Payback period plays a major role in valuation investment projects, along with profit margins. Especially in Russia, where the risks of losing capital are high, it is important for every investor to understand when the project will “become a plus”. Read how to calculate the payback period of the project and not miscalculate.
The payback period has a fairly simple and understandable definition - this is the number of periods (years, months), after which the total cash flow from the project will become zero.
It is important that after the project payback period has passed, the total cash flow must remain positive throughout the entire calculation period. That is, if the project “became a plus”, and after several periods “rolled into a minus”, then the payback period of the project has not yet passed.
However, why are there so many disputes and incorrect calculations regarding the payback period of projects?
In fact, there are two payback periods for the project - simple and discounted, and there are even more formulas for calculating them. Let's start with the basics - with formulas.
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The payback period of an investment project is one of the key indicators of investment efficiency, by which you can determine their feasibility, choose between several investment objects, etc. To quickly and accurately determine it, you need to:
The project manager got tired of office slavery and decided to become a self-employed taxi driver. The idea of getting a free schedule tempted him, but still, before making a final decision, he calculated the investment attractiveness of the project.
To get started, he needs: to purchase a car for 720,000 rubles, a license and other equipment for 30,000 rubles. Thus, the initial investment, according to his calculation, will amount to 750,000 rubles in the first month. To buy a car, you will have to take out a loan at 16% per annum for 5 years and pay 345,600 percent rubles on it. He did not take into account the depreciation of the car.
Working 8 hours a day, he will be able to receive a net income (minus the cost of gasoline, interest on the loan and the share of the aggregator) of 100,000 rubles per month.
The manager built a spreadsheet in Excel
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Based on the results of the calculations, he realized that the payback period for his personal project would be eight months. That is, only by the eighth month he will start earning directly.
Comparing such results with his salary of 60,000 rubles in the office, and considering that in 7 months he will have time to earn 420,000 rubles, he decided to postpone his dismissal, but for now, save for buying a car not on credit.
If it is enough for an entrepreneur to calculate the payback period of the project, then professional investors know that the income from the project, which is equivalent to the amount of money invested in the project, is not a zero income, but a loss. The investor always evaluates the attractiveness of the project in comparison with other investments, for example, opening a deposit in a bank, buying valuable papers, alternative business projects.
Thus, the investor forms his own discount rate - threshold value percent at which he is willing to invest.
The technique that helps to take into account the depreciation of the investor's money is called discounting.
Where DCF is discounted cash flow,
CF - cash flow in the n-th period,
The discounted payback period of the project is the number of periods (months, years) after which the project will pay off, taking into account discounting cash flows. In articles and literature, you can find other names for the discounted payback period - Discounted Payback Period, DPP, payback period.
The formula for calculating the discounted payback period:
That is, the formula for calculating DPP is the same as PP, only the terms differ.
A private investor received a project for a new fitness center for consideration. The creators of the project are interested in receiving 152 million rubles, 102 of them are planned to be received in the first year, 50 in the second. The planned income from the project will be 20 million rubles in the first year and 30 million rubles in the remaining periods. Entrepreneurs calculated the payback period of the project to be 4 years 5 months. Is such a project interesting for an investor if he has an alternative to investing money at 15% per annum with the same risks?
The investor's accountant compiled an Excel spreadsheet using the POWER function to determine the discounted cash flow.
We see that using the threshold rate of 15%, the payback period of the project is no longer 4 and a half years, but 8 years. Further, the investor assesses the risks: what can happen in the country's economy, in the fitness services market and in his own plans for 8 years, and is he ready to risk the money invested for such a period? In Russia, the answer to this question is most often negative.
The payback period of an investment project is the most popular indicator for evaluating the feasibility of investments.
The simplicity of the calculation and its clarity contributes to this popularity. Indeed, if an investor is informed that in a year his investments will be returned to him, and then he will receive dividends from the project, he understands that it is worth investing in the project, even without being interested in the size of dividends.
Being a static indicator, it shows the investor, up to a month, the return period of his investment in the project.
This indicator is also used to select an investment option, of several options, preference is given to the project with the shortest payback period.
The payback period of an investment project is the ratio of the initial investment in the project to the average annual profitability of the project. If there are several investors, then each one also calculates the payback period of his investments in the investment project, i.e. the ratio of his investment in the project to his average annual income in this project.
The calculation of the payback period of an investment project is carried out according to the formula:
Since it is not always possible to determine the average annual income, the calculation of the payback of an investment project is carried out according to the formula:
The payback period can be calculated in months or even days.
Below is an example of calculating the payback period for an investment in a restaurant:
Change from red (losses) to green color(profit) in the final line of the calculation shows the payback period of this project, which is 7 months.
If the cash flow from the investment is not relevant, i.e. during the evaluation period of the project, there are years that bring loss, then the calculation of payback becomes impossible.
It will not reflect the true return on investment.
The above figure does not take into account the time value of money. Money in each specific period has its own price, which depends on many factors; inflation in the country, the cost of loans, the efficiency of the economy, etc. Therefore, in calculating the effectiveness of investments, the value of money in future periods is taken into account and their value is brought to a specific point in time (the time of evaluation). This process is called discounting. The calculation of payback can be carried out taking into account discounted cash flows. This specifies the payback period and is determined by the formula:
DPP = n if 
From the calculation formulas of the discounted payback period, it can be seen that it will always be greater than the static payback period. This is demonstrated by the following calculation:
DPP is 8 months.
Both of these indicators (PP and DPP) have common disadvantage, they do not take into account cash flows after the investment payback period. And the cash flows after the return on investment can change the investor's opinion about the effectiveness of the project. Therefore, return on investment indicators are auxiliary indicators in assessing the effectiveness of investment projects, where the main indicators are the present net value of the investment project (NPV), the internal rate of return of the investment project (IRR) and the return on investment (PI).
If two or more projects have the same key indicators, the payback period of the investment project is used to make the final decision on the choice of option.
But sometimes it is more important for an investor to receive his investments in a project in short time, then the main indicator is the payback period.
The payback period significantly depends on the start of investment and the presence of "windows" in the investment process. Such stops (technological and forced) in the process of implementing an investment project increase the payback period. For example, in the process of investing in an object under construction, the time between pre-investment costs and the costs of the actual construction can be up to two years, which significantly increases the payback of the project.
In general, the indicators of the payback periods of investment projects are useful and necessary elements for calculating their performance indicators. Their calculation is not difficult and does not require complex methods; therefore, despite their shortcomings, they will continue to serve as a guideline for evaluating and determining the feasibility of investment projects.
Before making any investment, investors must without fail determine the period after which investments will begin to generate income (profit). To this end, economists use the payback period as a financial ratio.
DEFINITION
Payback period is the period of time at the end of which the amount of invested funds will be equal to the amount of income received.
In other words, in this case, using the payback period formula, the period is determined, at the end of which the funds invested in the project will be returned to the investor and the project will begin to make a profit.
Often payback formula is used to select one of the alternative projects as an investment. The investor will choose the project, the value of the payback ratio of which will be less. The payback period formula will show that the company will become profitable faster.
A simple calculation method has been used for a long time and makes it possible to calculate the period that passes from the moment of investment until the time of their payback.
This payback period formula will be accurate only if the following conditions are met:
This method of calculating the payback period is the simplest and clearest to understand.
A simple formula for the payback period is quite informative as an indicator of the riskiness of an investment. If the value of the payback period is large, then this indicates a high risk of investing and vice versa.
