In modern economic conditions, it is important to reduce losses and unproductive expenses in enterprises and associations by identifying shortcomings in the organization of the production process and sales of products.

Unproductive expenses are unplanned (forced) actual material costs of an enterprise that arise as a result of violations in its economic mechanism, committed both by the enterprise itself and by other economic bodies, which negatively affect the final results of operations. The main causes of violations in the economic mechanism:

on-farm - consist of shortcomings in the organization of production and the labor process, ensuring the release of high-quality products, logistics of production, conditions and procedures for fulfilling one’s own contractual obligations, organizing the shipment and sale of finished products (goods) to consumers, work to bring to justice those responsible in the assumption of unproductive expenses by the enterprise;

external – consist of illegal actions of suppliers, transport organizations and other counterparties, expressed in non-fulfillment or improper fulfillment of contractual obligations assumed for the logistics of the enterprise or the sale (shipment) of finished products (goods).

Unproductive expenses and losses include:

Marriage losses.

Losses attributed to non-operating expenses:

Non-productive costs attributed to production costs:

losses from downtime due to internal production reasons;

losses from underutilization of parts, assemblies and technological equipment;

losses from writing off shortages and damage to inventory items in the absence of those responsible or the recovery of which was refused by the court.

Other non-productive expenses:

payments to employees released from the enterprise due to its reorganization or liquidation, as well as due to a reduction in the number of employees and staff.

One of the main tasks of accounting for production costs is the modern and reliable identification and determination of unproductive expenses and losses incurred from defects, downtime, shortages and damage to material assets. Accounting information also allows us to establish the reasons and those responsible for the irrational use of enterprise funds.

1. Accounting for defects.

Rejects represent unproductive costs of production resources. It reduces the output of suitable products and increases their cost.

Defects in production are considered to be products (products), semi-finished products, assemblies, parts and structures that do not meet established standards or technical specifications in quality and cannot be used for their intended purpose or are used only after additional costs to eliminate existing defects.

Requirements for product quality are increasing, so technical control departments and other services of the enterprise are faced with the task of timely identification, analysis and prevention of defects. In particular, work is being done to prevent defects through the introduction of an integrated product quality management system and efficient use of resources.

In the effective fight against marriage, a properly organized accounting of losses, identifying the causes and culprits is of great importance. An important role is given to its operational accounting at the places of occurrence, which is carried out by the technical control department of the enterprise.

In all other cases, defects identified in production must be documented. If a defect is detected, employees of the technical control department make appropriate notes in the primary documents for recording production (work orders, reports, route sheets).

The most common document for registering a defect is an act (notice of defect), in which employees of the technical control service indicate the name of the rejected product, its technical number, the number of the operation in which the defect was detected; codes for the type and reason of marriage; the perpetrators of the marriage; cost of marriage; amounts to be recovered from the perpetrators; mark from the receiving workshop or warehouse regarding acceptance of rejected products.

The marriage certificate contains a special section for calculating marriage by items of direct costs. The act is written out in two copies and signed by the controller of the technical control department, the foreman and the head of the section or workshop. One copy, along with defective products, is sent to the defect storeroom, the other to the dispatch bureau (production department), and then to the accounting department. The act is approved by the head of the enterprise, who decides on the procedure for writing off losses from defects - at the expense of the guilty parties or at the expense of production.

Its classification is of great importance in organizing the accounting of defects and determining losses from them by places of occurrence, causes and culprits.

According to the nature of the identified defects, the defect is divided into correctable and irreparable (final). Correctable defects include parts, assemblies, products that can meet the requirements of standards or technical specifications after correction of defects, if such correction is technically possible and economically feasible. If it is impossible to correct the defect or the costs of correction will exceed the losses from the defect, these parts, assemblies, products, work are classified as final defect.

Based on the location of detection, a distinction is made between internal defects, detected at any production site before shipment to the consumer, and external defects, identified from the consumer (buyer) during the process of acceptance or use.

In addition, marriage is classified according to types, causes and culprits of its occurrence.

All transactions involving defects are accounted for on the synthetic active calculation account 28 “Defects in production”. The debit of this account reflects: for irreparable defects - expenses, the cost of rejected products, and for correctable defects - expenses associated with its correction. On the credit side, the invoices reflect amounts that partially reduce losses from defects: deductions from those responsible for the defects (enterprise employees, suppliers of raw materials and materials, etc.) and the cost of returnable waste at the price of possible use, as well as the cost of irreparable defects attributed to the costs of the main production.

The difference between debit and credit turnover, i.e. preliminary balance on account 28 represents losses from defects at the end of the month included in the cost of production under the costing item of the same name. Thus, account 28 is closed by transferring the balance (the amount of losses from defects) to the cost of production.

Analytical accounting on account 28 is carried out for individual workshops, types of products, expense items and culprits in statement 14 “Losses from defects” when using the journal-order form of accounting.

Statement 14 is intended to account for identified losses:

from the shortage of work in progress minus its surplus;

from write-off of parts and assemblies from production due to the modernization of manufactured products;

from defects in production, including losses associated with damage to semi-finished products during equipment setup.

The cost of defects and losses from it are reflected in statement 12 “Costs by shops” and journal-order 10, and compensation for losses is in journal-warrant 10/1 when using the journal-order form of accounting.

