Quality management and productivity increase

It is considered to be, that the defensive enterprises manufacture production of the high
Qualities. Thus seldom who muses of cost of achievement of a necessary degree of quality. By a principle «costs plus the fixed profit» does not induce pricing VPK to minimise cost price ViVT.
In general, any problems connected with quality, VPK can correct at the expense of government additional charges.
In 1993 corporation "Boeing" has developed system of tracing of defects on all line of production of planes. It has revealed 3,5 million defects that makes 52 defects on one passenger armchair. All defects which varied from dents and smudges of a protective layer to not drilled boltovyh apertures and badly adjusted details, have been found and corrected before planes have accepted aboard the first passengers. In 1993 the decision of these problems costed 1 bln. dollars - almost as much, all annual profit of corporation how many has made. In comparison with the cars manufactured by company "Тойота", it astronomically is a lot of. Certainly, quantity production of cars is much easier, than production of planes, but in company "Тойота" on each car is necessary less than one defect - 0,75 or 0,15 defects on one place.
The American association of quality [148, with. 58] has defined, that cost of bad quality makes 5,4-6,3 % of sales of sector of air military engines and 4,5-8,6 % of production of other air accessories. But it concerns only discrepancy to technical parametres that means cost of that is made incorrectly. Add conformity cost - i.e. such kinds of activity as inspection, test and alteration, - and overhead charges will increase to 15-25 % of the general sales. The corporate management «JUnajted Teknolodzhis» evaluates annual losses of corporation because of "nekachestvennosti" manufactured production in 2 bln. dollars Chiefs of corporations «Ellajd the Signal» and "Rejteon" evaluate liquidation of consequences vybrakovki at all production phases in 20 % of costs of the companies.
These data concern the beginning of 1990th then many VPK have undertaken significant steps on improvement of quality and today the command approach, interactive interaction and improvement of jobs have achieved certain results through attraction of workers to management. The markets required quality, the government officials who are responsible for purchases, became more and more qualified, globalisation generated a competitiveness of the increasing scale. Pressure from the countries of Pacific pool has accelerated movement to general improvement of quality and improvement of productions not only in defensive sector, but also in all industry of the USA.
In the early eighties in the defensive industry the concept of general quality management (TQM - from English Total Quality Management) has started to extend. Potential practical benefits in the form of reduction of costs, improvement of quality and the best satisfaction of requests of clients induce the largest VPK to put millions dollars in training, purchase of the new equipment, to raise the competitiveness.
At TQM there is no strict definition, and its application depends on the organizational problems, made production, specificity of the market and an available labour.
Nevertheless, the majority of plans includes items in which practical results are focused on the customer [112, with. 329]: 1) to encourage employees is more to participate in production improvement; 2) to develop reasonable and simple projects the commands uniting representatives of various areas, to facilitate production and maintenance service and to reduce quantity of defects; 3) to support the employees introducing the investment in improvement of business processes; 4) to achieve long-term adherence to quality from the top management; 5) to use statistical methods for definition of quality of production.
Application TQM is a difficult task. She requires purposefulness of the top management as this method, as a rule, contradicts submissions of the majority of traditional corporate cultures.
The companies to which do not manage to apply TQM because of indecision, usually perceive it as one of passing whims in a management style. However there are also those who could overcome a cultural shock and other obstacles and as a result has managed to raise productivity, are companies "Martins Marietta", «MakDonnell Douglas», «JUnajted Teknolodzhis» and «Ellajd the Signal».
Most vigorously TQM carried out «MakDonnell Douglas». Because of nepribylnosti industrial operations the company has decided to introduce system of general quality management and has begun with large reorganisation. In February, 1989 the company has simplified structure of management and has created industrial commands for work at factory in Long Bich. The basic attention has been given creation of small working commands on a line of products and decentralisation of the power to level of these commands. The management has felt, that working commands should receive authorities to make independent decisions because it is easier to them to find possibilities for production efficiency and quality increase thanks to personal experience and knowledge of industrial problems. However soon the management has changed this part of the plan. The problems which have arisen in connection with failure of a management from the control and transfer to its commands at the factory level, have shown, that the most lowest level which could act effectively, there was a division level. Even in spite of the fact that the company management has not applied the initial plan completely, it has reached substantial improvements in rates of productions along with formalisation of business processes, creation of versatile commands and the big attention to quality and satisfaction of clients.
The major TQM the integrated commands [114, with 51 became making; 21, with. 85]. In the early nineties corporation factory «MakDonnell Douglas», making helicopters "Apaches", has refused conveyor assemblage and has passed to a method of assemblage by means of the independent working teams competing among themselves. Workers have taken possession of adjacent trades that has brought it increase of earnings and has lowered risk of dismissal. The production efficiency has sharply increased: on assemblage of one helicopter began to leave 6 thousand man-hours instead of 22 thousand at an old method of assemblage. In military branches one more organizational-administrative achievement of the civil industry - connection of processes of designing and production began to be applied. Corporation "Boeing" by production of rockets MH borrowed this method such civil companies, as «АТamp; T». Designers and engineers of "Boeing" began to develop a design and the "know-how" of items simultaneously. The new approach has reduced return of the design documentation by completion and has cut by half time necessary for input in a system new ViVT. As in the course of designing "is mortgaged" about 85 % of cost of all life cycle of the weapon, designing and production association is capable to supply the original "feedback", allowing to revise a design of system with the purposes of decrease in the future production costs.
