PLANNING IN INDUSTRIAL ENTERPRISES IN CHINA, 1951

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700200211-3
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 15
• Document Creation Date: December 22, 2016
• Document Release Date: August 31, 2011
• Sequence Number: 211
• Publication Date: November 1, 1954
• Content Type: REPORT

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STAT
PLANNING IN INDUSTRIAL ENTERPRISE IN CHINA 1951
[Comment: The following report gives a summary in outline form
of the book entitled E, -eh Ch'i-yeh ti Chi-hua Kung-tso (Planning
in Industrial Enterprises) published by K'o-;..eh Chih-shu Ch'u-pan-
she, Peiping, April 1951.]
Introduction
After the Planning Conference of the Ministry of Heavy Industry, held in
July 1950, the industrial plans for 1951 were drawn up with the assistance of
Soviet specialists. Plan implementation began at the mines and factories un-
der the jurisdiction of the Ministry of Heavy Industry. This was an experi-
ment in adapting the Soviet plan system to the present situation in China.
Soviet national economic plans were used as reference material for drawing up
the industrial plans for China.
Section 1. STRUCTURE OF INDUSTRIAL ENTERPRISE PRODUCTION PLANS
A. Technical Industries' Financial Plans for Industrial Enterprises
Industrial production plans should be designated "technical industries'
financial plans." These plans used technical and economic calculations as a
basis and include the index and standard of production and business transac-
tions in the complete structure.
B. Organization and Plan Procedures of Industrial Production Plans
The following charts show the stages in the organization and plan proce-
dures of industrial production plans:
Chart 1. Organization and Plan Procedures
of Industrial Production Plans
Directive Issued by the Higher Levels on Production and Planning
egu a one on
technique operations
Techni ue cards
Manufacturing car
Calculation of production
index
1. Construction material index
2- Material consumption index
3. Labor index
4. Work time index
Utilization of production
equipment index
Plan results and
experiences of the
previous period
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Preparatory
stages
(prior to the
issuance of
control numbers)
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Calculation of standards
Determining the various indexes and
the standard and technique applications
Production plans
1. Production
quantity and
balance
2. Technique or-
ganization
plans
3. Equipment work
plans
Cost plans
Plans for cost
of products whic
can be compared
Total cost plans
Single-type prod-
ucts cost plans
Indirect expenses
Labor plans
1. Requirements for
labor power plans
Rate of labor
production plans
Wages plans
3. Balance of
income and
expenditures
plans
Purchasing plans
Supply of raw material plans
1. Raw materials, semifinished
materials, equipment supply
2. Fuel supply plans
Industrial
plan comple-
tion stage
(after the
issuance of
control num-
bers) 1
3. Casting and welding machinery
additional work plan
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IFinancia
`committee
Greater adcontrora- Enter-
Give area control prise
~
department or the
control bureau or
company
indicates the responsibilities in production of organizations
under control, directives in planning, and control numbers
Chart 2. Industrial Production Plans
in Relation to the Entire System
indicates the revisions given by the higher levels after in-
indicates approval given by the higher levels for action
Control numbers indicate the following considerations:
1. Calculation of total production value in fixed prices
2. Calculation of commodity production value according to prices of
commodities leaving the factory
3. Calculation of production quantity according to actual production
4. Large-scale repair
5. Enlarging of enterprises and basic construction projects
6. Number of workers and the labor production rate
7. Wage funds
8. Warranty standards on raw materials, fuel, and semifinished products
9. Budget on income and expenditures
10. Rate of lowering production costs
11. Calculation of profits
CHAPTER I. REGULATIONS ON TECHNIQUE OPERATIONS, TECHNIQUE CARDS,
MANUFACTURING CARDS, AND TECHNIQUE CALCULATIONS
A. Regulations on Technique Operations
These regulations show the procedures of production operations; the
handling of raw materials and semifinished products; the quality, standard,
and quantity of finished products; work organization and explanation of tech-
niques during operational procedures.
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Technique cards are standardized cards giving detailed descriptions
of each production procedure.
C. Manufacturing Cards
Manufacturing cards are standardized cards which include content and
procedures of operations;
cedure; and demand for function of equipment; time required for each pro-
semifinished products precision, characteristics, and quality of output or
D. Technique Calculations and Record
These are set up by using the shop records as the basis.
technique calculations and record must take the following Therefore, the
principles into con-
sideration: mapping plans for the following year and revising plans for the
current year; using the records as statistical material; providing guidance
material for production and techniques; and providing plan inspec-
tion of production summary. material for
B. Technique Cards
CHAPTER II. PRODUCTION INDEX AND STANDARD
A. Production Index
There are five things to consider in mapping production plans: labor
(workers) cadres), production equipment (machinery, working areas), materials
(raw materials, supplementary materials, water power, electric power, etc.),
products (principal products, secondary products, quantity and quality), and
sales (contracts, orders) free market, deliveries, and reserves). The pro-
duction index takes and compares these five items.