This method, along with its simplicity, has several disadvantages:
Dynamic (discounted) payback period project is an indicator of the duration of the period from the beginning of investments to the moment of its payback, taking into account the fact of discounting.
The payback period in this case occurs when the net present value becomes positive and remains so in the future. The dynamic payback period is always greater than the static payback period. This is due to the fact that when calculating a dynamic indicator, the change in the value of cash over time is taken into account.
The payback period formula is most often used to calculate capital investments. This indicator can evaluate the effectiveness of the reconstruction or modernization of production, reflecting the period during which the resulting savings and additional profits will exceed the amount that was spent on capital investments.
Often, the payback period formula is used to evaluate the effectiveness and feasibility of investments. Moreover, if the value of the coefficient is very large, then such investments, most likely, must be abandoned.
When calculating the payback period of equipment, you can find out for what period of time the funds invested in this production unit will be returned at the expense of the profit that is received when using it.
EXAMPLE 1
| Exercise | Stroymontazh is investing 150,000 rubles in the project. It is assumed that during the implementation of the project, the annual income will be 50 thousand rubles. |
| Solution | The formula for the payback period in this case is as follows: T=I/P Here T is the payback period (years), And - the amount of investment (rub.), P - profitability of the project (rub.) Т=150/50=3 years Conclusion. According to the results of the calculation, we see that at the end of 3 years the project will fully return its cost and begin to make a profit. This formula does not take into account the fact that additional costs may arise during the implementation of the project. |
INTRODUCTION
CONCLUSION
INTRODUCTION
Payback - an indicator of efficiency economic activity, calculated as the ratio of the costs incurred and the results obtained.
No market goals of an organization can be achieved if its products are not in demand. Therefore, issues related to quality assurance cannot be considered in isolation from economic activity enterprises. Consequently, with the development of competition among manufacturers, there is an urgent need to closely link quality costs with the final results. production activities, the level of product quality, sales volume, profit, which allows you to manage your enterprise more efficiently and achieve higher profits.
aim term paper is the study of methods for assessing and analyzing the cost of quality to determine the cost-effectiveness and payback on the cost of quality.
Taking into account the goal in the course work, it is necessary to solve the following tasks:
To reveal the essence of methods for assessing and analyzing quality costs;
To disclose the content of quality costs and the stages of their formation;
To reveal the essence of the ABC method and its identification and analysis of quality costs.
The relevance of this topic of the course work lies in the fact that in the conditions of fierce competition, the majority Russian enterprises strive to achieve a leading position in various markets by introducing integrated business management tools, for example, based on the principles of TQM, based on the concept of controlling, etc. Development experience market economy shows that successful quality management and ensuring the competitiveness of products is determined by the effectiveness of the quality management system and thereby determining the economic efficiency of the organization and the return on quality costs.
The subject of the study is the return on quality costs, the economic efficiency of activities.
The object of the study is the category of costs associated with quality.
1. STAGES OF FORMATION AND TYPES OF PRODUCT QUALITY COSTS
The production of goods and services is accompanied by production and service costs. The misconception that the production of high quality products is determined by a significant increase in costs has been one of the main obstacles to the development of better quality management systems in the past.
AT general sense, quality costs are the costs associated with establishing the quality level, its achievement in the production process, control, evaluation and information on the compliance of products with quality, reliability and safety requirements, as well as costs associated with the establishment of product failures in the enterprise or in its operating conditions consumer.
Product quality must guarantee the satisfaction of the consumer, product reliability and cost savings. These properties are formed in the process of the entire reproductive activity of the enterprise, at all its stages and in all links. Together with it, the value of the product is formed, which characterizes these properties from the planning of product development to its implementation and after-sales service. On fig. 1 shows the chain of formation of costs and the cost of goods and services.
It allows you to specify the principle of quality assurance and see when, i.e. at what stage of activity, and where, in what department, it is implemented. Since the manager is responsible for each stage and department, it becomes clear who is responsible for product quality. What is meant by guarantees are technical, technological, environmental, ergonomic, economic and other quality indicators that ensure customer satisfaction.
Rice. 1. Cost chain and product value creation
Quality costs are associated not only directly with the production of products, but also with the management of this production.
Aggregated costs associated with product quality can be divided into scientific and technical, managerial and production costs. Scientific, technical and managerial prepare, provide and control the conditions for the production of quality products, i.e. as if predetermine the presence and magnitude of production costs.
If the development and design of new products are carried out by external organizations, then the costs that ensure quality in a given enterprise will include only implementation costs. AT individual cases, especially in the production of new products, control over its preparation and development is carried out by design departments.
In general, the management costs associated with product quality assurance include:
Transport - external and internal transportation of raw materials, components and finished products;
Supply - procurement of raw materials and component materials planned by type, quantity and quality;
Costs for departments that control production;
The costs associated with the work of economic services, on the activities of which the quality of products depends: planning department, financial department, accounting, etc.;
Costs for the activities of other services of the enterprise management apparatus, which, to varying degrees, are related to and affect product quality assurance, especially personnel management, whose functions include recruiting, improving their qualifications and checking compliance with the required level and conditions.
Production costs, in turn, can be divided into material, technical and labor. And all of them are directly related to the cost of production. And if the amount of management costs in the cost of quality can only be determined conditionally, indirectly, then the size of material production costs can be directly calculated. It is much easier than management costs to calculate the amount of technical production costs - through depreciation, and labor costs - through wages(payment of standard hours).
In order to manage the costs associated with ensuring product quality, it is necessary to distinguish between the basic costs that are formed in the process of development, development and production of new products and are in the future until the moment of its removal from production, and additional costs associated with its improvement and restoration. lost (under-received compared to planned) level of quality.
The main part of the basic costs reflects the value of the factors of production, as well as general and general production costs attributable to the manufacture of a particular product through the cost estimate.
Additional costs include evaluation costs and prevention costs. The former include the costs incurred by the enterprise in order to determine whether the product meets the planned technical, environmental, ergonomic and other conditions. The second includes the costs of refining and improving products that do not meet the standards, the best world standards, the requirements of the buyer, for checking, repairing, improving tools, equipment, equipment and technology, and in some cases to stop production.
There is another group of costs that, if they occur, should be attributed to either basic or additional costs, depending on the novelty of the product. These are the costs of marriage and its correction. Their value can vary significantly and consist both of the costs of manufacturing products rejected in the future in the presence of an irreparable marriage or, in addition to this, the costs of correcting it if the marriage is not final, and may also include payment for moral and / or physical damage caused to the consumer by low-quality products .
According to the classification of A. Feigenbaum, quality costs are divided into:
1. Expenses for preventive measures
a) quality planning (organizational quality assurance, product design, reliability studies, etc.);
b) control technological process(study and analysis of technological processes, control over the production process, etc.);
c) design of equipment used to obtain quality information (design of equipment used to determine the quality of products and the technological process, collect data, process them, etc.);
d) training in quality assurance methods and work with personnel (development of training programs aimed at the correct application of quality management methods by employees);
e) checking the design of the product (pre-production evaluation of products);
f) development of management systems (development and management of integrated quality systems, their improvement);
g) other costs associated with the implementation of preventive measures.