The second the major TQM the scientific methods using statistical quality assurance and adaptive system of organizational values and belief which focuses attention and workers and managements to complete absence of defects [76 became making; 49]. Within the limits of this approach many VPK began to apply the monitoring system by a technique «6 sigma», representing vysokoorganizovannyj process which helps to concentrate on working out and production and granting of the services close to an ideal. Sigma is the statistical concept defining, how much this or that process differs from perfection. If it will be possible to reveal a deviation in process at an early stage of a work cycle expenses for return and alteration of defective production will be not too big. But if the defective product has already passed through all production cycle, having collected on a way additional defects, costs on its alteration, indemnification of mental cruelty of the client etc. Will grow in a geometrical progression. These costs develop in so-called cost of poor quality. One of the problems decided by means of system «6 sigma», - struggle against variability of processes and its deduction in the set minimum frameworks. For some corporations using system «6 sigma», an indicator 3,4 defects on one million possibilities - a far ideal. Such level of perfection of processes is reached by improbable efforts of all employees, let alone significant investments. However some companies managed to achieve decrease in level of deficiency and gradually to pass to higher "sigma-level" that has given them real competitive advantage. For example, the program «6 sigma» is a corner stone of the strategic plan of company "Рейтеон". More than 7 thousand employees of the company were trained in program principles «6 sigma», 527 persons have finished a rate of profound training. Employees have started to execute more than 990 projects within the limits of this program. In 2000 the program «6 sigma» has brought the companies 100 mln. dollars Moreover, since 1999 "Rejteon" has started to extend the program «6 sigma» among suppliers that will allow to raise quality of production of the company even more.
However, despite significant successes TQM on occasion, this program is not considered absolutely by all VPK as the universal decision. Some believe, that focus of this program - industrial quality - is too narrow. More important question - improvement of quality and a performance level not only in production, but also in all organisation. Backlog VPK from competing civil industries is traced not only in quality management. For example, merchandise turnover in VPK makes 4,9 times a year, and in computer branch - 8 times a year [146, with. 39].
MO in 1990th has conducted a number of researches and has realised some programs on reduction of the costs which purpose was the control or reduction planned ViVT, being either at the stage of working out, or in production. The program «Economical production in the aerospace industry» (English Lean Production in Aerospace Industry) became the most significant project. [55, с.9].
«Economical production» is the system originating in
Industrial model Japanese avtomobilestroitelnoj company "Тойота" characterised by very low is material-industrial stocks and initial quality, and also failure from bolshej parts of the works which are not creating an added value. Professor Bebson [34, with. 6] so summarises distinctive lines of the factory working according to principles «economical production":" Material stocks at "economical" factory gather by a principle «precisely in time» to minimise the required control and to reveal the spoilt details still before they act on a warehouse; the volume of not complete work also is sharply reduced, therefore defects are defined immediately before factory repair shops appear filled in by them; the volume of "auxiliary" kinds of activity (supervision, inspection, operating repair) is reduced, and the quantity of the basic specialised rates is reduced or they in general are liquidated, replaced by commands of versatily trained workmen which change jobs and accept responsibility for quality assurance, repair, service and preventive maintenance ».
Though «economical production» originates in avtomobilestroitelnom industry sector, its methods have accepted also other branches for the purpose of improvement of the work. A number of researchers have shown possibility of application of these methods in various branches [151; 89; 55].
In 1993 of the Air Forces have asked to study the Massachusetsky institute of technology possibility of the appendix of principles of "economical production» to the American defensive aerospace sector for the purpose of improvement of technical characteristics and simultaneous cost reduction ViVT. There was a consortium «Program of economical aerospace production» (English Lean Aerospace Initiative), consisting of ten
Government agencies (including the Air Forces), seventeen VPK, two trade unions and the Massachusetsky institute of technology. A consortium main objective - working out and distribution at the enterprises of aerospace branch «Model of the economical enterprise». The general problems of the program - to 50 % to reduce time design-production cycle and cost of the future systems of arms, simultaneously improving tehnikoekspluatatsionnye characteristics [35].
During realisation of this program of the company have achieved significant achievements. An indicative example - the program of "economical production» corporations "Lokhid Martins". For example, the management of one of the basic divisions of corporation - companies "Lokhid Martins Aviatsionnye Sistemy" - hoped by means of this program to lower in 1999-2000 production costs on 300 mln. dollars; savings of aerospace sector "Lokhid Martin" during this period will make, as it is supposed, 700 mln. dollars of One their first actions of the program there was a partial replacement of the maximum administrative link of division with new people.
The basic attention at the program initial stage of "economical production» has concentrated new company management to total conversion training of its employees. To the middle of 1999 from 9 thousand workers about half there have passed retraining rates, on what has been allocated over 80 thousand hours of working hours. Only in 1998 150 operating different levels participated in 4-day educational seminars with attraction of experts from the party in which course at them the thinking was formed necessary for «economical production», and also skills on its practical realisation were acquired. The special attention in the program is given to identification of "excesses" at all design stages and productions, and also to definition of methods of their removal. The past a curriculum managing directors becomes instructors and attends to conversion training of other managers.
Following radical changes and innovations at microlevel became the important components in program realisation. The disorder in industrial premises has been liquidated. All utilities - an electricity, air, hydraulics - have been moved under a floor to liquidate a network of the unnecessary cables covering working space. After that wooden blocks of which the floor consisted earlier have been thrown out, and the floor has been filled in by concrete, and then covered poliuretanom. New illumination has simultaneously been conducted and new jobs are equipped. The tooling and the details used at assemblage of planes F-22 and JSF, earlier delivered in bags (see an illustration 1А), will be delivered now in special boxes (see an illustration 1Б). Each detail takes the place, and one sight will be enough to warn workers: something does not suffice. NASA has set companies "Lokhid Martins" a problem to reduce by some tons weight of a huge external fuel tank of a reusable transport spaceship. Efforts of the company have got stuck on the last 300 kg. While the command of authoritative engineers tried to use more and more exotic easy materials, one of industrial workers has suggested to terminate to paint a tank. The white paint added 330 kg of weight to a tank which life in flight makes about eight minutes and the destiny - to sink in Atlantic ocean.

