition to building an effective cost management system was impossible without introducing strict financial and organizational discipline at the enterprise. The company's financial experts noted that the lack of a long-term energy strategy both at the state and at the level of individual companies has led to serious problems in the energy industry. In their opinion, tariffs for electricity and heat have been artificially low for a decade, which has provoked a chronic shortage of financial resources at industry enterprises. In addition, directly at the Ryazan State District Power Plant itself, for eight years (from 1992 to 2000), only about 10% of payments were made in cash, and the rest were made through barter and offsets. Electricity consumers provided the state district power plant with fuel, equipment, spare parts, repair work and services as payment. The enterprise did not have a management accounting system. Accounts receivable accumulated - by 2000, the level of bad accounts receivable at the State District Power Plant reached 1,112 million rubles. At the same time, significant tax payables arose, including penalties.

Note. Only thanks to the establishment of a budgeting system, the restructuring of the management apparatus and the restructuring of debts, management was able to significantly reduce production, management and operating costs. As a result, profits increased by 2.3 times.

Decrease in energy consumption due to the decline in Russian production in the 1990s. and the rising cost of spare parts and equipment for state district power plants led to a rapid increase in costs. In addition, due to the crisis in the coal industry, production and supplies of project fuel (brown coal) to the station have sharply decreased. Since 1997, GRES was forced to use imported coal from the Kansko-Achinskoye deposit, the price of which increased significantly due to logistics costs. In 2000, the share of this raw material in the station’s total fuel consumption was 40%, and in total fuel reserves reached 90%. The use of unplanned fuel in the project led to technical problems (for example, more frequent equipment breakdowns), which also required additional resources to resolve.

All together - reduced tariffs, non-monetary forms of payment, incomplete payment for products, rising costs - led to the fact that the enterprise lost a significant part of its own working capital. As a result, funding for investment and repair programs has sharply decreased, debt to suppliers for fuel has increased, and wages have been delayed for up to five months. Taxes and other obligatory payments amounted to no more than 50% of the accrued amounts.

The turning point came only after the development of a program for the financial rehabilitation of the State District Power Plant, which included a number of economic, business and organizational reforms. This program has become a priority in the implementation of the anti-crisis strategy of the Ryazan State District Power Plant, designed for three years. As part of the activities to establish budgeting, financial responsibility centers were identified, reporting forms and budget execution regulations were approved for all functional departments.

To carry out budget control, an automated “Treasury” system was developed (based on the technical specifications of the financial department of the State District Power Plant), which made it possible to control not only the daily execution of the budget, but also the movement of funds through the accounts of the management chart of accounts, as well as draw up a forecast for the short term and formulate management reports for operational management - cash flow statement and balance sheet. Now the company’s specialists could quickly respond to changes in expenses and income and track the cause of these deviations.

The ability, in agreement with the company's top management, to redistribute funds both within the division itself (according to expense items) and between divisions by mutual agreement of their leaders was a distinctive feature of the budgeting system of the Ryazan State District Power Plant.

The restoration of payment discipline allowed the Ryazan State District Power Plant to begin work to reduce receivables and payables, as well as to attract credit resources. In addition, lawyers for the Ryazan State District Power Plant managed to prove the legality of using property tax benefits in the amount of 32 million rubles, penalties for the pension fund tax were reduced by 80 million rubles, and cases for the recovery of another 170 million rubles. for contributions to the territorial road fund and 70 million rubles. to the federal road fund are in the arbitration court.

As part of the optimization of the organizational structure at the Ryazan State District Power Plant, a comprehensive personnel audit was carried out, as a result of which the fuel and logistics departments were transferred to the responsibility of the Deputy General Director for Finance. This decision was explained by the fact that fuel is the main cost item of the enterprise, therefore the Deputy General Director for Finance must constantly monitor the volume and prices of its purchases. For operational and tactical planning of the company's activities, the following departments were allocated: strategic planning; commercial dispatching (responsible for work in the competitive sector of the wholesale electricity market); legal protection (responsible for the return of old debts, as well as for the legal protection of the enterprise and ongoing work on the preparation and analysis of contractual agreements). On a competitive basis, highly qualified employees with extensive experience in related industry enterprises were recruited to the company's staff for the positions of legal adviser, deputy for energy sales, and chief accountant.

Note. Strict financial discipline and improvement of the financial performance of the state district power plant were the basis for further increasing the efficiency of the station: reducing production costs and increasing profitability.

Active actions

Transformations at the station began with measures that could have a quick and tangible effect: improving production technology and increasing the efficiency of working with suppliers.

