FACTORY ORGANIZATION AND ADMINISTRATION "Ms Qraw-MlBook Co, 7m PUBLISHERS OF BOOKS FOB^ Coal Age v Electric Railway Journal Electrical World v Engineering News-Record American Machinist v Ingenieria Internacional Engineering 8 Mining Journal * Power Chemical 6 Metallurgical Engineering Electrical Merchandising FACTORY ORGANIZATION AND ADMINISTRATION BY ixJL HUGO DIEMER MAJOR ORDNANCE U.8.R., FORMERLY PROFESSOR OF INDUSTRIAL ENGINEERING, PENNSYL- VANIA STATE COLLEGE; CONSULTING INDUSTRIAL ENGINEER; M.E. (OHIO STATE UNIVERSITY); B.A. IN HISTORY, ECONOMICS AND POLITICAL SCIENCE (PENN- SYLVANIA STATE COLLEGE) ; MEMBER AMERICAN SOCIETY OF MECHANICAL ENGINEERS, TAYLOR SOCIETY, AMERICAN ACADEMY OF POLITICAL AND SOCIAL SCIENCE, FELLOW AMERICAN ASSOCIATION FOR ADVANCEMENT OF SCIENCE, MEMBER SOCIETY FOR PROMOTION OF ENGINEERING EDUCATION, ENGI- NEERS* SOCIETY OF PENNSYLVANIA; SIGMA xi HONORARY SCIENTIFIC SOCIETY, ETC. THIRD EDITION McGRAW-HILL BOOK COMPANY, INC. NEW YORK: 370 SEVENTH AVENUE LONDON: 6 & 8 BOUVERIE ST., E. C. 4 1921 COPYRIGHT 1910, 1914, AND 1921, BY THE McGRAw-HiLL BOOK COMPANY, INC. THE. MAPLE. PRESS. YORK. PA DEDICATED TO THE CAUSE OF INDUSTRIAL PEACE AND CO-OPERATION PREFACE TO THIRD EDITION IN preparing the third edition of this text, the principal modi- fications which have been necessary in order to conform to the evolution of management and standards of present-day practice have been in those chapters which relate to general organization, the personnel department including employment and industrial relations, and functional control of production. Minor changes have been incorporated in various chapters to conform to current methods. As stated in the preface to the first edition, this book is in- tended to be of service to officers of manufacturing corporations, works managers, superintendents, accountants, and the heads of such departments as purchasing, stores, personnel, cost, and production, and in fact to all employees of manufacturing cor- porations who desire to acquire a comprehensive grasp of the problems treated. It is the result of a good many years' expe- rience on the part of the writer, of which time about one-half was spent as an employee and about one-half as a consultant and executive. The work has gradually acquired its present form as the result of magazine articles and of lecture courses delivered for a number of years to students in engineering colleges and before commercial and manufacturing organizations and it is believed that while primarily intended for the actual practitioner in manufacturing work, it will be of value to engineering students. It has been a source of gratification to the author that this book of his has stood the test of time so satisfactorily, as has been evidenced by its continued sale year after year to industrial executives and employees as well as being used as a text in lead- ing colleges of engineering, business administration and com- merce and finance. It is the author's hope that the present revision may result in a continued usefulness of the book. HUGO DIEMER. 25 FOUNTAIN STREET, NEW HAVEN, CONN., Aug., 1920. vii PREFACE TO SECOND EDITION IN rewriting this volume, the material has been rearranged in what appeared to be more logical sequence, and such new matter has been added as the more important developments in the science of management have demanded. The paragraphs have been numbered and given topical headings. References have been added at the close of each chapter to specific portions of modern books bearing on the subject matter of the chapter. These changes are made with a view to making the book more useful as a help to those who wish to make further studies of the topics treated and to facilitate the use of the book as a text. HUGO DIEMER. STATE COLLEGE, PA., December 15, 1913. PREFACE TO FIRST EDITION THIS book is intended to be of service to officers of manu- facturing corporations, works managers, superintendents, account- ants, and the heads of such departments as purchasing, stores, cost, and production, and in fact to all employees of manufactur- ing corporations who desire to acquire a comprehensive grasp of the problems treated. It is the result of some twenty years' expe- rience on the part of the writer, of which time about one-half was spent as an employee and about one-half as a consultant. The work has gradually acquired its present form as the result of lecture courses delivered for a number of years to senior stu- dents in engineering colleges, and it is believed that while pri- marily intended for the actual practitioner in manufacturing work, it will be of value to engineering students. . HUGO DIEMER. STATE COLLEGE, PA., July 1, 1910. vin CONTENTS CHAPTER I . PAGE THE PRINCIPLES, FIELD AND METHODS OF INDUSTRIAL MANAGEMENT. . 1 Influence of tradition, precedent, and analogy on industrial organization Data relating to industrial management. Where found Is there a science of management? The field of industrial management Efficiency in finance Efficiency in organization Efficiency in accounting Efficiency in industrial plants Effi- ciency in the selection and handling of employees Efficiency in production systems and methods Efficiency in distribution and selling The methods of industrial management Prominent principles of management Regulative principles of management Methods of the science of management Taylor's definition of the methods of industrial management. CHAPTER II INDUSTRIAL FINANCE .14 The corporation The corporation charter Where to incorporate Governmental control of corporations State corporation com- missions Organization prior to incorporation Capitalization Bonds Preferred stock Common stock Depreciation. CHAPTER III ORGANIZATION AND CONTROL 22 Organization Organization something distinct from management and system System Control Numerical- Military Type Spe- cialization Functionalized type Selecting organization and con- trol Specific duties A comprehensive industrial organization Statistical division Division of materials Plant, equipment > and processes division Routing Scheduling Motion and time studies Preparing instructions Standardization of equipment System division Progress of an order Applying above principles to smaller industries Types of organization charts. CHAPTER IV TYPICAL FACTORY ORGANIZATIONS 39 Existing organizations widely different Importance of charting The works manager's position Organization chart of a typewriter factory Chart of an automobile factory Chart of an engineering works Chart of an electrical machinery factory Chart showing the functions of the planning department. ix x CONTENTS PAGE CHAPTER V FACTORY ACCOUNTS 51 Accounts required by modern management different from old customs Double-entry principles to be applied to cost accounts The three fundamental cost accounts Subdivision of these accounts and monthly closing "Raw material" account "Work in process" account "Finished-stock" account Methods of allot- ting expense burden Separate man-hour departmental and general rates Method of establishing the hourly machine rate Segrega- tion of works expense from selling expenses Detailed cost statistics and records Proper classification of expenditures Detailed cost posting methods Gantt type of charts. CHAPTER VI DEPARTMENTAL REPORTS 58 Purpose of departmental reports Bureau of statistics and records Typical factory reports Drafting department reports Produc- tion or planning department reports Reports of finished product Shipping department reports Cost department report Weekly and monthly reports Discussion of reports Graphical reports Quarterly reports of the most important component parts Pay-roll analysis Money value of direct and indirect production Pur- chases. CHAPTER VII FACTORY LOCATION 71 Importance of plant location Considerations influencing selection of a certain town or city Influence of raw materials Labor con- ditions affecting selection of factory site Transportation facilities Sales market as affecting plant location Cost of plant as affected by site Branch factories Railroads as an Aid in factory location Selecting the site in a given town Local trade centers Local transportation Local labor market Local sales centers Sub- urban sites. CHAPTER VIII THE PLANNING OF FACTORY BUILDINGS; AND THE INFLUENCE OF DESIGN ON THEIR PRODUCTIVE CAPACITY 80 Process mapping Routing Processing equipment Arrangement of equipment Floor space occupied by equipment Arrangement of departments Consecutive and simultaneous processes Use of templets in arranging departments Service departments Visi- bility of work and economy of transport Single-floor or multi-floor building Allowing for future expansion Service equipment Heating and ventilating apparatus Lighting apparatus Fire pre- vention Water supply Sanitary engineering Mechanical trans- portation Power generation and transmission Floors Struc- CONTENTS xi PAGE tural and architectural details Employment of professional industrial engineers to aid in planning of buildings. CHAPTER IX PERSONNEL DEPARTMENT t jog Personnel organization Employment Job analysis Desirable qualifications of employees Applications for employment Employment record Record of office employees Psychologic and physical tests, industrial and family tests, industrial and family history Release cards Cipher code of characteristics of employees and exemployees Efficiency records Safety and compensation Education Apprenticeship system Suggestion system Social betterment and welfare work Medical division Labor turnover Shop rules. CHAPTER X OFFICE MANAGEMENT 136 Functions of office manager Handling mail Messenger service Filing system Relative location of offices Desks. CHAPTER XI THE ORDER DEPARTMENT 142 Functions of order department Classification of orders Manifold copies of orders Example of order series Instructions as to order system Special orders Changes in orders. CHAPTER XII BILLS OF MATERIAL 152 Bill of material defined Grouping of parts Special parts Departmental bills of material Assembly groups Bill of material as tracing or cost record Changes in bills of material Getting work started before completion of bill of material. CHAPTER XIII THE DRAFTING DEPARTMENT 159 Functions of drafting department Numbering parts Stand- ardization of parts Recording data for standard detail parts Drawing lists Filing tracings Stock of blue-prints Changes in drawings or patterns Blue-prints for shop use Titles of drawings Detail drawings for shop use Specifying limits of accuracy- Making and issuing blue-prints Checking drawings Time-cards in drafting department Chief draftsman. CHAPTER XIV THE PATTERN DEPARTMENT 169 Orders to make patterns Time-keeping system in pattern shop- Recalling or altering patterns Checking patterns and recording their travel and location. xii CONTENTS PAGE CHAPTER XV THE PURCHASING DEPARTMENT 175 Functions of purchasing department Qualifications of purchasing agent Requisitions on purchasing department Purchasing de- partment order form Following up deliveries Securing favorable terms Recording and classifying material, equipment and supplies Returned goods Freight, express and drayage Checking invoices. CHAPTER XVI STORES AND STOCK DEPARTMENT 185 Classification of materials Perpetual inventory of castings Perpetual inventory of manufactured parts Bin tickets "Find- ing lists" Numbering storeroom bins Replenishment of stores Monthly balances showing money value as well as quantity of stores Use of tabulating machine in obtaining money value of daily material receipts and disbursements Withdrawing materials from stores. CHAPTER XVII PLANNING AND SUPERVISING PRODUCTION . 201 Title of department controlling production Reasons for functional control Carrying the functional organization into the shop Qualifications of head of production or planning department Relation of production or planning department to other depart- ments Routing Instruction cards Rate-fixing clerk Order-of- work clerk Production or tracing clerk Tracing individual parts Moving work in process Rush orders Tracing groups of parts or complete machines Hastening purchased items Weekly report for foremen's meeting Shop tags Detachments or split lots Transfer clerk Estimate of times of completion. CHAPTER XVIII FOUNDRY SYSTEMS 224 Castings requisitions Moulders' and core-makers' order copies Daily record of work done Daily delivery record Consecutive job list Foundry tracing card Scrapped material Clerical help required Indirect foundry labor Daily cupola reports Foundry time ticket Weekly cupola reports. CHAPTER XIX THE MACHINE SHOP AND TOOL DEPARTMENT ' . 236 Arrangement of machines Foremenand gang bosses Tool room independent of machine shop Relieving foremen of clerical work Moving work in process Call bells Issuing blue-prints Repairs to machinery and transmission apparatus Orders for making tools Record on small tools Repetition work by tool- makers Tool-steel tests Scheduling machine-shop work Tool CONTENTS x jii lists for manufactured parts Identifying different brands of tool A steel Check system Bolts, clamps, washers and nuts for "setting up" Storing tools Selection of machines Proposals for new machinery equipment. CHAPTER XX SHIPPING AND RECEIVING DEPARTMENTS 253 Relation of shipping and receiving to other departments Copies of orders to be sent to shipping department Notice of items ready for shipment Stores and inspection records prior to shipment Packing rooms Packing cards and lists Shipping records- Shipping program for carload shipments Car records Freight payments Record by serial numbers of machines shipped Routing, classification and rates Receiving departments Reports of material received Reports of castings received Express charges Returned goods Patterns received. CHAPTER XXI TIME TAKING > 268 Time-clocks and numbering men Clock card used as job ticket Time-stamps Weekly time-sheet instructions to time-takers Individual operation time-slips Time-slips for clock stamping Time-slip with ordinary operations printed on Tabulating machine systems Pay-roll distribution and localization of depart- mental expenses. CHAPTER XXII COST DEPARTMENT 281 Competition and costs Importance of cost department Duties and qualifications of head of cost department Cost system must be adapted to product Development of a cost system Merging cost records into regular double entry accounts of accounting department Material costs Raw material costs Costs of manu- factured component parts made in quantity on stock orders and drawn from storeroom Current- value of actual invoice price as basis for material costs "Material burden" Labor or time post- ings on cost records Checking labor postings against pay-roll "Non-productive" or "indirect" labor "Standing orders" Plant additions, new equipment and fixtures Typical list of "standing orders" Items constituting expense burden "Fixed charges" "Percentage on labor" method of apportioning expense burden Use of separate expense percentages for different depart- ments Expense percentage different for different kinds of product Hourly expense rates Departmental hourly expense rates or local burden rates Hourly machine rates Machine rate should always be separate and independent of other expenses not connected with ownership and operation of machines Wide variation in costs in same establishment shown by applying the above different xiv CONTENTS PAGE methods of apportioning expense burden Importance of manu- facturers in same industry using same methods of apportioning expense in their cost systems Cooperation between accounting and cost departments Notification of completion of orders Cost summaries Comparative individual part costs Comparative com- plete machine or assembly group costs Competitors' prices. CHAPTER XXIII AIDS IN TAKING INVENTORY 304 Advantages of "perpetual" inventories Classification of items to be inventoried Tag system of taking annual inventory Checking inventory Material in transit Classification of work in process and finished product Units of measurement Shop order numbers for work in process Depreciation on obsolete goods Collecting inventory tags Sold goods Classifying materials Equipment inventory Depreciation and repairs on equipment Duplicate inventory tags Proper percentage of depreciation Inventorying patterns and drawing Perpetual inventories to be verified by actual count "Replacement" values Cost system as an aid to inventorying Congested and disorderly stock-rooms Precau- tions regarding inventory taking. CHAPTER XXIV INSPECTION METHODS IN MODERN MACHINE SHOPS 317 General classification of inspection Inspection of raw materials and purchased items Inspection of manufactured product Dimensional inspection Floor inspection Verification of inspec- tion Altering inspected parts Inspection of assembled groups Erection inspection Electrical Inspection Final inspection and test of complete machines Organization of inspection depart- ment Qualifications of inspectors Errors and defects Testing distinct from inspection Test reports and records. CHAPTER XXV RATE FIXING AND TIME STUDIES 329 Former time standards not a reliable basis for rate fixing Analysis of work into preparatory and supplementary steps and active work Rate fixing on non-repetitive or "job" work Foreman's time standards usually guess work Analysis of machine speeds and feeds to be undertaken prior to rate fixing Instruments and devices needed for time study Idle time of machines Taylor's description of correct time study Confining rates to new operations and new pieces Form for taking observations for time studies Computa- tions and statistics as an aid to observations Notice of new rates Time study and rate fixing to be permanent rather than tempo- rary Abridged time studies for transient work. CONTENTS xv PAGE CHAPTER XXVI WAGE SYSTEMS 342 Wage system must be adapted to conditions Fixed hourly or day rate Efficiency records under day-rate Comparative time records Piece-rate system Piece rates must not be cut Differ- ential piece-rate system Records of piece-rate earnings Gain- sharing methods Premium wage system Modifications of premium system Notices to employees describing premium wage system Combined bonus and premium system Notices to employees, describing combined bonus and premium system Bonus system or "task work with a bonus" Individual job bonus system Incentives to securing continuous efficiency Figuring premium or bonus pay rolls Notifications to workmen of gains or losses under premium or bonus system. CHAPTER XXVII PRINCIPLES UNDERLYING GOOD MANAGEMENT 359 Clear-cut organization Mutual confidence and cooperation Officials to be relieved of petty duties Internal harmony essential A successful business the accumulation of many men's ideas Suggestion systems Committee meetings Systematic and scien- tific selection and placing of men Justice in wage systems Suffi- cient clerical force Apprenticeship systems Industrial and vocational education-continuation schools Bureaus of voca- tional guidance Educational activities must not be hampered by factional influence brought to bear by organized business or organized labor Some examples of good apprenticeship systems Cooperative schools Employment of industrial engineers in an advisory capacity. CHAPTER XXVIII A BIBLIOGRAPHY OF WORKS MANAGEMENT 374 Reading and study necessary for the man who aspires to success in business administration and industrial management A business or shop library for managers and employees A bibliography of the classical or pioneer literature of works management or industrial engineering prior to 1904 A standard reference library of industrial management and industrial engineering A comprehensive library of supplementary reading for a school of engineering or school of business administration or public library. INDEX 389 FACTORY ORGANIZATION AND ADMINISTRATION CHAPTER I THE PRINCIPLES, FIELD AND METHODS OF INDUSTRIAL MANAGEMENT 1. Influence of Tradition, Precedent, and Analogy on Industrial Organization. If we were to look for the influences which have helped to establish the principles of industrial management, we would have to go back earlier even than the beginnings of civilization. When two barbarian tribes made war on each other that tribe which possessed the best fighting organization won out. Principles of military management were appreciated in the remotest antiquity. Training in discipline and knowledge of different methods of attack, utilizing men best fitted to handle certain kinds of weapons, and disposing of these various classes of men in the most effective ways, how many should be in each group, who should be the leaders in each group, how these leaders should act in concert under the direction of general lead- ers, were problems of management which were considered and solved 6000 years ago in Egypt, Assyria, and Persia. Similar problems in organization and management presented themselves in connection with the disposition of the captured prisoners who were usually sold into slavery. As trade by caravan and vessels developed, new kinds of problems in organization and management developed. Again as various tribes allied themselves under common leadership they developed governmental and legal organization and administration. We find at a later date the organization and management of slaves in conducting productive industries, such as brick making, stone hewing, lumber cutting, weaving, and transporta- tion. Still later there came about the development of the so-called guilds and free castes of skilled workmen. 1 2 FACTORY ORGANIZATION AND ADMINISTRATION Elaborate and complicated organizations are to be found in the management of the superstitious rites and religions of the various tribes and nations. We may summarize the sources of tradition, precedent, and analogy from which modern industrial rnanagement has been supplied" with formative influences as arising from: (1) Military tradition and usage. (2) Slavery and serfdom. (3) Customs of trade and navigation. (4) Civic and legal customs. (5) Religious organizations. (6) Existing industrial organizations. The ancient and existing industrial organizations which exerted their influence include such as the primitive condition of indi- vidual independence followed by the establishment of toolmakers, crafts, such as the arrow-makers and artificers of weapons. Analogies have also been drawn from the domestic system which was prevalent in England in the fifteenth century, where groups of families devoted themselves to specialized activities. In the family system the principle of co-operation is exemplified and specialization and sub-division of labor is applied. In the merchant and craft guilds the master craftsman was the pro- prietor. He was the business manager as well as the most skilled workman. Prior to the organization of the big trading corporations, the individual or group shipping undertaking affords an analogy. In these undertakings negotiations were carried on between the crew and the officers as to what should be the shares for owning the ship, for navigating it, for the ship's surgeon, the steward, and so on, and what should be the com- pensation of each man in the organization, this agreement being ordinarily binding for only a single exploit. With the advent of the industrial revolution covering the period of the middle eighteenth century to the early nineteenth century when the epoch-making power and machinery inventions startled the world, the introduction of the factory system in which dormitory and shop were combined, brought into play principles of organization derived from various of the foregoing forces, but with an autocratic control adapted from the feudal manor. 2. Data Relating to Industrial Management. Where Found. The data of industrial management are enumerated in allitera- THE PRINCIPLES OF INDUSTRIAL MANAGEMENT 3 live form by Charles B. Going in a series of words beginning with the letter M, which he designates as ''Materials, Markets, Money, Men, and Machinery." While this list of words is suggestive it will be a little more comprehensive to enumerate the various sciences from which industrial management draws its data and to which it is closely related. Selecting first from the list given by Mr. Going the subjects of markets and money it is quite apparent that a study of these two topics leads us to an investigation of the science of economics with the view of selecting from that science such data and rules as apply to industrial management. An investigation of the science of economics will lead us to such topics as finance, accounts, and statistics. We will not have gone far in our study of economics before we find we are bound to get into the fields of social and polit- ical science as containing some data relating to industrial management. Looking again at the list of words beginning with M we find Men. The selection of the right men to do certain work and a selection of the best work for certain men leads us into the field of psychology. We do not need to go far into this field until we begin to realize that the simplest forms of tribal and family life demanded of the leader some instinctive knowledge of the feelings, impulses, and desires of others. He must respect prejudice, be able to persuade to action, secure confidence and obedience. All of these powers imply some knowledge of his own conscience. It is singular that psychology as a vital factor in works management has not been recognized until within the very last few years. The topics of materials and machinery come under the head- ing of technical engineering. Engineering knowledge is required also for the proper solution of problems connected with the design and layout of factory plants and buildings, their service equip- ment including power plants, transmission apparatus, light, heat, ventilation and sanitation, elevators, cranes, mechanical transportation, and the various machines required in the proc- esses of the industries. We might then summarize as the sciences closely related to the science of management: A (1) Economic, social and political science. / (2) Psychology. I (3) Engineering. 4 FACTORY ORGANIZATION AND ADMINISTRATION 3. Is there a Science of Management? The simplest defini- tion of science is knowledge methodically digested and arranged. Every science has a subject matter and methods more or less peculiarly its own. Botany, physics and chemistry each have more or less distinct fields and more or less diverse methods. The science of management has its own fields. Tt. analyses, classifies and explains the factors which Contribute to __ bring about emcient industrial conditions and results. _It also Ms methods peculiarly-its own. 4. The Field of Industrial Management. Industrial manage- ment is one of the most important economic factors of our time. It is intimately related to problems of individual and national welfare. Hence any improvements that tend to lessen waste and promote, health, wealth and happiness in any of the fields of action or Departments controlled by the industrial manager are full of a human interest and appeal over and above any technical merit. Efficiency in industrial management involves efficiency in each of the various divisions with which any management has to deal. A general list of the fields of action covered by industrial management in which there is opportunity for developing efficiency, would include the following: (1) Finance, (2)* Organization, (3) Accounting, (4) Industrial plants, their* service and process equipment, (5) The selection and handling of employees, (6) Production Systems and Methods, (7) Distribu- tion, including selling and advertising. 5. Efficiency in Finance. Many concerns are over-burdened by reason of the financing not having been accomplished with the best judgment and ability. More money than necessary may have been spent in promoting. Again, if properties, patents or good will have been paid for by shares of stock, the amount of stock given in payment may have been excessive. In either of these cases the establishment is loaded with a burden of which it cannot rid itself. On account of this well-known fact it fre- quently happens that a man who is primarily a financier is put at the head of an industrial establishment; and we are then afterward confronted by the condition that although our financ- ing was efficiently done, we have a man at the head of the business who is primarily a financier and knows nothing about manu- facturing. He is carried on the pay-roll at a heavy salary, which becomes a constant drain on the establishment. In the case of a bank or brokerage house, this type of man is valuable every day. On the other hand, from the standpoint of the best interests of THE PRINCIPLES OF INDUSTRIAL MANAGEMENT 5 the manufacturing concern, he is valuable only in cases of financial crisis and is frequently unable to present the true state of internal affairs of the factory to the ultimate ownership. 6. Efficiency in Organization. There is a wide field open to investigation as to the kinds of departmentalization which have proven most effective in various industries. Another question is that which deals with the extent to which departmentalization shall be carried in various sizes of the same industry for example, the determination of what is the best form of departmentalized organization for a steam-engine manufacturing company employ- ing 150 men as compared with the departmentalized organization for similar companies employing say 300, 600, 900, or 1200 men. Efficiency in organization demands definite knowledge of methods of securing individual effort and enthusiasm as well as departmental co-ordination. It demands a knowledge of what has been accomplished by department meetings, by meetings of line officers with separate staff heads, by club, athletic and welfare work among employees, and other means of securing good will and loyalty. It demands definite knowledge as to how far matters of policy and general procedure may be made the subjects of thought and discussion by men in the ranks and the lower officials as well as by higher officials; and on the other hand, to what extent' methods as well as results shall be considered and initiated by the higher authorities. It demands up-to-date knowledge of the evolution of functional control from the form originally recommended by Dr. Frederick W. Taylor to its present-day practical application to the general organization as well as internally, not only in the manufacturing department but in the accounting, purchasing, sales, and per- sonnel departments. 7. Efficiency in Accounting. At the head of the accounting department we must have a man who knows how to prepare a balance sheet that will stand the criticism of the most conserva- tive auditor on the one hand; although on the other hand he must be so conversant with current practice as not to fail to list as assets everything to which his company is justly entitled. He must know what constitutes under-valuation as well as what constitutes over-valuation. He must see the advantage of co-ordinating the manufacturing records with the accounting system. He must realize the great 6 FACTORY ORGANIZATION AND ADMINISTRATION advantage accruing from carrying in terms of money such records as the current accounts of stores, of raw materials, of work in process, and finished stock, and closing these into a monthly bal- ance sheet. He must appreciate the advantage of differentiating the expense accounts so as to allocate them to different kinds of product in a manner that will represent the true costs and true profits of different kinds of product so as to enable the concern making a varied product to compete on the basis of actual knowledge of true costs with a concern specializing in only one of the varied products which his company makes. Here again the old-fashioned bookkeeper type of accountant who urges for a single expense rate based on the old-time percentage plan, because in his opinion it costs less to get this than a differentiated hourly expense rate for the different kinds of product, is wholly out of place and distinctly harmful to the interests of the ultimate ownership in an industrial establishment. An efficient head of an accounting department needs to have a broader view of his sphere of action than is possessed by a book- keeper. He must be broad minded enough to avoid blocking the path of progress of the progressive works manager by clinging to old-time methods. The particular old-time methods which he needs to revise are those which have to do with manufacturing and expense accounts. These he needs to rehabilitate so as to show every month or every four weeks classified profits and losses on products and classified expenses per unit of product and per unit of time. J He must be discriminating enough to appreciate the modern \ conception of the differentiation of the work assignable to a f treasurer, a comptroller, an auditor, a statistician, and a cost ^ service engineer. * ' He must realize the importance of scientific allotment of Jl budgets to departments and the furnishing of departments with ji the necessary follow-ups and break-downs. /I 8. Efficiency in Industrial Plants may be said to include efficiency in plant, in equipment, in the departmental arrange- ment, in power generation and distribution, heating, ventilation, illumination, sanitation, and mechanical transportation of material, and in machine and tool processes. Efficiency in factory location demands a knowledge of economic and trade conditions acquired only by a very careful study. Efficiency in buildings and the arrangement of departments in THE PRINCIPLES OF INDUSTRIAL MANAGEMENT 7 these buildings requires a careful study of process mapping and of the types fitted to different classes of industry. Efficiency in equipment required a technical knowledge of all of the processes involved. The problem for one industry is always a probletiflby itself, yet industries can be classified and types of plant can be selected which are best adapted to certain types of industry. 