Automation of Management Processes

the use of mathematical methods, automatic devices, and computer equipment to solve management problems in various sectors of the national economy.

The comprehensive automation of production, the great increase in the scale and tempo of industrial development, and the more complicated production links between different sectors of the national economy have greatly stepped up the need for extending automation into such processes as acquisition and processing of cost analysis data, handling of statistical data, routing and dissemination of various types of documentation and paperwork, and solution of planning and management problems. Automation equipment must be brought into the sphere of management by setting up integrated automated management systems encompassing specific regions of the national economy, since only in that case will the automation equipment be used to maximum effectiveness. The institution of such management systems will aid in (1) achieving a considerable rise in the production level of industry through shortening the lead time in the production of new commodities, through providing more exact information on the volume and assortment of commodities produced, and through more completely and rationally utilizing production capacities, labor, and material and financial resources; (2) cutting down considerably on reserves over the quota (and on the whole inventory stock in general) through more exact determination of materials needed and sets of items and semifinished products on hand, and through more complete and exact updating of changes in needs and flow of material values and day-by-day routing of funds and reserves on hand; (3) freeing the staff of central and local management bodies from labor-consuming computational work (even if the total number of personnel involved is not reduced, the planning and managing themselves are placed on a qualitatively higher level); and (4) radically improving the quality of decisions and guaranteeing the necessary effective guidance on all levels of management, a task which is aided by proper concentration and filtering out of redundant information by technical means.

The scientific basis of all automation of management processes is engineering cybernetics. Engineering cybernetics studies the specific features of management of the national economy, methods for synthesizing optimum management control systems in economics and cost and production analysis, and problems of application of mathematical techniques to the solution of economic problems. The paramount problem confronted in automation of management processes is the solution of basic methodological and concrete problems in the interaction between the human operation and cybernetic machines within the framework of a unified system of automated management of the national economy and in each individual sector of the national economy. Three basic levels can be singled out in the automation of management processes: the state automated management system (GASU), based on a state network of computing centers and designed to service all-state territorial management bodies (such as Gosplan—the State Planning Committee—and the Central Statistical Administration) and trade and commerce, agriculture, and administrative bodies; industry-wide automated management systems (OASU) for servicing individual branches of industry; and automated plant management systems designed to automate processing of economic information and to solve production planning and management problems for one plant or for several in geographical proximity.

The establishment of automated management systems presupposes a gradual restructuring of management in the national economy, in branches of industry, and in individual plants, on the basis of widespread reliance on computing techniques and mathematical cost-analysis techniques and optimum planning.

The basic hardware used in automation of management processes includes electronic computers and electronic control computers.

Digital computers, the machines used most widely in automation of management processes, are used tied together in a single system or in combination with on-line automation control equipment. Digital computers are used in the organization of centralized data-processing systems, for production planning, accounting and inventory, statistics, and payroll calculations; for calculations of optimum technology in the machining of parts; in the planning of production sections, shops, and plants as a whole; for in-process accounting of materials, semifinished products, and completed products in warehouses, with compiling of corresponding reports; for keeping track of needs and materials and filling out orders; for day-by-day net cost accounting; for optimizing equipment loading patterns; for drawing up production and shipping schedules; and so on. Digital computers are widely used in all forms of automation of management in various foreign countries, particularly in the USA, where about 90 percent of all digital computers manufactured are used in economic calculations and in production management. Experience has shown that digital computer installation costs are paid off within 1½-2 years after the computer goes into service.

Analogue computers are usually narrowly specialized and are used mainly for optimum control of manufacturing processes. But the use of analogue-to-digital converters has made it possible to use analogue computers in combination with electronically controlled computers and to regulate the process not only under optimum technological conditions but also under optimum economic conditions. There is every reason to assume that analogue computers of the new type, known as the automatic optimizers, will find application in production and cost management.