2. Expenses for quality assessment
a) testing and acceptance control of materials (assessment of the quality of the purchased material, travel expenses of inspectors);
b) laboratory acceptance tests (carrying out all types of tests in a laboratory or testing center to assess the quality of a procurement material);
c) laboratory measurements (measurements, checking of instrumentation, their repair, etc.);
d) technical control (assessment of product quality by employees of the technical control service);
e) product testing (evaluation of product performance);
f) self-control (checking the quality of products by the workers themselves);
g) certification of product quality by third parties;
h) maintenance and testing of equipment used to obtain quality information (testing and maintenance of this equipment);
i) technical verification of products and permission to ship (analysis of data obtained as a result of testing and technical control, issuance of permission to ship products);
j) field testing.
3. Costs due to failures caused by internal causes
a) production waste (losses incurred in the process of achieving the required quality level);
b) rework (additional costs to achieve the required level of quality);
c) expenses for material and technical supply (expenses in the process of working with marriage and as a result of considering claims for the purchased material).
4. Costs due to failures caused by external causes
c) maintenance (correction of defects or shortcomings of products that are not the subject of operational complaints);
d) legal liability (financial losses caused by the production of low-quality products);
e) return of products.
There are several more classifications of quality costs, however, it should be noted that any single, i.e. there is no generally accepted classification of quality costs even in developed Western countries. That is why in section 6 international standards ISO 9004, cost types are presented in only two groups: production and non-production costs for quality, with the proviso that such a grouping is of the most general nature.
Be that as it may, the costs of creating, maintaining the production of quality products and, consequently, the image of the enterprise itself are formed both at the enterprise and outside it, therefore their deep qualitative and quantitative analysis is necessary.
2. RETURN ON QUALITY
2.1 Information base of product quality cost analysis
Various information is used to analyze the cost of funds spent on maintaining product quality. But before proceeding to its collection, it is necessary to determine what the purpose of the information is.
The purpose of collecting data in the quality cost analysis process may be to:
Identification of the competitiveness of products in existing markets;
Determining the size of the required capital investments;
Identification of the relationship between the costs of product quality and the results of the economic activity of the enterprise;
Reduction of costs per unit of production while maintaining its former quality;
Reducing the cost of products while improving their properties;
Determining the amount of costs by type to change their structure;
Increasing the volume of production without reducing the quality of products from the previous volume of resources by reducing and eliminating waste;
Analysis of deviations from established requirements;
Product control;
Setting prices for products, etc.
This shows that part of the quality data relating to the technical features of the product and its production is located at the manufacturer, and the other part is at a competing enterprise or in the sales area, i.e. in the external environment.
Data for the analysis of quality costs can be primary, as a rule, these are technical and other parameters of products contained in specifications, state standards, certificates and other documents confirming product quality, and secondary, resulting from the processing of primary ones.
The data needs to be processed. It reduces the time spent on data processing by developing media types that make preliminary conclusions possible immediately after data collection. To do this, it is necessary to register the source of information (the date when it was collected, the employee who performed the operation, the machine on which the processing was performed, the batch of materials used, etc.). Information should be recorded in tables that facilitate and speed up the calculation of statistical indicators used in making operational management decisions and for further deeper statistical and mathematical analysis of relationships and trends.
There is a huge number of accounting registers that vary at different enterprises depending on the type of activity, type of products, etc. (timesheets, expense reports, purchase orders, rework reports, etc.). An example is the registration of defects by the QCD inspector of a stamped plastic part. This form allows you to see the causes of marriage and quickly determine the damage caused to them and its culprit.
In addition, further technical examination of defective parts, if necessary, and comparison of its results with the preliminary conclusion of the QCD inspector will also confirm the level of qualification of the latter.
As mentioned above, different enterprises may use similar and other accounting forms. Such forms of recording data on the deviation of product quality parameters from the planned ones are appropriate for collecting internal primary data. specifications of manufactured products, which are then used in the factor analysis of the cost of product quality.
Rice. 2. Defect checklist
One of the internal sources of information that allows you to determine the cost structure for a product and has a great advantage over others due to the mandatory compilation, continuity of the indicators included in it, reliability and clarity, is an estimate of production costs. It is convenient for finding ways to reduce them and minimize the price of the product. In addition, you can use data on production costs by their types, collected on accounts accounting.
More complex, time-consuming and expensive is the acquisition of external information. Part of it is contained in brochures, price lists, periodicals and special literature. These data are more reliable than those obtained in the field of sales through special sample surveys to study the opinion of consumers about the price and quality of products. However, information obtained from sample surveys is difficult to replace if the enterprise wants to take into account the desire of buyers to increase sales by improving the properties of products. For this purpose, you can use a survey of product sellers and buyers or conduct a survey of the population, which in the process of data processing must be divided into groups (classes). This will allow you to know the opinion of various social, age and other groups of the population about the company's products using a typical sample to obtain information.
When collecting such data for a limited number of consumers, especially with a small sample, it is convenient to build scatterplots that allow you to study the relationship between pairs of variables, such as price and external design, product packaging. These variables can be:
a) quality characteristic or factor influencing it;
b) two different quality characteristics;
c) two factors affecting one quality characteristic.
It is advisable to take at least one of the variables as an indicator that expresses the cost of quality, creation or maintenance of any property of the product or the price of it, i.e. cost value.
The scatterplot is built in several stages. At the first table, the collected data is recorded, between which the dependence is being studied.
On the second, a scale of indicator values is built by dividing the difference between their maximum and minimum values by the desired (approximately the same) number of parts. On the x-axis, the values of the factorial attribute are plotted, and on the y-axis, the values of the effective attribute.
At the third stage, a scatterplot is built by plotting the points obtained as a result of the observation on the graph.
At the fourth final stage, the address is entered: the name of the diagram, the time of observation, the name of the artist and other necessary information.
These scatterplots allow us to draw preliminary conclusions about the relationship of the studied variables (for example, about the preferences of buyers regarding the quality of packaging that ensures the safety of the product and the price of the product).
The following example can be given. Suppose a company is investigating how the quality of watch packaging affects the demand for a given product. For the consumer, packaging is a quality sign in terms of both the external design and the safety of the goods. For the manufacturer, it is also a quantitative indicator, expressed as a certain amount of costs. For the convenience of data collection, we denote each type of packaging with a number:
1 - sale without original packaging (wrapping in paper in a store);
2 - soft package;
3 - branded soft package;
4 - a simple cardboard box;
5 - plastic case;
6 - branded gift box.
Each type of packaging corresponds to a certain price of the goods (the price of the packaging is not reported to the buyer and is perceived by him as the difference between the next and previous prices of the product, depending on the design). It ranges from 4 to 9 monetary units with an interval of 0.5 monetary unit. The results of a survey of 30 buyers, which was actually conducted, are shown in table 1:
Table 1. Data from a survey of buyers of the "Gifts" store on the packaging and price of watches "Electronics"
It should be noted that the price of the gift box was not named and the maximum price was actually 8 monetary units.
Based on the data obtained, it is possible to construct a scatterplot (the squares highlight those points whose value occurred twice).
Rice. 3. Scatterplot for the type of packaging and the price of watches "Electronics"
Scatterplot data allow us to draw preliminary conclusions about the relationship of the studied variables; in our example - about the preferences of the buyer regarding the quality of packaging that ensures the safety of the product, its aesthetic appearance, and the price of the product. Preference is given to reliable packaging with moderate price, the upper level of which was not named in the answers, which should attract the attention of the manufacturer as a signal that the price is too high in the eyes of the buyer. You can also make a preliminary conclusion that, since the points are located from the lower left corner on this diagram to the upper right, the relationship between these two indicators is direct.
