Reverse engineering as a key for industry modernization per import substitution

Authors:
O.I. Karpishchenko1, O.O. Karpishchenko1, T.V. Vashchenko1
1. Sumy State University (Sumy, Ukraine)
Section:
Problems of Management of Innovative Development
Pages:
248 - 258
Language:
English
DOI:
10.21272/mmi.2017.2-23


Annotation

The aim of this article is research of the role and place of reverse engineering in the modernization of business processes of industrial enterprise on the basis of import substitution.

The results of the analysis. The article deals with problems to control business-processes at the industrial enterprise. It is based on the import substitution of the final goods components, as an intermediate stage to the production export activation with purpose to increase technical and scientific level of the production under changeable external conditions today. One proposes to use reverse engineering practice to modernize production and to increase the native goods competitiveness.

Import substitution has to be an intermediate stage in the process of economy restructuring in the country, to be realized to develop new industrial fields, to modernize productive processes, that will be key for export-oriented model of the economy development.

Modernization of the production with purpose to implement the import substitution strategy may take place in two ways, namely innovations investigation or their borrowing. Independent investigation of innovations requires much financing of science, researching productions creation, and mainly time, of which Ukraine is short to enter European markets. More available way, efficiency of which was confirmed many times by different countries, is to use reverse engineering.

The reverse engineering consists in the profound analysis of the foreign production prototype and in creation of analogue by modern technologies considering demands and needs of the native production that improves this or that product.

Production of goods, which are competitive at the international sales markets, is possible providing high-qualitative materials and innovative productive technologies use. The reverse engineering is a base for effective realization of the import substitution strategy.

Study of the prototype, projecting and investigation of the new product will allow to substitute imported components from ready production. The key principle of the reverse engineering is from general issue to concrete point.

Import substitution makes sense in case, when a product is competitive. Thus, in order to achieve the results, it is necessary use effective cross-sectoral technologies. It is important to take into consideration the global tendencies, to carry out technologies transfer, to carry out scientific and research and constructive works every time to make profound managerial decisions.

The goal of such global transformations for enterprise has to be not only the production of the export-oriented goods, but also investigation of high-technological service, that will lead to acceptance of scientific and research investigations at the global level. It is particular for giant enterprises. On the other hand, small enterprises have to try to be so called technological brokers between developers (applied scientists) and high technological industrial enterprises.

Introducing the import substitution strategy, commodity producers increase technical and technological level. It will be a base to enter international competitive sales markets and will allow to be actively developed and to introduce leading technologies, used by the European producers in their activity.

From the viewpoint of the European integration, the most perspective direction in the native industrial producers development is orientation to the export development under conditions of borrowed innovations, because besides lack of innovations, the intellectual resources deficit is a great barrier to the intensive development in the national industry. Thats why the international engineering practice, namely reverse engineering use in the long-term period, is the most real perspective to improve business-processes.

Conclusions and directions of further researches. The necessity to modernize business-processes at the industrial enterprise is connected with great impact of both external and internal factors. The contribution of Ukrainian European integration to the global community should be pointed out. It opens international sales markets for native producers. However, on the other hand, an old productive equipment, which has not been renewed since Soviet Union times, absence of the modern technologies, used in the whole world, high dependence on imported components, lack of the intellectual resources and other factors require to make strategic decisions. It will let the enterprise to produce competitive product and in future to orient its activity to the export. The article suggests to use international practice of the reverse engineering. It is a fundament to realize import substitution strategy, particularly substitution of imported components from the ready production. The problem to organize export-oriented production and to develop actions with purpose to optimize export-import operations at the enterprise level, requires further studies


Keywords
export, import, reverse engineering, import substitution strategy, production modernization