Based on the fact that up to 70% of the power plant’s costs are fuel costs, the priority at the Ryazan State District Power Plant was to reduce the costs of this very important component of the cost. Various methods of improving production were considered, and their economic efficiency was calculated. As a result, we decided to switch to a new coal combustion technology, the so-called VIR technology, developed by Politekhenergo LLC (St. Petersburg), which allows the combustion of almost any type of brown coal using existing equipment. This method has already been tested at foreign power plants and gave positive results. As a result, the reconstruction of only two of the four coal power units managed to increase equipment efficiency by 3-4%, reduce waste levels, and improve environmental performance. But the main advantage was that the state district power station was able to work not only on Moscow Region and Kansk-Achinsk coal, but also on other types of brown coal, so the enterprise’s dependence on suppliers was significantly reduced.

Tenders for suppliers of raw materials

Improving the material and technical supply of the station has become another area of ​​cost reduction. As part of an industry-wide cost management program, it was decided to purchase fuel, material and technical resources, equipment, and also enter into contracts for scheduled repairs and reconstruction through tenders. To effectively implement this procedure, the enterprise created four tender commissions, each of which is responsible for a certain part of the procurement. Through the consistent holding of tenders in 2002 alone, the economic effect from reducing the cost of supplied fuel amounted to 70.6 million rubles. Tenders for repair services were held in the amount of RUB 120 million. Thanks to competition between participants, the company managed to save 15 million rubles. Holding tenders made it possible not only to reduce the costs of repair work, but also to improve their quality.

Asset structure optimization

Previously, the property complex of the State District Power Plant included non-core facilities: housing stock, social facilities (kindergartens, a community center, a sports complex), subsidiary farming (pig farm, greenhouses), as well as a number of service units (motor transport and repair). Currently, housing and communal services facilities and a number of social facilities have been transferred to municipal ownership. In 2002, these transformations produced an economic effect of 56 million rubles.

Motivation management and personnel policy

Optimizing the number of personnel and increasing the productivity of each employee - this rather traditional option for reducing costs was achieved at the Ryazan State District Power Plant in ways that were not entirely familiar for that time (early 2000s). Namely: monitoring of executive discipline (MID) was introduced - assignment and control of the execution of tasks is now carried out using a computer information system.

Note. The total economic effect from the cost management program in 2002 amounted to 374 million rubles, which is 45% more than the planned target. With a planned net profit of 76 million rubles. the station made a profit of 176 million rubles.

Let's turn to theory

Over the period of recent economic history, foreign and domestic analysts have accumulated, systematized and theoretically substantiated a wealth of material on the strategic management of a company in various market conditions, both favorable and quite tense. Within the framework of this article, we are of particular interest in strategic cost management, in which we can highlight the main methods:

  • method of cost-forming factors;
  • value added method;
  • value chain method;
  • alternative cost method;
  • transaction cost method;
  • ABC method;
  • strategic positioning method.

Let's look at them in a little more detail.

For most types of business activity, it is traditional cost-forming factor method. This method is based on operational and structural cost-generating factors. Operational factors contribute to the successful existence and development of the company. These include all types of intra-company resources (capacity) and the efficiency of their use, improvement of personnel policies, integrated quality management, rational planning, project configuration (calculations), the use of relationships with suppliers and/or customers in the context of the company’s cost chain.

Structural factors include: scale of activity and volume of investment; horizontal and vertical integration; technologies used at each stage of the cost chain; complexity due to the wide range of products and services. Each of these factors involves choosing a cost management company. Under certain assumptions, it is possible to determine the impact on costs of each such factor. Structural factors are not proportionally measured against company performance, i.e., for each of the structural factors, “more” does not always mean “better.” For example, scale of activity along with economy can, under certain circumstances, turn into its own opposite. Structural cost-generating factors influence the overall level of costs not so much in an accounting sense, but in an economic sense. The optimization effect in this case is achieved not as a result of changing the composition of costs, but through rationalizing the use of on-farm resources and increasing their turnover.

Within value added method cost components are considered at all stages of adding value, starting with the purchase of raw materials and ending with the sale of own products, works and services. The main quality of this approach to cost management is to achieve the maximum difference between procurement and sales. At the same time, most of the material costs fall out of the view of analysts, and this is essential for material-intensive industries. When we are talking about non-material-intensive work and services, then an approach to analyzing cost behavior from the perspective of the value added method can be quite justified.

When choosing value chain method The company's management shifts the emphasis in cost analysis (for effective cost management) to processes occurring outside the company. In other words, this method is characterized by an expansive approach to the formation and management of costs. It proposes to consider cost-generating mechanisms along the entire value chain within an agreed set of activities, from initial sources of raw materials to finished products or services received by end users.