9. Efficiency in the Selection and Handling of Employees. The problems of selecting the right man for a given task and selecting the right kind of work for a certain man involve a care- ful analysis of both the work and the men. This requires a knowledge of the industrial processes 'whether they be mechanical or mental and also a knowledge of the physical and psychological qualities of various types of individuals. The control of industrial relations^problems is so important a factor in industrial management th ft the position of personnel manager is one ranking with that! of works manager. The present day tendency is to make the personnel manager respon- sible directly to the Company President. In corporations where a number of Vice Presidencies have been created to enable important executives to secure an interest in and recognition by the proprietorship, the personnel manager is a Vice President. 10. Efficiency in Production Systems and Methods. The word " production" indicates the making or manufacturing of commodities. Engineering as applied to production means' the planning in advance of production so as to secure certain results. A man may be a good mechanic but no engineer. The distinction between the mechanic and the engineer is that the mechanic cuts and tries, and works by formulae based on empiri- cism. The engineer calculates and plans with absolute certainty of the accomplishment of the final results in accordance with his plans, which are based ultimately on fundamental truths of natural science. Instinct and experience are valuable guides to the work of either the mechanic or the engineer, but they serve only as the coast-line does to the mariner without chart or compass. Guided by the chart and compass of his certain knowledge, the engineer is as positive of results in designing, for instance, a machine he has never before seen as is the mariner of reaching a port he may never before have set eyes on. The mechanical engineer has to do with the design, construc- tion, testing, and operating of machines. The mechanical engi- neer designs with certainty of correct operation and adequate strength. 8 FACTORY ORGANIZATION AND ADMINISTRATION It is the business of the production engineer to know every, single item that constitutes his finished product, and every step involved in the handling of every piece. He must know what is the most advantageous manufacturing quantity of every single item so as to secure uniformity of flow as well as economy of manufacture. He must know how long each step ought to take under the best attainable working conditions. He must be able to tell at any time the exact condition as regards quantity and state of finishedness of every part involved in his manu- facturing process. Efficiency in production systems and methods demands a thorough understanding of the matters connected with the phases of manufacturing which are included in what is at the present time designated as the planning department. This involves a knowledge of the correct handling of such matters as bills of material, drawing lists, perpetual inventories of stores, purchase records, process maps, route diagrams and charts, instruction cards, time and motion studies, tool lists, order of work and tracing records, methods of promptly moving work in process from department to department, as well as best methods of carry- ing on the productive processes of an industry, including such matters as feeds and speeds of machines, belt, chain and motor drives, repairs to machinery, and inspection and test of product. The engineer must be able not only to design, but to execute. A draftsman may be able to design, but unless he is able to execute his designs to successful operation he cannot be classed as an engineer. The production engineer must be able to execute in the most efficient manner the work as it has been planned. 11. Efficiency in Distribution and Selling. There are many correspondence courses in salesmanship offered at the present time. A study of any of these courses will reveal the large field open for work in the interests of greater efficiency. Efficiency in the selling department recognizes the fact that it is not quantity of sales which merits extra pay. That particular sales- man or selling office is entitled to the greatest reward who has sold goods on which the manufacturer has made the largest profits, whether it has been the result of quantity of sales or of careful selection, with an effort to sell those things on which the manu- facturer could realize the greatest profit. Progressive efficiency in selling demands extensive research work in various industries to accumulate data covering the THE PRINCIPLES OF INDUSTRIAL MANAGEMENT 9 methods and actual costs of selling. It is only by the accumu- lation and comparison of such data that we, as a nation, can make progress in reducing distribution costs. The research work above indicated is coming to be designated as sales engineering, requiring analytical ability applied to marketing and product problems. It is coming to be recognized that sales engineering demands a distinctly different type of man from sales production or actual selling. Finally it must be recognized that economies in production together with lower costs of manufacture will result in continual manufacturing activity only if some corresponding reductions in selling prices are made. National and international economy demands that production of all kinds be maintained at a maxi- mum; and in o^der that this condition may exist, we must be content with such profits as will provide fair returns in the way of dividends on actual investment, sinking funds to co^er depre- ciations and a reasonable reserve for bad business years. After these obligations have been met, however, there is no justifica- tion from an economic standpoint for adding any further profit over cost of production to increase selling price. . 12. The Methods of Industrial Management. A committee of the American Society of Mechanical Engineers made an ex- tensive canvass in the fall of 1912 to determine what were the new elements in modern management as well as what the com- mittee designated as the regulative principles of industrial man- agement. The committee confirmed Adam Smith's statement made in 1776 in his "Wealth of Nations," in which he held that the application of the principle of division of labor was the basis of manufacture. The committee also agreed with Charles Bab- bage, who in his work entitled " Economy of Machinery and Manufacture" written in 1832, added another principle, namely the transference of skill. The committee quotes from Adam Smith's " Wealth of Nations," as follows: "This great increase of the quantity of work which, in consequence of the division of labor, the same number of people are capable of per- forming, is owing to three different circumstances; first, to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labor, and enable one man to do the work of many." 10 FACTORY ORGANIZATION AND ADMINISTRATION They also quote from Charles Babbage's "Economy of Ma- chinery and Manufacture" as follows: "That the master manufacturer, by dividing the work to be executed into different processes, each requiring different degrees of skill and force, can purchase exactly that precise quantity of both which is neces- sary for each process; whereas, if the whole work were executed by one workman, that person must possess sufficient skill to perform the most difficult, and sufficient strength to execute the most laborious of the operations into which the art is divided." The committe also reported that methods of analyzing and recording operations were early developed. Charles Babbage gives a table from a French investigator showing the number of operations, time for each, cost of each, and expense of tools and materials for making pins in France in 1760. 13. Prominent Principles of Management. As a result of the above investigations the committee state that they conceive the prominent element in present-day industrial management to be: the mental attitude that consciously applies the transference of skill to all the activities of industry. The committee report the following as the most satisfactory answers to the question: "What are the regulative principles of industrial management?" The regulative principles of management along scientific lines include four important elements: (a) Planning of the processes and operations in detail by a special department organized for this purpose. (b) Functional organization by which each man superintend- ing the workman is responsible for a single line of effort. This is distinctly opposed to the older type of military organization, where every man in the management is given a combination of executive, legislative and judicial functions. (c) Training the worker so as to require him to do each job in what has been found to be the best method of operation. (d) Equable payment of the workers based on quantity and quality of output of each individual. This involves scientific analysis of each operation to determine the proper time that should be required for its accomplishment and also high payment for the worker who obtains the object sought. Another correspondent finds the .solution of problems of management in the observing and regulating of three classes of industrial phenomena: THE PRINCIPLES OF INDUSTRIAL MANAGEMENT 11 "(a) The economic results of different arrangements and forms of materials and operations upon them, either to produce equipment or product. This covers the whole field of recorded experience from invention and design of product and tools down, through the successive shop processes to ultimate finished product and its tests in service. It is the object of the scientific method to make the best of this experience, in its essential details, readily available for all concerned, and to see that it is actually absorbed and put in practice. "(b) The economic results of varying executive methods for effect- ively directing human efforts as a whole in the use of the above experi- ence. This covers the entire field of building up, co-ordinating and con- trolling the supervising organization of a plant with its statistical and recording systems. "(c) The economic results of steps taken to raise the industrial efficiency of the individual worker in every grade of service. This covers the whole problem of labor reward, intensified ability, conserved energy and the general relations of employer and employee." 14. Regulative Principles of Management. Messrs. Church and Alford have attempted to condense the above regulative principles still further and have denned them as : (a) The system- atic use of experience; (b) The economic control of effort; (c) The promotion of personal effectiveness. The first includes the use, in all essential detail, of traditional knowledge, personal experience and the results of scientific study on the part of the executive force. It implies the accumu- lation and use of records and the setting up of standards. The second includes the division and subsequent co-ordination of both executive and productive labor; the planning of single lines of effort, the setting of definite tasks and the comparison of results; and the effective training of the workers. It implies the previous acquisition of skill by the executives. The third includes a definite allotment of responsibility and the adequate, stimulative encouragement and reward of both executive and productive labor; the development of contented workers, and the promotion of their physical and mental health. It implies the most thorough comprehension of the human being. 15. Methods of the Science of Management. In the first edition of this book the writer outlined the methods of the industrial engineer as follows: He considers a manufacturing establishment just as one would an intricate machine. He analyzes each process into its ultimate, simple elements, and compares each of these simplest 12 FACTORY ORGANIZATION AND ADMINISTRATION steps or processes with an ideal or perfect condition. He then makes all due allowances for rational and practical conditions and establishes an attainable commercial standard for every step. The next process is that of attaining continuously this standard, involving both quality and quantity, and the inter- locking or assembling of all of these prime elements into a well- arranged, well-built, smooth-running machine. It is quite evident that work of this character involves technical knowledge and ability in science and pure engineering, which do not enter into the field of the accountant. Yet the industrial engineer must have the accountant's keen perception of money values. His work will not be good engineering unless he uses good business judgment. He must be able to select those mechanical devices and perfect such organization as will best suit present needs and secure prompt returns in profit. He must have sufficiently good business sense to appreciate the ratio between investment and income. He must be in close enough touch with the financial management to be able to impress upon them the necessity of providing sinking funds to provide for the more perfect installations and organizations which future demands of a more educated and enlightened public will necessitate. The industrial engineer to-day must be as competent to give good business advice to his corporation as is the skilled corpora- tion attorney. Upon his sound judgment and good advice depend very frequently the making or losing of large fortunes. The recognition of industrial engineering as a distinct field of engineering has become an established and permanent fact as evidenced by such strong and prominent organizations as the Society of Industrial Engineers and the Taylor Society. The latter was originally organized under the name of the Society to Promote the Science of Management but changed its name in honor of Dr. Frederick W. Taylor after his death. Still further recognition of industrial engineering as a distinct field of engineer- ing is evidenced by the increasing number of colleges and univer- sities establishing departments of industrial engineering and distinct courses in industrial engineering. These courses have been designated in some colleges as courses in engineering ad- ministration and involve a great deal more than one or two series of lectures on industrial management. They usually cover separate classes in charge of specialist professors teaching such subjects as cost accounting, time study, functional control in the shop, personnel management, and factory layout and equipment. THE PRINCIPLES OF INDUSTRIAL MANAGEMENT 13 16. Taylor's Definition of the Methods of Industrial Manage- ment. Fred W. Taylor summarizes the methods of industrial management as follows: (1) The Establishment into Scientific Form of all of the Working Data and Rule of Thumb Knowledge Relating to a Given Industry. As an example of the practical application of this method we have Mr. Taylor's own exhaustive treatise on " The Art of Cutting Metals." (2) The Scientific Study of the Workers. To illustrate what sort of investigation this involves we may again refer to Mr. Taylor's investigations as to the physical and temperamental qualifications of men best adapted to such work as shoveling iron ore, carrying pig iron, etc. (3) Bringing the Science to the Worker. This is accomplished through the medium of functional foremanship. Each functional foreman is an expert teacher in his speciality. (4) The Assumption by the Management Itself of Its Due Share in the Above-mentioned Three Divisions. REFERENCES CHEYNEY: "Industrial and Social History of England," Chapters II-IX. COMAN: "Industrial History of the United States," Chapters II-IX. DAY: "History of Commerce," Part IV. WRIGHT: "Industrial Evolution of the United States." Parts I, II and IV. GOING: "Principles of Industrial Engineering," Chapters I and II. Transactions A. S. M. E., 1912. Report of Committee on Present State of Industrial Management: No. 1378, pp. 1131-1229. Tuck School Conference on Scientific Management: pp. 28-35. CHAPTER II INDUSTRIAL FINANCE 17. The Corporation. The present-day theory of a corpora- tion is that it is an organized body of individuals who have agreed to co-operate in the conduct of some enterprise in accord- ance with federal and state laws as well as certain by-laws made by themselves. This theory is quite different from that, of the previous generation which held that a corporation was an intangible, invisible, entity, with perpetual existence, otherwise having all the attributes of a natural person. The present-day theory of the corporation does not segregate the directors and stockholders from the invisible and frequently well-named soulless mystery the corporation itself. To-day the officers, the directors and the stockholders are themselves the corporation. The acts of the corporation are the acts of the directors and their agents. Inasmuch as the directors are the agents of the stock- holders, the stockholders are responsible for the acts of the directors in so far as the directors are acting within the limits of the authorization conferred on them by the stockholders them- selves. The fact that the courts are interpreting more and more the corporation as a body of individuals each of whom shares in the responsibility for the acts of the corporation itself should serve as a warning to stockholders, directors, and responsible officials in all corporations to exercise care and forethought in seeing that there can be no charge substantiated that any acts of the corporation violate common law, statutory law or public policy. The commission of such acts, according to present-day intrepretation of the courts, involves not only the intangible, invisible thing known as the corporation but may mean civil and even criminal action against the individuals composing the corporation as well as those individuals in particular responsible for such acts. 18. The Corporation Charter. Incorporation is secured by the granting of a charter. This charter is usually granted by the office of the secretary of state of the state in which incorporation 14 INDUSTRIAL FINANCE 15 is sought, after the publication of the application for a stated time in certain newspapers. In its ordinary form the charter is furnished by the office of the secretary of state in brief standard printed form which refers to the act or acts of the legislature and also sometimes to the constitution of the state issuing the charter, as specifying in further detail the terms under which the charter is granted. This standard printed form of charter is, however, not the only form of charter issued. Certain large corporations, in order to secure the widest freedom of action possible, have had their attorneys prepare charters so worded as not to conflict with the laws of the state in which incorporation is sought, but securing a wider range of possible activities than would be expressly stated in the standard form of charter. Appli- cations for special forms of charter thus prepared have usually been granted, although the question has been raised by outsiders whether the wide scope of activities allowed in some cases is in accordance with the interest of public policy. 19. Where to Incorporate. The natural place for an indus- trial organization to incorporate would seem to be the state in which its plant is located, or, if it operates plants in several states, the state in which its principal plant is located. There is a certain prestige gained by being known as a home industry rather than a foreign corporation, the word " foreign" being used in the sense of belonging to another state. Incorporation in the home state might involve the acquisition of a certain amount of good will from the people at large of that state. Again there is a tendency in some states to license or tax foreign corporations and exempt home corporations from such licenses or taxes. Certain states limit the powers of corporations so far as the scope of their business activities is concerned more than other states and this may be a deciding factor in selecting the state in which to incorporate. Again the cost of the charter varies in different states. Certain states which grant special privileges to corporations levy a heavy tax in the form of incorporation fee, while other states, which are more strict with regard to privileges allowed corporations, charge a relatively small fee. The form of capitalization desired may decide the selection of the state 'in which to incorporate. The conservative and closely held corporation may choose to issue but one kind of capital stock and sell this stock for cash only. Such a corporation can afford to incorporate in the state in which its plant is located no matter 16 FACTORY ORGANIZATION AND ADMINISTRATION how strict may be the corporation laws of that state. On the other hand a corporation may wish to issue stock in exchange for property contributed by subscribers or in exchange for services rendered by promoters. Certain states are more liberal than others with reference to the matter of allowing stock to be issued for such things as property, services, patent rights, bonus, good will, franchise, etc., than other states. Again some states allow corporations to buy and sell stocks of other corporations, while other states prohibit this. The conservative corporation has everything to gain by incorporating under laws of a state which is strict and has nothing to gain by incorporating under the laws of a state having so-called liberal corporation laws. . On the other hand there are many successful corporations which have been organized by capable business men who had very little money themselves to start out with and who it is claimed could never have capitalized their businesses if they had been compelled to conform to the corporation laws of some of the stricter states. 20. Governmental Control of Corporations; So far as their intra-state business is concerned, namely the business entirely within the state in which they are incorporated, corporations are subject to (a) the terms of the charter under which they are operating; (b) the by-laws adopted by the stockholders; (c) the constitution of the state; (d) the statutes of that state; (e) common law; (f) public policy. So far as inter-state acts of corporations are concerned they are subject to (a) the federal constitution, (b) the federal statutes and (c) the interpretation by the federal courts of questions as to whether they are violating common law or public policy. It has been frequently urged that all corporations doing inter-state business should be subject to federal incorporation. Advocates of federal incorporation are hoping that the confidential data accumulated by the federal government in connection with the federal corporation tax as well as the principle of federal control carried with the act, may open the way for the construction of such a federal incorporation act. 21. State Corporation Commissions. The establishment of cor- poration commissions in various states to pass on the soundness of the financial plans of corporations seeking to sell their securities and to determine whether these companies shall be allowed to sell their securities in that state or not, is another recent phase of governmental control. These commissions have been designated INDUSTRIAL FINANCE 17 in popular parlance as "blue sky commissions" for the reason that corporations having very little tangible property to show back of the securities they are offering have been designated as "blue sky companies." Popular demand to-day is for the establishment of corpora- tion commissions in the states, who shall look after the interests of the investor and consumer as well as the just rights of incorpo- rators and apply a uniform standard to all in questions of ap- praisal of the value of tangible and intangible assets for which securities are proposed to be issued. The valuation of corporation assets by a commission would be desirable from the standpoint of the investor and consumer in such cases as the following: A has a business actually worth $10,000. He agrees with B that B shall put in $10,000 cash and secure a half interest in a company which is to be incorporated with $30,000 paid up stock on the following plan. An appraisal committee is to prepare an inventory showing the value of A's business as $20,000 instead of its real value of $10,000. The corporation will buy from A hie business for $20,000 worth of stock. B subscribes for $10,- 000 worth of stock and pays for it in cash. A secret contract is made by A and B whereby A agrees to transfer to B $5000 worth of stock apparently for cash at par value. B agrees to write out a check in favor of A for $5000, A is to get this check cashed and is to return the cash immediately back to B. The paper records show that B has paid par value in cash for his original $10,000 worth of stock, also that he paid A par value in cash as per bank account and checks which can be shown for his additional $5000 worth of stock. A and B now each own $15,000 worth of stock which has cost each of them only $10,000 and they are in a position to sell stock at a profit to minority stockholders. The figures and conditions of the hypothetical case given can, and usually are adjusted to suit any particular case under existing corporation laws. A strict corporation commission with capable appraisers might prevent A from having his business appraised at more than $10,000 valuation. It is apparent, however, that to secure such results the commission would have to be absolutely non-political and provided with a sufficiently large and capable force of appraisers to do its work thoroughly. 22. Organization Prior to Incorporation. The real organiza- 18 FACTORY ORGANIZATION AND ADMINISTRATION tion of most corporations is planned or " slated" prior to the first subscribers' meeting. The promoters get together and deter- mine what shall be their compensation, who shall be the directors and officers, what shall be the by-laws, how the stock shall be allotted in the case of over-subscription, what course shall be followed in case of under-subscription, and many other details, which are apparently solved by the free action of the subscribers at the first meeting. At the first meeting somebody usually nominates a temporary chairman as previously agreed on. This motion is usually unanimously carried. Then the temporary secretary is nominated and usually unanimously elected. Next a motion is made that the chairman appoint a nominating com- mittee to nominate officers. This motion is also usually carried. It has been advocated that statutes should be passed providing a set of rules governing the conduct of subscribers' meetings. Such statutes would be very desirable, as under existing condi- tions promoters claim that there is no law which requires even the usually accepted rules of parlimentary procedure to be fol- lowed in conducting a subscribers' meeting. For instance if one of the subscribers ventured to move that the nominating committee be elected by ballot or that directors be nominated by petition and elected by ballot the temporary chairman could simply declare such a motion out of order and declare in order only such motions as are made by the promoters in accordance with the agreed program. 23. Capitalization. The simplest form of capitalization is that in which there is only one kind of stock, the shares of which have been paid for in cash at par value. This simplest form, however, is less usual in the present generation than formerly. The requirements of modern industrial undertakings for large working capital, and expensive plants and equipment have made it necessary for the industrial corporation established in recent years to pattern itself somewhat after the railroad in its methods of capitalization. 24. Bonds. Industrial bonds are at present confined almost exclusively to first mortgage bonds secured by real estate and plant. It frequently happens that the citizens of a town desirous of securing an industrial plant will donate the ground and sub- scribe locally for first mortgage bonds of a sufficient amount to put up either the buildings alone or the buildings and equip- ment. In such cases a contract can be made between the bond- 2 INDUSTRIAL FINANCE 19 holders and the corporation regulating the amount that is to be set aside per unit of product to meet interest on bonded indebted- ness and to provide a sinking fund for paying off the bonds. For instance, in the case of an automobile factory the contract printed on the bond might specify that $20.00 per car is to be set aside for every car sold, to meet the interest and sinking fund requirements on the bond issue. Equipment bonds and debenture bonds have not as yet been employed to any extent in industrial undertakings. It is possible that the future may see their more extensive use in this field. 25. Preferred Stock. Preferred stock has priority of claim over the common stock in sharing any profits. Formerly pre- ferred stock was usually non-voting stock. A good deal of preferred stock in recent years however is voting stock. In some cases it becomes voting stock only if the dividend on the preferred stock has not been paid. It is becoming the custom to limit the amount of preferred stock issued by industrial corporations to a figure which fairly represents the value of unburdened tangible assets. For instance if the real estate and buildings were covered by a mortgage securing a bond issue, and if the equipment were not so burdened, then the preferred stock issue might represent the value of the equipment, the raw mate- rial on hand, work in process in the shops, and the finished stock on hand. Industrial preferred stocks usually pay a rate of divi- dend from 1 to 2 per cent, per annum higher than the bonds. In some cases it may not be necessary to issue both bonds and preferred stock. Under such circumstances the bond issue has the advantage of being more easily marketed and paying a lower rate of interest than would have to be paid on a preferred stock. On the other hand preferred stock if it is non-cumulative does not carry with it the same obligation to pay the dividend every year as is involved in the compulsion to pay the interest on the bonds. Most industrial corporations, however, make extreme efforts to pay dividends on their preferred stock as the failure to pay such dividends always results in a sharp decline of the market value of all securities of the corporation. If the pre- ferred stock is cumulative, any dividend which has not been paid in any one year remains as an obligation to be paid out of future profits before any dividend can be paid on the common stock. 