Statement 12, opened for the month, takes into account production costs by workshop; to reflect costs for individual workshops, the loose leaf sheets provided for the statement are used. Accounting for the costs of the main production shops is carried out in separate statements separately from the costs of the auxiliary production shops. With a significant number of workshops, statements can be opened for separate groups.

In accounting, losses from marriage reflect:

Table 78

Account correspondence

2. Accounting for losses from downtime

As a result of technological and organizational problems, downtime of workers, machines and mechanisms occurs. They represent an unproductive loss of funds and labor due to underutilization of equipment and labor and products not received for this reason. Downtime increases production costs, reduces profits, and damages the enterprise. Therefore, taking into account downtime, analyzing their causes and those responsible for their occurrence is of great importance for identifying reserves for increasing labor productivity and increasing production output.

Losses from downtime - unproductive costs of raw materials, supplies, fuel, payroll and related expenses as a result of unplanned shutdowns of individual machines, workshops or entire production.

Downtime at enterprises is divided into all-day and intra-shift and occurs for external and internal reasons. External ones include downtime caused by delays in the supply of electricity by energy supply organizations, water, steam, as well as raw materials, fuel and spare parts by suppliers. Internal downtime occurs due to the fault of the enterprise itself due to various production and organizational problems: inconsistency, violation of production and technological discipline (lack of technical documentation, untimely delivery of tasks, absence or malfunction of tools and devices). Those responsible for downtime include: suppliers; departments and services of the enterprise; workshops of enterprises; administration; workers.

The enterprise should develop a list of causes and culprits of downtime. In all cases of worker downtime for more than 15 minutes, a simple sheet is issued, which indicates not only the names and personnel numbers of the workers, the types and numbers of idle machines, the beginning, end and duration of the downtime, but also the codes of its causes and culprits in accordance with the nomenclature developed at the enterprises .

When a workshop, site, individual production or enterprise as a whole is stopped, an act is drawn up, which explains the reason in detail and lists all the costs and losses caused by the downtime.

Downtime losses include:

wages with deductions for production workers for downtime;

additional payment to workers employed in other jobs;

the cost of raw materials, materials, fuel, energy unproductively spent during downtime;

share of costs for the maintenance and operation of machinery and equipment.

Such losses resulting from external reasons should be taken into account as part of general business expenses, and internal - in general production expenses under the item “Losses from downtime.”

Depending on the duration, downtime is divided into intra-shift and whole-shift. Intra-shift downtime is issued with a sheet of downtime, and is additionally reflected in the working time sheet with the letter B. Whole-shift downtime most often occurs for external reasons and covers workers of the entire section or workshop. These downtimes are marked in the report card with the letter P and are documented by issuing an act with a list of workers participating in the downtime.

Downtime can be used, i.e. During this period, workers receive new tasks and are assigned to other jobs. Work is formalized by issuing work orders in accordance with the procedure for payment at piece rates or with preservation of average earnings. The downtime sheet indicates the work order number and the time worked.

In accounting, accounting for downtime is reflected:

Table 79

Account correspondence

3. Accounting for losses from damage and shortage of inventory items.

In accordance with current legislation, shortages and losses from damage, theft of material resources, including work in progress and finished products, due to the fault of materially responsible persons and officials are subject to compensation. There may be cases when the perpetrators are absent or the court refuses to recover from the perpetrators. Then shortages and losses from damage to material assets and unfinished production are considered unproductive expenses.

The presence of losses from spoilage and shortages is the result of irrational use of inventory, ineffective organization of supply and warehousing, lack of weighing instruments and measuring containers and is determined by conducting an inventory.

Table 80

Account correspondence

Other non-productive expenses.

The level of product costs is significantly influenced, along with losses from defects, downtime, shortages and damage to valuables, and other unproductive expenses:

benefits paid on the basis of court decisions as a result of loss of ability to work due to work-related injuries;

payments to employees released from the enterprise in connection with its reorganization and liquidation, as well as in connection with the reduction of employees and staff.

Liquidation of an enterprise is carried out by decision of the owner or a body authorized by him, or by a court decision in the following cases:

declaring him bankrupt;

systematically carrying out activities that are contrary to the goals of the enterprise, either without proper permission (license) or prohibited by law;

if the acts on the establishment of the enterprise are declared invalid.

A reduction in the number or staff of employees can occur either through an actual reduction in work or during various technical and organizational measures (introduction of new equipment) that make it possible to reduce the number of employees, although the volume of work remains unchanged or even increases.

Due to a reduction in numbers, workers are usually laid off, and with staff reductions, those workers whose positions are included in the staffing table are fired.

Upon termination of an employment contract due to the liquidation of an enterprise or the implementation of measures to reduce the number (staff) of employees, severance pay is paid in the amount of at least three times the average monthly salary. The amount of the benefit increases depending on the length of service with a given employer in the manner and under the conditions provided for by the collective agreement (agreement).

Severance pay is paid regardless of the fact that the employee has been warned about the upcoming dismissal.

Employers bear, in accordance with the law, financial liability for damage caused to employees by injury or other damage to health associated with the use of their labor duties.

Evidence of the employer’s guilt can be an industrial accident report, a court verdict or decision, a prosecutor’s resolution, an inquiry or preliminary investigation body, a decision to impose an administrative or disciplinary penalty on the perpetrators and other documents.

