ECONOMIC - PLANNING, RAW MATERIALS, ORGANIZATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700220147-0
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 4
• Document Creation Date: December 15, 2016
• Document Release Date: August 12, 2003
• Sequence Number: 147
• Publication Date: April 14, 1953
• Content Type: REPORT

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MAR 1952
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NT E AGENCY
mic - Planning, raw materials, organization
PUBLISHED Monthly periodical
WHERE
PUBLISHED Bucharest
DATE
PUBLISHED Jun - Jul 1952
LANGUAGE Rumanian
COUNTRY Ruma
SUBJECT Econ
HOW
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DATE DIST. )LL Apr 1953
NO. OF PAGES 4
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
PROBLEMS IN PLANNING MATERIALS SUPPLY IN RUMANIA
STATE
1 ARMY
Anton Moldoveanu
Vice President, State
Committee for Materials Supply
Comment; The followinE discussion of problems encountered in
the supply and use of materials and l:.ols needed for manufacturing
is one of many which appeared in Rumanian press and periodical pub-
lications during 1952 on the need for conserving raw materials, the
better use of available stocks. and the increased use of local raw
materials supplies and fuels in local factories for local consump-
tion]
The fulfillment of th.a Five-Year Plan requires great emphasis on the sup-
ply of materials. The plan for this supply covers raw materials, semimanuf'ac-
tured goods, machines, t,ols, fuel, and other items needed for manufacture.
The government of the RPR (Rumanian People's Republic) has devoted special at-
tention to the nlanninc, and oranization of materials to assure steady and
uninterrupted progress in production.. Planned circulation of goods permits
organization of the movement directly to the producer from the supplier, and
then directly to the consumer. The circulation of industrial goods according
to plan is carried out by contracts between producer and consumer within the
limits of the plan. Thus, state enterprises, sales organizations, and minis-
tries deliver materials only on the basis of the state plan and in quantities
and varieties approved by the Council of Ministers.
Of special importance in a socialist economy is the struggle to conserve
materials, to make rational use of them, to introduce new materials into pro-
duction, and to replace those which are scarce, inadequate, or expensive. To
solve problems in materials supply, the State Committee for Materials Supply
was created. The principal task of this committee is the preparation of a na-
tional plan for the supply of raw materials. This plan is submitted to the
Council of Ministers together with the production plan, the investment plan,
and other major components of the state plan.
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A close relationship exists between the various plans. For example, the
materials supply plan and the production plan must be completely integrated.
A calculation of the quantities of materials to be distributed must take the
production goals into account to assure production industries of the necessary
raw materials and equipment. The materials supply plan must register the same
figures as the production plan. Consequently, the State Committee for Mate-
r1als Supply must actively participate in the determination of the volume and
variety of production. The materials supply plan is also tied in with the in-
vestments plan. The volume of construction and assembly under the investments
plan determines the quantity of materials which must be supplied. The mate?-
rlalo supply plan is also closely linked to the plan for the reduction of pro-
duction costs. Materials and fuel represent 75 Percent of the total cost of
industrial production. Thus a cut in the use of fuel and materials means a
cut in costs. In addition, the materials supply plan is closely tied in with
the national financial plan. The provisions of the financial plan must provide
for sufficient raw materials and tcols to transform investments into produc-
tion.
There have been t.mes when these various plans were not integrated with
the materials plan. There have also peen instances in which funds were allo-
cated for general types of material and equipment only. Since the exact items
were not specified in advance it, wa,i difficult to provide for their supply.
Another error was incurred in the handling of turnover capital. Financial as-
sets of enterprises are calculated on the basis of stocks necessary for pro-
duction, of stocks of finished goods, of unfinished products, and of other
elements. Up to now, however, stocks have not been determined in a scientific
manner. The planned stock and turnover capital have failed to take into ac-
count the provisions of the supply plan and this has led to a series of grave
errors in the national economy. Excess stocks which were created in some en-
terprises immobilized the turnover capital of these enterprises, while, at
the same time, other enterprises lacked materials for the fulfillment of their
own production plans Antiparty and antigovernment elements under Vasile Luca,
former Minister of Finance, sought to limit the development of the national
economy, using, among other things, arbitrary fixing of the turnover capital
without financial coordination of the funds of individual enterprises, and
without coordination of the financial plan with production, supply, labor
force, and investment.
The materials plan is coordinated with the technical plan, since the
introduction of new processes and of Soviet methods assures the reduced use
of raw materials, fuel, and equipment.
The fixing of the materials supply plan depends on a number of general
principles, The first and most important is adherence to the objectives of
the national economy for a given period. The second is the maintenance of re -
a:rd~and schedules by enterprise and by sector. This permits the determina-
tion of which industries can receive short materials such as nonferrous metals.