B.Novaja system

Illustration 1. Change in system of giving of tools and accessories
A.Staraja system

Source: 55, with. 34.
The analysis of the results, reached "Lokhid Martin" in the field of productivity as a result of program realisation «the economical
Productions », has shown substantial increase of efficiency of productions within several years (see table 10).

Table 10. Results program realisation «economical production» in company "Lokhid Martin Aviatsionnye Sistemy"

The planned

Small shop ekstruzii (real improvements)

Mashinostr. Shop №1 (real improvements)

Electrothat. Shop №1 (real improvements)

The required areas

30-70 %

73 %

35 %

45 %

Movement of details

50-90 %

94 %

94 %

54 %

Productions. Stocks

50-80 %

99 %

89 %

66 %

It is direct. Human expenses

30-70 %

45 %

50 %

13 %


30-80 %

50 %

50 %


Throughput capacities

60-80 %

99 %

99 %

41 %

Source: 80, with. 56.

Important in understanding of distribution in all defensive industry
Method of "economical production», used in the military man
Aerospace sector, there was George Aleu's research [27].
As shown in table 11, in reply to a question on degree of use of methods of "thrift" for improvement of productions only 20 % of respondents have answered, that they did not use such methods whereas the others used them is in insignificant degree (32,5 %) or is wide enough (15 %).

Table 11. Degree of use of system of "thrift"

Very intensive (more than 50 % of production programs)

15,0 %

Intensive (from 31 % to 49 % of production programs)

2,5 %

Average (from 21 % to 30 % of production programs)

30,0 %

Low (20 % and are less than production programs)

32,5 %

It is not used

20,0 %

Source: 27, with. 78.

