Interplant Analysis

Interplant Analysis


in the USSR, the comparison of economic-effectiveness indexes in order to obtain an objective assessment of the performance of individual (and as a rule, related) enterprises and production associations. Interplant analysis makes it possible to evaluate the intensity of planned tasks, to assess the results of socialist emulation, to make known production reserves, and to help disseminate progressive innovations.

Interplant comparisons presuppose that objects and indexes of the objects’ performance are comparable. Comparability can be achieved, among other means, by excluding incommensurable values, by using correction factors to adjust the indexes, and by converting indexes according to the methods of calculation used at other enterprises. Several principal conditions for comparability must be met: the indexes being compared must be qualitatively alike and calculated in the same way, the same measures of production must be used, geographic conditions must be similar, distances from the suppliers of materials and equipment and from the consumers of the finished product must be similar, and the number of workdays in the periods being compared must be identical. If some of these factors differ from one plant to the next, the indexes describing these factors are recalculated so as to achieve commensurability.

Interplant analysis can be reduced to several stages. First, the objects to be compared are chosen. Then, the degree of comparability of the objects and indexes is determined. Economic information about the objects is gathered and processed, and the indexes are put into comparable form, compared, and analyzed. The results thus obtained are evaluated, and the reasons for any discrepancies and the factors that determine the values of the indexes are made clear. The results of the analysis are then synthesized, conclusions and suggestions on increasing production efficiency are developed, and, finally, the effectiveness of putting these suggestions into practice is assessed.

Interplant analysis involves the entire set of methods and techniques of economic analysis. Of particular importance, however, is the problem of selecting the basis for comparison and bringing together a scientifically valid grouping of enterprises. If the purpose of the analysis is to identify the best enterprise, the basis for comparison consists of the indexes whose analysis makes possible a comprehensive study of the performance of the enterprises being compared. A general algorithm of the mathematical method of comparative, comprehensive evaluation of performance by looking at a set of indexes can be reduced to the following. The initial data are presented in the form of a matrix, in which the element a¡j is the value of the jth index of the ith enterprise. In the table of initial data, the maximum elements—the indexes in each column—are determined. All elements in the column are divided by the maximum element. A “matrix of coordinates” is thereby obtained. All elements of the matrix are squared and summed line by line (if the problem involves indexes of different weights, each summand entering into the total sum is multiplied by the weight corresponding to the summand). The sums thus obtained are arranged in decreasing order: in the topmost position will be the enterprise with the highest sum.


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References in periodicals archive ?
Industrial Relations Performance, Economic Performance and QWL Programs: An Interplant Analysis," Industrial and Labor Relations Review, 1983.