Compensation for damage consists of payment to the victim of monetary amounts in the amount of earnings (or part thereof) that he lost due to loss of ability to work or its reduction, minus a disability pension due to work injury, as well as compensation for additional expenses caused by damage to health.

The amount of compensation for damages associated with the loss of the victim’s previous earnings or a decrease in it due to a work injury is determined as a percentage of this earnings, corresponding to the degree of his loss of ability to work.

If the work injury occurred not only through the fault of the employer, but also through the gross negligence of the employee himself, then the amount of compensation for damage should be reduced depending on the degree of guilt of the victim, or compensation for harm should be refused. Severance pay amounts are not subject to taxation and are not subject to collection of debts.

Table 81

Account correspondence

In addition to unproductive expenses and losses that negatively affect the cost of production, we can also distinguish losses that reduce the balance sheet profit of the enterprise and non-operating losses.

Accounting for other losses.

In the process of economic activity, an enterprise, along with profits, may also have unexpected losses from operations not related to the production and sale of products (works, services), fixed assets, inventory, intangible and other assets. These losses are recorded directly on synthetic account 90 “Income and expenses from current activities” or account 91 “Other income and expenses” in correspondence with different accounts.

Such losses include:

losses from downtime due to external reasons not compensated by the culprits;

awarded or recognized fines, penalties, penalties and other types of sanctions for violation of the terms of business contracts, as well as expenses for compensation of losses caused;

losses from writing off receivables for which the statute of limitations has expired;

uncompensated losses from natural disasters.

The reasons for the formation of overdue receivables are: lack of funds from the payer, return of payment requests by the bank without payment due to financial control, refusal to accept payment requests.

Debtors and creditors include organizations for non-commercial transactions, including: transport organizations that conduct payments related to the use of associated transport for the transportation of goods; depositors, organizations and persons in whose favor deductions are made on the basis of executive documents; apartment renters and people living in dormitories; tenants of non-residential premises; parents of children admitted to child care institutions. Uncollectible accounts receivable are written off by decision of managers either to the enterprise's losses, or at the expense of net profit or the reserve for doubtful debts.

Doubtful debt is considered to be an enterprise's receivables that are not repaid on time and are not secured by appropriate guarantees. The formation of this reserve is made after an inventory of accounts receivable.

A significant part of unproductive expenses consists of penalties, the need to pay which is caused by failure to fulfill obligations under contracts for the supply of finished products.

Fines, penalties, penalties can be received:

for failure to fulfill delivery obligations;

for late payment for delivered products;

for the delivery of incomplete and low-quality products.

Table 82

Account correspondence

When identifying losses and unproductive expenses, it is necessary to promptly establish the reasons and specific culprits to compensate the enterprise for damage and prevent similar losses in the future.

Cost + others

RESULT

(-)

1/2 STEPS – OWN NON-CURRENT AND CURRENT ASSETS

The postulate “Life is good.” The purchased (or produced) product is sold out. Demand exceeds supply. The entrepreneur is happy. All inventories are being sold without reserve, there are no accounts receivable, trade is carried out only on the basis of fact or prepayment, as well as by appointment.

DDS

STEP 1 – DEFICIT OF OWN WORKING CAPITAL

Postulate: “Greed is good. Greed is right. Greed exalts man. Greed pays."

The entrepreneur is fed up with his fixed size of his business. He can earn more. To increase the turnover of an enterprise, it is necessary to increase working capital, and it is also necessary to update fixed assets. Your own money is no longer enough, despite the fact that it has already been spent on non-current and current assets and is already in circulation. The fastest and easiest way is to increase Current assets due to Debt capital through Deferred payment to the supplier. Short-term accounts payable appear on the balance sheet. Now a payment calendar should appear to control timely payments to suppliers for goods supplied on credit, so as not to delay payments.

Uentrepreneur has a large choice of ways to increase the turnover of the enterprise. This can be not only a deferred payment from the supplier, but also bank loans, or loans from third parties, or attracting a partner to the business. Risks at this stage are minimal; mistakes that could complicate the work of the enterprise and worsen the result have not yet been made.

STEP 2 - INCREASE COSTS WITH INCREASED TURNOVER

Postulate: “An increase in turnover always leads not only to an increase in revenue and profit, but also to an increase in costs.” Anyone who is not ready to control, plan, minimize and limit them risks huge financial and economic problems. At this stage, budgeting should appear in the enterprise in order to accurately correlate income and expenses with each other and their receipt over time.

As an entrepreneur increases turnover, distribution costs increase: logistics costs. Appear: defects, illiquid assets, mis-grading. The cash flow at the output begins to gradually decrease by the amounts arising from the increase in costs during logistics, frozen in defects, illiquid assets, and re-grading. The entrepreneur is not yet ready to make unpopular and drastic decisions on this issue; all this hangs on the balance sheet. The markup exceeds the amount of losses, DDS remains positive.

DDS:

STEP 3 – ACCUMULATION OF COSTS, APPEARANCE OF RECEIVABLES

As old man K. Marx used to say, “The basis of any large capital is crime.”

The basis of cash flow is another imperishable postulate:

“MONEY – PRODUCT – MONEY”. And this always assumes that MONEY is always greater than MONEY by delta (margin). The size of the delta is almost equal to profit minus costs.

Thus, an ideal deficit-free cash flow is obtained - i.e. cash flow, in which the outgoing cash flow is always greater than the incoming cash flow, without attracting additional financing.