26. Common Stock. Common stock is in most cases the only 20 FACTORY ORGANIZATION AND ADMINISTRATION voting stock. The conservative industrialist sometimes prides himself on the fact that his company has issued but one kind of stock, namely, common stock. It is difficult under present-day methods of finance to dispose of common stock at par for cash, in view of the widespread custom of using common stock as a bonus to be given away to subscribers to bonds or preferred stock of new corporations. What relation may the amount of common stock bear to other securities issued? The conservative method of issuing common stock is to retain as unissued stock a sufficient quantity of authorized common stock so that the total outstanding securities of all kinds will not exceed the total volume of business done in a year representing an average condition of trade. Under such circumstances the profits on a year's business should be ample to pay interest and sinking fund requirements on the bond issue, as well as dividends on the preferred and common stock and permit some allotment of undivided profit to a surplus fund. Take for example an industrial corporation doing a business of $1,000,000 worth of sales a year. We might reasonably expect that after all production costs and expenses were met, together with all selling and office expenses outside of officers' salaries, a favorable balance of $100,000 would be left. This $100,000 would have to be utilized to pay interest and sinking fund on bonds, interest on stock, officers' salaries and leave some surplus on hand, approximately as follows: Interest at 6 per cent, on $100,000 bonds $6,000 Sinking fund 4,000 Dividend at 7 per cent, on $300,000 preferred stock 21,000 Dividend at 6 per cent, on $600,000 common stock 36,000 Surplus or depreciation fund 3,000 Total exclusive of officers' salaries 70,000 Balance left for officers' salaries $30,000 The above figures are not very far out of the ordinary for a $1,000,000 concern. One does not have to do much figuring to demonstrate that a concern with $1,000,000 capitalization can- not afford to pay more than about three $10,000-a-year salaries to officers, unless the profits on the business are abnormally high. It is frequently attempted to controvert such figures as the above by the statement that certain officers who are receiving salaries of from $10,000 to $25,000 per year are actual producers INDUSTRIAL FINANCE 21 in that ^hey are, as the case may be, exceptionally capable financiers, organizers, managers, designers, or sales managers, and that their salaries should be considered as part of the cost of production. Such arguments are not so easily met where the industry in question is a natural or artificial monopoly. But where there is competition, either domestic or foreign, the cost of the output and salaries paid for equivalent service are deter- minable. Exorbitant salaries to officers and to favored stock- holders have not been recognized until quite recently as one of the greatest obstacles to American trade supremacy and to the proper distribution of the benefits of the science of industrial management. The years 1915 to 1920 show a far greater increase each year in the total outstanding capital stocks and other securities of corporations as compared with the increase of tonnage of coal and steel and bushels of grain and similar actual production. Since the latter are after all the real measure of the increase in the world's wealth, the exorbitant increase in outstanding capitali- zation will sooner or later be recognized as a harmful element in diminishing the purchasing value of a dollar and in increasing the cost of living an element of as great importance as under- production or profiteering. A comparison of statistics published by Babson or Bradstreet of production measured in the concrete of products as compared with the increase of capitalization, presents the case very clearly. 27. Depreciation. Depreciation of plant and equipment is a loss incurred every year. Inasmuch as losses and assets are listed on the same side of the balance sheet it is important to discriminate between an item which shows depreciation as a loss and an item which shows a depreciation fund in the form of a bank account, or securities purchased to offset this loss. In order to make the matter clear it is always well to specify after the words " depreciation fund" the form which this fund takes. Writing down the word " depreciation" only, without specifying the nature of the fund might lead a reader to believe that no actual fund existed and that the depreciation was merely a loss. Depreciation cannot be satisfactorily determined by the use of arbitrary tables. In a given industry each type of plant and equipment has a determinable period of useful active life. At the end of this period the plant or equipment has also some residual value, as scrap or second-hand outfit. To determine 22 FACTORY ORGANIZATION AND ADMINISTRATION the depreciation, subtract the residual value from the initial cost. To distribute this depreciation by annual allotments over the period of useful active life is not so easy as would at first sight appear. One's first thought is that if we divide the total depreciation by the number of years of useful life we would have the annual depreciation. We need to bear in mind, however, that depreciation funds invested in securities are accumulating interest. Hence we need to determine from annuity tables the amount to be set aside each year in order to net us at the end of the period of useful life the total depreciation sum. The ultra-conservative enterprise with plenty of funds may invest such sums in bank or in securities. The argument against this practice is that the business itself must yield more profits than such investments. Hence the depreciation reserve it is argued is best reinvested into tangible assets of the business, preferably equipment. If this is the form of investment, the question arises as to whether the annual amount of depreciation shall be considered as (a) the quotient of the total depreciation divided by the period of useful life, or an annuity table sum based on (b) ordinary savings bank interest rates, or (c) the average dividend rate of the given business. Evidently (a) is the most conservative and (c) the least conservative practice. Depreciation must be recognized as something which happens every year and must be met. It is an obligation which cannot be shifted from one year to the next in anticipation of a year of good profits. Auditors and critical investors are paying more and more attention to the manner in which a corporation manage- ment provides for distribution as one of the important means of gauging the integrity and stability of the corporation in question. REFERENCES LOUGH: "Corporation Finance," Chapters I-XIV. COOPER: "Financing an Enterprise," Parts I-IV. BENTLEY: "Corporate Finance and Accounting," Chapter I. CONYNGTON: "The Modern Corporation," Chapters I -XII. SULLIVAN: "American Corporations," Chapters I-VII. ENNIS: "Works Management," Chapter VII. HUMPHREYS: "Lecture Notes on Business Engineering," Pages 258-318, 53-61, 29-39. HATFIELD: "Modern Accounting," Chapter VII. COLE: "Accounts," Chapter VIII. CHAPTER III ORGANIZATION AND CONTROL 28. Organization. Organization consists of the laying out of the scope and limits of action of the various individuals and groups of individuals whose work is required for carrying on the objects of the establishment. It consists further of the uniting of these individuals and groups of individuals in such a manner as to co-operate for the common good, harmoniously, promptly, and economically. There is no greater source of economy than conservation of human energy through efficient organization. To obtain the largest possible return from a given expenditure of capital and labor, the industrial organization must be logical, systematic and scientific. A well-designed organization will \_ do much to bring about mutual confidence and co-operation. The confidence of the men must be obtained. They must ap- preciate that it is to their own interests as well as to the interests of the community and stockholders to deliver the right kind of work. The right kind of organization will do much toward developing the right sort of industrial intelligence among all the working men, a factor of more importance than superlative refine- ments in the testing department. 29. Organization Something Distinct from Management and System. Organization is distinct from system and management. An industrial establishment may have excellent filing and accounting systems, but no well-defined lines of organization. Again there may be clearly defined organization, but very poor management. The distinction between organization, manage- ment, and system is important, and must be fully appreciated. We organize to manage. We manage largely through system. We manage successfully when we apply not only the principles fundamental to correct organization and system, but when we take into account all the principles and methods of industrial management. Some enthusiasts on industrial and business psychology while recognizing the importance of dealing correctly with the human factor in works management, do not lay enough 23 24 FACTORY ORGANIZATION AND ADMINISTRATION stress on the other basic principles and methods of industrial management. Management is the whole, of which organization, system, industrial psychology, and other elements and methods are parts. 30. System. There is a pronounced tendency by consulting experts to lay the greatest emphasis on certain methods of analy- sis and synthesis and certain peculiar forms of record and equip- ment. Certain experts have gathered together certain peculiar* methods and have added to them certain principles of manage- ment, and then dubbed the whole the " Blank System of Manage- ment." Proprietors who have seen the benefits gained by certain of these methods and systems in their particular industries are enthusiastic in their praise and advocacy of them. These methods and systems where they have been successful, are as deserving of praise and reward as great mechanical inventions. But it must be borne in mind that if we are endeavoring to formulate basic principles of the science of management, they are merely illustrative factors. To illustrate specifically, Mr. Carl Barth has invented a remarkable slide-rule for determining the best methods of metal removal by machine tools. Mr. Sanford Thompson has invented a high-grade decimal stop- watch. Both of these gentlemen are as much authorized to speak of their methods as the Barth System or the Thompson System, as certain men who have attached their names to methods and systems which they designate as " Systems of Management." Both of the gentlemen in question, however, recognize that while there may be a science of management, it would be as incorrect to speak of a system of management, as it would be to speak of a system of economics, or a system of psychology. Even Dr. Taylor, who has done more than any one individual in establishing the principles and methods of industrial management on a scientific basis, prefers the term " Scientific Management" to the term "The Taylor System." Special methods and systems represent practices based on a foundation of centuries of experience by earnest men in actually doing the world's work. 31. Control. To lay out a new organization or to analyze an existing organization we must determine first the processes and classes of activity required of plant, equipment alTd individuals. This demands a knowledge of all the interior workings of an in- dustrial establishment. The process of building up an orgfhiza- tion that shall be the best for a certain factory depends primarily ORGANIZATION AND CONTROL 25 upon scientific research work, having for its object the dissection of the entire series of internal workings into the elementary steps. We must list these in detail. Following this analytic process comes the even more difficult synthetic one of preparing a struc- ture which shall be the most efficient possible engine of industrial production of its type. We must determine which of these prime elements are to stand alone, and which are to be combined, so that the general result will make a well-arranged, well-built, smooth-running machine, as it were, of the entire aggregation. Such determination requires an inspection of the establishment with a view to determining what type of control is applicable to its various branches. Control may be based on the principle of military authority as exemplified by the line officers, on specialization, on functionalization, or on a combination of dif- ferent degrees of two or more of these principles. Each of these principles will be dwelt on in further detail. 32. Numerical-Military Type. The numerical type of de- partmentalization and control, sometimes designated as the mili- tary type, divides the men into groups in such a manner that each group receives its orders and instructions of all kinds from one man only. In this type in its extreme form, workmen are de- finitely instructed that in all matters they are expected to receive and obey orders from their gang boss only, he in return being responsible only to the assistant foreman, the assistant foreman to the foreman, and so ^n. In its modified type, instructions may be taken from any line officer superior in rank. This modi- fied type is quitej3ossible without conflicting orders. 33. Specialization. The principle of specialization demands that all similar duties, handicrafts "and* trades be selected and performed by one man or group of men so far as processes and classes of activity permit. The departmental division then follows processes, trades, handicrafts and classes of labor and equipment. The principle of specialization has come into pretty general application even in conservative establishments. It is exemplified in the manufacturing side by such departments as lathe, automatic screw machine, miller department, etc., and in the commercial side by such departments as correspondence, sales, etc. Specialization is an economic necessity, but over-specialization is to be avoided. After all it is the all-around men, the versa- tile, widely informed department heads, who form the vertebrae 26 FACTORY ORGANIZATION AND ADMINISTRATION of the backbone of a successful organization. Among laborers, mechanics and minor bosses, it is safe and proper to go to ex- treme limits in specializing, but among those who are to fill posts of higher responsibility, we should avoid drawing the lines of specific organization with prescribed limitations of authority so closely as to thwart ambition. This desideratum can be brought about by grouping allied specialized departments with a general officer as the head of the group. Such general positions afford incentives in the way of promotion to specialists and also provide insurance of succession when an unexpected vacancy occurs. It is impossible to foresee or prepare for the unexpected vacancy or other contingency which will demand experience in exercising independent judgment and all-around knowledge of an industry, qualifications which are stifled by over-specialization and too great limitation of the powers of higher officials. With the development of the manufacturing side, we begin to have, not only increased departmentalization by handicrafts, trades and types of machinery, but we have as a rule the division of metal machine-shop work into three classes, namely tooling, group assembly, and final assembly or erecting. Next comes the recognition of the advantage of distinct departments of works engineering (including power, light and heat), design of product, tool designing, stores, orders, shipping, cost and other factory accounts, etc. Many organizations have developed specialized departmentalization without the development of the principle of functionalization. 34. Functionalized Type. This term is used to designate a type of control in which there is delegated to a staff officer or de- partment, absolute control over certain features, performances or functions common to all departments but distinct from special- ized duties. To distinguish between specialization and func- tionalization we may define a specialist as aiTmdividual who is expert in a certain trade, handicraft or science which is an essen- tial constituent of the particular industrial process of the given establishment. A functional staff officer or bureau, on the other hand, investigates a single phase or aspect common to all these handicrafts, trades and sciences. Functional management is more than the assignment of the one function to a specialist, which is the distinguishing feature of specialization. v Functionalization determines what functions ORGANIZATION AND CONTROL 27 come into play in managing all departments, each functional head for any one function being supreme in that function in all departments. It is by means of the functional departments and staff officers that the efficient modern organization best accomplishes the co-ordination which is so necessary after departmental speciali- zation has been well instituted. Functional organization and control which does away altogether with line control, is a dis- tinguishing feature of Doctor Taylor's methods. He has three functional heads in what he designates as the plan- ning department, namely, a head for the order-of-work clerks, a head for the instruction-card men and a head for the cost-and- time clerks. In the shop side he has four functional heads, namely, the gang boss, the speed boss, the inspector and the re- pair boss. An eighth functional head, namely, the shop disci- plinarian, acts in the capacity of arbitrator of all differences. The functional men in the planning-department group operate as a whole through the head of the " order-of-work" clerks, who is the medium connecting the planning room with the shop bosses and through them with the mechanics and laborers (see Fig. 1). There has been an evolution in functional control so that while Fig. 1 represents the principle, this principle is actually carried out in varied ways. Those who have kept in close contact with the evolution of functional control realize that recognition is accorded as a rule to the two major classes of men, which may be designated as the analytic, scientific or engineering type on the one hand and the production, result-getting, following instruc- tion type on the other hand. A type of functional control which may be applied either to a business as a whole or internally in any department, consists of grouping the entire activities of a business and those internally of each department, under five functional headings, consisting of Planning, Preparation, Scheduling, Production, and Inspection. For example, in functionalizing a general organization, under "Planning" would come " Sales/ * Advertising, and " Ware- house" departments; under "Preparation" would come "Eng- ineering" and the activities designated in the Taylor Chart as under "Planning;" under "Scheduling" and "Production" would come "Manufacturing," "Purchasing," and "Personnel Service;" under "Inspection" would come "Accounting," "Costs," "Statistics," and "Auditing." 35. Selecting Organization and Control. It would be very difficult to set down a standard type to apply to all industrial 28 FACTORY ORGANIZATION AND ADMINISTRATION establishments. However, it is quite possible to present a' conventional general type of combined staff and line control adaptable with modifications to most industries. This con- ventional type is then to be carefully inspected and studied by all persons who are to lead in carrying out the plans for organiza- tion prior to adopting any given system. In deciding on what production, cost system, or wage system to use, it should be remembered that men of exceptional ability may devise systems of exceptional merit, but they must either keep personal repre- sentatives of high ability permanently in charge of those systems, or else turn them over to average proprietors and employees to handle. And it is the personal inefficiency of the average PLANNING PERFORMING *FiG. 1. Chart prepared by F. B. Gilbreth to illustrate functional control according to F. W. Taylor. proprietors and men who operate the systems that determines the practical limitations of their usefulness. No system should be forced onto employees. Their co-operation must be secured first. In planning a new organization, meetings should be called of the various existing officials and department heads. These meetings should be continued until a form of organization has been agreed upon. The sum total of the knowledge of a number of intelligent men is generally greater than that of any one of ORGANIZATION AND CONTROL 29 them, and action taken by an executive after consultation with the leading members of an organization, even if it is not in exact accord with majority opinion in some instances, is generally conservative and safe. In management, and particularly in developing an organization whose function it is to manage, the personal equation cannot be ignored. It is more important to know who your men are, how they are inter-related, their personal peculiarities, their feeling toward yourself and others, and the political organization of the plant STAFF (SEE CHART ) ( FIG. 3 ) CHIEF ENGINEER WAREHOUSE SUPT. SHIPPING 4- + I + OKUEftS PLANS PREPARATION SCHEDULES STORES RECORDS FOLLOW UP ON PURCHASES TIME STUDIES TIME RECORDS INVESTIGATION OF COST SERVICE DATA. INSPEC DESIGN OF ^ TOOLS AND METHODS FIG. 2. Chart illustrating line features of line and staff control in a large industrial organisation. as a whole, than to know the intimate details of production, although the latter is essential. You cannot treat any two men in the same way and get the best results from each of them. The most successful organizer and manager is the one who knows his 30 FACTORY ORGANIZATION AND ADMINISTRATION assistants, makes allowances for their peculiarities, and makes it a point to promote personal good will among them. 36. Specific Duties. Specific duties must be clearly set forth not only for each group of individuals and various departments, but a schedule of individual responsibilities and routine should be prepared for the use of each individual in each department. In addition to defining departmental and individual duties, the duties of groups and committees must be listed. Charts and diagrams should be prepared to show responsibility and inter- relation of various departments, officials and committees of the organization as a whole. Similar departmental charts and dia- grams should be prepared for the various departments and sub- departments. Each chart should be supplemented by such extensive, explicit, detailed instructions as are required to make it perfectly clear. It should be borne in mind, however, that an organization must be impersonal and must be built up along the lines of specialization, functionalization, and control, and not along the lines of individual personal abilities of present incumbents of positions. In addition to charting the organization, it is customary to write up a detailed description of the responsibilities and duties. This is designated as the " organization recond." This Is supple- mented by further written descriptions of the operation of systems. These descriptions are usually designated as pro- cedures and are given consecutive numbers so that they can be indexed and revised and easily identified. 37. A Comprehensive Industrial Organization. Fig. 2 is presented as a comprehensive conventional model organization embodying the best contemporary features of staff and line control. The staff functions are limited to research, investiga- tion and recommendation. All routine is carried on by the line departments. It is strongly urged that the staff be organized as distinct from the men having to deal with regular routine, and that all staff bureaus be collectively under the leadership of an industrial engineer as head of staff who should be a broadly educated man. We might designate him as an engineer-econo- mist, although he may have advanced and developed through one of the branches of the organization dealing with engineering accounts, or, on the other hand, through a department dealing with men, or one dealing with machinery. ORGANIZATION AND CONTROL 31 Fig. 3 illustrates the proposed staff organization under four general divisions, namely: (1) Statistics; (2) Materials; (3) Plant, Equipment, and Processes; (4) System. The term " Division " is used to emphasize the distinction between the staff divisions and major departments. Briefly outlined, the functions of these staff divisions are as follows : 38. Statistical Division. This division, like all of the staff divisions, is a division which has no direct disciplinary control over any of the various departments which keep records. It is INDUSTRIAL ENGINEER A BROADLY EDUCATED MAN WELL VERSED IN THE SCIENCE OF MANAGEMENT IN CHARGE .-DIRECTS RESEARCHES AND CONFERENCES BETWEEN STAFF AND LINE. AN ACCOUNTANT AN ENGINEER WHO 18 AN INDUSTRIAL SYSTEM DESIGN AND TRAINED IN THEORY OF AN EXPERT IN TESTING ENGINEER IN CHARGE, INSTALLATION. ACCOUNTS, STATISTICS, MATERIALS IN CHARGE. THIS BRANCH OF PLANNING OF PROCEDURES GRAPHICAL REPORTS, STAFF DIRECT MATTERS AND PRINTED FORMS. SYSTEM AND BUSINESS PERTAINING TO: NO NEW PROCEDURE OR METHODS AND FORMS, BUILDINGS FORM EFFECTIVE UNLESS AND ALL PHASES OF COST EQUIPMENT INCLUDING AUTHORIZED BY ACCOUNTS IN CHARGE. MACHINES, TOOLS AND HEAD OF THIS DIVISION. STANDARDS PROCESSES ROUTING SCHEDULING MOTION AND TIME STUDIES. FIG. 3. Chart illustrating staff features in a large industrial organization. The staff functions are limited to research, and recommendations. The routine is carried on by the line departments shown in Fig. 2. primarily a research and advisory division, the result of whose investigations and whose recommendations are brought up at such meetings of department heads and others as may have been predetermined. It is the duty of the Statistical Division to see that records by various departments are not merely kept and stored away, but that from each set of records is secured a method of most effective analysis, so that the records of the past may be compared with the records of the present and conclusions may be drawn as to future action. 32 FACTORY ORGANIZATION AND ADMINISTRATION The individuals engaged in this division must be experts in theory of accounts, the science of statistics, the art of graphical presentation and cost accounting. The tendencies and facts' indicated by an analysis of the records must be brought forcibly to the attention of all individuals whose actions, based on experi- ence and intuition, differ from the action indicated by an analysis of figures, records and statistics. It should be the aim of an organization to make history first and then to record it. The records of matters that are done and over with should be adequate but brief. Useless statements and reports should be eliminated. Detailed cost-keeping can be and usually is over-done. What constitutes a delightful problem for" an accountant may be of no use as an aid to executive control. It is not so important .to know exactly how bao! a mistake has been as it is to know that mistakes are" being made in tinle to stop them. An important-lunction of the bureau of statistics is to see that approximately accurate daily records are prepared which indi- cate quickly what the general trend of events is in each depart- ment of the plant. Direct contact with current work is brought about by the committee system, introduceo!" by C. U. Carpenter, by which department heads responsible for the prosecution of routine work frequently meet the members of the staff divisions. 39. Division of Materials. This division is advisory as to' the fitness of materials, as indicated by the technolo^ ofthe various materials employed, with constant attention to cost reduction as well as the bettering "of product. Its head should be an engineer thoroughly conversant with the testing of materials. 40. Plant, Equipment and Processes Division. This division will consider and decide upon methods of routing, scheduling, motion and time studies, preparation of instruction sheets and cards, standardization of equipment. In all of these matters the work of the staff division ends with the successful carrying out of a nethod recommended by it. The routine is carried on by men adapted to carry out routine work successfully. For instance, many of the decisions of this staff division are applied to the routine work of the planning or production de- partment, which is not a staff division. 41. Routing. This involves a study of the processes and product and the preparation of process maps for the various classes of product and the determination of most predominant paths, some of them consecutive, some of them simultaneous, ORGANIZATION AND CONTROL 33 together with the floor spaces, weights, bulks, etc., involved, and recommendations as to rearrangements of equipment and departments, and proposals as to building modifications and extensions. It consists further in the designation of which department, machine and class of individuals are to perform the operations indicated. 42. Scheduling. This consists of the determination of the sequence in which all orders which are to be worked on by the various departments of the establishment are to be listed so as to determine their precedence and the methods of preparing a definite program, in order that the shop may be provided by the production or planning department with a daily schedule covering the sequence of all work for the day. Scheduling naturally divides itself into two sections, one having to do with the scheduling and tracing of an order from the time of its first receipt or issuance as part of a manufacturing program to the time it is translated into many production orders by the produc- tion on planning department, the other having to do with the scheduling and tracing of the individual production orders. 43. Motion and Time Studies. Motion study consists of the analysis of each process into its ultimate simplest steps, and the elimination of useless or improper motions. This process is prerequisite to, and more difficult than, time study, which consists of the timing with a stop-watch of the elements indicated by the motion study. That motion study is more difficult than time study is proved by the revelations disclosed by Frank Gilbreth's application of ttfe motion-picture camera to assem- bling operations. Motion study research can be applied to ac- counting, designing and drafting methods and equipment, as well as to mechanical and trade processes. 44. Preparing Instructions. The results of the researches in routing, motion studies and time studies are to be taken up with the most skilled men in each process, these being the men usually detailed-a- demonstrators while the motion- and time- study observations are being made, due allowance being made if the demonstrator is a so-called pacemaker, and detailed instructions are to be prepared which are to be the standard practice and are not to be departed from. Proposals for different steps or methods from the standard are, however, to be en- couraged through the medium of a suggestion system, and duly rewarded if they result in improvement. 34 FACTORY ORGANIZATION AND ADMINISTRATION The instruction sheets are to be furnished to the production or planning department for all new operations in just the same manner that the designing department furnishes the detailed shop working drawings for the designed product. In this particular respect it may be said that the staff division does, after all, come in touch with the routine work of the shop. However, having once decided on the instructions, the staff division is through with them as soon as they are working satisfactorily. In the use of instruction cards, only absolutely necessary information should be issued, and this in the briefest possible form. There is a tendency among systematizers to require voluminous instructions to be issued to workingmen who have neither the time nor ability to read and absorb them rapidly, even if they have the inclination to do so. However, where the instructions are an attempt to present to the working man the time and motion analysis necessary to be followed by him in order to get his work out in the required time and earn his bonus, there is a good reason for statements such as "Read instructions 3 min.," "Pick up piece, 1/10 min." etc. 45. Standardization of Equipment. This covers standardiza- tion of tools, appliances and fixtures by an expert in tooling processes, who may wish to co-operate with the motion- and time- study man or men in securing data. 46. System Division. This division of the Industrial Engi- neering Department has to do with system design and installa- tion. The planning of our procedures and approval of printed forms are duties of this division. No new procedure or printed form is effective unless inspected by or authorized by the head of this division. 47. Progress of an Order. The table in Fig. 4 shows how an order passes through the various departments under the super- vision of the line departments. The numbers in front of each division indicate the sequence of steps in the progress of the order. The superintendent of planning 'and recording has con- trol over the manufacturing program and through his scheduling department controls the daily order of work. The methods of scheduling are determined by the staff organization. The rou- tine of the scheduling of the regular work is carried on by the line organization. There may be few industries large enough to require fully manned departments for all of the activities indicated. No matter how small the industry is, however, it must be analyzed ORGANIZATION AND CONTROL 35 minutely and the above principles of the science of management applied in its organization and operation. A department need PROGRESS OF AN ORDER Departments in charge of Chief Engineer Departments in charge of Supt. of Planning and Recording Departments in charge of Supt. of Foremen, Mechanics and Laborers Order Dept. 1. Order entered. 