Thus, despite the versatility of information characterizing the costs of product quality, and the factors affecting it and similar costs, it is necessary and quite possible to use visual forms of their presentation in combination with primary analysis methods at the stage of data generation: grouping, graphical analysis etc. This greatly speeds up the analysis process and facilitates its further use for the purpose of statistical and mathematical methods.
2.2 Quality cost analysis methods
Currently, the following methods for estimating quality costs are known:
With grouping for preventive costs, for control and elimination of defects
With grouping for compliance and elimination of inconsistencies
The first method today can be used by industrial enterprises to assess the costs of ensuring the quality of products. The second approach can be used in any field of activity when assessing the costs of ensuring the quality of business processes in accordance with the chosen method. Information on quality costs can be identified by introducing an integrated system of intra-company management accounting. Such a system is a set of interrelated objects and subjects of management, methods and principles of planning, accounting, control, analysis and regulation of costs. In order to plan costs, we apply the budget method, which will allow us to conduct a preliminary control of the activities proposed for implementation for their feasibility and effectiveness, as well as to rationally allocate resources. To account for costs, it is advisable to use an accounting system for collecting, registering and summarizing information in monetary terms about the property and obligations of the organization, as well as their movement through continuous, continuous and documentary accounting of all business transactions. The organization of cost accounting will allow collecting and preparing information for the purposes of making managerial decisions. It should be noted that today the leaders Russian market various fields activities - oil companies, metallurgical plants, holdings, transport companies widely use software products such as ARIS Process Cost Analyzer by IDS Scheer AG (Germany) for cost accounting. This module, firstly, allows you to carry out various types of cost data aggregation and analyze them using a large number tools. Secondly, ARIS PCA can be used as a tool for cost estimation and cost management in real business processes.
Cost control will provide feedback, comparison of planned and actual costs. Cost analysis using well-known modern methods of quality management will allow you to evaluate the efficiency of using enterprise resources, collect information for preparing plans and making rational management decisions. Cost control will allow you to take prompt measures to eliminate the deviations that occur.
Thus, the use of the above methods for identifying costs in an integrated management accounting system will allow enterprises to organize information flows for collecting and providing data on quality costs, assess the efficiency of using enterprise resources and increase customer satisfaction.
Depending on the goals and objectives of the analysis of quality costs and the possibilities of obtaining the data necessary for its implementation, analytical methods differ significantly. This difference is also affected by the passage of a certain stage of the enterprise's activity by the product, and its place in the cost formation chain at a particular moment.
Method of functional cost analysis.
At the stages of design, technological planning, preparation and development of production, it is advisable to use functional cost analysis (FCA). This is a method of systematic study of the functions of an individual product or technological, production, economic process, structure, focused on improving the efficiency of resource use by optimizing the ratio between the consumer properties of an object and the costs of its development, production and operation.
The main principles of the application of the FSA are:
Functional approach to the object of study;
A systematic approach to the analysis of an object and its functions;
Study of object functions and their material carriers at all stages life cycle products;
Compliance of the quality and usefulness of product functions with their costs;
Collective creativity.
The functions performed by the product and its components can be grouped according to a number of features. According to the area of manifestation, functions are divided into external and internal. External - these are the functions performed by the object when it interacts with the external environment. Internal - functions that are any elements of the object and their connections within the boundaries of the object.
According to the role in meeting the needs among external functions, the main and secondary ones are distinguished. Main function reflects the main goal of creating an object, and the secondary one is a secondary one.
By role in the workflow, internal functions can be divided into main and auxiliary. The main function is subordinate to the main one and determines the operability of the object. With the help of auxiliary, the main, secondary and main functions are implemented.
According to the nature of the manifestation, all of the listed functions are divided into nominal, potential and actual. Nominal values are set during the formation, creation of an object and are mandatory. Potential reflect the ability of the object to perform any functions when the conditions of its operation change. Real are the functions actually performed by the object.
All functions of an object can be useful or useless, and the latter can be neutral and harmful.
The purpose of the functional cost analysis is to develop the useful functions of the object with the optimal ratio between their significance for the consumer and the costs of their implementation, i.e. in the choice of the most favorable for the consumer and the manufacturer, if we are talking about the production of products, a solution to the problem of product quality and its cost. Mathematically, the goal of the FSA can be written as follows:
where PS is the use value of the analyzed object, expressed as a set of its use properties (PS = en ci)
Z - costs to achieve the necessary consumer properties.
Functional cost analysis is carried out in several stages.
At the first, preparatory stage, the object of analysis is clarified - the cost carrier. This is especially important when the manufacturer's resources are limited. For example, the selection and development or improvement of a mass-produced product can generate significantly more benefits for an enterprise than a more expensive, low-volume product. This stage is completed if a variant with a low cost and high quality compared to others is found.
At the second, informational, stage, data are collected about the object under study (purpose, technical and economic characteristics) and its constituent blocks, details (functions, materials, cost). They go in several streams on the principle of an open information network. Information on improving the quality of a product and reducing the cost of its production enters the network from the design, economic divisions of the enterprise and from the consumer to the heads of the relevant services. Estimates and wishes of consumers are accumulated in the marketing department. In the process of work, the initial data is processed, converted into the appropriate indicators of quality and costs, passing through all interested departments, and goes to the project manager.
At the third, analytical stage, the functions of the product (their composition, degree of usefulness), its cost and the possibility of reducing it by cutting off secondary and useless functions are studied in detail. It can be not only technical, but also organoleptic, aesthetic and other functions of the product or its parts, assemblies. To do this, it is advisable to use the Eisenhower principle - the ABC principle, according to which functions are divided into:
A - main, basic, useful;
B - secondary, auxiliary, useful;
C - secondary, auxiliary, useless.
The ABC method allows you to more accurately allocate overheads to operations, which contributes to the correct pricing of products and services. But its benefits are most pronounced in the area of quality cost management, primarily due to its ability to better identify activities aimed at improving quality. So, in the example where we discussed the costs associated with satisfying consumer claims, we actually considered one of the categories of quality costs - external losses from defects. To solve quality problems and continuously improve it, it is very important to know in what proportion these costs are distributed among different types of products.
With traditional accounting methods, the customer service department is contacted for this information and the claims reports are sorted. The complexity of such work increases many times when the enterprise produces many types of products, for each of which it is necessary to identify all the components of the costs associated with quality.
In addition, this work should be carried out regularly with a given frequency, for example, once a month. The ABC method, unlike traditional accounting methods, provides for the identification and breakdown of costs into components automatically. In addition, it allows you to identify and quantify many of the factors that determine costs, create databases on the basis of which you can break down costs into components and gradually get to the root causes that determine the appearance and magnitude of each of these components.
Theoretically, the ABC method allows you to identify the root causes of existing quality problems in the organization. This is particularly important as it becomes possible to assess the rate and payback period for addressing the root causes of poor quality. Below is an example of such an in-depth analysis.
In a company producing two types of products - shafts and housings, using the ABC method, it was found that the annual internal losses from defects amounted to $ 24,000. This amount is made up of the cost of reworking defects ($ 9,600 or 40% of the total internal losses from defects) and the cost of defective items sent to waste ($14,400 or 60% of costs). For various reasons, more defective shafts must be reworked than housings. Correspondingly, the percentages of defective products of both types sent to waste differ. In the terminology of the ABC method, rework and waste are commonly referred to as cost drivers ("cost drivers").
