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Technological innovation and manufacturing costs

In a modern market economy, the enterprise management environment should be the economic environment. This is due to the fact that the organization and the enterprise are economic categories that realize goals related to the growth of production and sales of products, increase in the productivity of technological complexes and income (net profit and depreciation deductions from tangible and intangible assets), increase in the value of the property complex and business generally.

Key words: metal products market, competitiveness, innovative development, operating costs, expanded reproduction, patent, trunk pipelines, metallophysical bases, chemical range.
The fundamental factor affecting the value of the business is the improvement of technological processes that determine the rhythm and profitability of the enterprise, the cost structure of production and the ability to stably produce products with desired consumer properties.

This factor is solved through the continuous use of innovative technical and technological solutions in production processes, which are aimed at creating competitive advantages and increasing revenue on this basis.

Let us consider in more detail the efficiency of using technological innovations in production using the example of the metallurgical industry.

At present, competition in the markets for the sale of metal products has significantly intensified, this is due to a decrease in demand for metal products and an increasing penetration of foreign manufacturers such as China into the domestic market of Russia. In such economic conditions, metallurgical companies should pay special attention to innovative business development, which will allow them to maintain a competitive advantage and remain profitable.

Demand for steel products depends on economic growth in various regions of the world and on the state of metal-consuming industries in these regions. Traditionally, metallurgical companies are most dependent on demand in the domestic market of Russia in construction, metal processing, engineering, and also in the pipe production industry, since the enterprises of these industries are the main consumers of metal products.

Consider the situation in the metal products markets in 2011.

In 2011, global steel demand slowed down compared to 2010. Demand grew by only 6% (13% in 2010) and, according to the World Steel Association, amounted to about 1.4 billion tons, which is higher than the pre-crisis level (1.2 billion tons in 2007).

The growth rate for steel products in Russia also slowed down with the achievement of the pre-crisis value. In 2011, demand grew by only 12% (about 38% in 2010), but exceeded the pre-crisis level of 2007 (40.4 million tons), amounting to 41.7 million tons.

However, steel production in Russia in 2011 grew by only 3%, amounting to 68.7 million tons, which is lower than the pre-crisis level of 2007 (about 72 million tons). That is, even with such a high level of demand in Russia, enterprises cannot achieve pre-crisis capacity utilization due to increased competition both in export and in the domestic market [1].

In these circumstances, to maintain the competitiveness of the enterprise, it is necessary to move in the following direction:

1. Development of innovations (new types of products) with added value. An increase in the share of such rolled products in the product portfolio will increase the company’s operating profit;

2. To carry out continuous work to reduce operational costs of product production through the development of new technologies;

3. To reduce the share of taxable operating profit due to registration of patents for production technology and deduction of depreciation on them, which will enable the transition to expanded reproduction [2].

Consider the innovative activity of Severstal as one of the leading developers of technologies, new types of products for metallurgical machines and assemblies in the metallurgical industry of Russia.

In recent years, the company pays great attention to one of the promising areas for the development of new types of products – the production of high-strength metal products (X70-X100), used for the construction of trunk pipelines and is currently the only manufacturer in Russia that has mastered the production of X70 metal on an industrial scale . This product has a high added value and its development has allowed to increase the operating profit of the company.

In turn, the builders of oil and gas pipelines are interested in increasing the strength classes of pipes (table 1) for the following reasons (figure 1):

· An increase in the strength class reduces the metal consumption of the pipes, which, in turn, taking into account the difference in prices for rolled metal, is estimated at about 7% savings;

· The effect achieved by reducing the cost of materials, transport and operating costs, reducing construction time is estimated at 5-15% of the cost of the pipeline.

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