2. Order scheduled and followed to tracer in production dept. This following up by schedule clerk includes processes 3 to 9 inclusive. Designing Dept. 3. New designs made. Drafting Dept. 4. Drawing list made. Production Dept. 6. Stores records checked and requisitions made on purchasing dept. Purchasing Dept. 7. Purchases entered. 5. New drawings 8. Receiving dept. notified. made. Production Dept. 9. Detailed shop order prepared including: 9a. Routing. 9b. Instruction cards. 9c. Tool lists. 9d. Time standards. 9e. Order of work. 9f. Tracing of work through shops. 11. Inspection Dept. Inspection and tests. 10. Work in shop department. 12. Time and costs. 13. Shipping. FIG. 4. Progress of an order through the line departments of an industrial establishment. Note that routine work is not handled by the staff bureaus, whose fields are research, conference, and recommendations. not consist of many men. It may consist of but one man, or one man may conduct several departments, but his specific 36 FACTORY ORGANIZATION AND ADMINISTRATION duties, routine and responsibilities must be accurately deter- mined and carried out, otherwise the industry is being carried on in a slip-shod, inefficient manner. In other words it is unor- ganized and the basic principles of the science of management are not being applied. 48. Applying above Principles to Smaller Industries. The above outline is intended to be sufficiently comprehensive to apply to an industrial organization of considerable magnitude. Extensive as it may seem it is not nearly as elaborate as the complete organization chart of a large railway system. In making a study of the existing organization of the plan- ning and recording departments, the first step is to write out a Clerk Mr. I. Drawing 'and Pattern Records and Patt'rn Storage. Mr.H. and / TOOL DESIGN DEPARTMENT Mr. A. AND ASSISTANT Purchases of Machinery Mr. B. /Design of Special Machines Mr.C. and 4 draftsmen Tracers Mr.G. and C men 'Research Study of Tool Steels Mr.F. and .Assistant Mr. B. Jigs. Mr.D. and 4 draftsmen Punches and Dies Mr.E. and 3 draftsmen, FIG. 5. Departmental internal organization circle. functional list, without names of individuals, showing the duties of each department and of each man in each department. With this functional analysis as a basis, there can be built up such as impersonal functional list or chart as appears best adapted to the company's conditions. The complete removal of the personal element is absolutely essential. After the new chart has been prepared, comes the selection of each man, of that man above all others that will best fit each place. After the listing of each distinct departmental function, out- side of the direct productive departments as above, or including the directr^rQductive departments also, the next process is the merging together of such departments as must necessarily be combined in establishments of moderate size, which cannot carry a list as long as the above, of distinct departments. The dis- tinct listing of functions is advisable, however, whether each ORGANIZATION AND CONTROL 37 function represents a department or not. The next steps in this direction would be the charting, first of the organization as ( Cost \ I \ f Finished} Inventory I Accounts I \ / \ / \- I \ / f " w D Zf} I****} r at an MP^ / \* } \VentiU FIG. 6. General organization chart. it now exists, and secondly, of any improved or ideal organiza- tion which it is hoped to secure. 38 FACTORY ORGANIZATION AND ADMINISTRATION 49. Types of Organization Charts. There is probably no better method of charting than that of circles connected by lines or arrows, each circle representing a department, and the lines or arrows representing either their subordination to each other, or, by some different type of line or by using a separate chart, representing also their geographic juxtaposition, or the manner in which the work is handled first by one department and then by another. This method of charting was first used by Messrs. Garcke & Fells, and adopted by J. Slater Lewis and subsequent investigators into the matter of factory organization. Fig. 5 is an example of this method of charting applied to internal departmental organization. This example will suffice to show the method of division of duties coming under each functional head. I believe it to be a good plan for each department to have a chart showing the organization within that department, as well as a chart of the general factory organization, so that each man may see his place and not labor under any delusions as to his authority or his prospects. In Fig. 6 is presented a form illustrating this method of showing the general organization scheme. The scheme here shown is presented merely as an example for illustration. REFERENCES ENNIS: " Works Management," Chapter VIII. PARKHURST: "Applied Methods of Scientific Management," Chapter I. GOING: " Principles of Industrial Engineering," Chapter III. TAYLOR: "Shop Management," Paragraphs 233-240. EMERSON: "Efficiency" Chapter IV. KNOEPPEL: ''Installing Efficiency Methods," Chapters VIII, IX. CHAPTER IV TYPICAL FACTORY ORGANIZATIONS 50. Existing Organizations Widely Different. Factory organi- zations as they exist to-day present as wide a range of physio- logical structure as the whole animal kingdom. We can well com- pare some establishments to a mass of protozoa. Others may be likened with justice to tlie highest "orders of "vertebrates, with their complex systems of organs, muscles, and nerves. In the lower and extinct types of animal life" we find beings with few organs/ and often with the same organ many timBS duplicated. As the ages have passed, these types have decreased in number, being unable to resist the more highly developed classes. In the higher types we have no duplication of vital organs. The same is true of factories. The crude types, lacking in some organs, and with much duplication of functions, must pass away and give place to the vertebrate type, with its higher physiolog- ical development. It is evident that the designing of organizations for the newer, larger, and more complex establishments becomes of constantly greater importance. 51. Importance of Charting. In the great majority of manu- facturing establishments the company officers are far more conversant with the details of financing, accounting, and selling than they are with those of manufacturing. From time to time questions of business policy arise which have an intimate connection with cost of production, time of delivery, stock of raw material, stock of finished f>arts, condition of work in process of manufacture, and similar matters. At such times many officers realize that whereas in the settle- ment of questions of financing, accounting, and selling they had clear-cut records at hand to guide them in forming policies, on the other hand, when it came to questions involving the* factory itself, they were dependent wholly upon opinions of superintend- ents or foremen, these opinions having no firmer foundation than intuition. The realization of their helplessness and the 39 40 FACTORY ORGANIZATION AND ADMINISTRATION absence of reliable and accurate knowledge of manufacturing conditions has been an incentive to progressive officers of manu- facturing establishments to devise more thorough systems of executive control of the factory. More and more it has been appreciated that some graphic method of showing inter-depart- mental relations is necessary if responsibility is to be placed. 52. The Works Manager's Position. The most successful factory organizations are those in which all departments having to do with production in any manner whatever are subordinate to and responsible to one general head, the works manager, who has a thoroughly competent assistant ready to take the chief's place at any time, and who is recognized as the acting works manager in the absence of his superior. This form of control is a typical characteristic of the most successful manufacturing organizations. There must be no paths whereby company officers or any other departments in any way deal with depart- ments responsible to the works manager except through the works manager's office. In manufacturing, next in importance to the centralization of executive authority is clearly defined functional, departmental and divisional lines, with a responsible head and assistant head for each department. The business which has its factory de- partments so organized that each department head is responsible to the works manager, without any intervening bosses, will be far more free from internal dissensions than one in which this is not the case. Yet one hears of company officers gleefully telling how they are " keeping them guessing," in referring to their most capable men and the question of where they stand in the organization. There are corporations who deliberately pursue this course as a fixed business policy, giving as their reason that they do not want to give any man too much power. Some corporations also follow the policy of purposely providing some overlapping or duplication in order to set up rivalry ancT"com- petition. They allow departments and executives to rise or fall as these departments and executives are able to establish con- fidence in themselves and their organizations. While there are some points of merit in such procedure, it is always athwart with danger because while some men proceed along the lines of es- tablishing efficiency and good will, others will proceed with strictly German ruthlessness, using every form of intrigue to malign or belittle the work of their rivals or of anyone who they TYPICAL FACTORY ORGANIZATIONS 41 " 09 a a i! VI! rir iili iy lJh.1i Ilil! o o fl ifl-s ? a a <*> H os o g t> S ^ "-3 -If ^ c^ ' $ : s 3 S *!1 bs C bC ^'^ O d !fj:i ^ ||i Il I ! 8 * a a % > O O O j .fill 8 S fl ^ . S&I6| l.^i *S : 3 i ^*i| S o I Sl-s E g . I ^ -8 42 FACTORY ORGANIZATION AND ADMINISTRATION think stands in the way of their realizing to the full their most selfish ambitions. Another reason for failure to establish clear- cut departmental lines lies in company officials making promises and offers to high-grade men in order to get them into their employ promises they know they cannot fulfil on account of numerous similar promises to other employees. Such policies are suicidal to a business in the long run. A few examples of successful organizations of factories are illustrated in the accompanying charts. 53. Organization Chart of a Typewriter Factory. Figure 7 shows the factory organization of the Remington Typewriter Co., of Ilion, N. Y., as reported a number of years ago. The prin- ciples illustrated by this chart, however, still hold good. The same is true of all the succeeding charts. This company is engaged in what is generally called "a straight manufacturing proposition." That is to say, things are not built to order, but the product is fixed and thoroughly standardized. Hence designing and drafting do not appear among the list of depart- ments under the control of the works manager. It will be noted that there are nine general departments, viz.: (1) General office of works; (2) Purchasing; (3) Finished parts and production orders; (4) Shipping; (5) Inspection; (6) Labor; (7) Cashier (including time and cost keeping); (8) Works engineering, and (9) Manufacturing. The head of each of these departments is directly responsible to the works manager and assistant works manager and no one else. It is noteworthy that this company has put under the works manager such departments as shipping, purchasing, time and cost keeping. In the great majority of American shops, where principles of good organization have not become well recognized, we find the head bookkeeper or some company officer looking after purchasing, time and cost keeping and shipping, leaving all the rest of the functions departmentalized, as shown on this Reming- ton chart. The shop Superintendent therefore, in addition to being the head of the manufacturing department with all its subdivisions, must also look after stock and production orders, employment, inspection, works engineering, power plant, and so on. Being badly over-worked he usually has an assistant Superintendent under him and a general foreman under the Assistant Superintendent, shop clerks under the general foreman, and so on, each being looked on as more or less of a "boss" in the works, but without clearly defined limits of authority. TYPICAL FACTORY ORGANIZATIONS 43 The type of man usually filling the position of shop superin- tendent in the average American shop is often not capable of filling the broader position of works manager. Frequently company officers, though capable of financing, accounting and selling are also incapable of acting as works managers. Most shop superintendents when relieved of the many duties which are shown segregated in this chart make excellent heads or super- intendents of " manufacturing departments." Another interesting feature of the Remington chart is the division of the labor department into two branches, one having to do with hiring, employment records, and general labor, and the other having to do with industrial betterments. This per- mits of combining a good hiring boss, on the one hand, and a trained welfare man or sociologist, on the other, who can pool their abilities to the best end for practical results. It is quite likely that with the development of the idea of the Personnel Department many other activities are now included In the general head of the Personnel Department. It will also be noticed in the Remington chart that all pro- duction orders emanate from the finished parts and production order department. No factory operation of any sort whatever, whether for stock, upkeep or betterments may be made without the proper order issued by this department. The stock of parts required for manufacturing purposes is entirely separate from stock for shipping and repair purposes. Also the stock of raw material is under separate jurisdiction, being under the pur- chasing department. All stocks, in each of the above classes, are regulated by definitely established maximum and minimum quantities. 54. Chart of an Automobile Factory. Fig. 8 illustrates the factory organization of the National Motor Vehicle Co., of Indianapolis, Ind., as it existed 'some years ago when the writer was Superintendent. It will be noted that the title of Superin- tendent in this shop carried with it many of the duties which at the present time would be assigned to the works manager. This type of factory is one in which designing and drafting comes to the front to some extent although not quite as promi- nent as in a works building special machinery to order or build- ing a line of varied engineering prbduct. Here the product is redesigned or modified annually and there is more or less rede- signing and experimenting throughout the season. It will be noted 44 FACTORY ORGANIZATION AND ADMINISTRATION TYPICAL FACTORY ORGANIZATIONS 45 that we have one general circle entitled company officers. The proprietorship of this company centered itself in two company officers who had not definitely divided responsibility between themselves, although,we had a very well-mapped-out chart from the company officers downward through the three-fold control exer- cised respectively over the purchasing agent, superintendent and the chief engineer in charge of the designing department. Various department heads were apt to receive conflicting in- structions from the two proprietors previous to charting the organization. The posting of the organization chart had the effect of eliminating most of these conflicts. Glancing at the chart, we will note that the purchasing department had charge of shipping and receiving, this work being divided into three groups: (1) Shipping, (2) Receiving, (3) Stock of raw material and purchase parts. The superintendent had charge of not only the manufacturing department but also the produc- tion and cost department, as well as the works engineering including power, light, heat and plumbing. The production and cost department had three divisions: (1) Production orders and cost, (2) time keeping, (3) stock of finished manufactured ^arts. The manufacturing departments were as follows: (1) wood-working, (2) tool department, (3) forge department, (4) machine department, (5) sub-assembly groups, (6) erecting department, (7) plating and polishing, (8) painting, (9) trimming, (10) testing and inspecting, (11) final assembly after painting. Subdivisions of some of the more prominent manufacturing departments are indicated on the chart; for example, the tool department has three subdivisions, viz: (1) Tool designing and tool making, (2) tool and blue-print storage, (3) machinery repairs. The forge department has three subdivisions, (1) General blacksmithing, (2) tool forging, (3) case hardening and annealing. The machine department is also subdivided thus: (1) Lathes, (2) screw machines, (3) drill presses, (4) millwright, shafts and belts and oiling, (5) vise and handy men, (6) milling machines. Of course there were some other machines including planers, shapers and boring mills in the department called the lathe department. The circle entitled sub-assembly group has eight subdivisions: (1) Men working on frames, (2) men work- ing on rear systems, (3) men working on front systems, (4) men working on assembling clutch, shaft and universal joint groups, (5) vise hands working at laying out and high grades of vise 46 FACTORY ORGANIZATION AND ADMINISTRATION work, (6) wiring and dash, (7) transmission, (8) steering head and control parts attached to same. The erecting department ri ~l - ASSISTANT TREASURER I ESTIMAT- ING AND SHIPPING SHIPPING RECORDS AND CORRESPONDENCE SHIPPER ING STENOGRAPHER STENOG- RAPHERS PURCHASING STENOGRAPHER 1 PURCHASED AND CLERK EXECUTIVE OFFICE PRESIDENT AND MANAGER FACTORY 8UPT. PRODUCT- ION AND TRACING "I DESIGN AND ORDER PATTERN SHOP MACHINE SHOP BOILER AND SHEET METAL 1 FIG. 9. Showing the organization of a strictly engineering business con- ducted by the Western Gas Construction Company of Fort Wayne, Indiana. Here the designing department takes the initiative on all orders, since prac- tically all product is built to order. The chart covers the entire organization, including accounting and selling. The advisory board, which consists of heads of all departments, meets once a week and makes and receives recommendations from the president and manager, who is himself an expert mechanical engineer. In plotting this chart the rectangular method of procedure has been employed. is shown in eight subdivisions: (1) Engine, transmission and axles, (2) control and brakes, (3) steering wheel, (4) wiring TYPICAL FACTORY ORGANIZATIONS 47 and batteries, (5) muffler, radiator and brakes, (6) dash, fittings and steps, (7) piping and tanks, (8) mileage test. It will be noted that the repair work and demonstration is put under the jurisdiction of the designing department, the idea being that in this manner the chief designer will keep in very close touch with the performance and wear of the machines. 55. Chart of an Engineering Works. Fig. 9 shows the organization of a strictly engineering business as laid out by the writer for the conditions existing at the Western Gas Con- struction Co., of Fort Wayne, Ind. Here the designing depart- ment takes the initiative on all orders since practically all pro- duction is built to order. The company is engaged in contract- ing for gas works. The chart covers the entire organization including accounting .and selling. The advisory board, which consists of the heads of all departments, meets once a week and makes and receives recommendations from the President and Manager, who is himself an expert mechanical engineer. In preparing this chart a rectangular method of procedure has been employed. It will be noted that on the commercial side there are three controlling heads, each head directly responsible to the executive office. These are: (1) Head of sales department, (2) head of purchasing department, (3) assistant treasurer. The sales department it will be noted controls assembling and shipping, the purchasing department controls stores, the treasury department has control of accounts, including cost accounting and all stenographic and clerical and filing work. On the manu- facturing side there are four general heads: (1) A factory super- intendent, (2) head of production and tracing department, (3) head of designing department, (4) head of equipment and erect- ing department. The factory department has charge of the pro- ductive departments of the factory, including the pattern shop, foundry, machine shop, boiler and sheet metal shop. The machine-shop foreman has also jurisdiction over the blacksmith shop and tool room. The production department has jurisdic- tion over the shop clerks. The design and order department has charge of all the drafting, issuing of all shop orders and check- ing, library, filing and technical data. The equipment and erecting department has charge of the erection equipment, and of the erecting men, who are scattered through the world, and the erectors' tool room. 56. Chart of an Electrical Machinery Factory. Fig. 10 48 FACTORY ORGANIZATION AND ADMINISTRATION shows the organization of a large electric machinery manufac- turing company. It will be noted that the control passes from the stockholders, via Board of Directors and the chairman of I * r o | 5 T? O O 2 c JL the Board to the President, and from him through four controlling heads, viz: Comptroller, first Vice-President, Second Vice-Presi- dent and Third Vice-President. The Comptroller's jurisdiction covers two divisions: (1) That of auditor, (2) that of treasurer. TYPICAL FACTORY ORGANIZATIONS 49 In the auditing department we have works accounting, traveling and claim agent, general accounting and invoice department. In the treasury department we have the legal work on collections, collecting department and credit department. The First Vice- President has jurisdiction over the works management. He X x JT IG> 11. Chart prepared by C. W. Adams of the Link Belt Mfg. Co. and published in Factory Magazine, illustrating the functions of the planning department. exercises control over three distinct groups: (1) Head of engineer ing and his assistant, (2) purchasing department, (3) manager of works. The Second Vice-President exercises his control over two distinct groups: (1) Sales, (2) Publicity, including (3) shipper, 50 FACTORY ORGANIZATION AND ADMINISTRATION (4) welfare and employment department. Each division super- intendent has jurisdiction over the general foreman and the general cost clerk of his division. The Second Vice-President has control of selling and adver- tising, he exercises his control over two general heads: (1) Sales manager, who has control of the various district sales offices, (2) publication department, which has control over the printing, publishing and advertising departments. The Third Vice-President has jurisdiction over two branches: (1) General legal department, (2) patent department. 57. Chart Showing the Functions of the Planning Department. Fig. 11 shows how the planning department relieves the shop foremen of handling many details which they are expected to look after in the unorganized shop. Before an order goes to the shop it goes first to the drafting room who see that all drawings are provided, such drawings for shop purposes being usually simplified to include only such references and dimensions as are necessary in the shop. The drafting department furnishes a complete bill of materials. The bill of material goes to the balance of stores clerk who makes any purchase requisitions nec- essary and also indicates what parts are in finished stock. The checked copy of the bill of material goes to the route clerk who indicates the process-map through the factory. From him it goes to the instruction-card man who indicates the detailed operations entailed. From him the bill of material, route sheet, and instruction cards go to the rate-fixing clerk who indicates the standard times. Thence the order and all accompanying papers go to the order of work clerk who sees how it is to fit into the manufacturing program and the schedule of work to be done. Thence it goes to the production clerk who sees that the various work orders are properly put into the shop in proper sequence and properly followed up. 58. The illustrations given in this chapter outline for the most part typical line organizations. The principle of staff features as illustrated in figure 3, chapter 3, and of functional control as described in paragraph 34, can be introduced effectively into any of these organizations without danger of disruption. In fact, this process is at the present time going on in virtually all progressive industrial organizations in America. REFERENCES ARNOLD: "Factory Manager," pps. 117, 236, 275, 323. EMERSON: "Twelve Principles of Efficiency," Chap. II. KIMBALL: "Principles of Industrial Organization," Chap. VII. J CHAPTER V FACTORY ACCOUNTS 59. Accounts Required by Modern Management Different from Old Customs. There are certain accounting methods in connection with modern management which vary from old- fashioned accounting methods, yet whose introduction is abso- lutely necessary before the industrial manager can get a correct and prompt survey of cost of production. Inasmuch as these methods are different from those formerly in general use by bookkeepers who had obtained their training in business colleges, the industrial manager is apt to have difficulty in getting them installed in cases where he does not have direct supervision over the bookkeeping department. 60. Double -entry Principles to be Applied to Cost Accounts. Cost records are always most satisfactory and intelligible if they are constructed on the basis of the theory of double-entry bookkeeping. To meet these requirements we need merely to bear in mind that in double entry we debit what we receive. When we receive nothing we debit the person with whom we are transacting business. We credit what we give. When we give nothing we credit the person with whom we are transacting the business. Another fundamental principle which is the basis of all trial balances and balance sheets is that total debits must equal total credits. According to Hatfield the fundamental equation of double-entry bookkeeping may be stated in the form: Goods account (debit) = proprietorship account (credit). This equation may be expressed in somewhat more complete form as follows: Assets (debit) + negative proprietorship accounts (debit) = capital account (credit) + profits (credit) + debts (credit). Resources and losses are always a debit; liabilities and gains are always a credit. 61. Controlling Accounts. Accounts which involve a prepay- ment or anticipation of an expense or a series of expenses, to be 51 52 FACTORY ORGANIZATION AND ADMINISTRATION adjusted exactly at certain definite fiscal or financial periods, are designated as controlling accounts. Controlling accounts play an important part in connection with cost-keeping. A single expense account which may be a general controlling account may receive summarized periodic entries from a considerable number of subdivided detailed expense accounts which serve to assist the cost-keeper in determining as far as possible the expense burden factors, of every product and every service. 62. The Three Fundamental Cost Accounts. The old custom provided three basic cost accounts, which with some modifica- tions still constitute the basis of modern cost-keeping. These accounts were designated as "Material," "Labor," and "Ex- pense." 63. Subdivision of These Accounts and Monthly Closing. One of the important changes is that instead of having the accounting department carry only the three fundamental accounts mentioned, new accounts have been substituted as fol- .lows, namely, "Raw Materials," "Material Burden," "Direct Labor," "Labor Burden," "Expense Burden," "Work in Process," and "Finished Stock." 64. "Raw Material Account." This account is debited as material is received, with the amount of its cost as per invoices, and is credited with the total charges to "Work in Process" for all materials drawn for work in process, per orders on store- room. The debit balance should represent the cost value of raw materials on hand at the opening of each period, which should be monthly, the account being closed monthly, or by four-week periods. "Material Burden" is a general account which is debited with the monthly or periodic totals of all costs of carriage on materials received, including freight, express, and drayage, cost of buying, including purchasing department salaries and expenses, cost of storing and handling, including all store- room salaries and expenses, as well as the monthly total of all salaries and wages paid to receiving department clerks, and laborers' time spent in hauling and placing materials received into the store-rooms. "Material Burden" account is credited with the burden amounts charged to "Work in Process" account. These charges are usually on the basis of percentage-on-raw-material-cost, based on the ratio of the "Material Burden" account during FACTORY ACCOUNTS 53 the past period or several periods to the "Raw Material " account during the same time. 65. "Work in Process" Account. This account is charged with all materials drawn for work in process per orders on store- room, which have been credited to "Raw Materials" account, as well as with all "Material Burden" items which have been credited to "Material Burden.' 7 It is also charged with all Direct Labor charged to production orders during a given period as well as the Expense Burden. This Expense Burden may be determined by a number of alternate methods as described under the heading of "Methods of Allotting Expense Burden." If the Expense Burden includes in addition to Indirect Labor, also all other expense factors, there will be no further charges to Work in Process, but if the expense burden is divided into different kinds of expense factors, such as "Indirect Labor Burden," "Machine Burden" and "General Expense" burden, these will also have to be charged to "Work in Process." "Work in Process" is credited with the total of all orders as soon as finished, or in other words just as soon as they become "Finished Stock." 66. "Finished Stock" Account. This account is charged with the total of all work in process just as soon as an order is transformed from work in process into a finished order. "Work in Process" account is credited with the same amount. "Fin- ished Stock" is credited with the manufacturer's cost price as established for the various articles to be made, whenever any articles are shipped. This "Manufacturer's Cost" price is then made the basis of operations of the selling department. " Manu- facturer's Cost" price may be slightly higher than the sum of "Raw Material," "Material Burden," "Direct Labor," "In- direct Labor," "Machine Burden" and "General Expense Burden," in order to allow for slight fluctuations in cost. Any apparent profits accumulated in this way can be transferred to reserves, for meeting depreciation of plant and equipment, once a year. Fig. 12 illustrates graphically the theory of cost ac- counts as above indicated in its simplest form. 67. Methods of Allotting Expense Burden. Percentage on Wages. The oldest method and the one still in most general use is the percentage on wages method established by finding the ratio in percentage, which the sum total of Indirect Labor, "fixed charges" and all other expense accounts in a given period 54 FACTORY ORGANIZATION AND ADMINISTRATION bears to the sum total of Direct Labor in the same period. Its greatest weakness lies in the fact that it over-charges high-priced labor which may use shop and equipment and share running expenses only a short time, and under-charges low-priced labor which may use shop and equipment and share running expenses FIG. 12. a long time, in creating a direct-labor cost of the same dollars- and-cents value. The ' 'fixed charges" include the allottments from constant expenses such as rent, interest, insurance, taxes, general officers* salaries, etc. 68. Hourly Expense or Man-hour Rate. A more recent method, and the one which is in use by all machine-tool builders using the uniform cost-accounting methods recommended by the National Machine Tool Builders' Association, is the hourly expense rate obtained by dividing the sum-total of all indirect FACTORY ACCOUNTS 55 labor, "fixed charges" and expenses during a given period by the sum total of direct-labor hours in the same period. 