To increase the sales market, a business plan is being developed. In order to retain regular customers, the entrepreneur begins to offer goods for deferred payment, and he has short-term receivables. A cash gap appears between the transfer of goods for sale and the receipt of money after its sale by debtors. To close the gap, the entrepreneur is forced to take out loans. Non-current assets may also continue to increase. DDS is reduced and adjusted for the amount frozen in scrap, illiquid assets, mis-grading and receivables.

DDS:

STEP 4 – FORMATION OF A DEFICIT OF BORROWED WORKING CAPITAL

Postulate: “Money, like drugs, can be fast or slow, cheap or expensive.”

The entrepreneur sits on the needle of borrowed funds and for now enjoys it. At this stage, with each new cycle, absolutely all indicators in the enterprise increase.

Inventories in the warehouse increase, but the quality of purchases and assortment decreases due to an increase in the volume of supplies.

The entrepreneur begins to give the goods on deferment, including to unknown buyers. Due to competition in the market, old buyers have to reduce prices. The markup ceases to cover the entrepreneur’s losses from freezing funds in current assets: inventories, defects, illiquid assets, re-grading, accounts receivable. Bad receivables appear due to the lack of analysis and monitoring of the financial condition of debtors.

One way to solve the receivables problem radically is Factoring. Of course, it is an effective solution to combat cash gaps and accounts receivable, and increases turnover. Some also offer accounts receivable administration. But the effect of factoring will be short-lived. And it will be the same as if someone addicted to heroin is given cocaine. The short-term result will be positive, because adding fast, expensive factoring money to slow, cheap credit money will only have an effect in the short term - 1-2 quarters maximum. But it will not solve the problem radically.

DDS:

STEP 5 – DEFICIT OF BORROWED WORKING CAPITAL

Postulate: “When you get on drugs, the main thing is not to rush.”

At this stage, the Enterprise is already an experienced drug addict. Sits on the needle of borrowed working capital. However, it works. The machine for moving money, goods and generating losses is in full swing. If market conditions change and trade margins fall, the risk of loan default increases to at least 50%. It all depends on who and how will behave in a given situation.

Some of the funds are frozen in illiquid assets, defects, mismatches, some of the funds are frozen in accounts receivable and bad accounts receivable. The enterprise has an increased demand for credit funds to replenish working capital due to their shortage.

In parallel with the increase in lending limits, another long-overdue internal process begins - cost reduction. Since it is easiest to cut down the one who is nearby, the process begins with lowering the salaries of the staff.

This in turn leads to the formation of two parallel opposition movements in the collective. “Movement of personnel in nature,” who go to other places, often with the same money. And “The movement to plunder the loot, or the expropriation of expropriators in the name of compensation for their losses on wages.” In this movement, people so dashingly and with such imagination begin to rob the owner that you are simply amazed at the talent of our people. Moreover, if earlier this was done to increase their average income, sometimes not tied to the profit of the enterprise, now this is done for purely ideological reasons.

When the markup received from sales, as well as borrowed funds, is not enough for timely settlements with suppliers and banks, there is a shortage of borrowed working capital, a liquidity crisis of the enterprise and default. A curtain!!!

Communication between the client and the bank at this stage is not a spectacle for the faint of heart. In some places they are more reminiscent of a conversation between a Huckster and a Drug Addict. The borrower can use the following words and expressions: “We’ll take it at any percentage!”, “No market, you’ve known me for a long time”, “We need it urgently!”, “Really, how much can you give quickly?”, “How quickly can I can I get this money?”, and finally - “What exactly do I need to do to get this money faster?”

An attempt to solve all the accumulated problems by obtaining new loans and refinancing old ones does not yield results.

DDS:

Diagnosis. Urgently requires hospitalization and treatment in a drug treatment clinic at the place of residence.

Methods for treating dependence on borrowed working capital.

There is no panacea, but there are solutions that can reduce the intensity of passions.

1. In various banks, the calculation of the credit limit for replenishing working capital may be limited to 50-70% of the average monthly turnover. This mechanism does not work because There are other banks with other methods, ready to give more or more. You can also negotiate with suppliers and increase your lending limits. Factoring does not require collateral and turnover on the current account, but increases the overall debt load of the enterprise.

This conflict with the overall debt burden can only be resolved by the enterprise itself by limiting its borrowings. Banks can limit or reduce limits in fact after 1 month - after reading the quarterly reports, there are no more mobile and objective methods for monitoring the financial condition of the borrower. If the borrower made erroneous decisions or suffered losses in the 1st month of the reporting quarter, the bank will be able to find out and document this only 3 months after the balance is submitted. Agree, 3 months is a long time for accumulating mistakes and making new ones.

2. Do not attract short-term loans to solve long-term problems, such as opening new retail space, construction, or purchasing fixed assets. The borrower’s logic is simple - the easiest money to obtain is circulating money, so I invest my turnover in expansion, and cover the deficit with short-term loans.

There are even more exotic options for financing long-term investments. If the borrower cannot obtain an investment loan, including due to financial indicators, then he takes out short-term loans and will refinance them according to the term.

In my memory, both schemes led to technical defaults and borrower requests for extension due to a mismatch in the financial cycle, project payback and loan repayment terms. The second path more obviously ends in default and a liquidity crisis in the enterprise.