Links
  1. Zhalilo, Ja.A. (2012). Priorytety polityky importozamishhennja u strateghiji modernizaciji promyslovosti Ukrajiny [Policy priorities in the strategy of import substitution industrial modernization Ukraine]. Kyiv: NISS [in Ukrainian].
  2. Illiashenko, N.S. (2009). Metodychnyi pidkhid shhodo obhruntuvannia dotsilinosti realizatsii innovatsiinykh proektiv [Methodical approach to study the feasibility of innovative projects]. Mekhanizm reghuljuvannja ekonomiky – Mechanism of economic regulation, 1, 184-193 [in Ukrainian].
  3. Mazaraki, A.A., & Bosovskaia, M.V. (2013). Teoreticheskie i metodologicheskie osnovy formirovaniia integracionnoj strategii predprijatij [Theoretical and methodological bases of formation of the integration strategy of the enterprises]. Biznes inform – Business  Inf, 7, 299-308 [in Russian].
  4. Melnyk, T., & Pughachevska, K. (2015). Perspektyvy importozamishhennja v Ukraini [Outlook import to Ukraine]. Visnyk KNTEU – Bulletin KNTEU, 2 (100), 16-33 [in Ukrainian].
  5. Mykhailova, L.I., & Slabospytska, O.Yu. (2011). Otsinka dynamiky vektor-struktury eksportu produkciji mashynobuduvannja vitchyznjanymy pidpryjemstvamy [Evaluation of vector dynamics of exports of engineering products domestic enterprises]. Marketyngh i menedzhment innovatsii – Marketing and Management of Innovation, 2, 164-172 [in Ukrainian].
  6. Pazizina, S.M. (2012). Importozamishhennia yak chynnyk zrusheni struktury vyrobnyctva i zovnishnjoji torghivli Ukrainy [Import structure changes as a factor of production and foreign trade of Ukraine]. Zhurnal Yevropeskoi ekonomiky – Journal of the European economy, 2, 199-214 [in Ukrainian].
  7. Platizhnyi balans u veresni 2016 roku [The balance of payments in September 2016]. (n.d.). index.minfin.com.ua. Retrived from http:index.minfin.com.ua [in Ukrainian].
  8. Popova, O.I. (2012). Importozameshhenie kak uslovie razvitiia mashinostroitelnogo kompleksa regiona [Import substitution as a condition for the development of the machine-building complex of region]. Ustoichivoe razvitie territorij, otraslei i proizvodstvennyh kompleksov – Sustainable development areas, industries and industrial complexes, 3 (59), 39-43. Retrived from http://pdt.vscc.ac.ru/file.php?module=Articles&action=view&file=article&aid=2111 [in Russian].
  9. Postanova KMU vid 12.09.2011, 1130 “Pro zatverdzhennja Derzhavnoji proghramy rozvytku vnutrishnogho vyrobnyctva” [Holds the CMU from 12.09.2011, № 1130 “About zatverdzhennya Derzhavnoї prog rozvitku vnutrіshnogo virobnitstva”]. (n.d.). zakon2.rada.gov.ua. Retrived from http://zakon2.rada.gov.ua/laws/show/1130-2011-%D0%BF [in Ukrainian].
  10. Primak, I. (2007). Reinzhiniring: teper bez razrushenij? [Reengineering, now without razrushenyy?]. Upravlenie kompaniej – Management Company, 7. Retrived from http://www.management.com.ua/cm/cm086.html [in Russian]. 
  11. Pshennik, Yu. (2007). Kakoie importozameshhenie nam nuzhno? [Import substitution What do we need?]. Ekonomicheskaja hazeta – Economic newspaper, 68 [in Russian]. 
  12. Robson, M., & Ullah, F. (1997). Prakticheskoe rukovodstvo po reinzhiniringu biznes-processov [A practical guide to business process reengineering]. Moscow: Audit, YuNITI [in Russian].
  13. Savchuk, V. (2010). Hhlobalizatsiia ta problemy intehratsii u tsei proces postsocialistychnykh krain [Globalization and problems of integration in the process of post-socialist countries]. Visnyk Ternopilskoho natsionajnoho ekonomichnoho universytetu – Bulletin of Ternopil National Economic University, 5, 22-27 [in Ukrainian]. 
  14. Sytnichenko, V. (n.d.). Stratehia rozvytku mashynobuduvannia na osnovi systemy sbalansovanykh pokaznykiv [Strategy of engineering on the basis of indicators sbalansovanyh. www.ukrtest.com. Retrived from http://www.ukrtest.com/raznoe/publikacii/11.pdf [in Ukrainian].