69. Separate Man-hour Departmental and General Rates and Hourly Machine Rates. A third method, probably in the least general use, but destined to become far more widely used is one which establishes (a) an hourly rate for each department, local to that department (b) a general hourly shop overhead rate (c) an hourly rate for each machine or group of machines. Rates a, b and c are mutually exclusive and the sum total of all expenses allotted from these three channels must approximate the total of all indirect labor, "fixed charges" and all other expenses in the same period. Inasmuch as the charges to " Work in Process " and corresponding credits to the various expense accounts during a given period are the results of calculations based on averages of preceding periods, the exact balancing in order to close the expense accounts must be left to an adjustment entry which may result in either a debit or credit to the expense account at the opening of the next period. If a considerable item, this adjust- ment entry may demand a modification of the rates for allott- ing expense burden during the next new period. The establishment of local departmental burden rates affords the proper basis for comparing local expenses from month to month, as well as holding down costs on product which passes through departments having low local burdens. 70. Method of Establishing the Hourly Machine Rate. A number of different considerations enter into the establishment of the hourly machine rate. Among these are the following: (1) The interest and depreciation on the purchase price of the machine ; (2) the annual cost of repairing the machine and keep- ing it supplied with lubricants and cutting tools, etc.; (3) the floor space occupied by the machine and the stock lying about it; (4) the power consumed by the machine. With the previous year's expense accounts as a basis, an estimate is made of the total maintenance of all machines. Out of this grand total or budget, each machine tool is given a certain definite allowance or allotment for the coming year. A card is then written out for each separate machine tool, and after determining approximately the number of hours that the machine will run during the year, its hourly operating rate is established for the next year by dividing the total budget by the estimated hours that the machine is to be used. Every time that 56 FACTORY ORGANIZATION AND ADMINISTRATION the machine is used, it is credited with the amount it earns as its hourly rate, the amounts being posted on the card record for that machine tool from the cost department's records, showing amount or semi-annual period it is found likely that the postings on any card will over-run or fall short of the amount allotted the given machine changes must be made in the individual machine rate. The exact balancing at the close of a year will be left to an adjustment entry which may result in either a debit or credit to the machine expense account at the opening of the next period. With careful allotment of rates these adjustment entries will be relatively small and required only in order to make an exact balance at closing. 71. Segregation of Works Expenses from Selling Expenses. It will be noted that at the outset it was recommended to keep out of General Expense account, items relating to "Material Burden," such as transportation, hauling, purchasing and stores. Similarly all expenses of the finished stock-room and all shipping department expenses outside of outgoing freight charges can be kept in a separate account, which is entered into the general total for determining the Expense Burden. All distinctly selling expenses should be kept separate and the sales department made to show a profit on the basis of the difference between Manufacturer's Cost and Selling Price. Administrative expense which is neither a direct charge to Works Management nor Selling, may be equally divided between Manufacturer's Cost and Selling Cost. 72. Detailed Cost Statistics and Records. Very little has been said in this discussion as to the forms for posting these records. The nature of the business will determine whether these records are to be based on unit prices per quantity of output, per variety of output, or per individual lot or item, whether each individual item is to have its cost figured regularly or at intervals. Most books on cost-keeping are filled with examples of forms for record- ing the statistical data. A minimum of stress is laid on these features in this discussion in order to bring out more strongly the importance of the foregoing general principles. The extent to which detailed costs are obtained depends very largely on the nature of the business. In some industries it will be satisfactory to obtain costs by processes, in other industries by classes or groups of products, in others by weight or bulk and in still others by departments or by machines. FACTORY ACCOUNTS 57 73. Proper Classification of Expenditures. The first thing for an accountant to determine with regard to an expenditure is whether it is a charge to assets or to revenue. We must deter- mine whether the expenditure was (a) for materials, supplies or labor for regular production (b) for materials, supplies or labor for special production which is to be charged to customers (c) for distinct additions to plant or equipment (d) for maintenance of existing plant or equipment, or (e) for replacement of worn-out plant or equipment. If the system of accounts heretofore indicated is in use, which shows the value of raw materials, work in process, and finished stock each month, then there is apparently no need for the carry- ing over of heavy purchases under (a) and (b) to be diffused over several months, as the month's operating profits and losses are easily determinable and quite independent of whether heavy purchases have been made in any one month or whether the pur- chases have been unusually light. In the matter of items under class (4), namely the replacement of wornout plant or equipment, such items would be paid for out of depreciation fund if such exists. If such does not exist and the expenditure is of consid- erable magnitude, the expenditure should be diffused over such period as may be determined on as fair to ordinary production. It is frequently the case that good discrimination is exercised in properly distributing expenditures for which there is a sup- plier's invoice whereas no such discrimination is used in dis- tributing expenditures of the materials and labor of the industry, so that the apparent cost of production varies widely, whereas if expenditures were properly allotted there would be no such apparent discrepancies. 74. Detailed Cost Posting Methods. The methods, records and forms required for finding and posting costs are discussed fully in a later chapter on The Cost Department. REFERENCES GOING: "Principles of Industrial Engineering," Chapters V and VI. HUMPHREYS: "Lecture Notes on Business Engineering," pages 498-510. DAY: "Accounting Practice/' Part II. KNOEPPEL: "Maximum Production." Chapters III and IV. CHURCH: "Expense Burden." BRISCO: "Economics of Business," Chapter VI. WEBNER: "Factory Costs, Parts IV and V. EVANS: "Cost Keeping and Scientific Management," Chapters I to IV. REDFIELD: "The New Industrial Day," Chapters IV and V. CHAPTER VI DEPARTMENTAL REPORTS 75. Purpose of Departmental Reports. Departmental reports serve two purposes they enable the head of each department to know conditions in his own department, and they enable the management to get in concise form definite knowledge as to each department. The first requisite of a departmental report is that it serves some really useful purpose. This fact is often lost sight of. In some establishments, reports are made covering data which have very little if any practical value. This is a danger which must be carefully avoided. Whenever a works manager finds reports accumulating on' his desk which he finds he passes by week after week, without drawing any useful information from them, he would better discontinue such reports altogether. On the other hand, there is no better way of keeping in inti- mate touch with the whole field of a large establishment than through the medium of well-planned periodic reports. Just what should such reports cover? The purpose of this chapter is to determine methods of furnishing classified periodic information to the executive office covering existing conditions and out- look of every phase of the manufacturing side of a business. Certain reports need to be made in order that the executive department may at any time know the exact conditions prevail- ing in every department. Such reports, although comprehensive, should be condensed. Hence, the method of preparation may, in certain departments, require that department to keep detailed records which can be referred to if necessary in explaining the summarized information in the reports. 76. Bureau of Statistics or Records. The duty of determining the nature of the departmental reports, as well as how these reports are to be condensed or transformed into graphical or statistical form, is best placed under the jurisdiction of a staff bureau of statistics, or in the case of a smaller concern, a single statistician. This bureau or single official should be subordinate 58 DEPARTMENTAL REPORTS 59 to no one excepting the works manager and should confer with the various departments furnishing reports, explaining fully the objects sought to be accomplished. It is recommended that any reports prepared by certain depart- ments be returned regularly to the department from which the reports originate. It is desirable that all reports be provided with spaces where they can be checked in the statistician's office, indicating that the report has been noted, or that they be stamped in the office of statistics after having been noted and approved, and that there be a private secretary in the statistician's office who has a list of reports that should come in, with the dates on which these reports fall due. The private secretary should see that these reports are presented to the statistician's office when due, and that they are returned from there to the depart- ment concerned after having been noted, such statistical posting from them having been done in the statistician's office as may be deemed desirable. 77. Typical Factory Reports. Let us take first the general factory office. The general office of the factory receives the orders from the sales department, turns them over to the proper order departments, and advises the sales department of promise dates of delivery. This would be the routine in a factory which does not .regularly ship everything from stock. The nature of the reports from the general office department to the statistician will vary with the class of manufacturing done. For instance, the reports of this department in a hosiery mill, employing 1200 people in the manufacture of a few dozen varieties of hose, will be quite different from the reports in a factory employing three hundred men in the manufacture of a dozen types of machinery, in- volving some ten thousand different component parts, to cover the whole line. In general the things the works manager wants to know periodically are: First, the condition of orders; second, the con- dition of stock; third, the cost of product and of running of plant. It is not the purpose of this chapter to discuss financial reports such as should be received by the general office management from the accounting department. The particular class of re- ports here referred to are such as are to be rendered to the works manager of a factory. Certain reports should be made every week, and turned into the works manager's office on Monday of each week, such reports 60 FACTORY ORGANIZATION AND ADMINISTRATION covering the week ending the previous Saturday. These weekly reports are then discussed at a meeting of an advisory board or council consisting of heads of all responsible departments. Weekly reports of this character can be presented to the manager either in the form of a statement on a regular printed blank, or in the shape of a typewritten statement from the head of the department. A printed sheet for this purpose is shown in Fig. 13. This may be used for a general office department report of machine orders entered, a shipping department report COST DEPT'S REPORT OF EMPLOYEES AVERAGE WAGE RATES AND PRODUCTIVE AND NON-PRODUCTIVE LABOR. NO EM- PLOYEES AVERAGE WAGE PAY-ROLL FOR DEPT HOURS FOR DEPT. HRS. FOR DEPT. PRODUCTIVE HRS. FOR DEPT. DUCTIVE HRS FOR DEPT. GENERAL OFFICE DEPT'S REPORT OF MACHINERY ORDERS ENTERED. WEEK ENDING: ORDER NO. NAME OF CONSIGNEE NO. MACH. WEIGHT DATE TYPE VOLTAGE GAUGE TO BE SHIPPED GENERAL MONTHLY SUMMARY. TOTAL NO.MACHINES SHIPPED TO DATE THIS YEAR NO MACHINES ON HAND READY FOR SHIPMENT THIS DATE THIS YEAR ' ORDERS STILL TO BE SHIPPED AT THIS DATE THIS YEAR TOTAL PAY ROLL TO DATE THIS YEAR SHOP EXPENSE MATERIAL ACCOUNT TO DATE THIS YEAR Fig. 13 (middle), Order Report; Fig. 14 (top), Cost Report; Fig. 15 (bottom), Monthly Summary. of machines shipped, and a manufacturing department report of machines ready for shipment. The general office department report is turned into the statis- tician's office by the head of the general office or correspond- ence department, and on it are listed the most important items for which orders have been received during the preceding week. DEPARTMENTAL REPORTS 61 The form shown would apply to a business in which electrical mining machines are manufactured. A little ingenuity will adapt the principle involved to any other class of manufacturing. 78. Drafting Department Reports. The second report in which the manager is interested is that of the drafting depart- ment, covering bills of material sent to the production depart- ment. For this report no printed form is necessary. It can be written on the typewriter. A list of bills of material actually sent to the production department should be followed on the same report by a list of such orders as have been received during the week requiring bills of material, but for which the bills of material have not been issued. Drafting department organiza- tion counts for a good deal in this matter, and the routine should be so fixed that all bills of material for orders received by the bill of material division of the drafting department from the general office department during any week are issued during the current week, including orders received on the last two days of the week, except for entirely new designs. A comparison of the drafting department report of bills of material sent to the production department, with the general office department's report of machinery orders entered, will indicate what orders remain in the drafting department, for which that department has not yet prepared bills of material. 79. Production or Planning Department Reports. The pro- duction or planning department in its turn should send a report of bills of material disposed of, and sub-orders sent to the shop like the drafting room's report. This statement requires no printed form and can be written on the typewriter. Routine, too, must here be fixed so that all bills of material received during the week are disposed of that week, with a possible exception of bills of material received on Saturday. A list of bills of material disposed of should be followed on the same report by a list of the bills of material left over. The first part of the report shows orders which have been sent to the shop for actual work during the previous week. By comparing this report with the two pre- ceding reports it is easily understood to what extent the produc- tion department is lagging behind the orders received. 80. Reports of Finished Product. The manufacturing or tracing or testing department's report of machines ready for shipment forms the next link in the chain of reports. This report is made by one of these departments from its records or obser- 62 FACTORY ORGANIZATION AND ADMINISTRATION vations, and covers all orders of any magnitude completed during the preceding week which are ready for shipment. 81. Shipping Department Reports. On a printed form, similar to that used for the preceding reports, a report of the shipping department may be presented. By comparing the shipping department's report of machines shipped with the manufacturing department's report of machines ready for shipment, the manager can discover about how much time elapses between the shop's report of completion of an order and shipping it. Such a com- parison will also indicate what part of the product goes into fin- ished stock instead of being shipped. 82. Cost Department Report. Another report, that of the cost department, covers the labor conditions in the factory, and is one of the most important. The printed form for this report is shown in Fig. 14. This report, considered by men who have had an insight into manufacturing, enables them to feel the pulse of the manufacturing department. Considered in connection with the previous reports, it forms the basis for telling whether certain departments are working at their best efficiency or not. 83. Weekly and Monthly Reports. All the reports which have been mentioned are best submitted weekly under ordinary conditions. In addition to these weekly reports, there will be in any business certain monthly reports. These monthly reports will be kept on hand for reference until the next monthly report is ready. Such a monthly report can be well presented on the same printed form as that shown in Fig. 13. The machine orders are arranged in this case in order of urgency. Comparison of this monthly statement with reports for previous months will show to what extent shipping capacity is taken up. For summarizing some of the principal reports which have been submitted by the different departments, a general monthly statement is prepared by the private secretary in a works man- ager's office. The items given in this report indicate the number of machines shipped during the year up to the day of the report, and comparison of this number with the same items, same date, previous year. Fig. 15 shows such a report. For particular purposes, carefully prepared reports, as above indicated, can be made nearly as effective as the results obtained from a monthly closing of the books. The latter process is, in many businesses, totally out of the question. 84. Discussion of Reports. To gain any real advantage from DEPARTMENTAL REPORTS 63 reports, however, they must be given attentive consideration, and thoroughly discussed by a council consisting of the heads of all departments affected by the reports. A great many manu- facturers realize the advantage of such council meetings, but fail in lacking the initiative of getting such meetings started and keeping them up. These meetings are becoming more and more a feature of successful manufacturing establishments. The meet- ings are best held at such times when they do not interfere with the lunch hour, or personal time of employees. A morning period from 10 A. M. to not later than 12 has been found the most satisfactory. 85. Graphical Reports. To many managers graphical sum- maries of reports present a lifelike picture of conditions in a most comprehensive manner, and suggest remedial steps, where mere tabulated figures would not have been such a stimulus. This is particularly true when the works manager is an engineer, or has had scientific training, and is accustomed to the graphical method of presentation and consequent analysis. I have known of instances where the most important and radical steps were inspired by reflection over a graphical chart. On the other hand, there are managers who can appreciate only the numerical and tabulated figure method of making charts or reports, and who consider any conversion of numerical records into graphics as needless waste of time. It is well worth while for those who have not used graphical methods to consider that every successful manager makes scientific use of this imagination when his intuition or judgment tells him that certain steps are necessary. If certain helps to guide this intuition or judgment can be gotten from graphical charts which do not require a great deal of time or expense to prepare, then the charts are certainly worth while. Such a graphic report (Fig. 16), showing graphic comparison of orders received, orders shipped, and orders in production, arranged by classes of product, can be easily prepared. Similarly, other elements in manufacturing can be visualized. Fig. 17 shows a graphic comparison of labor and material costs with estimated value of product. The lowest line is that repre- senting supervision and clerical labor. This will not vary as much as the other lines; the next line is measured from the line just drawn as a base line, and shows the cost of unskilled labor (the items given are expressed in dollars, and laid off to scale) ; 64 FACTORY ORGANIZATION AND ADMINISTRATION GRAPHIC COMPARISON OF ORDERS RECEIVED, (7); ORDERS SHIPPED. (2): ORDERS IN PRODUCTION, (3) : TYPE OF MACHINE BELTED DYNAMOS DIRECT CONNECTED DYNAMOS LOCOMOTIVES 5 TON AND UNDER NUMBER 5 10 15 J 03 ip 15 2 OS 1O 15 2 o @ g ) (?) W 3 0) w (3) T -x \ / \ 1 / \ / v A ^ ^> I ? s j <' s ^ |J J AN 23 < ( 1 / "> * s \ i 2a 31 ** \ \ 1 / 2 SI ^ ^~ 7 f / \ \ i , / \ \ \ / I ^ i / P It 7 ( j \ / i 7 ' J N A1 23 / / / ^N / / v ^ 23 31 \ s - y / ** \ / / 31 N / / \ , X \ 5 X \l'/ \ / ! JUT L j \ V 5 J ( 14 v UN 22 \ R 5 I ii^i 30 \ _/ > \ IN / 1 M I 7 I* ' / \ i r \ ; , \ / \ K T JUL * 5 ) (i r; \ ( ,' < j ' J J UL Y 23 / v \ ' / \ 23 31 v X ' / \ / / 3' 7 ^ \ \ / / i \ < / * ! 1 \ ; ' U< . "* 5 ) < / /' i lj A UC 23 / 5 A \ p. ^ J 31 \ / / k \ 31 FIG. 16. For the manager who has learned the value of graphic repre- sentation of facts, nothing can compare with a chart as a means of getting at the essence of a mass of figures. The data given in this chart is hypothetical and the quantities taken are arbitrary. The value of the graphical method is well brought out, however, and the arrangement necessary to secure the results here shown is applicable to a great variety of conditions. The rela- tive condition of three of the facts essential to the manager orders received, orders shipped, and orders in production is made evident at a glance four times a month throughout the year. Pay-roll periods often make satisfac- tory intervals by which to plot the condition of production on a chart, but periods suitable to the business must be taken, DEPARTMENTAL REPORTS 65 while the third line is the cost of skilled labor. Cost of material used in the month's production is graphically presented by line PS CO o. 81 CJ u? Z S HO O "; if ? U t Z s ^ LJ $ o li Si a a i i i i i i i than it would be if located on a railroad track. 101. Local Trade Centers. There is also often an advantage in being located in a center which is already known as one where certain classes of manufacturing prevail. For instance a clothing shop would likely be manifestly out of place in a center devoted to the manufacture of machine tools and vice versa. 102. Local Transportation. In changing locations in a given city a manufacturer should get positive knowledge concerning the cost of trucking to his various city customers and where there will be extra drayage charges from his local supplier to the new site, also what the drayage or switching charges will be to the various railroads from his new site as compared with the same charge from his present location. The factory site on a water way without railroad facilities is of little advantage nowadays. On the other hand a location access- ible by both water and railroad is particularly desirable. The wonderful manufacturing development in recent years in such cities as Detroit, Cleveland, and Buffalo, is evidence of this. Such a location is especially desirable for industries using bulky raw materials such as timber and iron ore. Since the waterway will serve these raw materials with low transportational charges and a railway is convenient for shipping out finished products, such a site offers especial advantages. In selecting railroad trackage the particular class of raw material which may be found along the line of a certain railway may decide the question of site in favor of a certain railroad even though outward shipping facilities on that road may not be as good as those of another. For instance, a company making sewer pipe or fire brick might prefer to be located on a road which passes through the fields from which it draws its raw material even though that road might not be as able to handle outgoing shipments as well as another railroad. 103. Local Labor Market. Nearness to a general labor market may even have to give place to nearness to a specialized labor market. For instance, there is a constantly increasing trend of machine-tool builders toward the Mill Creek Valley settlement of machine-tool shops in Cincinnati. A similar trend of manufac- turers of automobiles is toward the favorite driveways of Detroit, whereas both Detroit and Indianapolis are recognized as good 73 : FACTORY ORGANIZATION AND ADMINISTRATION cc z o H o o u. -1 FACTORY LOCATION 79 labor markets for workers on automobiles and automobile parts. Even in getting into the specialized centers, however, another factor needs to be considered, namely, the nearness to the work- ing man's home. Other things being equal, the working men will * prefer to work in that shop to which they can walk or to which the street-car trip is shortest, hence it is important to find out where the majority of the workers live who are employed in the special industry involved and to locate the new factory near to the working men's homes. 104. Local Sales Centers. Nearness to the sales center of a city may in many establishments be especially important since ^ personal visits from buyers will thus be encouraged. This is evidenced in many of the jewelry and other small manufacturing businesses in our large cities. In buying land at the outskirts of a city, the purchaser should assure himself of the adequacy of such factors as are dependent on public service corporations, such as supply of water, light and power, and street railway transportation. The busy manufacturing plant located where many people will see it, has an advertising value worth many pages of paid space in newspapers and magazines. A number of successful auto- mobile factories have for this very reason been located on roads which are favorite drives. 105. Suburban Sites. In considering the cheapness of a site in the suburbs or outskirts, attention must be given to such ques- tions as cost of survey, of laying water and sewer lines, of road improvements, of side-walks, of grading and other preliminary work; also the cost of the building operations in a location where all the material and equipment have to be hauled a long way. The general run of real estate agents do not have available such data as are indicated in the above outline and a manufacturer t/ selecting a site is lucky if he can secure the services of a real estate man who has made a special study of factory sites in his town. Such a specialist is likely to be in much demand and will have little time to waste on promoters, cranks and inventors without any real money to invest. Fig. 18 summarizes in the form of a chart the leading con- siderations with regard to Plant Location. REFERENCES DAY: "industrial Plants," Chapter III. TYRRELL : " Engineering of Shops and Factories," Chapter II. CHAPTER VIII THE PLANNING OF FACTORY BUILDINGS AND THE INFLUENCE OF DESIGN ON THEIR PRODUCTIVE CAPACITY 106. Process Mapping. In general the first step in solving the problem of laying out a complete factory plan, or an addition to an existing plan consists of the determination of the general processes required to produce the various products of the estab- lishment, and indicating the paths followed by the product in passing from process to process. The best way to begin is to take an existing plant making the product under consideration, or one nearly like it. Take one class of product if there are vari- ous classes, or one component if there are various components. Draw a phantom perspective sketch of the building or build a small skeleton framework of the building, putting in the floors but omitting the walls (see Fig. 19). If the phantom drawing on paper is used, take colored crayons, letting a certain color of crayon represent a certain product or component, and follow the product or component from process to process, from department to department, and from floor to floor of the existing factory. Use a separate color of colored crayon for each sepa- rate principal product or principal component and trace the proc- essing for each in the same way. If the small wooden frame model has been used, colored threads can be used in place of the colored crayon lines. 107. Routing. Routing is a more detailed form of process mapping, and consists of the listing of every process on a com- ponent part. A general route map is usually prepared for the various groups and sub-groups which go to make up a machine or other compositive product, and a route-list is then prepared for each component part. Thus the distinction between process mapping and routing may be shown by stating that in process mapping, departments would be the limit of differentiation; in routing, on the other hand, we would assign work to specific machines. A still further differentiation is designated by the 80 THE PLANNING OF FACTORY BUILDINGS 81 82 FACTORY ORGANIZATION AND ADMINISTRATION items on the detailed instruction card or instruction list, which lists each distinct step under the heading of lathe work, etc. The making of detailed instruction lists is more fully discussed in a later chapter. This minute subdivision of processes is not considered in connection with factory planning, but process map- ping and routing play an important part in the layout of build- ings and departments. 108. Processing Equipment. Knowing the approximate man- ufacturing program or year's output, it becomes necessary to determine the equipment required for the production of a given quantity of output. It is evident that this investigation requires at least a general knowledge of the time standards of the various processes. As an example of the methods to be pursued in estimating equipment required let us take the case of the manufacture of a line of side-crank steam engines, and determine machine-tool equipment required for machining the crank shafts: Size engine No. of engines of this size to be built in a Lathe operations and time for one Total lathe time for one Total lathe time on crank Center Rgh. Fin. year and face turn turn engine shafts H. M. H.M. H.M. H.M. H.M. 7& 8X10 100 .20 .40 .50 1.50 108-20 9X14 20 .25 .45 1.00 2.10 42-20 10 & 11X16 20 .25 .45 1.00 2.10 42-20 12 & 13X18 20 .40 1.00 1.30 3.10 62-20 14 & 15X20 10 .40 1.00 1.30 3.10 31-10 16 & 17X22 10 1.00 1.30 1.45 4.15 42-30 18 & 19X24 5 1.15 1.30 2.00 5.15 26-15 20 & 22X27 5 1.30 2.00 2.45 6.15 31-15 24 & 26X30 5 2.00 2.30 3.30 8.00 40-00 Total lathe ti me on crank sha f ts 426.30 From the above estimate of the time required to do the lathe work on a crank shaft for the entire line of engines, it will be seen that there is 426 hours and 30 minutes of estimated lathe time on the crank shafts. Experiments made by the Lodge & Shipley Machine Tool Company with an electric recorder wired to a contact piece on the belt shifters on all of their lathes showed that their lathes were running about 50 per cent, of the time. THE PLANNING OF FACTORY BUILDINGS 83 By constant attention for a period of six months they were able to increase this period to 75 per cent., which probably represents as good an attainment as is possible. In most shops the lathe may be estimated as running not over one-half of the time so that for the purpose of estimating the time that a lathe will be engaged with a given class of work we must double the actual estimated time of doing the work. Hence, we should say that the crank shafts would require two times 426 hours and 30 minutes or 853 hours of lathe-department time. The immediate conclusion is that one lathe will be ample equipment to do the work on crank shafts and that it can also be used for work on some other parts. The above example is given to indicate the process of esti- mating machine-tool time followed in going into detail. In order to be accurate one should, of course, have complete bills of material covering all the machines proposed to be built, also a complete estimate of all operations on all parts. This it will be seen is entirely out of the question as the method to be pursued in preliminary work, as such estimating for a line of engines alone would require the constant time of an expert for a number of months. One can, however, make such generalized investi- gations as will tend to put him on the safe side in providing sufficient machinery. Frequently data are gathered on the equipment for a given quantity of output necessary in the existing plant or in other plants making a similar product, such data serving as a guide or check on the adequacy of the equipment for the proposed new plant or extension. 