B. Production Quality Index, Rate of Finished Products Rate of Re ected
'Products
The production quality index compares one type of content of products
with another.
C. Utilization of Production Equi ent Index and production Quantit Index
equipment and another, between-materialrand products, between equipment pment an
products, between products and the time factor, and between productsd
,went, and the time factor. , equip-
The work-time index shows the distribution of time during the production
process.
E. Labor Index
The labor index shows the rational utilization of labor power, rate of
production, labor costs, and wage index.
F. Consusiotion Index
The consumption index shows the consumption of raw materials, supplemen-
tthaer7d.megarteeeria of costsoand,theetc. ad vaduring ntages t and production
disadvantaprocess ad thus shows
ment. disadvantages of production manage
-
D. Work-Time Index
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G. Standard
The following chart shows how the standard is determined from the index:
(Analysis, Comparison, Research,
Decision, Approval
Utilization of produc-
tion equipment index
Production quantity
index
Work-time index
----------------------
Labor standard
--------------------------
Consumption index
---------------------------
Section 3. INDUSTRIAL ENTERPRISE PRODUCTION PLANS
Utilization of
equipment stand-
ard
Production quan-
tity standard
Work-time stand-
ard
Labor index, per-
sonnel standard
Consumption stand-
ard
Production plans include production quantity and its balance) technique
organization plans, and equipment work plans. The aims of production plans
are to reveal quantity, quality, value, and improvement of products; improve-
ment of techniques and increase of production capacity; combination of pro-
duction processes; and utilization and quota of production equipment.
A. Production Quantity and Its Balance
The following four factors must be considered: (1) quality standard of
products; (2) amount, value, and balance of finished products, semifinished
products, unfinished products, and artistic work; (3) comparison of produc-
tion results of the current year and the preceding year; and (4) fluctuations
of production capacity.
B. Technique Organization Plans
Technique organization plans include (1) a plan for the improvement of
techniques and the testing of new products; (2) a plan for material consump-
tion and working hours; and (3) a plan for balancing the total amount of semi-
finished goods or rejected goods.
The plan improvement for techniques and experiments includes (1) mechani-
zation of the production process, (2) improvement of the work process, (3) in-
crease of equipment, and (4) utilization of certain rejected goods and material.
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The experimental work plan includes (1) estimate and technique re-
search, (2) manufacture of experimental articles, (3) inspection and
testing of experimental articles, (4) installation of special instru-
ments, models, and equipment, and (5) planning the manufacture of prod-
ucts.
C. Equipment Work Plans
Equipment work plans include (1) the comparison of the production
capability of the equipment and the production capability needed to com-
plete the production, (2) the utilization of the equipment, and (3) the
combination of the production process.
D. Large-Scale Repair Plans
Large-scale repair plans include the following: (1) Production De-
partment -- repair of warehouses, public utilities equipment, construction
connected with production, mechanical equipment, power equipment, and trans-
portation equipment; (2) Nonproduction Department -- residences and public
works equipment.
Preliminary draft of
the standard and the
index
Control number
issued
Technique operation
standard, technique
cards, manufacturing
cards, and technique
organization improve
meat plan
Technique improvement and experimental
work plans
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Material consumption, working
hours standard
Equipment work index of the
basic production workshop
plan
Plan for balancing the
total
amount of semifinished
prod-
ucts or rejected goods
during
production
Work index plan for
production workshop
the aid of
Transportation work index
plan
Large-scale plan
Plan for the balance and
change in production
quantity
Original and newly added
production capacity plan
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STAT
Labor plans include (1) labor production rate plans (2) labor re-
quirement plans, and (3) wage plans.
A. Labor Production Rate Plan
Factors affecting the labor production rate are (1) the technique
and political levels of the workers, (2) the technique level of produc-
tion, and (3) labor organization and production organization.
A hypothetical analysis of the labor production rate is shown in the
following table:
Average labor production
rate per hour
Average actual work-hour
period per workday
Average labor production
rate per day
Average number of work-
days per month
Average labor production
rate per worker in one
mouth
Basic Period Report Period
50 kg 57 kg
7.8 hours 7.9 hours
390 kg 450 kg
25 days 19 days
B. Labor Requirement Plans
The labor force is classified as follows: (1) production personnel --
includes those who participate in production, apprentices, engineers, manage-
ment personnel, maintenance personnel, and police guards; (2) nonproduction
personnel -- railway workers, cultural and health workers, educational work-
ers, special workers, and survey team workers.