3. The borrower must have its own full set of financial mechanisms to solve internal problems. Budgeting helps you control and plan your income and expenses. But this is not enough. Internal directive documents of direct action are needed on the maximum amount of defects, illiquid assets, and re-grading with its attribution to the turnover of the enterprise. Accounts receivable must be clearly regulated by terms, types and amounts. The financial condition of debtors must be monitored. Often banks, when analyzing the borrower, lose sight of the risk of non-repayment of receivables, which only the borrower can realistically assess, including by involving the bank in the analysis of the debtor’s balance sheet.

EPILOGUE.

Poverty and Wealth are like two different sides of the same coin. Poverty or lack of capital is the reason that pushes the entrepreneur to borrow to Wealth, and Wealth through the borrowing of capital and through the withdrawal of rent from circulation is the reason leading to his Dependence on loans. Is there a golden mean in this vicious circle? I think no. No choice. Only loans. Unless, of course, there is a tight pocket with oil and gas rubles or free government property. As a last resort, there are also Colombian or Afghan investment funds, as well as the Vladimir-Central Mutual Funds.

Business development always involves reinvesting earnings in order to increase the scale of the business and its turnover. Even if the goal is the subsequent sale of this business.

The game is always big. And if we are talking about a growing market, or about increasing market share, there is nothing at all to do with a small or medium fixed equity capital. Therefore, the aphorism “you take someone else’s and for a short time, but you give away yours and forever” sounds very relevant in relation to our topic.

Annotation: The article discusses the causes of 7 types of losses in production, analyzes the possible consequences, which makes it possible not only to avoid losses but also to control the further development of the situation with limited resources, thereby optimizing management. An easy-to-use table for identifying and eliminating/minimizing losses has been developed.

List of keywords:, loss reduction, loss identification, optimization of production processes.

Identifying and reducing losses is a priority task for any modern enterprise. Because this is the basis for successful activities.

First introduced (1912-1990), CEO of Toyota - being the most ardent fighter against losses, he established seven types of muda. - this is one of the Japanese words, meaning loss, waste, that is, any activity that consumes resources but does not create value. These are errors that need to be corrected. This is performing actions that you can completely do without.

The literature considers, first of all, the assessment of loss as a fact of what has already happened and as a method of elimination. Which is certainly important, but does not answer what causes and consequences accompany the 7 types of losses.

The goal of lean manufacturing is prevention. It is necessary not only to eliminate, but also to prevent further occurrence and/or development of losses.

The task of management is to optimize the process. By considering the consequences of losses, management, with limited resources, can decide where to focus their efforts first.

Types of losses, causes and consequences

Overproduction– the most dangerous of losses, as it entails other types of losses. But the easiest way to exclude and identify this type is to follow the motto: “Don’t produce too much!” It is necessary to produce only what is ordered.

The reasons for overproduction may be large batches - which in turn may be a consequence of the impossibility of quick changeover. Also, anticipatory production can also cause overproduction. Excessive equipment and unstable quality are also causes of overproduction.

The consequences that arise from overproduction are premature consumption of raw materials, and as a result, the purchase of materials, which leads to excess inventories, and loss of quality.

The amount of unclaimed products and supplies in warehouses and intermediate operations is the cost of the “Overproduction” loss. Determined during the month, quarter, year.

A pull supply system, as well as leveling the load on production lines, helps to avoid overproduction.

Reason excess stocks is a long readjustment, which in turn is associated with the production of products in large quantities. As well as the imperfection of the production planning and supply of materials system.

To store supplies, we need additional space, warehouses, and additional labor. Also, these reserves will need to be searched for later, which means spending time and energy again. All these efforts are unnecessary costs, and the inventories themselves are frozen capital of the enterprise.

As with overproduction, improving the planning system helps reduce inventory. Production flows should be based on a pull system with small batches whenever possible, which is facilitated by production leveling.

The next type of loss is transportation - is a consequence of irrational placement of equipment and large distances between production areas. A value stream map can help identify inefficiencies in the production flow organization. By displaying material flows and their direction, we see the distance that a workpiece or material travels before it becomes a finished product. Increased transportation costs lead to higher prices for products.

Optimizing the location of equipment, storage facilities, and the direction of material flows in general helps reduce the number of transportations.

A loss " Movements» is associated with the movement of workers during a work shift. Contributes to a decrease in labor productivity, increased personnel fatigue and an increase in injuries. Timing the worker’s movements—the Spaghetti diagram—helps identify this hidden loss. But it is also important to understand the personal role of the worker himself in optimizing his working day and his actions. To eliminate unnecessary movements of the worker, it is first necessary to improve his skills. Together with him, optimize the production process and effectively organize workplaces. Personal engagement of staff can be increased by implementing the Kaizen movement - making small improvements on your own.

Of all types of losses, comparatively less damage comes from “ Expectation" This is the time that equipment or personnel spend inactive, that is, without creating value. When optimizing production flows, it is necessary, if not to exclude all other losses, then at least to strive to translate them into expectation. The timing of the work of personnel and equipment allows you to determine the waiting time. The total number of downtimes per shift, month and year will give us the waiting time. To reduce the amount of staff waiting time, during downtime it is recommended to direct them to cleaning, implementation of 5S, TPM, SMED, Kaizen systems.

Optimizing the location of equipment and reducing changeover time can reduce waiting time.