Cost alternative method Also called the opportunity cost method. It is based on the fact that any financial decision is made as a result of comparing alternative costs and the practical implementation of any management decision in this case is associated with the rejection of some alternative option. Its effect extends to current operating costs - for example, delivery using your own transport or using the services of specialized structures; making financial decisions of an ongoing nature - for example, regarding the management of accounts receivable. In addition, it is used in the organization of intra-company management, in particular to create a management control system; in making and carrying out investment decisions - for example, when assessing options for possible investment of capital.

Opportunity cost (sometimes called opportunity cost or opportunity cost) is the amount of savings that a company could have realized if it had chosen a better use of resources.

Let's turn to transaction cost method. Transactions usually mean the exchange of goods, legal obligations, short-term and long-term transactions that require detailed documentation and require a simple mutual understanding of the parties. The costs and losses that may accompany such interaction are called transaction costs. These include the costs of information search, negotiation, measurement, specification and protection of property rights; opportunistic behavior (unconscionable behavior that violates the terms of the deal or aimed at obtaining unilateral benefits to the detriment of a partner) and “politicization” (decision making within the company). Accounting for transaction costs is most interesting for companies focused on international markets.

It allows you to formalize the accounting and analysis of costs by type of activity in terms of distribution of overhead costs for specific goods, works and services. method ABC (Activity Based Costing) . Traditional overhead allocation options are implemented in accounting and are based on volume (volume or value), direct labor costs, or machine hours (with a high degree of automation). The ABC method is most effectively implemented in cases where strategic costs (research and development, marketing and distribution) are separated from overhead costs, and the costs themselves are considered in their entirety and in the broadest sense of the word, regardless of how accurately they are estimated in the production segment current (today's) chain of values. The key idea of ​​the method is to include in the scope of management accounting and cost analysis detailed information about the strategic development of the company, industry and the economy as a whole.

The company proves its competitiveness by maintaining low costs or offering products (services) that are superior in quality to competitors. These two divergent strategies require different perspectives on cost analysis and management. Cost information in one form or another is important to all companies, but different strategies require different ways of looking at it.

In this article, it is no coincidence that we dwell in more detail on the experience of energy companies, because ultimately, the activity of each enterprise that receives energy for its production facilities depends on the tariff policy pursued by companies in the energy sector of the Russian economy.

At the federal level

In February 2011, IDGC of Siberia OJSC submitted proposals to improve legislation to the Joint Working Group on reforming the housing and communal services and energy sectors. Recently, the State Duma of the Russian Federation held an expanded interdepartmental expert meeting on issues of legislative regulation of energy-saving technologies. It was attended by representatives of the Public Chamber of the Russian Federation, the Ministry of Energy, the Ministry of Regional Development, the scientific and business communities. One of the issues of the meeting was the discussion of the need to amend certain articles of federal laws dated November 23, 2009 No. 261-FZ “On energy saving and increasing energy efficiency and on amending certain legislative acts of the Russian Federation” (as amended on July 27, 2010) and dated July 27, 2010 No. 190-FZ “On Heat Supply”.

IDGC of Siberia submitted 14 proposals for discussion for inclusion in these federal laws. According to experts cited by the press service, the implementation of these provisions will make it possible to achieve the desired reduction in the energy intensity of the Russian economy by 40%.

In particular, IDGC proposed a transition from the current tariff setting model, based on the use of the “boiler method,” to a Western economic model based on an analysis of marginal costs. The end result of such a step, according to the network company, “will be the creation of economic conditions for the introduction of energy-resource-saving technologies that reduce the energy intensity of GDP (primary fuel costs) in production, transport and consumption of heat and electricity, and consequently, a reduction in tariffs for consumers.”

IDGC of Siberia also proposed to organize the standardization of energy losses in tons of standard fuel (t.e.). Thus, currently the calculation is carried out in kilowatts (kW) and gigacalories (Gcal). According to industry analysts, if you make calculations in t.u. i.e., it will be permissible to compare the fuel-saving effect from the use of various energy-efficient technologies. And thus clearly control the process of reducing the energy intensity of GDP.