The level of detail of costs provided by the ABC method allows you to evaluate the economic consequences of identifying and eliminating the causes of defects. In this example, the company loses $10,560 annually as a result of damage to shafts and housings. If, by identifying and eliminating the root causes of defects of this type, it was possible to reduce these costs by 75%, then the annual savings would be $ 7920. The savings are comparable to what needs to be invested in eliminating the causes of defects. For example, if the required level of investment is $4000, then the estimated payback period will be (4000: 7920) x 12, that is, about six months. Thus, the level of detail inherent in the ABC method allows you to analyze the relationship between investment and economic results achieved, thus providing a reliable basis for making informed investment decisions in the process of continuous quality improvement.
1. Identification of all operations related to the prevention of defects and quality control, and possible internal and external defects;
2. Establishing the costs associated with the implementation of operations to prevent defects and quality control, and losses from internal and external defects;
3. Identification of actions that depend on the prevention of defects and quality control and serve as sources of internal and external defects;
4. Distribution of quality costs in accordance with ABC. At the same time, it is necessary to subdivide the costs associated with the prevention of defects and quality control, according to the corresponding operations that depend on these actions, and establish the relationship of losses from internal and external defects with the operations that generate them, and with the root causes of these defects;
5. Adjustment of the estimated cost of products or services, taking into account the reflection in them of additional costs for quality
The ABC method, combined with quality cost analysis, has the following advantages:
1. In overhead costs, which can make up the bulk of the cost of products or services, it is possible to strictly identify the components. This allows you to determine which departments, processes or activities are causing them to appear. The computerized ABC method makes it possible to significantly reduce the cost of obtaining this kind of accurate and detailed information.
2. Most of the components of quality costs are not direct, but overhead costs. This is especially true for so-called "hidden" costs that do not fit into known categories. material costs, such as the cost of rework and disposal of defects, warranty costs, etc. Using the ABC method, it is possible to accurately determine the source of these costs.
3. With the correct distribution of overhead costs, the approach to calculating the price of inadequate quality changes, which affects the identification of vital areas for improving quality and, accordingly, the choice of projects to be implemented and the rationale for investment decisions.
4. With the correct distribution of overhead costs, it becomes more obvious which departments allow inadequate quality.
5. It becomes possible to more realistically manage changes in quality costs by eliminating incorrect or arbitrary allocation of overhead costs.
Can identify and eliminate cost-inefficient or non-value-added operations from manufacturing processes, thereby reducing lead times while improving quality and reducing costs
At the same time, previous costs are cut off. The use of a tabular form of the distribution of functions facilitates such an analysis:
Table 2. Distribution of service functions of product X according to the ABC principle
The final columns contain data on the number of secondary, auxiliary, useless functions by details, which allows us to draw a preliminary conclusion about their necessity.
Next, you can build a table of the cost of parts according to the estimate or its most important articles and evaluate the weight of the functions of each part in relation to the costs of their provision. This will make it possible to identify possible ways to reduce costs by making changes to the design of the product, production technology, replacing part of its own production of parts and assemblies with received components, replacing one type of material with another, cheaper or more economical in processing, changing the supplier of materials, the size of their supplies, etc. d.
Grouping the costs of functions by production factors will make it possible to identify the priority areas for reducing the cost of the product. It is advisable to detail such areas, ranking them according to the degree of significance determined by an expert, and comparing them with costs, to choose ways to reduce the cost of products. To do this, you can create a table:
Table 3. Comparison of coefficients of significance of functions and their cost
Comparing specific gravity cost per function in the total cost and the significance of the corresponding function, you can calculate the cost ratio for each function. Kz / f = 1 is considered optimal. Kz / f< 1 желательнее, чем Кз/ф >1. If this coefficient of unity is significantly exceeded, it is necessary to look for ways to reduce the cost of this function (in our example, this is the second function).
The result of the FCA carried out are solutions in which it is necessary to compare the total costs for products, which are the sum of elemental costs, with some base. This base can, for example, be the minimum possible cost of the product. The FSA theory proposes to calculate economic efficiency FSA, which shows what proportion is the cost reduction in their minimum possible value:
(2)
where K FSA is the economic efficiency of the FSA (coefficient of reduction of current costs);
Ср – actual total costs;
With f.n. - the minimum possible costs corresponding to the designed product.
At the fourth, research, stage, the proposed options for the developed product are evaluated. At the fifth, advisory, stage, the most appropriate options for the development and improvement of the product are selected for a given production. To this end, we can recommend the construction of a matrix table:
Table 4. Decision table for product selection options for production
Taking into account the importance of the function of the product, its components, parts and the level of costs through pricing, based on knowledge of the demand for products, the level of its profitability is determined. All this together serves the purpose of making a decision on the choice of a specific product or directions for production and the scale of its improvement.
Technical standardization methods can provide significant assistance in determining and analyzing the costs of product quality. They are based on the calculation of detailed norms and standards. material resources(raw materials, purchased components and other types of materials), calculation of labor intensity and other costs included in production cost in accordance with design dimensions, the specific technology of its manufacture, storage and transportation, as well as the costs of warranty and service maintenance. For their calculation, methods of microelement rationing, regulatory and reference materials are used. Methods of technical regulation make it possible to accurately determine the costs of both a new product in terms of its components and the improvement of products.
If an enterprise switches to the production of new products that previously had an analogue in terms of consumer purpose and properties, then the cost of quality (Qk) can be determined by the difference between the costs of old (Wst) and new (Wn) products:
Zk \u003d Zst - Zn, (3)
If an enterprise improves the quality parameters of a previously manufactured product, then the cost of quality can be determined by direct account in accordance with the relevant standards and directions.
The degree of relationship between any quality characteristics that have a quantitative expression, and the cost of it or the price of the product as a whole as a form of its cost, in which the main share is occupied by costs, allows you to determine the correlation coefficient. It can be calculated using the formula:
(4) where
(5)
(6)
(7)
where n is the number of data pairs;
S(xy) - covariance;
x and y are two studied indicators.
The correlation coefficient can take values from -1 to +1. At r close to ¦1¦, one can speak of a high degree of closeness of the relationship between the variables under study, and vice versa: at r close to 0, the correlation between them is weakly expressed. If r = ¦1¦, all points on the scatterplot will lie on the same straight line. If r = 0, correlation between the factor and performance indicators is absent. The sign "+" or "-" indicates the direction of communication - direct or reverse.
One of the methods that allow you to analyze the change in costs associated with a change in product quality is index method. The complexity of its application to this subject of research lies in the fact that both features must be expressed quantitatively. Quality, however, does not always have a quantitative meaning and cannot always be described verbally, for example, products that are suitable and not certified, conforming and not conforming specifications and etc.
If the quality indicator has numerical characteristics, then when building indices, they can be used as cost weights. Otherwise, the number of structural elements of the product, the number of parts, assemblies, and products can serve as weights.
To assess the quality and competitiveness of a product, it is also possible to use the scoring method and the unit price method. The scoring method is based on assigning a score to each quality parameter of the product, taking into account the significance of this parameter for the product as a whole and the scale chosen for evaluation - 5-, 10- or 100-point. After that, the average score of the product is determined, which characterizes the level of its quality in points. To calculate the price of a new product, you can use the formula:
where Рн is the price of new products, den. units;
Rb - the price of basic products, cash units;
Bb - the sum of points characterizing the quality parameters of the base product;
Bb - the sum of points characterizing the parameters of the quality of new products.