It can also increase production costs overprocessing. It arises as a result of the lack of a standard among the worker and the imperfection of technology. Before placing an order, you need to clearly understand what properties of the product are important to the consumer. This understanding must be reflected in the worker's standard. For example, in a standard operating chart, where all the steps and actions of the operator will be clearly stated.

Defects in manufacturing entail additional costs for rework, control, and organizing a place to eliminate defects. They arise as a result of technology violations, low qualifications of workers, inappropriate tools, equipment, and materials. The cost of defects is determined by the cost of defective products and the cost of rework. Implementation of quality loop systems and TPM help reduce defects. Also important here is the personal interest of workers to produce quality products.

To analyze production losses, it will be useful to consider the table (Table 1. Causes and consequences of 7 types of production losses), which will simultaneously present the causes and consequences of all types of losses, as well as methods for identifying, counting and eliminating them. The importance of this table lies in the fact that it helps determine the priorities of management actions in the fight against hidden production losses. Having a list of problems, it is important for management to correctly understand the direction and sequence of actions. Only by building a clear program can you achieve sustainable results.

Table 1. Causes and consequences of 7 types of industrial losses

Oleg Primin,
Professor, Doctor of Technical Sciences, Deputy General Director of JSC MosvodokanalNIIproekt

Water leaks in water supply networks entail overuse of resources, significant repair costs, interruptions in the supply of water to consumers and deterioration in its quality. To comprehensively solve these problems, JSC MosvodokanalNIIproekt has developed a “Strategy for reducing water losses in the public water supply system.”

At the present stage of development of municipal water supply in Russian cities, the issues of assessing and managing water losses are of particular relevance for reducing water consumption and eliminating unproductive costs, since they have a significant impact on the cost of services of water supply enterprises. The production of drinking water always exceeds the total rational requirement. This is due to a number of technical reasons, as well as wasteful consumption and unaccounted for water consumption. Drinking water is a valuable natural and industrial resource that must be managed with great responsibility. The main reasons for fighting water leaks from the water supply network, as well as other types of losses, are:
shortage of water resources, both existing and potential;
the danger of secondary contamination of drinking water in the event of a decrease in pressure at the leak site;
financial and economic aspects;
the need to attract new sources of water and, consequently, additional facilities and capital investments.

It is important to note that one of the main indicators that make it possible to objectively evaluate the activities of a water supply and sewerage enterprise (WSS) is the amount of losses and unaccounted for water consumption.

Basic Concepts
The following basic concepts are adopted in Russian regulatory documents in the field of water supply:
unaccounted water costs - the difference between the volumes of water supplied to the water supply network and consumed (received) by subscribers;
water loss in the water supply system - the volume of water lost during transportation, storage, distribution;
water leaks - spontaneous outflow of water from tank structures and various elements of the water supply network in the event of a violation of their tightness and accidents;
hidden water leaks - leaks that are not detected during an external inspection of the water supply network and tank structures.

Unaccounted for water consumption is structurally divided into the following groups: useful, technologically necessary expenses; losses from the water supply network and tank structures; unregistered (organizational and accounting). Useful, technologically necessary water flows include:
1. water consumption for the water supply enterprise’s own needs, preventive maintenance of the water transport system:
water supply network: flushing dead-end sections of pipelines (emptying, flushing, disinfection); flushing of existing sections of pipelines (emptying, flushing, disinfection), networks with low speeds; flushing of new sections of pipelines (emptying, flushing, disinfection); checking fire hydrants;
drainage network: technological needs for operating pipelines of drainage networks (flushing pipelines, eliminating blockages);
tank structures: preventive cleaning of drinking water tanks (emptying, washing, disinfection); natural loss of water;
2. water consumption during work related to the elimination of accidents and damage to the water supply network (emptying, flushing of pipelines, disinfection);
3. expenses for fire safety needs;
4. water consumption for the needs of municipal services - watering green spaces and streets.
Water losses include: water consumption during accidents and damage to the water supply network before they are localized; water consumption when leaking through water dispensers; hidden water leaks from the water supply network and tank structures; water costs not recorded by the water supply company, not paid by consumers during unauthorized use of public water supply systems (unauthorized water use). Unregistered water costs include: costs not taken into account due to errors in measuring instruments for water supply to the city; expenses not taken into account due to errors in water meters of subscribers. Standards for unaccounted-for water consumption are indicators that reflect the technically real (justified) structure and size of unaccounted-for water consumption for a specific water utility organization. These indicators should be included in costs when calculating costs and setting tariffs for water supply services, as well as when developing measures to save and rationally use water, calculating limits for water withdrawal from water sources, and adjusting water consumption standards for subscribers. The structure of standardized unaccounted water costs subject to calculation should include only those that are technically inevitable and technologically necessary, without which the normal operation of public water supply systems and the implementation of contracts for the provision of services to subscribers is impossible. These include: water consumption for the technological needs of water treatment stations (washing, preparation of reagent solutions, preventive cleaning of tanks and structures, laboratory needs, etc.), preventive maintenance of the water supply network (emptying, washing, disinfection), flushing and cleaning of the sewer network, inspection fire hydrants. These costs can be normalized for a specific city water supply enterprise in accordance with the features of the design and operation of the water supply system and current regulatory documents. These costs are included in the “Regulations for the technical operation of the city’s public water supply system,” the implementation of which is controlled by Rospotrebnadzor and local authorities.