C. Wage Plans
The wage plan is divided into (1) time wages, (2) overtime wages,
(3) piecework wages, (4) overtime on piecework wages, (5) progressive piece-
work wages, and (6) guarantee work system.
CHAPTER III. RAW MATERIAL SUPPLY PLAN
Raw material supply plans include (1) plan for the quantity of raw
materials, important materials additional materials, semifinished products,
and construction materials; (2j plan for the provision and supply of fuel;
(3) plan for casting and metallic ore; (4) plan for the purchase and trans-
portation of material.
The following chart shows important features to be observed in estimating
production and consumption in an industrial enterprise.
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Balance Casting, Balance Balance
of tarldi
weng, of of
material additional steam elec-
work needed trio
Production 39 Production 36
The four types of coat plane are (1) indirect expenses plans, (2) produc-
tion costs plans, (3) total cost of production plans, and (4) comparative com-
modity cost lowering plans.
Chart 6. Mapping of the Cost Plan
Per unit product
consumption index - ->Direct costs
ma+._4 icat Shop expenses, -'Shop costs-,
mo, -> .
I
t F.-ROMN-1
material I expenses gland mines ~Factory costs
Historical
material
Unit Comparative
poduc- ~ products
tion cost loxer-
cost ing plan
plan
Production and Products
sales cost total
cost
plan
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Production Plan:
-J
ILalor p
- - --- -
roductio'nl'Raw material
Fuel
Irate I'semifinished
'products, ma-
'Personnel numberl1terial needed
needs
:Base wages
I
I :Supply plan
~I I
::C omplete ma-
t
Fuel
Pro-
vision
- _ - _ -
erial purchase
land transport Ivalu
Cost plan
Finance plan
tion expenses
7
Factory
circula-
tion ex-
penses
Sales expenses
and higher
cadre manage-
ment expenses
Factories
circulation
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CRAFTER V. FINANCIAL PLANS
In mapping out the financial plans, there must be an indication of
capital for enterprises. The organization of the financial plans include
the following:
A. Calculation of Sales and Purchases
To calculate the sales and purchases of products, one must calculate
the profit and loss of goods. Besides the production, the sale of excess
material and material maintained after clearing the fixed capital must be
calculated into the receipt and expenditure of product sales and purchases.
B. Calculation of Depreciation
The depreciation of fixed property is calculated by adding the value of
fixed property to the value of the newly increased rate of fixed property
and subtracting the value of the fixed property which cannot be used during
the planning period.
C. Calculation of Necessary Turnover Capital
Turnover capital includes turnover funds and circulating funds. Items
which =at be calculated are important material, additional material, parts,
equipment, consumer goods, and fuel.
D. Loans Plan
Enterprises can borrow either from the bank or from the state.
E. Basic Construction Investment Plan
F. Receipts and Expenditures Balance Plan
the govvernment. Income includes ependitures
and expenditures
income and
funds i from sthe
government. The income and expenditures must balance.
Section 4. THE ENTERPRISE PLAN WORK ADMINISTRATION AND INSPECTION
CHAPTER I. THE ENTERPRISE'S PLAN ORGANIZATION AND ITS RESPONSIBILITIES
ment,T anhedspec (2)i aalunifiedfeatures of the enterprises are (1) independence of govern-
The important work of the enterprises is to increase production, in-
crease the quality and labor production, increase fixed capital, use fixed
capital, eliminate unnecessary expenditure of capital, lower costs, increase
enterprise profit, and increase the circulation of circulating capital.
A. Management System oY the Enterprises
There are three types of management systems:
1. The direct management system -- all responsibilities are administered
by one leader.
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2. The division of responsibilities management system -- a system
whereby there are many higher leaders, and the system provides opportunity
for the leaders to give guidance.
3. Production local management system -- the organization is such
that each department (enterprise, workshop, and work unit) has a leader.
B. Management Organ of the Enterprises
In industry, the management organ is affected by the following features:
1. Type of production, such as (a) individual production b
ous production, and (c) complete production ( ) continu-
2. Production scale, such as (a) production quantity, and (b) number
of personnel
3. Specialization of types of products, organization of production, and
specialization of shop work
4. The detailed procedure of manufacturing
5. The technique of production
Chart 7. Plan Organization for Small-Scale Machinery Enterprises
plan and operation-plan ?IIU? Various workshops
Statistics and calculating unit
unit unit
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Chart 8. Plan Organization for Small- and Large-Scale Enterprises
Plantlhead or manager
Chief engine er
(deputy plant head)
Cost and finance plan unit Order plan unit
Production plan unit Production work plan unit
Labor plan unit Production preparatory
Material supply plan unit shift unit paratory
Statistics unit Production work calculation
unit
Shift unit
Production
preparatory
division
Mechanical unit
Material supply
unit
Purchase of semi-
finished prod-
ucts unit
Testing group
Model room
Equipment room
Smelting unit
Planning unit
CHAPTER II. OPERATIONAL PLANS
The operational plan serves five functions:
1. It must combine the entire operational system into the enterprises.
2. It elop
ty of the
raw and labor, a ndssuitt
conserve
principlesiof economicgcalccuulation by developingead is
vanced technical processes.