  15. Sosnov, A. (2015). Fenomen shpilki. Inzhiniring uskorit importozameshhenie [Phenomenon studs. Engineering accelerate import substitution]. Poisk. Gazeta nauchnogo soobshhestva – Search. Newspaper scientific community, 39. Retrived from http://www.poisknews.ru/theme/edu/15878/ [in Russian].
  16. Stratehiia ekonomichnoho ta sotsialnoho rozvytku Ukrajiny “Shljakhom jevropejsjkoji integhratsii” na 2004-2015 roky [Strategy of economic and social development of Ukraine “Towards European Integration” for 2004-2015]. (n.d.).  shron.chtyvo.org.ua. Retrived from http://shron.chtyvo.org.ua/Halchynskyi_Anatolii/Stratehiia_ekonomichnoho_i_sotsialnoho_ rozvytku_Ukrainy_2004-2015_shliakhom_yevropeiskoi_intehratsii.pdf [in Ukrainian].
  17. Taraniuk, L.M. (2012). Naukovo-prykladni aspekty procesoorientovanogho upravlinnja na promyslovykh pidpryjemstvakh pry provedenni reinzhynirynghu biznes-protsesiv [Scientific and practical aspects protsesooriyentovanoho management in industrial enterprises during the business process reengineering].  Marketynh i menedzhment innovatsii – Marketing and Management of Innovation, 1, 180-189 [in Ukrainian]. 
  18. Fedulova, L.I. (2006). Perspektyvy innovacijnogho rozvytku promyslovosti Ukrainy [Prospects of innovative development of industry of Ukraine]. Ekonomika i proghnozuvannja – Economics and Forecasting, 2, 58-76 [in Ukrainian].
  19. Hammer, M. & Champi, D. (2009). Reinzhiniring korporatsii: Manifest revoljucii v biznese [Reengineering the Corporation: A Manifesto revolution in business]. Moscow: Mann, Ivanov i Ferber [in Russian].
  20. Yakubovskyi, M.M. (2011). Restrukturyzatsiia promyslovosti jak zasib podolannja importnoji zalezhnosti ekonomiky Ukrajiny [Restructuring industry as a means of overcoming import dependence of Ukraine's economy]. Natsionalne hospodarstvo Ukrajiny: teoriia ta praktyka upravlinnia – National Economy of Ukraine: Theory and Practice Management. (pp. 100-112). Kharkiv: In-t ekonom. ta proghnoz. NAN Ukrajiny [in Ukrainian].
  21. Werner, B. (1972). Import Substitution and Industrialization in Latin America: Experiences and Interpretations. Latin American Research Review, 7. 95-122 [in English]. 
  22. Blair, J.P., &  Carroll, M.C. (2008). Local economic development. Sage Publications [in English].  
  23. Bruton, H. (1998). Reconsideration of Import Substitution. Journal of Economic Literature. Retrived from http://econintel.org/Cl705/BrutonImpSubs.pdf [in English].
  24. Cardoso, F.H., & Faletto, E. (1979). Dependency and Development in Latin America. Berkeley: University of California Press [in English].
  25. Davenport, T. (1993). Process Innovation: Reengeneering Work through Information Technology. Boston, MA.: Harvard Business School Press [in English]. 
  26. Dunning, J.H ., Artisien, P., Rojec, M., & etc. (1993). The Prospects for Foreign Direct Investment in: Eastern Europe. Foreign Invetsment in Central and Eastern Europe. New York: St. Martin’s Press [in English].  
  27. Narula, R., & Dunning, J.H. (2000). Industrial Development. Globalisation and Multinational Enterprises: New Realities for Developing Countries. Oxford Development Studies, 28(2), 141-167 [in English].  
  28. Prebisch, R. (1959). Commercial Policy in the Underdeveloped Countries. American Economic Review, 49, 251-273 [in English].  
  29. Aguilar, R. (1986). Latin American structuralism and exogenous factors. Social Science Information, 25(1), 227-290 [in English].  
  30. Saantos, T. (1969). The Crisis of Development Тheory and the Problem of Dependence in Latin America. Modernization and Development, 21, 42-43 [in English]. 
  31. Street, J.H., & Dilmus, D.J. (1982). Structuralism, and Dependency in Latin America. Journal of Economic Issues, 16(3), 673-689 [in English].