The unit price method consists in determining the price based on the calculation of the unit cost of the main quality parameter: power, productivity, etc. The formula is used to calculate:
where Mon is the value of the main quality parameter of a new product, score;
Pb - the value of the main quality parameter of the base product, score;
Both of these methods should be used as components of a comparative analysis of products to decide whether they are put into production or the effectiveness of the proposed qualitative improvements. However, in practice, to resolve the issue of choosing a product for launching into production, all types of project analysis should be carried out: commercial, technical, organizational, social, environmental and economic. To do this, use all available methods in each specific situation. Only such an analysis can be considered complete and give an objective result for making a management decision.
2.3 Scrap and scrap analysis
The policy of the enterprise should initially aim at high product quality. However, marriage, which is its opposite, can occur in any enterprise. It must be taken into account.
Marriage can be detected at the manufacturing enterprise itself and beyond. The defect that manifested itself in the sphere of sale or in the process of using the product indicates both its poor quality and the quality of the enterprise. It's called a complaint.
Claims are compared in value and quantity with the previous period. They are calculated for 100, 1000, 10000 products, depending on the volume of production. The appearance of a complaint causes not only material, but also moral damage to the manufacturer, affecting its reputation.
When analyzing marriage, absolute and relative indicators are calculated. The absolute size of the marriage is the sum of the costs of finally rejected products and the costs of correcting the correctable marriage. The absolute amount of losses from the marriage is obtained by subtracting from the absolute size of the marriage the cost of the marriage at the price of use, the amount of deductions from the perpetrators of the marriage and the amount of penalties from suppliers for the supply of low-quality materials. Relative indicators of the size of scrap and losses from marriage are calculated as a percentage of the absolute size of scrap or losses from marriage, respectively, to the production cost of commercial products. Consider an example.
Table 7. Calculation of marriage indicators
From table 7 we can conclude that the main reason for the marriage was the supply of low-quality raw materials or other types of material resources. AT reporting year Based on the experience of the previous period, the manufacturer drew up a contract for the supply of materials, providing for compensation in case of their poor quality, which made it possible to reduce the absolute amount of losses from marriage by 9,300 den. units (24,000 - 14,700) or by 38.75% (14,700 / 24,000 100%).
The relative size of losses from marriage decreased by 2.5%.
You can also determine the cost of good products that could be obtained in the absence of defects (?q). To do this, the actual volume of marketable output at planned prices (q1Ppl) should be multiplied by the share of the final defective production cost (dо.b.).
Let for our example q1Ppl = 500,000 den. units Then
The analysis of defects found at the enterprise and the analysis of complaints should begin with an examination of the causes of their occurrence. This will allow to more accurately determine the amount of funds spent and ways to reduce the cost of ensuring product quality.
However, the costs associated with solving problems related to the occurrence, prevention of marriage, can sometimes exceed the costs incurred by the enterprise if the marriage is not eliminated. To do this, you should carefully analyze the costs of preventing various defects and their elimination. The Pareto curve and additional graphs showing the costs associated with these defects, estimates of the costs associated with solving problems, and estimates of the time required to solve problems can help with this.
On fig. 4 the defect leading to the greatest number of failures is determined, but the subsequent graphs (Fig. 5, 6 and 7) show that the area of the largest number of defects does not correspond to the area of \u200b\u200bthe highest costs for the company caused by marriage, since the part with this defect is much cheaper, less important or easier to fix. If a part is manufactured in a much larger quantity than the rest, then the number of defects of this type can be misleading, since a large absolute number can be in this case low interest. For example, 5% of failures out of 10,000 parts equals 500 failures, but 20% out of 1,000 parts is "only" 200 failures.
Of course, with an increase in the cost of quality management, the cost of defects will decrease. However, this does not mean that the company should increase the cost of quality indefinitely. It is necessary to constantly analyze the costs of quality management, the costs of defects and the total costs of the enterprise, because with an unreasonable increase in the cost of quality, an increase in total costs is possible.
Quality control costs and scrap costs can be plotted on the same graph, as shown in Fig. eight.
Rice. 8. Cost-effectiveness of quality management
The point of intersection of these two curves is usually the point of minimum cost. But in practice it is not easy to get even a rough estimate, because many other variables must be taken into account. However, this task is the most important task for management. Many firms do not make these calculations, although quality costing can be a source of huge savings.
2.4 Controlling as a method of quality cost analysis
It seems that the implementation and successful operation of the quality cost management system is most effective when controlling is used - a relatively new scientific concept and field for Russia. practical activities. We emphasize that at present there is a significant scatter of opinions regarding the connection between the concept of "controlling" and management functions. Thus, the confusion of the concepts of "controlling" and "control" often found in publications leads some practitioners to the conclusion that "it already exists" in their enterprise. Many specialists identify controlling with management accounting, thereby leaving only the accounting function for the former and unjustifiably reducing it to the level of operational management.
Controlling is a management support function implemented through a system of information, analytical and monitoring procedures carried out at all levels of strategic market management and at all links in the value chain.
If we follow this view in relation to quality cost management, enterprise managers should receive from the controlling service analytical information, which allows making management decisions of a strategic, tactical and operational nature, monitoring the process of their implementation, implementing corrective actions as certain deviations appear, and, finally, periodically evaluating the effectiveness of the implementation of these decisions. At the same time, controlling should pay special attention to the issues of substantiating a rational strategy for relationships with suppliers and monitoring these relationships in order to maximize the required quality of the supplied materials and semi-finished products, which is necessary to maintain a high level of competitiveness of the company's products and prevent defects. There is no need to prove that the losses of the enterprise due to defects in the components supplied to it can be very significant. For example, in the 1980s, Ford stopped production of the Tempo and Topaz models at four of its factories due to defective engine parts purchased from a supplier. For each day of downtime, the company could produce about 2 thousand cars. Symptomatic is the recent statement by AvtoVAZ's quality director that the company will break off relations even with long-term partners if they supply components that do not meet the plant's new standards.
However, the strategy of relations with suppliers, obviously, involves not only such radical actions, but also joint efforts to improve the quality of supplies. In this regard, it is appropriate to cite the point of view of housing interior specialists, who note that in order to radically eliminate noise from the upper floor, it is cheaper to repair the floor of the neighbors living there at their own expense than to install suspended ceilings in their own apartment. Obviously, in a number of cases, it is advisable for an enterprise to eliminate "noise" in the form of a flow of materials or semi-finished products with defects to incur additional costs from "neighbors" along the production chain. First of all, it is necessary to pay attention to cases of the so-called hidden marriage, when neither the supplier nor the company that will subject the part or assembly unit to further processing, until a certain point, can detect a defect without special studies. For example, in mechanical engineering, cast blanks can contain hidden cavities, which are often discovered when significant funds have already been spent on processing these blanks. The situation is significantly aggravated if this defect is detected by the consumer in the form of breakdowns, complete failure of the product, and even accidents.
The controlling service should collect and analyze information of this kind in the context of individual suppliers, assess real losses over several years, extrapolate possible damage to the future and thereby contribute to the formation of a different business vision for managers, showing, for example, the economic feasibility of acquiring and installing an appropriate diagnostic tool from a supplier. equipment.
In our opinion, at the initial stage of the implementation of quality cost controlling, the classification proposed by J. Juran is acceptable, according to which the total quality costs are divided into four categories:
Low quality warning costs;
Costs for control (monitoring) of the quality level;
The cost of correcting poor quality identified at the manufacturing plant;
The costs of eliminating the negative consequences caused by the low quality of products that have reached consumers. The first category includes costs associated with actions aimed at preventing defects, for example, designing a new production process, improving product design and technological processes, training and advanced training of workers, and, of course, as already noted, the costs of eliminating quality problems in the link " supplier is an enterprise.