3. It must control production management and adjustment work.
4. It must combine the systems and standards of factories.
5. It must fit in with the enterprise production system and, in accord-
ance with the order forms, guarantee the completion of plans.
A. Basic Documents of the Operational Plans
1. Operational Standard of Production Techniques -- includes the standard
of products, quality of material, working time, etc.
2. Detail Standard of Products -- the standard of products is affected
by the operations.
3. Work Process Card -- gives the steps and time of operation.
4. Equipment Technique Management Standard -- shows the use of equipment.
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5? Type and amount of raw material used
3. Equipment working time
4? Time for stopping work and reasons for stopping work
7. Technique Organization Administration Laws.
CHAFtpd; III. ANALYSIS AND IMPECTION OF PLAN ADMINLsTRATION
A. Inspec lion plan
The statistical chart, shows production, labor, and cost plans.
To indicate inspection, the technique must be analyzed. From this
type of analysis, the utilization of equipment, labor power, and raw mate-
rial'should be applied. The technique report must reveal the following;
1. Amount and utilization of equipment
2. Production Power of each piece of equipment per hour, working day and night, calendar day and night
per shift,
-FY
the technique
safety r r egu egu Y_. y laationstionstions -- no operational method can violate
moat
; and at the same time, the operational plan
administered during regular production.
5. Technique Cards -- show shop work.
6. Additional material used during the Planning period
7. Amount and cost of products
8. The balance of commodities during the manufacturing process
9. Consumption of fuel and Power
10. The effective use of equipment
Work process of inspection:
1. First step
c. Completion of amounts, quality, type, standard, and cost of
a. Finding the present situation as to aims and plans
b
. Completion of working steps
2. Second step
s Reasons as to the completion of a product or completion
dividual ahop work
of in-
b. Finding the reason why shop work is not completed
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pr sea
e. Utility of equipment is not completed
f. Standard of material supply is not up to par, changes in
techniques, difficulty in transportation, increase of rejected goods, etc.
g. Insufficient labor force, lowering of efficiency rate, diffi-
culty in workers' living conditions, sickness and illness, resignation of
workers, etc.
h. Economic index technique and system unbalanced
i. Planning is not uniform
Section 5. BASIC CONSTRUCTION PLAN OF INDUSTRIAL EMMUMISFS
A. Ideas of Basic Construction
The actual effect of basic construction is as follows:
1. Increase the number of products
2. Raise the quality of products
3. Raise production power
4. Lower production costs
5. Increase capital circulation
6. Improve the welfare of the laborers
7. Eliminate the import of foreign loans and conserve foreign exchange
B. Steps in Mapping the Basic Construction Plan
The important plans of basic construction include:
1. Types of construction and types of products
2. The planning of production power
3. Construction area
4. Use of the newly constructed departments
According to plans, the following shows process planning:
1. Preliminary estimate
2. Technique estimate and budget
3. Work blueprints
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c. Balance of weekly, 10-day, monthly, and seasonal production
d. Production power is not sufficient in newly constructed enter-
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1. Construction engineering -- including temporary construction and
work, reconstruction and enlargement of engineering operations, reconstruc-
tion work on telegraph and telephone lines which include electric operations,
health engineering equipment and putting up electric light lines, construc-
tion of basic machinery, mapping construction area, preparing construction
work
2. Installing construction -- temporary or permanent enterprises and
industries, power, weight-lifting, and transport equipment
3. Machinery equipment, instruments, and purchasing of products
4. Estimate survey, geological survey, and scientific study
5. Production organization
6. Increase of fixed expenses
7. Expenses which cannot be refunded
8. Temporary management expenses for construction
The Entire Plan is as follows:
C- Calculating the Basic Construction Plan
Purchasing The budget
expenses for for the year
equipment for before changing
the previous the work total
year
This year's This year's
finance budget budget change
.investment for total work
elan
Previous yeazy F
Using the previous year's
prepaid equipment pur-
chase expenses and putting
them into the following
yea's work
> Annual work total
quantity department
Increasing fixed
property department
Not increasing fixed)
property department I
Previous year's
equipment-pur-
chasing expenses
placed in the
total work of --I
the previous
year
STAT
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