If these metals cannot meet the reeds of all industries for a plan period,
the needs of to principal branches of industry can be covered, for example,
electric power and the electrical equipment industry, on wnlch all other in-
dustries depend Other sectors receive allotments according to their im-
portance The lack of nonferrous metals, for example, is offset by the use of
replacement materials A third principle involves the establishment of aver-
age progressive norms fcr the consumption of raw materials, fuel, and tools,
and the. organization of labor to apply these norms.
Up to now, the materials plan has suffered from serious errors stemming
from the fact that the establishment of standard norms is still in progress-
A great deal of inertia and passiveness have occurred in this respect Im-
portant enterprises and even ministries have made too large demands on the
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RESTRICTED
supply plan. For example, the People's Council of Bihor demonstrated that the
specific consumption of mine timbers in lignite and brown coal mines was ?033
cubic meter, while in coal mines this was only .0056 cubic meter. The inflated
demands of the lignite and brown-coal mines led to greater production costs.
Units of the State Committee for Materials Supply erred by permitting enter-
prises to submit specific consumption figures without documentation or proof
on the basis of which a critical analysis could have been made. By contrast,
railroads were able to document satisfactorily their promises for curtailed
use of fuel.
The, preparation of a materials supply plan requires thorough preparation
of planning and supply by party organs The plan must define concrete respon-
sibilit_eh and indicate the supplier and the recipient of products delivered.
This means that the person responsible must be designated for every task This
will permit liquidation of such cases as occurred in 1951 when a factory did
not distribute its entire production
Another very important principle of materials planning is the adherence
to schedule. Delay ty one ministry can hold up the entire plan for materials
and in turn caa delay the plan for the national economy A detail of the plan,
for example, is transportation To assure the necessary number of railroad
cars, for example, by January, producers must draw up exact transport plans,
by 5 December, at the latest, stating the number of cars they will need and
the exact destination of each. To do this, each producing enterprise must
close Local contracts with its consumCrs This in turn can be done only if
the state plan has already been approved. Thus it is necessary that minis-
tries and economic organizations submit drafts of their production and invest-
ment plans to the State Committee for Materials Supply in time to permit co-
ordination of this information in the materials plan. The most serious con-
sequences can result from delays and failures to respect control figures. For
example-, in the first quarter of 1952, the transport capacity of tens of thou-
sands of cars was lost because of the failure to coordinate various plans.
Tne norming of the use of materials constitutes a scientific basis for
plan preparation. By the normir.g of the use of materials is meant the deter-
mination of t!;(-- quant:ty of materials necessary per unit of production. In
planning, the maximum quantities of materials necessary for the plan period
must be determined for earn unit of production Norming of the use of mate-
r+aII prepare; for the ratlrnal use and conservation of materials P
'progreesive norm takes into account the s ~ The average
achieved b leading specific consumption. Hof materials]
Y g production elements, such as Stakhanovites, using tools
available. In preparing the norms, it is necessary to take into account the
necessity for cutting the use of materials, especially of scarce
items o or expensive
Competitions were organized in the RPR for the conservation of scarce
materials. The Sarmei Industrial WirE Factory in Campia Turzii saved mate-
ri'iLs valued at 223,E+74 lei during April 1952. The steel section of the plant
saved 190,000 lei. Innovations suggested at the ?3 August Steel Plant in
April 1.952 will. result ir. economies of 6,274,200 lei in materials. The col-
lective of the Republica Steel Plant saved 150,000 lei between 20 March and
1 May 1952 Petroleum fields and enterprises have pledged conservation of
materials
During the first half of 1952, approximately 163 materials-use norms w-.re
revised and 728 other cases studied These will be fixed by the beginning of
1953,
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A decree of the Council of Ministers and of the Central Committee of the
party, issued 7 March 1952, provided that ministries, institutes, and central
economic organizations establish materials norms for each enterprise and trans-
mit them to the State Committee for Materials Supply by 20 April. In conform-
ity with this decree, proposals were submitted to the committee by ministries
and other units. However, it was found that not all proposals were well stud-
ied. Investment drafts were not well prepared. Statistical data in all fields
was often incomplete, and showed exaggerated needs for materials. Technical
offices did not always examine proposals closely. The Ministry of Agriculture
caused delays by constantly repeated requests for more time.
Similar delays were caused by the Ministry of Petroleum and Coal Indus-
tries, the Ministry of Construction and Construction Materials Industries, the
Ministry of Transports, the Ministry of Wood, Paper, and Cellulose Industries,
and others. .
In the future there must be a drive against carelessness in handling and
storing materials. This is expecially necessary in regard to wood and con-
struction materials at lumberyards and at construction projects. The conserva-
tion of materials can best be accomplished by the removal of errors in the sup-
ply of materials and the establishment of strict progressive norms.
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