109. Arrangement of Equipment. Having determined on the processing equipment, according to the methods above indicated, this equipment must then be arranged in the most advantageous manner so as to secure the least unnecessary traveling and hand- ling of materials, so as to secure the allowing of abundant space for storing of rough materials and partially finished product around the machinery and so as to leave ample passage for trucks, industrial railways, cranes, or other methods of transportation. Sufficient room must be allowed to provide convenient access to all parts of a machine, and for the removal of any machine when necessary. It has been agreed that the floor space in the main shop is too valuable to use as storage space. At the same time there must 84 FACTORY ORGANIZATION AND ADMINISTRATION be sufficient work in sight that the employees may see that they are not " working themselves out of a job." Having determined on the equipment required in a given department the best procedure is to cut paper templets to scale to represent each item of equipment and secure final arrangement by pinning these templets into various trial positions until the best possible arrangement has been secured. 110. Floor Space Occupied by Equipment. In order that the templets may be of proper size it is necessary to know the approx- imate floor space of the various kinds of equipment required. Data of this sort may be obtained by writing to the manufacturers of the equipment in question. As an example of the kind of data to be obtained, the following tables of floor spaces are given : FLOOR SPACE OCCUPIED BY LATHES Lodge & Shipley Machine Tool Company, Cincinnati, Ohio Swing Space occupied 14 in. 37 in. X 11 ft. 3/4 in. 16 in. 44 1/2 in. Xll ft. 3 3/4 in. 18 in. 50 in. Xll ft. 6 3/8 in. 20 in. 50 in. Xll ft. 6 in. 22 in. 57 1/2 in. Xll ft. 5 in. 24 in. 59 in. Xll ft. 4 1/2 in. 27 in. 64 in. Xll ft. 4 in. 30 in. 67 1/2 in. X 13 ft. 11 1/4 in. 36 in. 67 1/2 in. X 13 ft. 11 1/4 in. 42 in. 78 in. X15 ft. 1 in. 48 in. 78 in. X 15 ft. 1 in. FLOOR SPACE OCCUPIED BY RADIAL DRILLS Bickford Drill & Tool Company, Cincinnati, Ohio Size of working surface Floor space required No. 1, 2 1/2 ft. X3 ft. 90 in. X 97 in. No. 2, 2 1/2 ft.X3 1/2 ft. 90 in. X 109 in. No. 3, 2 1/2 ft. X4 ft. 90 in. X 121 in. FLOOR SPACE OCCUPIED BY MILLING MACHINES Cincinnati Milling Machine Company, Cincinnati, Ohio Horizontal Millers Working surface Floor space No. 2, llin X7 1/4 in. 77 3/4 in. X92 in. No. 3, 13 1/2 in. X55 3/4 in. 83 in. X 106 1/2 in. No. 4, 16 1/2 in. X64 1/4 in. 97 in. X 125 1/2 in. No. 6, 19 in. X76 1/2 in. 105 in. X 145 1/2 in. THE PLANNING OF FACTORY BUILDINGS 85 Vertical Millers Working surface Floor space No. 2, 11 in. X7 1/4 in. 84 in. X89 in. No. 3, 13 1/2 in.X55 3/4 in. 89 1/2 in.X 103 1/2 in. No. 4, 16 1/2 in. X64 1/4 in. 100 in. X 125 1/2 in. FLOOR SPACE OCCUPIED BY UPRIGHT DRILLS Cincinnati Machine Tool Company, Cincinnati, Ohio Swing Floor space required 21 in. 18in.X48in. 24 in. 21 1/2 in. X 58 in. 28 in. 24 in.X 67 in. 32 in. 26 in.X 71 in. 36 in. 28 3/4 in.X 79 in. 42 in. 30 in. X 90 in. FLOOR SPACE OCCUPIED BY PLANERS American Tool Works Company, Cincinnati, Ohio 22 in. X5 ft. planer 4 ft. 8 in. wide by 12 ft. long 24 in. X6 ft. planer 4 ft. wide by 14 ft. long 26 in. X6 ft. planer 5 ft. 2 in. wide by 14 ft. long 28 in. X6 ft. planer 5 ft. 4 in. wide by 14 ft. long 30 in. X8 ft. planer 5 ft. 8 in. wide by 18 ft. Sin. long 33 in. X8 ft. planer 5 ft. 11 in. wide by 18 ft. Sin. long 36 in. X8 ft. planer 8 ft. wide by 19 ft. 4 in. long FLOOR SPACE OCCUPIED BY SHAPERS Cincinnati Tool Works Company, Cincinnati, Ohio 15 in. shaper 60 in. wide by 42 in. long 16 in. shaper 66 in. wide by 43 in. long 18 in. shaper 72 in. wide by 46 in. long 21 in. shap'er 82 in. wide by 53 in. long 25 in. shaper 90 in. wide by 54 in. long 30 in. shaper 98 in. wide by 60 in. long 111. Arrangement of Departments. After having determined on the equipment and its arrangement in each department, the lay-out of each department being prepared separately first, the next step is the arrangement of the departments and their sur- rounding buildings with respect to each other. It is not advisable to consider proportion, dimensions, or loca- tion of various departments until one has determined for each department its equipment, space required for same, storage space, and passage areas. It is desirable in this connection to 86 FACTORY ORGANIZATION AND ADMINISTRATION investigate data covering actual equipment in use in shops making the same or similar product to that contemplated, and to reduce these data to such units as floor space per unit of output and floor space per employee. It must be evident that a wide variety of output cannot be advantageously built in a single shop. It sometimes happens in the machine-manufacturing business that a single shop must, on account of trade conditions, manufacture both light and heavy machinery, or machinery and light detail fittings. In such cases careful planning of departmental arrangements, equipment, and organization is particularly necessary, so as to keep the sepa- rate costs of production of each type distinct, and at a price reasonably near the minimum for each class. Again, it has been found that the building of groups of parts representing a complete organ of a machine, in a single department, is often more likely to bring about more economic production than an arrangement in which all pieces travel through the whole shop in which each distinct class of machine tools is grouped by itself. 112. Consecutive and Simultaneous Processes. The route charts for the various kinds of product will indicate that certain groups must arrive at a state of completion simultaneously. The departments and buildings must be arranged so as to adapt themselves to the equipment and flow of work, following always the lines of least resistance as regards not only losses in trans- mission apparatus but losses in activity of working men. The proper arrangement of departments and of machines with regard to each other depends upon statistical knowledge of the most predominant paths of travel of the material in process of manu- facture. Such observational information alone can determine to best advantage also the location respectively of rooms for stores, stock, tools, grinding, etc. Where a number of simul- taneous machine-tool operations must terminate in a central assembling or erecting department it may be desirable to have two or more buildings running east and west, for example, contain- ing the preliminary simultaneous operations, these buildings terminating in a single north and south building in which the assembling and erecting are done. 113. Use of Templets in Arranging Departments. Having determined in the foregoing manner the general dimensions of the various departments, and given due consideration to depart- mentalization by processes as against departmentalization by THE PLANNING OF FACTORY BUILDINGS 87 product, as well as to simultaneous and consecutive processes, templets should be prepared showing the general proportions of each department, and these templets shifted around until the most desirable arrangement of departments with reference to each other is secured. 114. Service Departments. The process-maps and route- charts will be found valuable guides in determining to best advan- tage the location of the so-called " service" departments, such as rooms for stores of raw material, stocks of finished parts, tools, blue-prints, grinding, lavatories, etc. Lockers and wash-rooms should be so planned that thorough discipline and system can be maintained with regard to them. Good discipline and system in these incidental features is bound to react on the work of the shop as a whole. Workmen should register time after depositing clothes, etc., in lockers, and not before, and location of lockers and time-clocks should favor this method. 115. Visibility of Work and Economy of Transport. Outside of the locker and wash-rooms, the only portions of the shop which it is desirable to have partitioned off and not subject to visibility are such departments as need isolation on account of the work to be carried on in them by reason of gases, smoke, dust, or similar objectionable features. The requirements of modern factory regulations, however, usually specify exhaust systems for removal of all of these objectionable gases, smokes, dusts, etc., so that a forge-shop or grinding department may be seen in modern fac- tories under the same roof as the machine shop and without any separating wall or partition. It is important that as much floor space as possible should be visible at all times. Hence all "L's", "E's" and "HV should be avoided in favor of the plain rectangle with all departments under one roof. Economy of transport demands a minimum of passage ways. Passage ways encourage aimless wandering and loitering. 116. Single-floor or Multi-floor Building. Considerations of visibility and the avoidance of unnecessary walking or elevator- riding, argue for the single-floored structure as against multi- floored buildings. Even the single gallery in monitor-roof buildings is best avoided, as it forms a more or less isolated set of areas not readily visible, and increases walking, stair-climbing, elevator-riding, and trucking. 88 FACTORY ORGANIZATION AND ADMINISTRATION The questions as to whether the fixed charges due to increased cost of building and land will not be in excess of the economies due to visibility and economy of transport, must be given due consid- eration. The cheapest type of building calculated on the basis of fixed charges per square foot of floor area, is a three-story building 40 to 50 ft. wide and 100 to 120 ft. long. As a general rule for medium heavy and heavy work, the single-floored build- ing will show up favorably even where land is costly. The lesser fire-risk and greater productivity per unit of floor area must be set off against the interest and other fixed charges per unit of floor area. Moreover a large tract of valuable land is bound to rise in value, and would mean a greater value of real estate in time, though it might also mean higher taxes. ' The fixed charges should be calculated for the various proposed sites and types of buildings and compared with estimates of comparative economies or losses in productivity. 117. Allowing for Future Expansion. The site selected, as well as the shape of the building, must be such as to allow for expansion. This demands the possession of land enough to allow for the extension lengthwise of a building and such lateral expan- sion in the way of increased width of single buildings or additional buildings as may in time be needed. One way of securing ease of expansion is to have at hand a plan for buildings to house double, triple, or quadruple the production at present planned for, and make the present plans in such a manner that the future plans can be easily worked out. A well-designed building will provide facility of enlargement, maintaining the same balance of floor area. This demands the recording of all increases of departmental area whenever they have become necessary, and the use of such records in preparing the designs for new buildings. It has been aptly stated that a well- designed factory building or set of buildings should be as flexible and adaptable to enlargement as the "unit" system of filing cabinets. Fig. 20 shows the rear view of the factory of Ludwig Loewe atWittenau, near Berlin. It will be noted that either the saw-tooth shop or either of the lateral buildings may be extended toward the rear, preserving the same balance of area. 118. Service Equipment. By service equipment is generally understood all machinery and apparatus necessary for running the factory and not constituting processing machinery. Under the heading of service equipment would come such apparatus as THE PLANNING OF FACTORY BUILDINGS 89 heating and ventilating appliances, lighting apparatus, fire pre- vention equipment, water supply, sewage system, mechanical transportation, power generation and transmission. 119. Heating and Ventilating Apparatus. With regard to heating and ventilating, it can safely be said that the loss in labor efficiency and consequent output per man due to faulty installa- 90 FACTORY ORGANIZATION AND ADMINISTRATION tions will certainly be found to be enormously greater than the cost of proper heating and ventilating facilities. The heating of most factory buildings is best accomplished by the indirect pressure system, using the exhaust steam of one or more non-condensing engines as complete or auxiliary heating medium. Fig. 21 is a view of the shops of the United Railway Company, Baltimore, Md., showing hot-blast heating apparatus and exposed distributing ducts. A more pleasing interior finish can be secured by concealing ducts under floors and in walls. This may involve the use of rectangular ducts, and alterations in length of the ducts as they would be used if exposed, and such alterations must be designed by competent engineers. In many cases the heating system has been very carelessly put up, without any plans or specifications having been prepared for it. As a result, heating is often insufficient or poorly balanced, and circulation defective. A system of heating should always be planned by a competent engineer. Owing to the very long pipe lines necessary in factory buildings of the modern type, direct radiation systems for factories, even when designed in the best possible manner, are likely to have poor circulation and to be slow in action in cold days unless a vacuum system of circulation is used. The hot-blast system of heating the air in heating cham- bers supplied with steam coils, and delivering it under pressure from a blower, possesses the advantage of heating a shop quickly in the morning, and of uniformly distributing the heat, if it is properly designed and installed, so that, although the total heat units required to heat the air will be theoretically greater than with direct radiation, the tremendous gain derived from uniform- ity of temperature and comfortable workers will far more than counterbalance the additional cost of operation when using the indirect pressure system, as compared with direct radiation. The pressure is always outward, hence there is a freedom of drafts and, when properly installed, an avoidance of the accumulation of the total heat radiated at the top of the building, as is so apt to be the case with the direct radiation system. The cubical contents of most factory buildings are so large that sufficient number of changes of air per hour are secured by drawing only a portion of the air for circulation from out of doors, so that the expense of the indirect pressure system when applied to factories can be made a good deal less than that of the same system as applied to public buildings, where the cubic space per person is THE PLANNING OF FACTORY BUILDINGS 91 many times less and the number of changes per hour must be much more frequent. Of course, if the air in the shop is vitiated by the processes of manufacture going on, the foregoing remarks will not apply. It will always prove economical to provide pure air. This is especially true of a factory located in unsanitary surroundings, in which circumstances it will be profitable to provide air shafts of considerable height to draw in pure air or provide other means of purification. Clean air as a money saver in mercantile establishments and offices has not received the attention - it deserves. One can FIG. 21. Hot blast heating system as applied to shop of the Jaxon Steel Products Co., Jackson, Mich. Courtesy of the Austin Co., Cleveland, Ohio.' daily see on display, in the show windows of high-grade dry goods establishments, fabrics and gowns worth thousands of dollars, which are being badly damaged by sooty and dirty air. The same conditions prevail, to a greater or less extent, throughout these establishments. The depreciation due to dirty air could be reduced 90 per cent, by the introduction of air-clean- ing devices whose cost is trivial compared with losses now taking place. Most engineers and writers on heating have confined their attention, in the matter of the use of the pressure system, to 92 FACTORY ORGANIZATION AND ADMINISTRATION calculations as to how to provide sufficient heat to overcome the heat losses through walls, windows, roofs, floors and open doors, and have apparently failed to appreciate the importance of fur- nishing better health and greater activity of employees from breathing wholesome air, which always results when the pres- sure system is properly installed. In a building thus ventilated there need be no drafts, as the most healthful conditions are reached by keeping all windows tightly sealed. The outlet of air is best secured by a separate set of ducts leading to the roof. This system is so common that it seems almost impertinent to mention it. Nevertheless it is equally common to see great black streaks radiating from the hot-air ducts, showing how full of soot and dust the air is which is forced into the building, though it is otherwise full of oxygen and far more healthful than the air furnished by any other system of heating and ventilating. The black streak, however, is entirely unnecessary, and can be absolutely avoided by proper systems of air washing a process accomplished by either of two systems of spraying; the first method is used where only a moderate water supply is available; the second, where abundant water is at hand. The first plan, for cases where it is necessary to be economical of water, is that of using a "coke" washer. In this system the air is drawn through a series of cages filled with coke, over which fine streams of water trickle. The coke absorbs the soot and dust, and will serve in this way without replenishment for at least a year. Fig. 22 shows a typical hot-blast heater with coke air washer. The second and better plan is that used where an abundance of water is available. This plan consists of blowing the air through several curtains of fine streams of water. The drying is effected by passing the air alternately over and under a series of baffle plates. The centrifugal force, where the air makes the sharp turns about the edges of the baffle plates, separates the moisture so that the air can be furnished at any degree of humid- ity desired. In order that there may be no discomfort with sealed windows in summer, the air can be passed over refrigerator coils, making it possible to secure any degree of coldness. Another advantage, from the standpoint of economy as well as of health, accompanies the use of .air-washing systems, namely, THE PLANNING OF FACTORY BUILDINGS 93 the ability to humidify the air to any desired degree. The nor- mal degree of humidity of the human body is between 60 and 70 per cent, and with this degree of humidity the body is just as comfortably warm at 65 F. temperature as it is at 70 with a low condition of humidity, say 15 to 20 per cent., which is the usual condition of artificially heated atmosphere where the air is not humidified. This means that a fuel saving of 7 or 8 per cent, can be effected by furnishing air of lower temperature but of higher humidity. It should also be borne in mind that it is seriously detrimental to health to breathe air having so low a degree of humidity as is furnished by most heating systems. The result is an excessive FIG. 22. Hot-blast heater with coke air washer: C, screen through which outside air enters; D, tempering coil fed by steam pipe E; F, by-pass so air can go through without touching tempering coils; G, coke air filters moistened by perforated water pipe H; I, catch basin; K, blower; O, partition permit- ting part of the air to be blown over heater coils and part or all to be blown through ducts without passing over heater coils. evaporation from the membranes of the body, which is productive of catarrhal diseases. In addition, one is more apt to contract a cold when passing from an atmosphere of 15 relative humidity and 70 F. temperature into outside zero weather with 70 F. of humidity than if the normal percentage of moisture had been maintained within the building. Humidity control is effected through the agency of a ther- mostat. This is possible because of the discovery that the amount of moisture which a body of air will absorb during any given length of time in contact with water is more dependent on the temperature of the water than on the temperature of the air. Hence, when the thermostat indicates that the temperature of the air surrounding it is changing, it follows that the absolute humidity must be changed in order to preserve the relative hu- 94 FACTORY ORGANIZATION AND ADMINISTRATION midity at a constant percentage. The temperature of the spray water is therefore changed by a steam jet, acting through a device similar to an injector, over which the thermostat! c motor has control. Another duty which the spray system of air cleaning accomplishes very efficiently is that of cooling the ventilating air in summer. The entering air is placed in contact with an im- mense amount of cooling surface, namely, the total area of the water globular surface. The air can thus be cooled by about 80 per cent, of the initial temperature difference between the spray water and the entering air. In order to use the same water a second time, ice must be placed in the settling tank, or such tank provided with brine coils connecting with a small refrigerating machine, to keep down the temperature. 120. Lighting Apparatus. Abundance of light is as important as abundance of pure air. Natural light should permeate the whole shop during all hours at which it prevails out of doors, and not only work-benches and machines, but stairways and all pas- sages, should be light. The saw-tooth roof, with glass portion toward the north, gives the most agreeable and diffused light. It should be borne in mind that with saw-tooth roof construction, the side windows in the walls can be dispensed with altogether, although this practice is by no means common. To determine how far inward good light will penetrate, a very close approxi- mation can be secured by taking a 45 triangle and laying the hy- pothenuse along the extreme edges of the glass in either side windows or saw-tooth roof windows. In shops of ordinary height, this will limit the well-lighted area to a distance of from 20 to 25 ft. from the windows, and will limit the width of the saw-tooth "bays" to about the same, unless unusually high windows are introduced or prismatic glass is put into the upper window sashes. Fig. 23 shows some structural details of the saw-tooth roof construction used in the shops of the Blake & Johnson Co., Waterville, Conn. An interior of this same shop is shown in Fig. 24, showing how well the light is distributed. Skylights are generally undesirable on account of their admit- ting so much direct sunlight, and also on account of their liability to breakage of glass and obstruction by snow. In the case of the saw-tooth roof, facing the north, clear window glass may be used, since it is never exposed to the direct rays of the sun. Windows in the ventilating portion of the central roof gable will THE PLANNING OF FACTORY BUILDINGS 95 96 FACTORY ORGANIZATION AND ADMINISTRATION o II 1 CJ ' co ' 1 T3 C3 THE PLANNING OF FACTORY BUILDINGS 97 need shades, unless made of ground or yellow glass. As to the side windows, except those facing the north, they are exposed to direct sunlight if there are no closely adjacent buildings. Shades usually receive rough treatment in a shop, and are certainly shortlived, hence opaquing the glass is usually preferred to instal- ling shades. If the nature of the work is clean enough to permit their use, buff color is recommended, since this variety does not shut out too much light. Ground or cathedral glass panes may be desirable in certain locations where it is advisable to keep out direct sunlight or to obstruct the view inward or outward. Prismatic glass has been used to advantage in places where the light requires to be deflected inward into the space desired to be lighted, as in basements, or in a space darkened by neighboring walls or in top floors with little or no side-lights, but receiving light from sloping skylights. A ribbed pressed glass acting somewhat like a prism may be found to answer in some cases where the more expensive plate-glass prisms might be considered too costly. As to artificial light, there is but one kind to be considered in a modern establishment having its own power plant, and that is the electric light. In some cases where the factory generates its own gas it may be found that a carbureted producer-gas will be more economical than electric light, even with prompt renewal of Welsbach type of mantles. As wide fluctuations in the loads of electric generators are ac- companied by low efficiencies, it will sometimes be advisable to have a distinct engine and dynamo for lighting purposes. Arc lamps on the incandescent circuit are desirable for general illumi- nation, supplemented by incandescents for individual machines and benches. For monitor roofs where lights must be high above the floor to afford free space for crane service, the flaming arcs will be found advantageous. The mercury vapor lamps are less expensive to operate than the flaming arcs, but proportionally less satisfactory owing to the weird color effects accompanying their use. It may be found desirable to alternate them with flaming arcs to secure sufficient white light. Good light demands that the wiring be of ample size to prevent drop enough in voltage to produce any dulling of incandescent lamps. Wire guards should not be used on lamps excepting where really needed. Their cost and interference with light renders it doubtful whether 98 FACTORY ORGANIZATION AND ADMINISTRATION they are any real saving. For delicate work, the so-called "tipless" incandescent lamp provides the most perfect illumina- tion, being free from the circles of darkness that are cast by lamps sealed at the bulb end. Some provision must of course be made for artificial illumination when the power plant is shut down, by connection to a public electric or gas circuit, or, if this is not available, by a stock of oil lamps for emergency use. Eye-strain causes brain fatigue and materially deteriorates manual efficiency. Hence careful consideration needs to be given to daylight and artificial lighting. The efficiency of any lighting system depends, not on the number of lights supplied, but upon the extent to which this system enables the eyes to per- form their duties with least effort and strain. With good daylight, all parts of a machine are about equally illuminated. At night, however, with the commonly prevailing system of localized lights, the illumination of machines is very uneven, one part being very highly illuminated and other parts being in comparative darkness. With suitable diffusion, direc- tion and intensity of light, operators can see their work far better with a low foot-candle value of illumination than they can with the high foot-candle values of concentrated illumination. The eye adapts itself to artificial illumination in such a way that the intensity of light required for good vision at night is only a small fraction of the intensity of average daylight. As a rule, the general illumination of a shop at night is wholly neg- lected. In order to read ordinary writing, a minimum illumina- tion of about one foot-candle is required. A good reading light should be about two foot-candles. In most shops, the general illumination falls below this. A good indoor daylight illumina- tion needs to be only about forty foot-candles, although this may be considerably increased or decreased without discomfort. Where the daylight is insufficiently diffused, prismatic glass should be used. With a highly concentrated artificial light and a dark field just outside this concentrated area, conditions are such as invari- ably result in eye-strain. Continued subjection of the eyes to this kind of illumination results in decrease of vision until the workman is unable to perform his work with accuracy or rapidity. A strong objection to the use of concentrated lights is the glare due to reflection of the bright image of the light, which is thrown into the eye of the operator. THE PLANNING OF FACTORY BUILDINGS 99 The general illumination of a shop should not be so inefficient as to make it appear gloomy. A low degree of general illumina- tion makes it impossible for the foremen to exercise the same de- gree of supervision at night as in the daytime. The remedy for many of these objectionable features lies in the introduction of suitable illumination, proper care of lamps, reduction of the intrinsic light sources, and improved diffusion and direction of light. 121. Fire Prevention. Too much stress cannot be laid on the great importance of the absolute fireproofing of such parts of buildings as are intended for the reception of the almost unreplaceable requisites of manufacturing, such as drawings, patterns, and inventory. Drawings and patterns of tools, jigs, etc., are too often carelessly treated, since there may be but one article completed from them, but their loss in case of destruction of the tools by fire would be enormous. Consultation of the publications of the National Underwriter's Association, the Factory Mutual Fire Insurance Association, various well-known insurance companies, and the building codes of the various states will be of great aid in settling questions connected with the installation of adequate fire prevention equipment, including such matters as automatic sprinklers, fire pumps, fire hose attachments indoors and outdoors, fire walls, fire doors, etc. 122. Water Supply. It is important that ample drinking water be available, distributed to sanitary drinking fountains within easy reach of all employees. If there is any question as to the healthfulness of the general water supply of the factory a separate system of healthful drinking water should be installed. Small electric water purifiers for industrial water supplies are now standard articles. 123. Sanitary Engineering. Questions relating to sewage, baths, and lavatories should receive the attention of capable sanitary engineers. 124. Mechanical Transportation. In mechanical transporta- tion equipment are included cranes and hoists, trolley tracks and trolleys, automatic conveying apparatus, industrial rail- way equipment and trucks, also facilities for unloading and load- ing freight cars and wagons. In regard to cranes it is necessary to determine the span and lift, whether the main crane is to be motor driven or hand propelled, whether the hoist is to be a hand hoist or motor-driven hoist, also whether the hoist and load 100 FACTORY ORGANIZATION AND ADMINISTRATION carried is to run on a drop crane which can make connections with similar drop frames on other cranes in the bays so as to enable the hoist with its load to be transferred from the main aisle into side aisles. In order to determine the power required for driving electric cranes the following data given by Mr. S. S. Wales, before the Western Society of Pennsylvania are useful: An electric crane is divided into three general parts bridge, trolley and hoist, each of which has its own motor and con- trolling system, and each subjected to different conditions of work. For the bridge, where the ratio of axle-bearings to diameter of wheel is between 1 to 5 and 1 to 6, the following table will answer our purpose for weights and traction for different spans: Let L = working load of crane, in tons. W = weight of bridge alone in tons. W = weight of trolley alone in tons. S = speed in feet per minute. P = pounds per ton required. Span W P 25ft 0.3L 30 Ib. 50ft 0.6L 35 Ib. 75 ft 1 . L 40 Ib. 100ft 1.5L... 45 Ib. For the trolley the weight and traction may be assumed as follows : L Lb. P 1 to 25 tons 0.3L 30 Ib. 25 to 75 tons 0.4 L 35 Ib. 75 to 150 tons.. . 0.5L.. . 