The technical hardware used in automation of management processes, aside from electronic computers, includes many dozen types of specialized equipment, which can be classified in several basic groups: (1) data-recording machines: card punchers; typewriters; devices automatically counting the quantity or quality of products; equipment for signalizing output of information on the progress of control processes; tape recorders, dictaphones, stenographic machines; equipment for encoding, copying, and duplicating documents, etc.; (2) data-processing machines: tabletop keyboard and billing-adding machines, calculators, and other tabulating machinery; (3) data-converting equipment: converters, optical and other reading and encoding devices, devices for transferring data from punch cards to punch tape and vice versa, microfilm equipment and equipment for reading microcards, etc.; (4) data-readout equipment: automatic punchers in a module with decoders, automatic printout machines, etc.; (5) data retrieval and storage equipment: card collators; document retrieving machines; special-purpose electronic data-processing machines possessing large-volume external memory storage (hundreds of millions of bits); large-capacity, long-term, and operational memory devices (these machines have a large number of input and output devices operating in parallel and feature a branch logic circuit system capable of reading out data not only on addresses but also on a whole set of symbols and signs); (6) computer interfacing equipment: telegraphic equipment; telephone equipment; radio equipment; a wide variety of intercommunication and signaling equipment such as supervisory and dispatcher telephone extension board systems, internal automatic telephone systems, selector switches, document transmission equipment (electrical, mechanical, pneumatic); equipment for locating persons on plant premises; and the like.

It is the organization of automation of management processes on a nationwide scale that ensures the most effective implementation of modern scientific methods of planning and management. There is now a tendency toward the development of large-capacity multipurpose computing centers directly connected, as a rule, with a telephone network having a large number of subscribers. The pattern and structure of the operations of such computing centers vary substantially in such complexes. They have become transformed from operations with manual data-handling capabilities into complicated automatic and even subadaptive data systems, usually well equipped for complicated calculations and processing of large volumes of information and for controlling individual plants and whole industrial complexes. Large computing complexes have the capability of simultaneously solving many different problems, automatically optimizing the sequence in which a specified volume of computational work is to be carried out, preparing and automatically programming problems, finding the optimum distribution of solution time, and also automatically checking the performance and eliminating malfunctions and errors to a partial extent. In achieving effective automation of management processes, the national economy would benefit most from setting up large regional information-processing centers for comprehensive servicing of plants and regional economic control bodies, including agencies concerned with production planning and management, materials logistics, banking and financing operations, statistical analysis, trade and commerce, and so forth. Individual large plant and management agencies can have their own computing and accounting machinery exchanges or medium and small computers. In the first stage, materials and data will be brought mainly by manual means to the information-processing centers. Later, information-processing centers must be linked up by special communication lines or by the existing telephone and telegraph network with input and output devices and also with equipment for preliminary processing and recording of information, installed directly at the enterprises or the institutes. In that case, enormous amounts of paper work and correspondence will be replaced by direct exchanges through telegraph or telephone messages with automatic recording, processing, and storage of the incoming information. When such a highly developed network of cybernetic systems materializes, it will be possible to shift from management based on total information to management based on disturbances (deviations from set point), which will curtail the volume of cost-analysis information to a fraction and will render management much cheaper and much simpler. The ability of cybernetic systems to store experience and to learn and adapt will contribute to the development of optimum methods for managing the social production process.

An interesting example of integrated automation of management functions is seen in the L’vov information-control system set up by the Institute of Cybernetics of the Ukrainian SSR Academy of Sciences and the L’vov television plant for plants engaged in mass production and in large-quantity production. The basic organizational unit of this system is the plant’s information-processing center, which includes services for receiving and checking information, quota setting, and keeping up with current accounts and calculations and groups responsible for mathematical cost analysis, technical developments, and the development of the system.

The technical equipment available to the system includes a Minsk-22 digital computer, with input and output devices, interfacing equipment tied into telegraphic communication channels, and automatic devices tallying the amount of products manufactured, gauging the progress of conveyor belts, and monitoring the state of the equipment. The system also makes use of closed-circuit television facilities, data transmission equipment, visual luminescent display panels, and various other hardware. The information-processing center automatically collects and processes data on the progress of the production process, on the state of the equipment, and on the availability and movement of materials, purchased parts, and finished products; it makes the necessary information available to in-plant services and executes various economic planning calculations. The use of a L’vov-type system means improved pacing of production and materials logistics, greater labor productivity, lower net production cost, and elimination of unproductive expenses. Nominal annual savings accrued from the introduction of this system amount to 201,500 rubles (according to 1967 data). The L’vov system has enabled the plant to increase the television production plan for 1968 by 18,000 units, without increasing plant capacity. The estimated time for recovering investment is three years.

Integrated automation of the management process, by freeing the human employees from the job of handling the enormous volume of mechanical work involved in collecting and processing data and in carrying out standard management functions, has the effect of increasing human creativity while providing the necessary material for a more profound analysis and for developing new and still more sophisticated management techniques.