When respondents have asked, whether rates of the revolutionary are high
Innovations in production at their enterprises, only 37,5 % answering to some extent have agreed with it whereas 52,5 % - have disagreed. These data show, that majority VPK is considered by the productions settled, more suitable for constant evolutionary improvements. At the answer to a question on planning of work of 62,5 % of respondents have characterised a method of the organisation of productions and the equipment as allowing to make production in small volumes working groups. On the other hand, 42,5 % of respondents have characterised productions at their enterprises as serially placing working centres. Only 10 % of respondents have characterised production as continuously created in one working centre. These data correspond to the concept of the integrated industrial groups.
As to a question on increase of operational productivity thanks to application of methods of "thrift" data show, that 60 % of respondents agree with it. Among the small companies this share makes 54 % whereas among the large companies it makes 63 %. On a question, whether principles of "thrift" have helped efforts on the general reduction of operational costs, 67,5 % of respondents have answered in the affirmative. Again - taki, exists very small distinction between the small companies (69 %) and large (67 %), that allows to assume, that such opinion is not function of the size of the company. When respondents asked to answer, whether cost of losses in productions is significant, 90 % of respondents have answered in the affirmative. This indicator again slightly varied between the small and large companies - 92 % and 89 % accordingly.
It is possible to notice, that along with strong positive correlation between the factor of success of application of methods of "thrift", on the one hand, both purposefulness of the top management and training of workers - with other, there is stronger correlation between the factor of success of application of methods of "thrift" and purposefulness of managing directors. These data allow to assume, that though both variables are important, purposefulness of managing directors is a major factor of improvement of operations, as well as it was supposed in this research.
At last, when innovations were discussed, the big share of respondents (77,5 %) has agreed that innovations and constant improvement together lead bolshemu to productivity increase.
Thus, results of research of George Aleu [27] show, that 85 % of respondents consider, that the approach based on principles of "thrift" and directed on constant improvement of activity of the enterprises, can help VPK to improve productions whereas 15 % of respondents have taken of a neutral item. Anybody from the interrogated has not answered negatively. "Thrift" methods are a reliable source of constant improvements of activity of the enterprises which in long run lead to creation of competitive advantage in production. However for this purpose fulfilment of certain conditions, in particular, is necessary for purposefulness of the top management and training and labour training. Purposefulness of a management is expressed mainly in sharing of managing directors in working out and realisation of methods of "thrift" and adequate distribution of resources. Training of employees requires the investment into this process at all levels of the organisation.
Within the last six years the consortium «Program of economical aerospace production» had been accumulated significant data about results of realisation of principles of "economical production» in aerospace branch. Various examples of realisation of principles of "economical production» show possibility of depreciation of systems to 60 %, reductions design-production cycles to 25 % and improvement of quality at the expense of increase of reliability and tehnikoekspluatatsionnyh characteristics.
As it has been shown above, the Air Forces began «the Program of economical aerospace production» for the purpose of radical cost reduction of production ViVT. However data about results of realisation of "economical production» at this or that enterprise for a long time past were not systematic. Program influence «economical production» on general cost reduction ViVT and on the defensive budget was not clear. Therefore MO has entrusted with the independent organisation - corporations "Rands" - to conduct a program estimation of "economical production». It is possible to summarise is short a condition for 1998 of introduction in a military aviabuilding industry of principles of "economical production» [55, with. 65]. Almost all manufacturers have accepted principles of "economical production» that is confirmed documentary by appointment of vice-presidents or directors for «economical production», and also corresponding initiatives on revision of the costs, directed first of all on their reduction. Almost at all manufacturers pilot projects of "economical production» have already been involved or planned. All manufacturers who were carrying out such pilot projects, have informed on reduction of floor spaces. Nobody introduced methods of "economical production» on all industrial chain or even in scales of one factory. Trade unions and workers at the factories which do not have the trade-union organisation, in long run have accepted methods and principles of "economical production» since they understand, that the warranty of their employment depends on ability of the companies to make qualitative air military goods. It is important to notice, that interview of representatives of corporation "Rand" with