40 Ib. Power required for bridge: (L+W+w)XPXS 33,000 = horse-power. As the nominal horse-power rating of a series motor is based on an hour's run with a rise of 75 C. above the surrounding air, and as conditions of bad track, bad bearings, or poor alignment of track wheels may be met with, in factory operation 1 1/2 THE PLANNING OF FACTORY BUILDINGS ' ' 101 times the above result should be taken as the proper size motor for the bridge. For trolley: Horse-power = 33,000 use factor of 1 1/4 X above for size of motor. For hoist assume: 1 h.p. per 10 foot-tons per minute of hoisting. D. Selby Biggs reports following results of a test (Iron and Steel Institute, 1903) : 30-ton crane, 25 h.p. motors, 220 volts Weight 16 tons. Horse-power. Max. Avg. Heaving 11.1 6.2 Cross travel 9.2 4.4 Longitudinal travel 5.5 0.6 In many cases trolley track and trolleys are desirable for mechanical transportation where the bridge type of crane would be out of the question. In laying out a trolley system it is neces- sary to determine approximately the location and number of lineal feet of straight trolley rail and approximately the number of feet of curved rail, the number and style of switches, carrying capacity, method of attachment of the trolley rail, number of trolleys and carrying capacity of same. For sending light trolleys and light materials from central storerooms to branch storerooms, store service apparatus such as cable drives or pneumatic tubes may be found very convenient. The locations of the various stations for such service should be determined in the plans for such systems. With regard to indus- trial railway equipment the location of the tracks, the weight of same, also the gauge need to be determined, location of switches and turn tables, also the types and number of cars to be used. If locomotives are wanted for the industrial railway system we must determine whether they shall be driven by gasoline engines or storage batteries and electric motors. With regard to truck systems the main routes need to be laid out; also determine the approximate number of trucks required, location of central depot, number of motor trucks to be used. 102 ''FACTORt'-OttGANIZATION AND ADMINISTRATION The open areas must be wide enough to permit the passage of two trucks in the aisles and the side tracking of trucks around the ma- chines. A truck system involving the retention of the material in the trucks with as little unloading and reloading and with as little hauling of empties as possible is an important feature and one deserving attention in any establishment. It involves the building of a considerable number of trucks and departmental supervision, but is likely to result in economy. In some instances trucks are desirably built so as to pick up and deliver a sheet steel keg for holding working processes. An ample supply of metal "tote boxes" for holding small parts will facilitate stock, moving and lessen losses of small parts. In some establishments the transfer of work in processes from department to department is delegated to a distinct department known as the "stock- moving department." In other establishments the inspection department has j urisdiction over the stock movers. At the Lodge & Shipley Company in Cincinnati an inspector accompanies the motor trucks which move all material duly inspected from one de- partment to another, the inspector handing the tracing depart- ment job slips representing work inspected on each trip. 125. Power Generation and Transmission. Economy usu- ally demands the location of the source of power and heat at the side of the building, somewhat nearer the end which is likely to be elongated. It should be provided with easy means of access for delivery of fuel and for removal of ashes. The use of sloping trestles is often an advantage in bringing cars to the level of upper floors or platforms in the case of power-plant, foundry, etc. A system of outdoor tracks' and of outdoor cranes and power shovels should be considered and provided wherever, on investigation, it would appear to be an economic move. In estimating the total power requirements we need to deter- mine, first, the power required by the processing machinery; second, the power required by the various service equipment other than lights; third, the power required by electric lights. In determining the power required by various machines it is desirable to secure data from the manufacturers of various machines as to the power requirements of their machinery. If possible these data should be accompanied by actual tests made in the work of the plant itself or in a similar plant. The following are typical data as furnished by machine tool builders: THE PLANNING OF FACTORY BUILDINGS 103 HORSE-POWER REQUIRED BY MACHINE TOOLS Lathes Lodge & Shipley Machine Tool Company, Cincinnati, Ohio Swing Style Horse-power idle Horse-power aver- age cut 14 in Cone head. 31 1 73 14 in. 16 in. 16 in Patent head Cone head Patent head .... .39 .377 53 2.56 1.93 3 78 18 in Cone head 45 3 27 18 in. 20 in. 20 in. Patent head Cone head Patent head .77 .53 1.54 6.28 4.25 10.55 POWER REQUIRED BY RADIAL DRILLS Bickford Drill & Tool Company, Cincinnati, Ohio Working surface Idle Average load No. 1, 2 1/2 ft. X3 ft. 3/4 h.p. 2 h.p. No. 2, 2 1/2 ft. X3 1/2 ft. 3/4 h.p. 3 h.p. No. 3, 2 1/2 ft. X4 ft. 3/4 h.p. 3 h.p. POWER REQUIRED BY MILLING MACHINES Cincinnati Milling Machine Company, Cincinnati, Ohio Working surface Horse-power Average Motor No. 2, llft.X7 1/4 in. No. 3, 13 1/2 in. X 55 3/4 in. No. 4, 16 1/2 in. X64 1/4 in. No. 5, 19in.X76 1/2 in. POWER REQUIRED BY UPRIGHT DRILLS Cincinnati Machine Tool Company, Cincinnati, Ohio Swing Average horse-power 3/4 h.p. idle load recommended 1/2 h.p. 3 h.p. 5 h.p. 3/4 h.p. 5 h.p. 7 1/2 h.p. Ih.p. 7 1/2 h.p. 10 h.p. 1 1/4 h.p.' 10 h.p. 12 1/2 h.p. 21 in. 24 in. 28 in. 32 in. 36 in. 42 in. 1 1/2 h.p. 2 h.p. 2 h.p. 3 h.p. 3 h.p. HORSE-POWER REQUIRED BY PLANERS American Tool Works Company, Cincinnati, Ohio 22 in. and 24 in. planers 2 1/2 to 3 1/2 h.p. 24 in. to 30 in. planers 4 to 5 h.p. 30 in. to 36 in. planers 6 to 8 h.p. 36 in. h.p. 12 to 15 h.p. 104 FACTORY ORGANIZATION AND ADMINISTRATION HORSE-POWER REQUIRED BY SHAPERS American Tool Works Company, Cincinnati, Ohio 15 in. shaper 1 1/2 to 2 1/2 h.p. 16 in. shaper 2 to 3 h.p. 18 in. shaper 2 to 5 1/2 h p. 21 in. shaper 3 to 6 h.p. 25 in. shaper 4 to 6 h.p. 30 in. shaper 5 1/2 to 7 1/2 h.p. HORSE-POWER REQUIRED BY SHAPERS Cincinnati Shaper Company, Cincinnati, Ohio H.p. idle H.p. light H.p. med. H.p. heavy load load load 16 in. G. G. 0.5 0.75 1.0 2.0 16 in. E.G. 1.0 2.0 3.5 5.0 20 in. B. G. 1.2 2.5 4.0 6.0 24 in. B. G. 1.5 3.0 5.0 7.0 HORSE-POWER REQUIRED BY GEAR CUTTERS Cincinnati Shaper Company, Cincinnati, Ohio H.p. idle H.p. light H.p. med. H.p. heavy load m load load 26X10 0.8 1.5 " 2.5 4.0 36X12 1.2 2.0 4.0 6.0 A number of data on horse-power required for driving machine tools are given in data sheets from Machinery, No. 12, September, 1902. The average power losses in a motor shaft drive and counter- shaft are given by C. H. Benjamin as 25 per cent., hence after having determined the horse-power required by the various machines 25 per cent, should be added for the losses due to shaft, countershaft and belt drive. 126. Floors. Factory floors are often responsible for much dis- comfort. The wood floor is the only one that is conducive to c6mfort, since wood is a poor conductor of heat. Hence the wooden shoes worn in many cold and earthen-floored foreign shops, the object being to keep the feet less cold. A wood sur- face on concrete floors is advantageous for other reasons than those of comfort. The dust from concrete when it is abraded is injurious to machined surfaces. Moreover, a wood floor furnishes a good grip for bars used in moving heavy castings, machines, etc. Short lengths of hard maple, even of poor grade, are to be preferred to softer woods for flooring. The short lengths facili- THE PLANNING OF FACTORY BUILDINGS 105 tate repairing. The best floors for factories are constructed of 3-in. yellow pine flooring, grooved on both sides and with sepa- rate tongues. The separate tongue makes it possible to take up and remove or repair the floor with very little waste. This yellow pine floor is next covered with a sound deadener of tarred paper, and on top of this is placed the surfacing of 3/4-in. hard maple. For heavy machines and on testing floors, metal floor plates with "T" slots, sunk in concrete, are often desirable. In ground floors made of concrete with wood surfaces, it has been found that asphalt or coal tar mixed with the concrete, or used as a surfacing, prevents the rise of moisture through the con- crete to the hard-wood surfacing. The most satisfactory ground floors are constructed with steel "I" beams, laid in concrete, with asphalt moisture-proof coat and hard-wood surface. ' 127. Structural and Architectural Details. In designing fac- tory buildings considerations of utility and economy must come first, and architectural effects must subserviently adapt themselves to these prime requisites. The building must be designed with regard to intake and output, adapting the arrangement to the equipment and flow of work, following always the lines of least resistance as regards both losses in transmission apparatus and losses in activity of live operators. The general form of the framing of the building designed to conform with the ideas suggested will not include many varieties. It may have the central monitor with sloping sides, the central monitor with saw-tooth construction on the sides, or the entire shop may be of the saw-tooth roof construction. The central monitor gives a more pleasing architectural effect than the saw- tooth roof over the whole building, although the monotony of a saw-tooth roof structure is easily relieved by a multi-floored ad- ministration portion. Fig. 25 is a view of the Potter & Johnston Co. factory at Pawtucket, R. I., a good example of the last- mentioned style. It is not the aim of this presentation to take up such features of building construction as have not directly to do with the pro- ductive output. Hence it will be unnecessary to treat of such matters as materials for foundations, side-walls, framework, roof, paint, etc., excepting to reaffirm the general statement that inasmuch as interest and depreciation affect costs of production, as they are greater or less, so it is desirable to construct that type 106 FACTORY ORGANIZATION AND ADMINISTRATION of building which will result in least total sum of combined in- terest, depreciation, and insurance. The very cheapest factory building can be constructed of wood framing of just sufficient strength to withstand the stresses to which it is subjected, and covered with corrugated steel siding and tar paper or asbestos paper roofing. Such construction in- volves a rather high insurance rate, high cost for heating, de- preciates rapidly, and is unsafe. The slow-burning type of wood construction uses much heavier timbers for framing and thick flooring, the idea being that, coupled with' a good automatic sprinkling system, no fire can gain great headway, and that only the surfaces of timbers, or certain sections of the building, will be destroyed. The slow-burning all-wood type of construction is apt to be no more expensive and a better fire-risk than light steel and brick construction. A more permanent building than FIG. 25. Factory of Potter & Johnson Co., Pawtucket, R. I., showing administration front, saw-tooth shop, and power plant, all practically under one roof. the all-wood slow-burning type, and a better fire-risk than the light steel and brick, is presented in the brick and wood slow- burning type of construction. This last-named type of construc- tion is apt to fill in most cases the requirement of that type of building which presents the lowest combined charges for interest, depreciation, and insurance, although its cost is but slightly ex- ceeded by a construction of reinforced concrete, which will be accompanied by still lower fire insurance rates. Reinforced concrete presents difficulties in tearing down which may in some cases cause a preference for slow-burning brick and wood. In designing a building it must be borne in mind that while it must be so planned as to place to greatest advantage the ma- chinery of manufacture, there will always be a great deal of work that depends upon human attendance, and that it is just as im- THE PLANNING OF FACTORY BUILDINGS 107 portant that the human machinery be provided with such sur- roundings and arrangements as will make it the most efficacious. Such arrangements are too often looked upon as philanthropic or advertising measures, when in fact they are part of the productive equipment. The output of man as a machine is regulated first of all by the amount and quality of fuel or nourishment supplied, as food and air and heat. Poor air and insufficient light and warmth inevitably result in poor work, both as regards quantity and quality, even though the workers might be picked for their cheerful and sunny dispositions. But another factor enters, namely, that of contentment. Agreeable and healthful sur- roundings will tend more than anything else to remove the chief cause, next to lack of proper and sufficient vital supplies, which is responsible for diminished labor efficiency, namely, discon- tent. Hence it becomes important to consider what features of building construction influence comfort. Except when specific reasons to the contrary appear, the cheapest building is to be constructed in which it is physically pos- sible to do the work well. A building must provide shelter from weather, afford good light and ventilation, and must be able to resist all stresses to which it is subjected by equipment and employees, besides offering reasonable resistance to weather and conflagration. Beyond these considerations any additional elaborations are excusable only when charged to advertising account. For psychological reasons it is desirable that the building present a pleasing appearance rather than that of an ugly monster or prison. Hence any architectural artifices are to be commended that will relieve monotonous continuity, such as in the case of a long building, the use of projecting pilasters, which also add to the rigidity of the structure, or the use of external projections for elevator shafts, stairways, or lavatories, if such a location is found otherwise desirable. Where a low building with central monitor and single gallery is used, it may be desirable to have elevators and stairways at the inside of the gallery on account of their thus feeding a wider territory with a shorter amount of walking and hauling than they would if placed at the outer walls. An architect with an eye for beauty will know of many devices for making an ugly sky-line pleasing, converting a plain stairway at the front or side of a building into a pleasing terrace, etc. 108 FACTORY ORGANIZATION AND ADMINISTRATION When, by reason of increased business, a manufacturing estab- lishment finds it necessary to erect an extension or to put up a new plant, the progressive firm seldom plunges headlong into building. The necessity for alteration leads to a careful investi- gation of such matters as the travel of work through the factory, the maintenance of proper balance of floor area, the provision for a rational growth, an investigation of processing and service equipment, and other important considerations. 128. Employment of Professional Industrial Engineers to Aid in Planning of Buildings. In the planning of extensions and new buildings, the owners of a business will usually find it most profitable to employ the services of an experienced industrial engineer or firm of industrial engineers to relieve their own super- intending staff from the additional labor involved in such plan- ning a strain which, without outside assistance, might seriously handicap the regular productive work of the factory. "Usually the industrial engineer should be retained and allowed to com- plete his plans and reports prior to the engagement of an architect, as the structural and architectural features cannot be intelli- gently handled until the industrial engineer's work is practically completed. Conferences and consultations should be arranged for between the architects and industrial engineers before final contracting is done. REFERENCES ENNIS: " Works Management," Chapter X. TYRRELL: "Engineering of Shops and Factories," Chapters III to XXX. PERRIGO: "Modern Machine Shop Construction, Equipment and Man- agement," Chapters I to XV. DAY: "Industrial Plants." SCHNEIDER: "Specifications for Buildings." CHAPTER IX PERSONNEL DEPARTMENT 129. Personnel Organization. Recent years have witnessed the evolution of what, was formerly known as the labor bureau or employment department into a much bigger and more im- portant factor in general management, now recognized more generally by the name of " Industrial Relations" or " Personnel Department." ; The ordinary activities of a modern Personnel Department may be grouped under the following divisions : 1. Male Employment Division, including contact with sources of supply, selection and placement of male employees. 2. Female Employment Division, including contact with sources of supply, selection and placement of female employees. 3. Educational Division, including shop training, vestibule school, apprentice school, night classes. 4. Safety Engineering and Compensation Division, including sanitation and working conditions in general. 5. Medical Division, including physical examination, hospital, visiting nurses, matrons, and direction over rest rooms. 6. Recreational Division, including athletics, social clubs, lunch rooms, etc. 7. Records Division, including service and efficiency records, payrolls and statistics. 8. House Organ Division, covering the management of the Company newspaper for employees. 9. Pass and Service Division, including the issuance of passes, the assign- ing of lockers and locks, management of sales and loans to employees, and taking charge of clearances and unclaimed wages, etc. 10 Industrial Relations and Wage Adjustment Division, including transfers, promotions, grievances, wage adjustments and direct tie-up of Personnel Department with shop foremen. 11. Administration, organization and control of labor policies and above divisions. This is covered by the Head of the Personnel Department and his personal staff of supervisors. 130. Employment. It is best to have the Male and Female Employment Divisions under independent control. A capable woman has much more freedom to exercise her good judgment if she is put in complete charge of female employment. 109 110 FACTORY ORGANIZATION AND ADMINISTRATION The Employment Divisions have to deal with determination of available sources of supply, planning of methods of recruiting and advertising, ascertaining and recording the shop and office labor requirements; must survey labor conditions and rates of pay of other plants, see that applications for employment are made out correctly, determine the priority of requisitions, re- cord progress in filling requisitions for help, interview and hire applicants. 131. Job Analysis and Specifications. The eagerness with which engineers adopted time study and planning department methods and the wonderful results obtained from these methods were so engrossing that until within the last few years little attention was paid to an equally important part of Dr. Taylor's philosophy of scientific management. I refer to that portion in which he defines scientific management as follows : ". 1st. The determining in each industry of the peculiar science of that industry by gathering information from all sources. These sources might include laborers, office boys, janitors, salesmen, mechanics, accountants, and in fact, anyone connected with the industry. 2nd. The systematizing of these data into principles, laws, and instruction. 3rd. The study of the work as it s related to the men. 4. The study of the type of man required for each class of work. 5th. Bringing the science to the men. It is quite evident that the modern terms of shop analysis, men specifications, and shop training schools indicate merely a natural evolution of Dr. Taylor's conceptions of the human problems involved.s Fig. 25A is a typical job analysis .or man job specification. 132. Desirable Qualifications of Employees. Taylor lists the following nine qualities as those which he states go to make up a well-rounded man: (1) brains; (2) education; (3) special or technical knowledge; manual dexterity or strength; (4) tact; (5) energy; (6) grit; (7) honesty; (8) judgment or common sense; (9) good health. He adds that plenty of men who pos- sess only three of these qualities can be hired at any time for la- borer's wages; add four of these qualities together and you get a higher-priced man; the man who combines five of these qualities begins to be hard to find. Those with six, seven, and eight are almost impossible to get. Doctor Katherine Blackford sets forth as fundamental require- ments of all employees: health, intelligence, honesty, and indus- PERSONNEL DEPARTMENT HI try. Doctor Blackford has gathered interesting statistics show- ing according to her deductions definite relationships between texture of skin and flesh, physiognomy and complexion, and psychologic characteristics. Kind of work Shop Symbol Description Heavy Light Medium Hauling Lifting... Clesn Dirty, _ .-Medium Hot Sitting Walking Standing. . Day Work Low High Ave. Overtime. Earnings Piece Work Low__.High Ave.__ PROMOTION BREAKING IN PERIOD SPECIFICATION Male Female Weight Height Eyesight Age__ Education. _NS PS HS COL Prerequisite experience English, Understand Talk___Write Arithmetic: Add Subtract Multiply___Divide_ REMARKS Date. FIG. 25 A. Job analysis or man job specification, (Card 8" X 5"). Sheldon classifies qualities of men as (1) mental faculties (objective) including reasoning, judgment and recollection; (2) mental faculties (subjective) including intuition, memory and emotion; (3) physical qualities, including health, strength and vigor; (4) moral qualities including honesty, industry, loyalty, enthusiasm and temperance. 112 FACTORY ORGANIZATION AND ADMINISTRATION Doctor Blackford's mode of classification affords a good basis for systematic selection of men. Sheldon's philosophy is founded on the belief that by training, suggestion and education, latent positive or desirable qualities can be developed, and negative qualities and habits eliminated. Sheldon's philosophy should prove useful in the upbuilding of an existing set of employees to higher standards. Vocational guidance bureaus are beginning to gather data based on psychologic and physical measurements and records of family history, environment, and education, which will prove of inestimable value in the future in the matter of selection of employees for given work and the selection of the most appro- priate work for given individuals. If we combine Sheldon's philosophy of the certain possibility of improvement with Dr. Blackford's methods and the methods of vocational guidance bureaus, we can easily refute the notion that there is any fatal- istic predestination as to the occupation of every individual; vocational guidance supplies for the present only the best man for a given job and the best job for a given man. It does not follow at all that that man must spend his life at that job. It lies with the individual man and with his employers to fit him for greater efficiency. Doctor Munsterberg has made some most interesting studies in determining the qualifications required for greatest efficiency in certain occupations such as telephone service, electric railway service, ship service, etc. The correctness of his tests is proven by the certainty with which the tests reveal individuals fitted for the employment for which the tests have been devised, and eliminate those not fitted for it. Munsterberg selects three purposes of business life: (1) To find the men whose qualities make them best fitted for the work they have to do; (2) to find the psychologic conditions which will secure the greatest and most satisfactory output of work from every individual; (3) to produce most completely the influences on human minds, which are desired in the interest of business^ In other words, we must answer the questions how to find the best possible man, how to produce the best possible work, and how to secure the best possible effects. 133. Requisitioning Help. All help should be requested through the medium of requisitions made on the Personnel Department. Requisitions for office help should all pass through the Office Superintendent or a person delegated by him, to determine priorities, check wages and salaries, etc. In a similar PERSONNEL DEPARTMENT 113 manner all requisitions for shop help should pass through the hands of the Manufacturing Superintendent or a person desig- nated by him, to take care of priorities and wages and to follow up the requisitions as to their execution. REQUISITION FOR OFFICE HELP COVERING ONE PERSON ONLY DATE WRITTEN DEPARTMENT DIVISION OR SECTION LOCA TION DATE WANTED MALE AGE FEMALE TO STARTING SALARY TO POSITION DO YOU CONSIDER THIS POSITION PERMANENT IF TEMPORARY, FOR WHAT PERIOD OF TIME DUTIES OF POSITION SHOULD THE EMPLOYEE BE.A GRADUATE OF GRAMMAR HIGH I BUSIN SCHOOL SCHOOL | COLLE .58 COLLEGE SPECIA 3E COURSE | L COURSE IN EXPERIENCE REQUIRED NECESSITY FOR THIS.ADOITIONARY HELP ENLARGING FORCE | REPLACEMENT | |" R GE 1 TEMPORARY RUSH EXPLANATION ADDITIONAL FL RNITURE OB EQUIPMENT NECESSARY SIGNED APPROVED CHE CKED CHIEF CLFRK OR OFFICE * EAO OEPT HEAD OFFICE SUPT POSITION Fll 1 ED ON BY REQ'N DATE NAME OF NEW EMPLOYEE FIG. 255. Requisition for office help, (4"X 6"). REQUISITION FOR SHOP HELP (ONLY ONE CLASS OF WORK ON A REQUISITION) SHOP DATE FILED DATE WANTED MALE REQUIRES FEMALE FOR (CLASS OF WORK) DEFINITE DETAILS THIS POSITION REQUIRES THE FOLLOWING QUALIFICATIONS AND TRAINING ITAIL HEAVY ENGLISH ENDURANCE STRENGTH MECHANCIAL TECHNICIAL I 1 PERMANENT OR TEMPORARY If TEMPORARY PROBABLE DURATION RATE, DAY WORK CHANCE PROBABLE PIECE WORK RATE PROMOTION SIGNED BY APPROVED BY FOREMAN OR PROCUCT REQUISITION FOR SHOP HEI ION OVERSEER GENERAL FOREMAN ' " * " PRODUCTION SUPERINTENDENT FIG. 25C. Requisition for shop help, (4" X 6"). Fig. 2oB shows a typical requisition for office help and figure 25C, one for shop help. 8 114 FACTORY ORGANIZATION AND ADMINISTRATION 134. Applications for Employment. A form to be used in keeping record of applications for employment is shown in Fig. 26. These applications are best filed according to the kind of work, APPLICATION FOR EMPLOYMENT. Kind of work wanted. Name Street Address. Date of Birth _ Married? Town. Place of Birth- Served. .years Apprenticeship with Previously employed as follows: FROM TO WITH WHAT COMPANY IN WHAT CAPACITY Wages expected . Do you belong to any Labor (Last line not to be filled by Applicant.) FIG. 26. Application for employment record. White card, 6 inches wide, 4 inches high. Name ofEmploi Date Employed in EMPLOYMENT RECORD. ("APPLICATION FOR EMPLOYMENT" CARD TO BE FILED WITH THIS CARD.) ifi nheeJr. JVft. as He partment. Hate of Wag fliinn RS Employment approved b RECO u zrintendent. RD OF SERVICE AND ADVANCES IN WAGES. Date of Report Quality of Work Quantity of Work Cleanli- nets Proficiency and Disposition Punctu- ality Date of Advance- ment Advanced to Supt's Approval of Advance EMPLOYMENT OR ADVANCES MUST BE APPROVED BY SUPERINTENDENT BEFORE PAY-ROLL ENTRIES ARE MADE FIG. 27. Employment record. White card, 6 inches wide, 4 inches high. the guide card specifying whether lathe hands, milling-machine hands, etc. PERSONNEL DEPARTMENT 115 135. Employment Record. As soon as an applicant is em- ployed, it is desirable to fill out a more comprehensive record than is contained in the application for employment. Fig. 27 is a form for employment record. This record, it will be noted, serves also as a record of service and advance in wages. 136. Record of Office Employees. A form for building up a record of office employees is shown in Fig. 28. RECORD OF OFFICE EMPLOYEES, Dept Nami Address. How to reach by 'phone- Position When entered this com.'s employ- In what capacity- Later positions with this company (Give dates, nature of work and salary in each capacity) Amount of present salary and date of present salary put into effect. Previous experience and references. Approved. FIG. 28. Form for employment record of office employees. White paper, 81/2 inches wide, 11 inches high. 137. Psychologic and Physical Tests, Industrial and Family History. The foregoing employment records include pretty nearly all the data on which satisfactory returns can be obtained through the medium of reports from the average foreman and 116 FACTORY ORGANIZATION AND ADMINISTRATION 3 o C5 D 2 P3 i f i Q H | cr 2 cr "Z. K LU ?. M cr o LU o r X ^H lO Q 5 i LU 9 o cr LU . u IOTHER I U 1 .-S LEAST? LU < SCHOOL I 5 bb s 3 ( ^- * i ^ H J co . 03 5 "2 hr] CL *" H o '53 U LL o S ^ i *O CD o ^ _l LU s D a 1 O o X 1 | H s g PH 5 i c LU 1 Q O o C- L. C5 CO o 1 Q LU Q h- 0- UJ CQ Q Q 1 Ij ^ ] | LU CO LU CO - "Z. UJ LU | J cc w 6 < LU O 01 i Q fa Z5 ^ 0" ID ^ u cr 01 RECOR i O LU _J ID X CJ ID X CJ CO f- u_ u_ O {/> h- o c I 01 : TT Q , u_ 1 1 1 LU J 5 LU 5 Ol O :REED ' OCCUPATION: [A] FA1 5CHOOL ATTENDED STANDING: SCHOOL ATTENDANC iPECIAL TRANING :ONDUCT ^PLICATION JEMARKS: j A/HAT SCHOOLS 1 Q CO LU O h- 1- CC s pJ H^ 5 00 WHOOPIN PNEUMO oo ol O cc VIUCOUS 01 h- cc 1 ^ * 1 oo z w < o 01 ^1 _ o oc: ^ I 5E 00 h- .2 ^"* D3 LU 01 Q_ <: cc D 01 a - cn \- co X MUMPS DIPHERIA HEALTH DURING Z Q Z U EARACHE EXPECTORATION UJ u. 1 TONSILS THYROID GLAND CHEST VITAL CAPACITY SPINE CO 2 1 cc: LU =c <^ ^ UJ CC X z u_ Q. Q_ LLJ 118 FACTORY ORGANIZATION AND ADMINISTRATION LU 1 CO U a. E 1 n o cn 2 cc m UJ g c/> LU ^-^ ^ j^ Z LLl z LU ro O ! Q. 00 s g r 1- UJ tr 1 1 ID CM 01 Z ^C l U- (ft ce 2 o "^ X |_ O u- UJ z QC ^^ ~r CO o a: LU U S^ O o UJ H K LU /) o Q_ E CD li yj LU - U CL OPPOS o tn Q r H ID ^ L^ to CO Q Q: UJ ^ tn a z LO 8 LO g y> LU z C5 Z X LU Q o LU - LO ro 1 LO Z LU C/1 *~ (N < CO Ul s g X c 7 5 UO Z i i z co CHOLOG: GRADE h 3. e i t ^- UJ H O CO Q a: N CORRECT a. ^ t^ tr Ij 1- s Z CO ~*^*7*~ i PH O CM a Q UJ LO ^ 3 CO 1 1 "* cn a z U O 9 H 5 a 1 1 i LU O h- U ^ ro 1-1 31 LJ Z C5 1 o CO CO T~ Dd H CM LU O O z ^, C\I O a UJ LU ^ O CO z r~ CO CO UJ^ Z _J CL co UJ en U. Q. a? D_ < CO- a: Q to CO Q 1- CO - cc QL o: Z Z 1 C Z 1 1 1 LJLJ LJ t . JL ro ID ^* oc ' r/> CO UJ tT CHEDUL 0. o" CO SECOND! LO 1 ro LO LO -r s g LO SECTION a H O U INDEX Q Z X u. o X CONTACT LU 5 1- CJ O INDEX jENTENCf CO Z ^ 1 l o I I S3 PERSONNEL DEPARTMENT 119 1 Z g O w o 3 2| M 03 cc g i u. Si <1 C ) 0. g Q I u O Z 5" * O h z H i> g < H _ j cc 2 z Ql O D3 (0 u DC (0 H . > 3 s ^ L i H ^ w p^ \ ^ 3 **1 Q H H 1 r PH ^ Q H 8 CO Z 2 Q s H O I Ul P _l u. Q Su i6 * S3 ">. ij u - 2 3 u O I Z t > u u. u Ul g CJ z (0 cc 3 ^ O J- X 5 0) CD ^ m CO ^ *l CO ^ O 120 FACTORY ORGANIZATION AND ADMINISTRATION - j so - JOBS u 3 u iH eS ,Q i ii i u D 91 r a 3 EARNINGS r r a 4: APPRENTICE r IgCONTINUATION OF EDUCATION Ig RELATION OF STUDIES TO WORK 17 ENJOYMENT OF WORK U p u LJ C GO CJ ^5 O jl I s 01 I-* ^COMBINATION OF IU WORK &. SCHOOL ~ PERSONNEL DEPARTMENT 121 3 o X o j co LU 01 j co < ^ m z o o X z n t Z Z. co CN V LU co 5 I z III < i LU - ! 0- X z 3 1 LU LU u z o u a; 00 X < to 1 l_ Q cc K CO ^ LODGEF z LU cc O o LL. CO z 1 CO z c X 1 1 > _, I UJ LL z 1 i " j 2 '* i ^ g Q _, i OJ z 1 CL 5! cc LU 6 o 1- a E ^ LU Z LU UJ o Si E LO LU -g CHEDUL i g 01 REMA : ORSELF C SOURCE 1 CO V u_ h- en bO en en g 3 a: 0- i CL u CM 1 LU 2 (_ o3 ce Q a \ 1 < [i i c. z o 1 a Q | r j ? CO ^ Z z a c o Q u. | 1 Z ^ o _J ~ Of. d ^ u _, o o u I D LU OLD " 1- ca o g ^ ICT ^ c i 1 i > S~ C H 1 I z _J J Q Ij O 1 CJ LU 1 CO z 5 ^ Z < ^ 1 CO Q o ~ d LJ o (J TYPE OF 1 s 1 (VN OR GUARI r O o 3 t i ^ UJ O 1- LU LL i i 5 r 2 O c Q j LL c a ' C LU O u U L i LU a: | u H z u 1 u. ^ Q. Q 122 FACTORY ORGANIZATION AND ADMINISTRATION timekeeper. It is quite apparent that if we are to apply modern principles of intelligent selection of employees and training them to higher efficiency, we must build up more comprehensive data as a working basis for the trained expert in our labor bureau who will keep up this important part of the establishment's activity. Figs. 29 to 35 inclusive are here given to indicate the comprehensiveness of such records as are necessary to afford a basis for intelligent selection and placing of employees and for progressive training to higher efficiency of apprentices and such older employees as will avail themselves of such opportunities as continuation school, part-time school, or night school. The RELEASE CARD. PAY ROLL DEPARTMENT MUST BE NOTIFIED AS SOON AS ANY EMPLOYE IS LAID OFF, DISCHARGED, OR QUITS VOLUNTARILY. Date Mr. Check No ( been"laid off" \ has this day and hour 1 been discharged > ^ uot;/t u too/tu-/ j/c-tf/ r r> ir 1 quit voluntarily ) Reasons assigned He has turned in all Checks, Tools, Wrenches, etc., the property of this Company, and is entitled to his wages in full. Dept. Foreman. Tool Room Foreman. Noted Superintendent. FIG. 36. Release card. White card, 6 inches wide, 4 inches high. forms given here are in use at the Vocational Guidance Bureau of Cincinnati. Schedule I is the school record, Schedule II the record of Physical Examination, Schedule III the record of Psychologic tests and measurements, Schedule IV, the indi- vidual's industrial history, Schedule V, Economic data regarding the individual's home, family and earnings. The problem of satisfactory labor is one which goes far beyond the mere matter of keeping record of the men's previous employ- ment or their promptness and regularity of present service. PERSONNEL DEPARTMENT 123 138. Release Cards. When a man leaves he should be given a release card which serves as a notice to the pay-roll department. Fig. 36 shows such a release card, which must be signed by the tool-room foreman and department foreman, showing that the man leaving has turned in all tools, checks, and other property of the company, and that he is entitled to his wages in full, or minus certain deductions for unreturned checks, tools, etc. It is desirable to designate a certain person as "clearance interviewer" and obtained a record of the reasons given by all employees cleared, for leaving. This clearance interviewer may be able to save a number of desirable employees. His reports should be summarized and presented to the Manufacturing Superintendent. 