For your information. Interregional Distribution Grid Company of Siberia (JSC IDGC of Siberia), a subsidiary of JSC IDGC Holding, carries out the transmission and distribution of electricity in the territories of the Republics of Altai, Buryatia, Tyva and Khakassia, Altai, Transbaikal, Krasnoyarsk territories, Kemerovo, Omsk and Tomsk regions. IDGC of Siberia OJSC includes branches Altaienergo, Buryatenergo, Gorno-Altai Electric Networks, Krasnoyarskenergo, Kuzbassenergo-RES, Omskenergo, Khakasenergo, Chitaenergo. JSC Tomsk Distribution Company, JSC Ulan-Ude Energo and JSC Tyvaenergo (subsidiary) are managed by JSC IDGC of Siberia. The integrated management system of IDGC of Siberia complies with the standards ISO 9001, ISO 14001, OHSAS 18001, GOST R ISO 9001−2007, GOST R ISO 14001-2007, GOST 12.0.230-2007. The branches operate 244 electrical network districts (RES), 39 technical centers (TC). Service territory - 2.173 million square kilometers. The total length of power lines is 271.770 thousand km, transformer substations 6-10-35/0.4 kV - 55,445 units, substations 35-110 kV - 1,921 units. The number of personnel is 21.5 thousand people.

Introduction of innovations

It is generally accepted that automation, while helping to establish accounting, also helps to reduce costs in the enterprise. The current level of development of information technology makes it possible to automate most processes. But innovation doesn't stop there.

For example, the management of the Steklotara plant decided to introduce glass melting technology, which uses a large percentage of scrap, previously attributed to production costs. This made it possible to reduce the cost of production by using waste from the main production in the manufacture of products. Special equipment was installed to enrich the combat (up to 50%), the cost of which quickly pays off.

And the top management of the Tkatskaya factory reorganized the spinning section. As a result, a higher percentage of weaving waste that was previously disposed of is used in the production of yarn. This made it possible to reduce the cost of yarn produced at this site by almost half. Now the volume of yarn produced on our own spinning equipment allows us to utilize a significant part of the weaving production capacity ourselves, even at high prices for supplied cotton raw materials.

It is important. The introduction of new technologies into production at many enterprises helps to improve the quality of goods and increase production volumes through the development of new types of products; allows us to ensure compliance with environmental production standards and improve working conditions, intelligently approach issues of resource conservation, saving energy, water, raw materials, and reducing losses.

In some cases, enterprises were able to reduce the cost of production when the cost of electricity increased, switch to alternative energy sources, in particular gas fuel, or produce cheaper electricity themselves at their enterprise from their own steam (for example, the Tkatskaya factory). At the Suit Fabrics plant, for example, its own boiler house was built to generate steam.

If, in order to reduce production costs, an enterprise is forced to switch to cheaper raw materials, then in order to maintain the quality of its products at a high level, special technologies are introduced to optimize the quality of new supplied raw materials. In particular, at the Tekstilshchik plant, when replacing a wool supplier, cryogenic wool cleaning technology was introduced to clean raw materials contaminated with plant impurities. At the same time, the energy and material consumption of the processing process has been significantly reduced.

In addition, in order to save water, energy, fuel, etc., enterprises install meters to regulate resource consumption. And in order to reduce the cost of using water for technical purposes, it is planned to drill its own wells (for example, the Suit Fabrics plant).

Technologies are being developed to reduce labor costs in production. For example, at the Ugolnaya mine, a technology has been introduced that makes it possible to simultaneously lay a rail track when laying a conveyor. Moreover, the developers of this project were the mine workers themselves. In the same company, organizational innovations are aimed at increasing the centralization of company management, reducing the number of its units, and moving from a multi-level management system to a two-level one.

Note. Centralization of the management of the supply of raw materials and supplies made it possible to reduce the cost of supplying the enterprise by increasing the size of batches of purchased materials and components.

Centralization of sales has reduced the costs of selling finished products. The efficiency of financial flow management increased, accumulated financial resources began to be directed to the development of enterprises included in the company, and a unified technical policy began to be pursued.

At OJSC "SLPK", also in order to reduce production costs, a restructuring of the main production was carried out, a transition was made from a multi-level management system to a two-level one, and subsidiaries were created on the basis of the main production workshops. Restructuring of enterprises, as a rule, involves a reduction in the management apparatus, if the number of staff members included in it was unjustifiably inflated. At the same time, savings in the wage fund inevitably occur.

At the Sibkhleb plant, a new remuneration system has been introduced to stimulate product sales, in which the salaries of directors of company stores are made dependent on sales volumes, which should affect the financial results of the enterprise.

Organizational innovation also includes the separation of auxiliary production into subsidiaries of large enterprises, which allows reducing costs in the main production, and allowing these newly formed firms to conduct their own production activities. Innovations of this kind are supported by employees of enterprises (the Suit Fabrics plant).

Conclusion

As we see, when choosing cost management methods among all their diversity, company management must proceed from industry specifics, market conditions, and take into account infrastructural factors (whether this enterprise is a city-forming enterprise, etc.). All this allows us to develop an optimal cost management strategy.

A. I. Kruglov, economist at Salut LLC