Chiefs VPK have shown, that in spite of the fact that the largest VPK are a part «Program of economical aerospace production», pressure from party MO became the principal cause which has induced them to begin to carry out pilot programs on introduction of principles of "thrift".
The major conclusion of research of corporation "Rand" consists that though savings from pilot projects of "economical production» by presumable estimations make to 50 %, followed express more frostily and to consider, that savings vary in the range from 0 % to 20 %, considering the traditional estimations of cost ViVT based on habitual methods of production, and supposing, that "thrift" principles are applied in all industrial chain. Really, contractors and subcontractors have already shown productivity of some programs and pilot projects, and it is necessary to render special trust to those programs which have led real izmerimym to cost price reductions. Nevertheless, the forecast of possible level of savings on the scale of the whole plane, made on the basis of the savings shown in these pilot projects and programs, will be, possibly, is too doubtful and can include a repeated account.
The serious problem consists that the large part of efforts VPK on introduction of principles of "thrift" is directed on reduction of the direct labour necessary for production and assemblage. When chiefs VPK asked about introduction of methods of "economical production», they mentioned industrial zones more often. It signals about very limited understanding of "thrift". By some estimations, at level of the largest VPK on a direct direct labour it is necessary all from 10 % to 12 % of overhead charges of aerospace production. Even reduction on 50 % of time of industrial work would lead to reduction of a total cost of the program of all by 5-6 %. More reserved estimations (20 % of economy of production costs) already lead to much more modest numbers (less than 2,5 % of economy of overhead charges).
For the valid application of principles of "thrift" VPK should concentrate and on other major spheres relating to product cost - such, as purchased materials and an overhead charge. At level of the largest VPK purchased materials can make to two thirds of cost ViVT. Thus, the attention to economy on all chain of deliveries offers much more possibilities for product cost reduction. The same possibilities the plan of reduction of an overhead charge because they can be twice more than can grant costs for a direct labour.
The companies have informed on many results of pilot projects of "economical production» which, as a rule, were carried out in small departments. Reduction of direct industrial work as a result of realisation of these projects was shaking. However these projects seldom concerned the major aerospace productions, and the presented savings of industrial work made a small share of overhead charges on production. Projects have not introduced the big investment in a common cause because they did not mention the major areas of costs at factories so, that the general savings were insignificant. It is impossible to predict potential savings for completely "economical" factory because in sector of production of military planes there is no example of such enterprise. Savings from application of principles of "thrift" at level of the whole company to define even more difficultly. Moreover, corporation "Rand" attempts to find out the schedule of distribution of principles of "thrift" in factory scales, as a rule, were not successful.
Thus, research of corporation "Rand" [55] has shown, that the consortium purposes «the Program of economical aerospace production» (significant cost reduction ViVT and design-production cycles) are far today from achievement. Nevertheless, it is already possible to speak about decrease on 0-20 % (depending on the program) to cost and working out/production time. Corporation "Lokhid Martin" has already reduced by 10 % cost of fighter F-22 for MO, and for such program as JSF, with total amount of production more than 3 thousand planes, it will mean economy of billions dollars. Advancement forward is obvious, and it is possible to expect, that the further realisation of the program will bring even more powerful results. «The program of economical aerospace production» became one of the most successful initiatives MO on work with VPK.
Hence, it is possible to draw a conclusion, that VPK together with MO have made a significant step forward in the field of improvement of quality and depreciation ViVT. Unconditionally, it will raise competitiveness American ViVT in the international markets, and carrying over of skills will strengthen items VPK in the civil markets.
Today's partial backlog of the Russian defensive enterprises from foreign VPK as production is in many respects caused by backlog in