The costs of the second category are associated with the definition and confirmation of the achieved level of quality. For example, verification and testing of a prototype, input control and testing, control during the execution of work and quality control of finished products.
The costs of the third category are the costs of internal marriage, the correction of defective products before they reach the customer. For example, culling, reprocessing, repair, post-reprocessing inspection, downtime due to defects, and potential loss due to lost sales associated with fewer marketable products available for sale.
With this approach to the cost structure, the relationship between them and quality is as follows:
The level of quality increases as the costs of prevention and control increase, i.e. is a function of the costs of the first two categories;
The cost of correcting defects, warranty repairs, product returns and some others, i.e. the costs related to the last two categories are a function of the quality level and decrease as it increases.
In this regard, some authors say that the schedule of total costs for quality is similar to the Latin letter "U", in the lower part of which there is some flat area that characterizes an acceptable level of quality and the corresponding minimum level of total costs.
As you know, traditional accounting does not generate information on costs in the context of each category, which does not allow for appropriate analysis and development of recommendations for managers in order to select a rational ratio of categories and, as a result, reduce the total amount of costs for quality assurance. Managers of Russian enterprises can only receive information about losses from marriage from the accounting department. Other costs associated with testing, experiments and research of the quality of incoming materials and semi-finished products, control of technological processes, etc., are "dissolved" in the accounts of overhead (indirect) costs. Similar problems exist in foreign enterprises. It is no coincidence that A. Feigenbaum notes that "there is a need to develop a form for reporting on quality costs that meets the requirements of the company." Note that management accounting, being more suitable for decision makers, nevertheless does not consider costs in the context of these categories as accounting objects.
In this regard, the development of reporting forms on quality costs should be one of the most important tasks in the activities of controlling services. At the same time, depending on the level of management (responsibility), the degree of specification of information should increase as you move to lower levels. Thus, a report to the top management of the company is possible for the whole company or for its large divisions (production facilities, branches, etc.) in the context of each category of quality costs, indicating total amount such costs, as well as their share (percentage) in the sum of all production costs and (or) in sales volume. Reports on quality costs prepared for managers of lower levels of management (responsibility) should be compiled in the context of individual departments, production lines, types of products, etc.
The table shows an example of a quality cost report submitted by controllers to senior management.
Analysis of the table data allows us to conclude that for the period from 2002 to 2005. total quality costs decreased by 26.5% in absolute terms, or almost 2 times (from 19.6 to 10%) in relation to all costs. This result was achieved due to a sharp increase in the cost of spoilage prevention (4 times) and control (1.25 times). Prevention and control costs combined more than doubled (from CU6 million to CU13 million), while internal and external marriage costs decreased by 3.7 times. Thus, improving quality by investing heavily in activities that are, in the figurative expression of J. Shank and V. Govindarajan, “upstream is a good investment for any organization.” Controllers need to be able to explain to managers that an increase in control costs also leads to an increase in internal defect costs, as happened in our example in 2003 and 2004, because improved control systems help to identify more defects within the firm. Finally, controlling specialists should take into account (and interpret accordingly) the situation that developed in 2003 and is characterized by the fact that a 2-fold increase in the costs of prevention and control (12 million versus 6 million CU) did not lead to a decrease in total costs, which is explained by a certain time interval between the corresponding costs and results.
When establishing controlling as a subsystem for managing the corresponding costs, one should proceed from the fact that between separate categories costs, there are more complex relationships than is modeled by the U-curve. For example, preventive measures, such as improving the process or training workers in quality assurance methods, lead to lower control costs. However, these activities may include the design and organization of defect-free production, i.e. additional measures for incoming control of materials, control of the progress of work, etc., which will entail additional costs for control. In turn, effective (and more expensive) control is likely to lead to the detection of a greater number of violations of the technical process, unreasonable replacement of materials and semi-finished products and, as a result, to an increase in the cost of internal rejection. Finally, the cost of correcting a defect identified at the enterprise makes it possible to achieve savings at the stage of relations with consumers regarding product deficiencies. In this regard, it is advisable to consider a rather complex dynamic interaction of these four components of quality costs, and the controlling service of a particular enterprise should form an appropriate information and analytical base, on the basis of which management decisions of various levels will be developed, as well as monitor possible changes in the nature of the relationship between these components.
It also seems very promising for controllers to focus on the formation of a rational after-sales service policy, which is becoming increasingly important in the face of intense competition, as buyers are increasingly trying to assess the costs that they incur not only when purchasing products, but also during their operation. Some Western top managers characterize the relevance of after-sales service as follows: "Getting an order is the easiest thing; after-sales service is what really matters."
After-sales services become more important in the process of choosing a product by the consumer, the more complex its design and mode of operation. For technically complex products intended for industrial use, after-sales service may be one of the factors that determines the purchase decision.
We believe that the main task of after-sales service controlling is to assess the rationality of management efforts to organize such service, taking into account the fact that the service component in the price of most products is increasing. However, it should be borne in mind that the costs of such maintenance can be highly dependent on the activities and corresponding costs carried out in other parts of the value chain. For example, more costly product development and more expensive raw materials can reduce the cost of after-sales service. In this regard, controlling should, in particular, find out what is the share of the costs of warranty repairs of the company's products in its cost (in terms of both planned and actual data), and determine the possibility and, we emphasize, the feasibility of reducing them. It should be noted that it is not always justified the attempts of enterprises, primarily those producing products for the individual consumer, to compensate for the shortcomings in the design of products and the technology of their manufacture by creating a network of service centers and warranty workshops, for the maintenance of which significant funds are spent. We emphasize that the creation of any additional organizational or production unit is fraught with the formation of additional fixed costs associated with its maintenance. In this regard, on the one hand, the functioning of a well-functioning after-sales service system (repair, consulting, etc.) increases the prestige of the manufacturer, and on the other hand, it can lead to the loss of some buyers due to an increase in product prices.
As an example of an unsuccessful design decision of the product, which entailed significant costs for the manufacturer for its warranty repair, we will cite an electric beater produced by one of the factories former USSR. Our analysis showed that when calculating the cost of its manufacture over a number of years, about 17% (actually even higher) accounted for the costs associated with warranty repairs. As a result of the research, it was found that such high costs were caused by failure and, accordingly, the need to replace the electric motor, the cost of which was more than a third of the cost of the product. Subsequently, through a functional cost analysis, it was found that this device is characterized by low level functional rationality, i.e. poor compatibility of their functions. Because of this, the technical and operational characteristics of the electric beater turned out to be extremely low. Factory specialists did not find anything better than to indicate in the instructions for using the electric beater that when mixing the dough, it is necessary to turn off the device every 2 minutes. Naturally, such a "regulation" of the work of an incorrectly designed product did not give much effect, and it often failed. We note, by the way, that in the case of installing a larger engine, its underutilization would occur, since other functions of the electric beater do not require such high power characteristics. The most reasonable option seemed to exclude mixing as incompatible with the other functions of the device. As a result of the redesign of the product, the number of complaints about burned-out electric motors decreased by 5.2 times and, accordingly, the cost of warranty repairs decreased to 7% of the cost.
Note that the rate of cost reduction turned out to be much lower than the rate of reduction repair work, which, as already noted, is largely due to the presence of fixed costs, the value of which did not change as the number of repairs decreased.
In this regard, controlling should also prepare a justification for the possibility of using outsourcing, i.e. the transfer of all or some of the functions of after-sales service to specialized organizations, thereby eliminating or reducing such costs.