Water losses in public water supply systems
There are water losses in all public water supply systems, only their volume varies. In different cities of the world, the magnitude of water losses in water supply systems varies significantly depending on the level of equipment of these systems with water consumption metering devices, as well as on the material of pipelines and their service life, the availability of modern equipment for diagnosing the condition of pipelines, etc. (Table 1). Only in the most efficiently managed water supply systems in Europe and North America, the amount of water loss is 4–6%, and the average value for developed countries is within 15%. The level of water losses in Russia's public water supply is quite high. According to available data, in the housing stock alone, the amount of water loss in the country averages 18–27% of total water consumption, and in some cities it reaches 40%. There are a number of temporary factors that determine the high level of water losses in municipal water supply systems of most Russian cities. These factors include: network wear and tear; the use of steel pipes that are not protected from corrosion; increased pressure; large amplitude of their fluctuations during the day; hydraulic shocks; insufficient volume of tanks; lack of flow control tools; unsatisfactory provision of resources for repair and maintenance needs; lack of reliable instruments for timely detection of water leaks. In recent years, abroad, on the recommendation of the International Water Supply Association (IWA), to assess water losses, the amount of water losses related to the specific length of the network is more often used as an assessment indicator. This indicator, according to experts, is more universal, because it allows, to a certain extent, to establish approximate permissible leakage rates depending on the state of the network and the values ​​of other influencing factors with properly established operation of the network. For comparison, in Fig. Table 1 shows the values ​​of water leakage in pipelines of various water supply systems (m3/day per 1 km). Germany's low water loss rates (less than 8%, some utilities around 3%) are a result of the significant funding allocated to utilities and the fact that the German tariff system allows for full recovery of structural maintenance costs, without any or significant problems with collection of payments. In addition, in Germany, 56% of the total network length is made of cast iron pipes, 26% of plastic pipes, 10% of asbestos-cement pipes and only 6% of steel pipes with internal lining.

Unaccounted expenses
A one-time determination of all types of unaccounted-for water consumption, including water leaks from the network, directly on water pipelines is impossible, given the continuous cycle of water production and consumption. In addition, this approach does not allow obtaining reliable data on their further level, since with such a definition, random, uncharacteristic values ​​have a high probability. In this regard, the amount of unaccounted costs and water losses is subject to assessment based on the collection, systematization, appropriate processing and analysis of initial operational information, as well as through the use of calculation methods based on probabilistic statistical approaches, which are based on data accumulated over a certain period of observation actual water consumption. The main source of information for assessing unaccounted costs and water losses should be information provided by the operational services of the water and wastewater utility enterprise. The scientific and technical literature notes that neither real nor fictitious losses can be completely eliminated. Reducing losses requires significant effort and expense. Often, success is considered not just a reduction in losses, but the absence of their growth. For the majority of effectively operating Russian water and wastewater services organizations, especially private ones, a loss level above 15% is considered unacceptable, but in our conditions it is quite difficult to achieve such an indicator. Water losses are the basis for drawing up a water balance, which serves to assess the effectiveness of water supply management. It is determined by estimating or accounting for water produced, consumed and lost - the calculations must lead to balance. To assess water losses and calculate the water balance, JSC MosvodokanalNIIProekt has developed an appropriate methodology and computer program “Water Balance”, the algorithm of which is based on the “Methodology for estimating unaccounted costs and water losses of the Moscow water supply system” and the recommendations of the International Water Association (IWA). The main menu of the program is shown in Fig. 2. Authorized water consumption is divided into paid and unpaid. Paid authorized consumption, or sales of water (total water consumption measured by meter readings) constitutes the volume of “revenue” water.

Water loss reduction strategy
An analysis of existing work on the problem of reducing water losses and research conducted at MosvodokanalNIIproekt OJSC made it possible to develop a “Strategy for reducing water losses in the public water supply system” with the development of a list of organizational and technical measures. This document represents a system of controlled organizational and technical measures to influence the main elements of the water supply system in order to deliver drinking water to the consumer with minimal losses. The strategy is implemented and managed by a combination of four primary components to control and reduce actual water losses (Figure 3), including:
pressure control, optimization of the water transport system;
speed and quality of repairs, intensification of emergency repair and scheduled maintenance work;
active search and control of leaks;
infrastructure management – ​​modernization and reconstruction of the network.
Real water losses (sometimes called physical losses) are the annual volume of water lost through all types of leaks (visible and hidden) due to damage and accidents of drinking water pipelines (to the subscriber’s home water meter) and fittings, as well as leaks in clean water tanks. Real losses cannot be eliminated completely.

