Engineering control and supervision as institutions of sustainable development and drivers of economic efficiency of modern business under technological transformation and rising corporate governance requirements

Abstract

Technological transformation of industrial production and tightening corporate governance requirements reshape the configuration of a company’s control functions, shifting them from ex-post financial control towards anticipatory support of engineering and economic processes. Engineering control and supervision are treated as two coupled institutions that sustain economic activity and secure gains in economic efficiency. The aim is a quantitative assessment of the contribution made by an integrated engineering control and supervision loop to the financial and economic results of an industrial enterprise. The calculation rests on an author’s model of a mid-sized machine-building enterprise for the period 2019-2026, using horizontal and factor analysis, chain substitution and scenario modelling at a discount rate tied to the monetary conditions of 2024-2026. The share of costs spent on correcting production non-conformities fell from 7,8 to 3,2% of the cost of sales, return on sales rose from 8,4 to 12,7%, and factor decomposition attributed about 61,7% of the profit increment to the reduction of non-conformities delivered by the supervision loop. The net present value of the loop in the base scenario amounted to roughly 182,7 million roubles, with a discount-rate elasticity of about −0,54. The anticipatory nature of engineering and technical control relative to balance-sheet indicators means that sustainability and efficiency are achieved by reconfiguring and integrating already applied control procedures rather than by erecting a separate superstructure above the management system.