CONCLUSION
The cost of ensuring product quality is part of the total cost of production and operation of products over the entire period of its service. From an economic point of view, these costs represent the sum of current and one-time costs used by the manufacturer and consumer at all stages of the product life cycle.
The analysis of quality costs is carried out mainly in order to determine the most important and priority tasks for improving quality. Depending on the goals, objectives of quality analysis and the possibilities of obtaining the necessary information, cost management methods may be different. This is also affected by the passage of products of a certain stage of the enterprise. It seems that the implementation and successful operation of a quality cost management system is most effective when controlling is used, with the help of which the collected information allows you to make a management decision of a strategic, tactical and operational nature, track the process of their implementation, implement corrective actions as certain deviations appear and Finally, periodically evaluate the effectiveness of the implementation of these decisions.
It is also effective to use the ABC method for quality cost analysis, since it helps to identify well the actions aimed at improving quality, it becomes possible to more realistically manage changes in quality costs by eliminating incorrect or arbitrary allocation of overhead costs.
The policy of the enterprise should be aimed at achieving high quality. Marriage, which is its opposite, can occur in any enterprise. But in any case, the cost of marriage also needs to be analyzed.
A well-organized analysis of quality costs and reject costs can be a source of significant savings for the enterprise, allow the organization to accurately calculate the cost-effectiveness and return on quality costs, and can also improve the image of the enterprise in the eyes of potential customers.
LIST OF USED SOURCES
1. Quality cost or poor quality cost. - Ser. "It's all about quality. Overseas experience". Issue 9. - M .: NTK "Trek", 1999. -40 p.
2. Peter T., Waterman R. In search of effective management (experience of the best companies): Per. from English. - M.: Progress, 1986. - 423 p.
3. Porter M. Competition: TRANS. from English. - M.: Publishing house "William", 1998. - 495 p.
4. Slutskin M.L. Controlling as a system for improving management efficiency industrial enterprise: Monograph. - St. Petersburg: SPbGUEF Publishing House, 2004. - 259 p.
5. Feigenbaum A. Product quality control: Per. from English. - M.: Economics, 1986. - 471 p.
6. Shank J., Govindarajan V. Strategic cost management: TRANS. from English. - St. Petersburg: CJSC "Business-Micro", 1999. - 288 p.
To assess the effectiveness of invested costs in the activities of any company or manufacturing enterprise, relative indicators are used. One of these is cost-effectiveness. The coefficient can be calculated different ways. For general data, accounting data is used for the entire organization or individual divisions, departments or areas of work. ROI can be calculated from different types products.
Profitability is a relative indicator showing the ratio of expenses and income received. Its value is influenced by internal and external factors. Internal factors include:
External factors influence the level of market prices of the products offered, the demand in the market, the level of competition and the share of the analyzed enterprise in the market.
Costs of the enterprise - the totality of all expenses incurred in the company for the production and sale of products. When calculating the cost factor, use the full, shop or production cost.
The coefficient shows the share of income received from each ruble invested in the activities of the enterprise. By its value and dynamics, it is possible to evaluate the effectiveness of enterprise management, the level of costs and compare with industry-wide data or standard values.
Krz \u003d Pr / Z
Where Krz - cost-benefit ratio
Etc - net profit
Z - the costs of the enterprise.
According to form No. 2, net profit corresponds to line 2400. Costs are taken from several values: cost of sales for No. 2120, selling expenses for No. 2210, management expenses for No. 2220, interest payable for No. 2330, other expenses for No. 2350. In fact, this is the profitability of the enterprise or the return on total costs. It takes into account all possible expenses of the enterprise, reflected in financial statements. To calculate it for a group of companies, a holding company or several related companies, it is necessary to consolidate reports. reflects overall efficiency activities of the enterprise, its management.
Payback on products sold is calculated using the following formula:
Krz \u003d VP / C
VP - gross profit,
C is the cost of production.
According to form No. 2, gross profit corresponds to line 2100. Expenses are taken from the “cost of sales” indicator for No. 2120. Essentially, this is cost-benefit. It does not take into account other expenses of the enterprise: commercial, administrative and other expenses.
According to it, we can judge the level of markup on the goods sold. To analyze the profitability of expenses for a certain group of goods, a similar formula is used. For the calculation there will be indicators for each group of goods: profit from sales and cost.
To calculate the sales efficiency, a similar formula is used, adding the additional costs of the company:
Krz \u003d PR / (S + K + U)
Where Krz is the cost-benefit ratio,
Pr - profit from sales,
C is the cost of production,
K - business expenses,
U - management costs.
According to form No. 2, the profit from sales corresponds to line 2200. Costs are taken from the "cost of sales" for No. 2120, commercial expenses for No. 2210, management expenses for No. 2220.
In order to see the overall picture of the use of invested funds, you can use the following formula:
Krz = Z / V
Where Krz is the cost-benefit ratio,
Z - costs,
B - revenue from products sold.
The numerator reflects the sum of all expenses at the enterprise: cost, commercial, administrative expenses, other expenses. It is more expedient to take the value of revenue from management accounting, which reflects and future income for shipped, but not yet paid for products. Accounting reflects the proceeds received on the company's current account.
The ROCS indicator is also used for calculation.
The ROCS indicator is also used for the calculation. It characterizes the efficiency of cash flows and investments. It is calculated according to the following formula:
ROCS = NPVpr / C
Where ROCS is the profitability ratio,
NFIpr - net cash inflow,
C is the cost.
Net cash inflow consists of two values: net profit, reflected in the form No. 2, line number 2400, and depreciation. Depreciation is reflected in account 02 in accounting. It is also included in the cost. In the calculation, you can see the required amount. The cost indicator is reflected in line 2120 of Form No. 2 of the financial statements. With the help of this formula, the level of payback of production and the levels of investment in production and sales of products are reflected.
The share of net income in the cost of production or goods sold is determined through the following formula:
Krz \u003d CHP / S
Where Krz is the cost-benefit ratio,
PE - net profit,
C is the cost.
The numerator reflects the amount of the company's net income, this is line 2400 in Form No. 2 of the financial statements. The cost price can be taken from the same form for line No. 2120.
With it, you can trace the dynamics of net income received at a certain level of costs. And it is also possible to predict the expected level of net income of the company with an increase in production or purchase of goods.
There are no strict definitions of the norm for this indicator. Each company can determine for itself the level of acceptable return on costs and reflect this in accounting policy. The corridor of these values is also determined by the enterprise.
Many financial institutions determine normative value, based on industry-wide values. As a rule, it should be in the corridor from 0.15 to 0.4. In this case, you should consider how it is calculated.
There are no strict definitions of the rate of return
To analyze the activities of the enterprise and its current costs, the indicator is studied in dynamics. To do this, compare annual, quarterly or even monthly data.
Decrease in value can be characterized in different ways:
An increase in the indicator characterizes:
These characteristics take place at a relatively constant level of costs of the enterprise. The dynamics of the indicator reflects other changes in the management of the company and characterizes its effectiveness.
Factor analysis is used to identify factors that affect the level of profitability. It consists of several step by step formulas. How to calculate indicators for factor analysis is indicated below:
An analysis of the factors of influence will reveal weak or, conversely, strengths. With their help, it is possible to regulate the value and level of costs in the future period and adjust the marketing and production policy of the organization. It will also allow planning future performance in the preparation of next year's budgets. for planning, you should take the values of the last few periods.