Industrial technologies. Therefore the combination of shine of design thought and poverty of technologies precisely enough characterises the general condition of the Russian defensive industry. For example, today's not modified version ПС-90А on 7 % is more economic than engines «Rolls - the Royce» and on 4 % - engines «Pratt end Uitni». But its serious defect - inefficient cooling of the second step of the turbine - reduces reliability of the unit. Therefore the engine does not maintain more than 4,3 thousand business hours without overhaul whereas the western analogues work in five-six times longer. However more serious reasons of backlog in quality and productivity are connected with low level of organizational management at the defensive enterprises. Moreover, creation of individual samples, instead of the whole series, does not give possibility to find all weak places. On the other hand, if to consider productivity it is necessary to notice, that till now at the Russian defensive factories of system gather from the details made still in Soviet Union. Construction, for example, "completely" the new domestic plane in the present
Economic conditions will manage in the sum comparable to cost of planes "Boeing" and "Airbus". Thus, the western companies thanks to rationalisation of organizational and industrial activity could lower so the cost price of systems, that today it levels low wages of the Russian workers. Whether application of methods of "economical production» at the Russian factories is possible? Undoubtedly - yes, but «administrative revolution» for this purpose is required. Conclusions
Significant work is necessary for realisation of potential of re-structuring at microlevel. The most significant benefits from the point of view of competitiveness it is possible to reach only in the event that the merged companies in common will undertake difficult steps - such, as reduction of jobs, liquidation of duplicating capacities, rationalisation of production for the purpose of a concentration on key kompetentsijah and organizational changes for the purpose of encouragement of command work in corporations and teamwork with customers. Other valuable lessons of reorganisation of administrative mechanisms VPK consist in the following. After consolidation reorganisation of the administrative mechanism is necessary. Consolidation and corresponding increase in organizational levels has led to that chiefs VPK became isolated from failures of the basic projects. The signal transmission occurs more slowly, and otfiltrovyvanie signals occurs more intensively. For this reason along with search of a corporate synergy American VPK aspired to create in the corporations a number of the large independent strategic segments, allowing to avoid unnecessary bureaucracy. As it has been shown in the second chapter, VPK did not aspire to create the vertically-integrated structures, and have started to develop difficult network forms of the organisation of business that has invariably caused to reconstruct system of work with subcontractors. Despite the general increase in subcontracting works, quantity of suppliers it has been reduced - what remained, became original system integrators of subsystems for the largest VPK. Succeeding VPK not only synchronise the chain of deliveries on purpose to achieve competitive advantage, but so plan the future relations with suppliers to optimise work of the virtual organisation as a whole. Thus, VPK and their major subcontractors began to represent certain ekosistemy which well-being depends both from VPK, and from subcontractors. The largest VPK, taken by consolidation and integration, in first half and the middle of 1990th have considerably lowered the investments into research and development. However in process of end of the period of corporate reorganisation VPK have again paid the attention to this sphere as to one of main components of their competitiveness that was expressed in acceleration of transformation of the system of research and development. The basic direction - creation of the integrated design-industrial commands which find civil application of developed technologies and systems, accelerate process of working out and join ideas of services of research and development and technological possibilities of industrial divisions. Change of the relation to quality and productivity increase that has been reflected in «the Program of economical production» became significant initiative VPK in 1990th. Already today it is possible to speak about depreciation, time of working out and production to 20 % depending on the program. Undoubtedly, that this significant advance, also it is possible to expect, that the further realisation of the program will bring even more powerful results. «The program of economical production» became one of the most successful initiatives MO at work with VPK. Thus, it is possible to draw a conclusion, that VPK together with MO have made a significant step forward on improvement of quality and depreciation ViVT. It will raise competitiveness American ViVT in the international markets, and in case of carrying over of skills will strengthen items VPK in the civil markets. The significant part of the savings received as a result of optimisation of work VPK in second half 1990th, has been transmitted MO in the form of more low prices on ViVT. The means saved as a result of reorganisation of system of work with subcontractors of corporation "Boeing", have been divided fifty-fifty into three parts and distributed between the corporation, subcontractors and MO.
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A source: BOLSHAKOV Zahar Anatolevich. the Basic tendencies of development of military-industrial corporations of the USA in 1990th years / the Dissertation on competition of a scientific degree of a Cand.Econ.Sci. - Moscow: the Russian Academy of Sciences, Institute of economic and the international relations. - 179 with.. 2002

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