In general, the number of new leaks occurring each year is primarily influenced by the long-term management of pipeline upgrades and reconstructions. Pressure control can affect the rate of new leaks, as well as the water flow of any leaks and broken pipes. The average duration of water losses is limited by the speed and quality of repairs, and an active leak control strategy determines how long undetected losses will persist until they are contained. The minimum technically achievable annual real loss in a well-maintained and well-managed system is the inevitable annual real loss, represented by the small rectangle in Fig. 3. The difference between inevitable annual real losses (small rectangle) and current annual real losses represents potentially avoidable real losses, which include:
water consumption in case of accidents on the water supply network until the damage is localized;
water consumption when leaking through water dispensers;
hidden leaks.
The ratio between current annual real losses and unavoidable annual real losses represents the infrastructure loss indicator ILI, as used by the International Water Association. The Infrastructure Loss Index (ILI) measures how effectively the activities shown in Figure 1 are performed within the existing infrastructure at the current operating pressure. 3: speed and quality of repairs, active monitoring of leaks, infrastructure management - modernization and reconstruction of the network. International experience shows that ILI values ​​close to 1.0 correspond to almost flawless technical control of actual water losses at the current operating pressure. For each of the four actions, there is some economic level of investment that is calculated or estimated and depends on the maximum amount allocated to actual losses. Along with reducing actual water losses, reducing commercial losses is a very effective first step towards a water loss management strategy. This step does not require a large investment and can lead to a quick return on investment. Commercial losses include:
water consumption for the water supply enterprise’s own needs;
fire-fighting needs (fire extinguishing) not presented for payment;
water consumption for the needs of municipal services that are not presented for payment;
unaccounted water consumption due to errors in measuring instruments for water supply to the city;
unaccounted for water consumption due to errors in water meters of subscribers;
unauthorized water use.
To illustrate the strategy for reducing commercial water losses, Fig. Figure 4 shows a diagram of the four main principles for regulating commercial water losses. Using all four components will help reduce annual commercial water losses to manageable levels. Assessment of water losses and their reduction in internal water supply systems of subscribers (residential buildings, municipal and industrial enterprises) are not included in the objectives of this strategy and should be implemented in separate programs.

Program events
In table Table 2 shows the content of the program activities of the strategy for reducing water losses in the public water supply system.

Strategy effectiveness
The implementation of the “Strategy for Reducing Water Loss in the Public Water Supply System” should ensure increased reliability and environmental safety of the water supply system, reduce water losses, reduce resource consumption, and increase energy efficiency. The effectiveness of the strategy as a whole should be assessed to determine its potential attractiveness to possible investors and to find sources of financing. The effectiveness of strategy implementation includes:
public (socio-economic) effectiveness of the project;
commercial effectiveness of the project.
A certain indicator of the economic effect of implementing the strategy is the annual, compared to the current level, reduction in the costs of eliminating accidents due to a reduction in their number per 1 km of pipeline. Other positive effects from the implementation of the strategy are the following factors:
1. Increasing the reliability of water supply. As a result of increased wear and corrosion of the environment, sections of the water supply network are susceptible to destruction with water pouring into the ground. Accordingly, during the period of repair work, water supply to consumers is stopped or limited. For consumers equipped with water consumption metering systems, this causes a decrease in sales revenue, and, consequently, leads to a lack of financing for semi-fixed costs of the water supply company. For consumers who pay for water according to the consumption standards for this resource, cases of water supply disruption also lead to a decrease in sales revenue. This is probabilistic in nature - the consumer has the right to demand recalculation of payments for undelivered volumes of water. However, against the background of rising tariffs for water supply services, consumers are increasingly using this right.
2. Improving the quality of supplied water. As a result of damage to pipelines until they are detected and eliminated in places where fistulas form, untreated industrial and domestic wastewater and other contaminants may enter the water supply network. The latter cause a deterioration in the quality of tap water to the point of making it unsuitable for consumer use. Such cases may cause not only direct damage to the health of consumers, but also financial claims for compensation for the damage caused to them.
3. Reducing the volume of emergency water outflows. As a result of accidents and damage to pipelines, until they are detected and eliminated, water overflows occur in places where fistulas and leaks form, which are direct losses to the water supply enterprise. In addition, during repair work, water is consumed to flush and disinfect the section of the pipeline where the repair is being carried out.
4. Reducing capital costs by reducing the volume of repair and restoration work.
5. Reduced operating costs. An increase in the hydraulic resistance of sections of water pipes as a result of corrosion entails a decrease in the operating pressure in the network that includes this section. This leads to excessive consumption of electricity for water transportation, increased physical wear of the pipeline, and increased operating costs resulting from deviations of the operating pressure from the calculated value.
6. Increasing the business reputation of the water supply enterprise. This factor, among other things, can have an impact at the stage of setting tariffs: consumers and the regulatory body will adequately perceive an increase in tariffs for paying for services of proper quality. This will facilitate the introduction of new technologies and the development of the public water supply system as a whole.

conclusions
One of the main indicators that make it possible to objectively evaluate the activities of a water and wastewater utility enterprise is the amount of losses and unaccounted for water consumption. Leaks from the water supply network and structures negatively affect the reliability and strength of buildings, utilities (primarily water-carrying ones), worsen the state of the environment, lead to flooding of territories, that is, significant material, social and environmental damage. There are a number of temporary factors that determine the high level of water losses in the water supply network of most Russian cities. These are wear and tear on the network, the use of steel and cast iron pipes that are not protected from corrosion, increased pressures, large amplitude of their fluctuations during the day, water hammer, and the lack of reliable instruments for timely detection of water leaks. To assess water losses and determine “non-revenue water”, a “Methodology for assessing unaccounted costs and water losses of the Moscow water supply system” has been developed. To calculate the water balance, the standard approach adopted by the International Water Association is used. For automated calculation of water balance, a computer program “Water Balance” has been developed, which can be used for any city in the Russian Federation. “Strategy for reducing water losses in the public water supply system” is a set of controlled organizational and technical measures to influence the main elements of this system in order to deliver drinking water to the consumer with minimal losses. The implementation of this strategy will ensure increased reliability, environmental safety and energy efficiency of the system, as well as reduce water losses and reduce resource consumption.