139. Cipher Code of Characteristics of Employees and Ex- employees. In order to keep information confidential, the fol- lowing cipher code, or one similar to it, may be very advanta- geous: (In the example given, the figures corresponding to the various traits have been purposely disarranged so as not to reveal the cipher.) 1. Laid off. 23. 2. Discharged. 24. 3. Quit. 25. 4. Struck. 26. 5. Trouble with foreman. 27. 6. Trouble with other em- 28. ployees. 29. 7. Wanted higher wages or piece 30. rate. 31. 8. Wanted shorter hours. 32. 9. Objected to piece work. 33. 10. Objected to premium system. 34. 11. Bad health. 35. 12. Too old. 36. 13. Too young. 37. 14. Better job. 15. Did not report for work. 39. 16. No work. 40. 17. Not suited to class of work. 41. 18. Skill, excellent. 42. 19. Skill, average. 43. 20. Skill, poor. 44. 21. Production, fast. 45. 22. Production, medium. 46. Production, slow. Interested; ambitious. Careless; indifferent. Obedient; reliable. Disobedient; unreliable. Diligent; energetic. Indolent; wastes time. Prompt; regular. Not prompt; irregular. Good disposition. Bad disposition. Non-union man. Union man. Loyal; faithful. Discontented; unreasonable. Agitator; trouble maker. Untruthful. Dishonest. Intemperate. Striker. Talks too much. Borrows money; dead beat. Desirable man. Undesirable man. 124 FACTORY ORGANIZATION AND ADMINISTRATION 140. Records Division. This Division keeps on file records covering all data which it is desired to have on hand with regard to former and present employees. Fig. 3QA shows the front and Fig. 3GB the reverse of a typical record form for employees. TARTED SHOP OH DEPARTMENT POSITION RATING LEFT FIG. 36 A. Record form for employees. (Front side.) Yellow cards are used for male employees and white cards for female employees. 141. Efficiency Records. Efficiency records may be made much more useful and specific in a shop using piece-work, bonus, or premium system, than in a shop where the efficiency records are based wholly on the opinions of foremen. A well-conducted shop will keep an efficiency record of employees in the ranks that will enable the labor superintendent to encourage and keep the best workers, and to weed out the bad ones. Many shops have an employment record giving sundry details as to a man's street address, previous employment, the size of his family, etc., but PERSONNEL DEPARTMENT 125 I have seen few of even such meager records as are kept intelli- gently and in good order, and which are ever studied or frequently consulted. I have introduced individual workmen's records showing each man's successes and failures in merit wage systems, but I have found it difficult to secure the careful study of these QUALIFICATIONS AND ABILITIES SPECIAL EDUCATION Common school High school 55?" - YEARS OF SERVICE ORGANIZATION Trade- Night 01 Business school RGE M VN M MAIN OCCUPATION 2ND EtST OCCUPATION 3RD BEST OCCUPATION APPLIES FOR RATING -TRADE TE8T8 PHYSICAL NOTES BIRTHPLACE OF FATHER 3IRTHPLACE Or MOTHER Fold Here MO. DAY YR. APPLICATION Impresses of Interviewer FIG. 365. Record form for employees. (Reverse side.) efficiency records which should be accorded them by persons in authority. What use can be made of such records? If we dis- charge the inefficient workers, what guarantee have we that new men will be more efficient? To this question I would answer that the efficiency records will reveal to us which men need to be given 126 FACTORY ORGANIZATION AND ADMINISTRATION a chance to do better work, and they will show also which men in the shop are most capable of showing them. The workingman will take more kindly to a demonstrator selected from among his Name Add ess Born Age Married ' H,red Wages Served Years Apprenticeship with Last Employed bv Waees Date of Rep't i O 1 Charac- ter of Work Quan- tity of Work Quality of Work Clean- liness at Work Profi- ciency as Work- man IE Punctuality Work- ing Prem. Gain $ C. Advancement I ill w I Remarks FIG. 37. Efficiency record. (General.) White card, 6 inches wide, 4 inches high. peers and fellows than to a speed boss or speed expert hired from abroad. It is easy to pick out in a machine shop one's best mill- ing-machine hand, the best lathe hand, the best drill-press hand, and by paying a higher hourly rate while on demonstrating work, WORKMAN'S EFFICIENCY AND PREMIUM RECORD EMPLOYE EMPLOYE NAME NUMBER DEPT. RATE WEEK ENDING .OIAL ON 80. SUCCESS ss BONUS REMARKS TOTAL FOR PERIOD TOTAL FOR PERIOD TOTAL FOR PERIOD FIG. 38. Record of efficiency and earnings under combined premium and bonus system. White card, 6 inches wide, 4 inches high. to have them serve as instructors to the poorer men. The great majority of men who have fallen below a standard of good per- formance will make a success of their tasks when helped in this PERSONNEL DEPARTMENT 127 way. Fig. 37 shows a form for efficiency record. An additional form is shown in Fig. 38, showing efficiency under bonus wage system. 142. Safety Engineering and Compensation Division. This Division has supervision over sanitation and accident prevention and in some industries also over fire prevention and plant pro- tection. Activities of this Division cover planning of new safe- guards, outlining the work of the shop safety committees, investigating proposed shop changes in co-operation with the proper engineering department, investigating safety suggestions, approving or altering new shop layouts and designs for new machinery and for safeguards. This Division looks after the preparation of danger signs, carries on experiments with new safeguards, and prepared safety bulletins. It must keep a statistical record of accidents and file all accident reports; classify compensation cases and keep accounts of compensation cases. It must install and maintain sanitary equipment, advertise safety work, supervise safety education; must prepare disputed cases for court and adjust and settle claims. It must provide for the inspection of plant and yard from the safety view point; must investigate and . classify accidents; investigate complaints and inspect records of accidents and settlements. The technical features of these important activities should be delegated to a man with the requisite engineering education to work out. The compensation work may demand the services of a man with legal training. 143. Educational Division. The Educational Division should be under the direction of an experienced educator who will be able to co-ordinate and assist in planning the educational activi- ties in all divisions, whether they relate to marketing classes for experienced salesmen, classes in organization and manage- ment for minor executives, training classes in accountancy or stenography, classes in Americanization and citizenship, direc- tion of the work to be carried on in a training course for college graduates, in the shop vestibule school or in tho shop apprentice school. This Division will have to arrange for advertising the courses to be given, arrange for class rooms, schedule classes, work of the classes, record the grades and class standing of members of the various classes and courses, investigate quality of instruction, inspect attendance of classes, determine the use- fulness and effectiveness of the classes, and recommend a reward for employees whose work justifies same. One phase of the 128 FACTORY ORGANIZATION AND ADMINISTRATION educational side of the shop which requires more attention than is usually given it is the apprenticeship system. In most shops this is a farce. Some of the larger shops, however, are introduc- ing apprentices' schools, and paying attention to the character of the boys they are employing, weeding out the undesirable ones and holding tight to the good ones. No matter how we may scoff at paternalism and the coddling of the workman, there is no denying the fact that to make better men and women of the rank and file is a great fundamental step in the direction of a disposition on the part of the employees to become better help. Give them better 'air and better surround- ings and they will have better health and better dispositions. But we must do more than this. We must have better craftsmen with better technique in their trades. It is right here that we are weakest, and it is here that we will first feel foreign competition. The all-around machinist is almost extinct the man who knows how to get best results out of a lathe, a milling machine, a planer, a shaper, a drill press, and a boring mill. Machine-shop foremen who have advanced from the ranks are. as a rule men who are proficient on but one tool, and are not competent judges of the best way to do work on all the different machines even in their own departments. The great majority of workmen in shops to-day have not had any schooling beyond the seventh or eighth grade. Their shop apprenticeship has not made them all- around craftsmen. The philanthropy expended in the erection of manual training high schools has failed to reach the great mass of working people who have never got that far along in school life. It is this great majority of our people who never get beyond the seventh or eighth grade of school that are most in need of further trade education to make them better craftsmen. There is cer- tainly tremendous need for the establishment of real trades schools with the best obtainable really practical instructors for this great class of working people. 144. Suggestion System. The suggestion system can ad- vantageously be handled by the Personnel Dept. A suggestion system can be made of benefit in any shop, even a small one, but only if handled systematically and intelligently. The men need to have the benefits of the suggestion scheme kept continually before them. This can be done by handing out each month individual slips to every employee announcing the prizes for the coming month. Another means is the printing on the time-slips that show the workman's gains or losses under a merit wage system, of a few words, calling attention to the suggestion PERSONNEL DEPARTMENT 129 scheme, as for instance, "We are always glad to have our men make suggestions for changes in fixtures, appliances, and tools to facilitate the work. If an idea occurs to you, write it out and put it in the suggestion box. Prizes are offered for the best sugges- tions." Suggestions should be acknowledged by a personal letter to every one making a suggestion. Awards must be intelligently made by competent judges. Suggestions adopted should be put into effect promptly. Foremen should be made partici- pants in the suggestion scheme on a different footing from the men. 145. Recreational Division Including Social Betterment, Welfare, Athletics, and Cafeteria. This Division will have control of the company club and in a company employing several thousand people will have to include the services of a cafeteria head, a business manager, a social secretary and athletic director and a membership secretary. It is well to have the club's policies and activities approved by a board of management composed of employees known to have an interest in the activi- ties of the Division. Many shop superintendents are apt to look unfavorably upon so-called betterment or welfare work as something which smacks of effeminacy and faddism. The workmen themselves are apt to regard it in the same light; especially is this true if the persons engaged in the work are not sincere. From a shop-owner's standpoint, the ideals to be realized are, first, the producing of a marketable product which will command the highest price of any similar product in its class; second, the producing of the largest possible quantity of this article at the lowest possible cost. With the development of a better educated and more enlight- ened purchasing class, it is coming to pass that the shop-owner is beginning to feel that in order to realize the first-named ideal, the quality of his product must be continually improving. The most marketable steam-engine or machine tool of to-day is a product of much higher quality than that which was the most marketable but a few years ago. This realization has resulted in better machinery, and in the employment of better designing talent, and in the introduction of labor systems which seek to attract and hold the better class of mechanics. The second business ideal, namely, the producing of the largest possible output at the lowest possible cost, involves not only good equipment, good design, and careful mechanics, but the 9 130 FACTORY ORGANIZATION AND ADMINISTRATION element of human activity. The need for pronounced emphasis on this element is becoming more and more felt by manufactur- ers. The standpoint of advantage to the shop-owner is usually the only point of view from which the directors will consider wel- fare and betterment propositions. A good works manager can as a rule find abundant arguments in favor of rational welfare work from this point of view. The terms "Welfare" and "Betterment work" have been rather loosely used to include practically all of the activities heretofore mentioned in this chapter, such as proper selection of employees, efficiency records, promotion system, apprenticeship system, sanitation, fire prevention, and suggestion system. A better designation would be to include all of the aforementioned activities under the general functions of a labor bureau, as well as the social, athletic, and similar features which contribute to mutual confidence. The popular acceptance of the terms " welfare" and "betterment" is to associate them immediately with company contributions of a philanthropic nature to a great annual picnic, Saturday afternoon baseball, benefit society funds, and similar matters. In regard to the workingman's home life and his habits, he does not want these interfered with. However, time and again, workingmen have expressed themselves to me in regard to their wishes for better home surroundings. They complain to me in the same way in various cities, that civic improvements are made in those parts of a city occupied by the homes of the well-to-do. There, they say, they. find paved streets, good sidewalks, shade trees, water, sewer connections, electric lights, gas, and street sprinkling, while the workingmen 's homes are on muddy streets, no trees, nor sewers, no paving, poor sidewalks, poor lighting at night. Workingmen complain to me that manufacturers are willing to spend time and money to influence councils to secure switches and to secure election to public office of men pledged to grant their corporation special privileges, and that the working- man would like to see these same influences at work to secure public betterment of his home surroundings. This phase of the question is one that can hardly be controlled by the engineer within the walls of the shop, but it is well worth the thought of the shop-owner. The greatest successes in social betterment work in connec- tion with factories have been accomplished in shops where work PERSONNEL DEPARTMENT 131 is light, such as the manufacture of breakfast foods, chocolate, cash registers, bed-springs, etc. The employees in these shops are more easily reached than are the workers in the foundry, the forge shop, and the heavy machine shop. I have attended enter- tainments of a high order, given without charge by the owners of one of the largest shops in Chicago, and under the auspices of skilled social settlement workers. Yet they failed to reach the men. I have in mind particularly one evening when the enter- tainment was a lecture on the Klondike, preceded and followed by music by the shop band. With many thousands to draw from, there was but a half dozen men outside of the band present. The lecture was intensely interesting to me; yet one after another the men went to sleep. There were two reasons for this: first, the men were physically exhausted; second, it was not the type of entertainment that appealed. When the orchestra struck up it was with vigor and abandon, and the men came to " attention" at once. This same large shop, assisted by private donations from large stockholders, instituted much betterment work, includ- ing a manual training school for the children of the employees. A minor feature that was a good one was the distribution, on a truck, of bottles of pure sterilized milk sold at cost. But the greatest difficulty encountered here, as in the heavy steel indus- tries about Pittsburg, is the handling of the adult workman engaged in heavy labor. The Pittsburg district abounds with magnificent club buildings, provided with libraries, gymnasiums, social features, etc., open to the laborer who wishes to avail him- self of their opportunities, and yet these institutions fail to reach those who most need uplifting. These clubs are taken advan- tage of by the young college-educated apprentices, shop clerks, and some few of the young men of the higher grade mechanic class. There is great need of successful plans for reaching the heavy labor class, plans which will result in continuous and per- manent good. 146. Medical Division/ This Division should be under the direction of a competent physician assisted by capable trained nurses. Its work will include the administration of first aid, giving of medical and hygienic advice, the conduct of physical examinations, the proper execution of major operations where such are necessary, making of home visits; also the development of such contacts as may be desirable by way of shop matrons. 147. Labor Turnover. The labor turnover is a ratio in regard to which there is some difference of opinion. Some employers define it as the ratio of the number hired in a given period of time 132 FACTORY ORGANIZATION AND ADMINISTRATION to the average number on the payroll during the same period of time. Others express it as the ratio of the number leaving in a given period of time to the average number on the payroll during the same period of time. It will be noticed that the value of the ratio and its reliability will vary, depending on whether a company is working under an increasing or diminishing labor program. Hence, some com- panies use both ratios in their statistical reports. The majority, however, use the ratio of the number leaving to the average number employed, which would be a perfectly rational basis under normal labor conditions. The total turnover data are preferably broken down by de- partments and shops within the departments. An example of a turnover report broken down by shops is shown in Fig. 38A. DMA DM2B DM3B DM0 HM1D DM2D DAI3D DM1E DM2E DMF DMG DM4K DM5K DM1P DM2P DMS DMT DMW ADH ADV ADZ ^ , FIG. 38A. Turnover report broken down into turnover for each shop in a department. 148. Shop Rules. Another matter frequently overlooked is the providing of each employee with a full set of shop rules and regulations. The posting of such notices at different places through the works is not a satisfactory plan. Every new em- ployee should be given a booklet on which is written his name and his check number, so that he will consider it his individual property and not throw it away. In the booklet are listed con- cisely all of the shop rules and regulations. As an example of what such rules and regulations may be, the following is quoted ; PERSONNEL DEPARTMENT 133 1. On entering our employ the time-keeper will provide you with a check number. Do not fail to notify the time-keeper of any change in your address. The tool-room attendant will provide you with tool checks which must be returned to him when you leave. In order to place the responsibility for breakage and loss of small tools, the tool- room will issue no files or hack-saw blades, unless regular order slip is presented, signed by foreman, and bearing check number of man. Checks will not be returned on broken taps, drills, or end mills, unless an order bearing man's check number and signed by the foreman is returned with the broken tool. A record of each man's breakage will be kept in tool-room, and men will be held responsible for an unreasonable amount of breakage. 2. Each employee must personally register at the time-clock at the time he commences and ceases work. As the pay-roll is figured accord- ing to registration on time-recorder, you will appreciate the importance of registering correctly. Employees ringing in late will be paid from the nearest quarter hour following time rung in, and must begin work at once on entering shop. All employees will ring clock four times daily, whether going home at noon or not. A record of punctuality is kept for use in connection with record of general proficiency in establishing em- ployees' standing. NOTE. Insobriety will not be tolerated. Employees must give reason for absence, and should see that their foreman is notified by phone or otherwise in case of sickness, so that work can be arranged for. 3. You are engaged at so much per hour, and will be paid by the hour. Time over sixty hours per week is paid for at the rate of time and one- quarter for the additional time over sixty hours. 4. Whistle will blow in the morning and after the noon recess two minutes before time to begin work, so that all may have a chance to reach their place before starting whistle, when every one is expected to be at his post ready for work. Just entering the building at starting time will not be satisfactory. 5. You must use the employees' entrance only, at front of building, in entering and leaving premises. 6. Any one wishing permission to leave during working hours must get permission from his foreman, and ring out on time-clock. 7. In case you expect to be absent a number of days, or wish to leave the company's employ, you must obtain regular release card from your foreman before you can receive your pay from cashier. 8. Every one must keep his machine tool or working place as clean as possible. Paper, rags, scraps of food, and tobacco-spit must be kept from shop and wash-room floors. Good air is required fo^ good health and good work. It is the duty of men and foremen to see that the shop is kept clean, properly ventilated, and to do everything else to keep the sanitary conditions in good order. 134 FACTORY ORGANIZATION AND ADMINISTRATION 9. Receiving visitors, lunching or eating, or reading cannot be per- mitted during working hours. Smoking and "lighting" of pipes, cigars, etc., is absolutely prohibited at any time. This rule is imperative, owing to the inflammable and explosive nature of materials used, and it will be necessary to dismiss any employee disobeying same. 10. It is absolutely necessary to have all time on work going through shop reported correctly. You are therefore requested to see that each job you take hold of has a shop-order tag with it, and also see that the shop-order tag leaves your place with the work. Where stock is drawn from wareroom for first operation, foreman sends tag to wareroom for material, the man in there attaches the tag to the stock and retains warehouse coupon. Workmen must not work on stock of any kind unless shop-order tag accompanies stock. Workmen should count the number of pieces in each lot before commencing work, and, if full quan- tity called for is not there, report to foreman immediately before begin- ning on the job. No alterations of any kind are to be made on the face of tag excepting by production department. Necessary changes in quantity are to be made by production department only. In such cases new tag must invariably be issued. 11. In all cases where men are to make more than one piece of a kind, foreman must be called to inspect first piece and pass on it before any others are made. Defective or spoiled pieces must be immediately sent to finished storeroom by foreman. 12. All parts must be made according. to blue-prints, which are obtain- able at tool-room. No deviation from blue-prints is allowable. This applies to special as well as regular work. Blue-prints must not be borrowed under any conditions. If a blue-print is out when called for, it is the duty of the tool-room to hunt it up. 13. Should any work be spoiled or any castings prove defective, such pieces must be shown immediately to foreman, who will see that they are sent to finished storeroom, and that any necessary changes in tags are made by production department. 14. An order signed by department foreman must be presented for any material wanted from storerooms. All slips must give an order number of either general or standing order series. Use a separate slip for each separate order number. Positively no material will be issued except in exchange for the order properly filled. No one except store- keepers allowed to handle material. These instructions must be enforced by storekeepers. 15. In all matters pertaining to orders, reports, or any company busi- ness, men will consult with and receive orders from foremen of their own departments only, and foremen from superintendent. Orders from office will be given to superintendent and by him to foremen. 16. You are expected to be governed by the above rules, and your compliance with same affects your standing and the permanency of your employment. PERSONNEL DEPARTMENT 135 REFERENCES TAYLOR: "Shop Management," Paragraphs 221-234. HARTNESS: "The Human Factor in Works Management." REDFIELD: "The New Industrial Day." Chapters VII-IX. MUNSTERBERG: "Psychology and Industrial Efficiency," Parts I and II. GILBRETH: "Primer of Scientific Management," Chapter IV and V. SCOTT: "Increasing Human Efficiency in Business." RUGER: "The Psychology of Efficiency." GODDARD: "The Binet-Simon Measuring Scale for Intelligence." LODGE: "Rules of Management." KELLY: "Hiring The Worker." SLIGHTER: "The Turnover Of Factory Labor." BLOOMFIELD: "Labor And Compensation." U. S. ARMY, ADJUTANT GENERAL'S DEPARTMENT: "Trade Specifications and Occupational Index of Professions and Trades in U. S. Army." Pre- pared by Col. John J. Swan, Government Printing Office, 1918. U. S. DEPARTMENT OF LABOR: 'Description of Occupations." Govern- ment Printing Office, 1918. Boots and Shoes, Harness and Saddlery, Can Sugar Refining, Flour Mills, Electrical Manufacturing, Distribution and Maintenance, Logging Camps and Saw Mills, Medicinal Manufacturing, Metal Working, Building and General Construction, Railroad Transporta- tion, Shipbuilding, Mines, and Mining, Office Employees, Slaughtering and Meat Packing, Street Railways, Textiles and Clothing, Water Trans- portation. CHAPTER X OFFICE MANAGEMENT 149. Functions of the Office Manager. The Office Manager or Office Superintendent of a manufacturing establishment usually has charge of the mail distribution and collection, central filing of all mail to and from parties outside the establishment, internal mail service, telephone system, telegrams, central typing, multigraphing and mimeographing, and supervision so far as regards discipline, promotion and transfer, over all office help. It is his duty to see that standard methods are employed in all offices. This is best secured by designating some one individual as the chief clerk in each office or department and having this chief clerk responsible to the Office Manager in all matters relat- ing to the foregoing list of subjects 150. Handling Mail. The delegation of the duty of opening the mail depends very largely on the nature of the business. It is always desirable to have DECEIVED a ll ma ii O p ene( i by one man, BY if the mail feature of the business is not too heavy to permit of this arrangement. FIG. 39.-Time-stamp showing date j n many establishments the and hour of opening mail, by whom it M . , . , * i ,-, , ..'. J , mail is opened either by the is opened and to whom it is referred. secretary of the company or by the chief correspondent, the latter being usually the man in direct charge of the general office. It is sometimes desirable to use a time-stamp to designate the hour and date of opening the mail, such stamp bearing a space for the entering of the name of the person or department to which the letter or document is referred. Fig. 39 shows such a stamp. An additional stamp, showing ANSWERED the hour and date and name of person answering the letter, BY is often used, as shown in Fig. FlG - 40. Time-stamp showing date 4Q and hour of answering letter and by , , . , whom it is answered. If the man who does the stamping of the time of receipt and the distributing of the in- coming correspondence is the only one provided with a time- 136 OFFICE MANAGEMENT 137 stamp, his time-stamp should not be taken as evidence of laxity of attention on the part of others, since the letter or document may have been delayed in the original party's charge after having been stamped. The question should be very carefully weighed as to whether the advantages gained by the use of a time-stamp are sufficient to overcome the disadvantages incidental to possible internal frictions. Certainly every one likely to be held to ac- count for delays in the handling of documents should be pro- vided with a time-stamp if the system is to be a fair one. 151. Messenger Service. A messenger service at fixed hours will do much toward promoting promptness in all departments. Where such a system is in use, the head of each department is provided with a three-decked basket, one deck being marked "In," one "Out," and one "File." The messenger leaves the incoming mail in the basket or deck marked "In," and removes the con- tents of those marked "Out" and "File." Such a system must be made prompt and accurate. Under these conditions it is possible to request heads of departments to resort to a minimum of calling on each other, and to avoid the carrying in person of papers from department to department. 152. Filing System. All correspondence with people outside the office should be filed under the direction of one chief filing clerk. This filing place should be centrally located so as to be easily accessible to all departments, especially to those who need to consult the files most frequently, such as the sales or purchasing departments. The various departments will soon adapt them- selves to this system of a central file, and will find that condensed reference records are more convenient than a continual handling of original letters and documents. At first sight it might seem somewhat useless to burden the general file with inter-departmental correspondence, but on further reflection it will appear that it is very desirable that the general manager see regularly or occasionally copies of all such correspondence, before it is filed, in order that he may suggest, where necessary, the avoidance of too much correspondence and internal disputes. In the matter of filing locally at the various departments internal correspondence, it will generally be found that provi- sions should be made for each head of department to file his inter- departmental letters and instructions, an additional carbon copy of all internal letters and instructions being made so that one can be kept at the department and one sent in for the general manager's scrutiny and the general file. 138 FACTORY ORGANIZATION AND ADMINISTRATION The numerical filing system is the most satisfactory in an establishment having a central filing department because it facil- itates the file clerk's recording the withdrawal of the correspond- ence between any firm or individual by v merely entering against the party withdrawing the correspondence the number of the file holder and the date. Fig. 41 shows the file clerk's numerically arranged card record. This card record gives the name of the firm or individual, whose correspondence is in the folder of a certain number, to- gether with the exact address of the party or firm and the dates of all correspondence, as well as date and number of transfer when the folder becomes too bulky or is so obsolete that it should be transferred to a storage file. The alphabetically arranged cross-index or finding card is shown in Fig. 42. This enables one to find the number of the NAME FILEN - ADDRESS DATES OF LETTERS DATES OF REPLIES DATES OF LETTERS DATES OF REPLIES DATES OF LETTERS DATES OF REPLIES DATE AND NO. OFTRANSFER FIG. 41. Numerically arranged card record showing contents which should be in folder of a given number, together with dates of transfer to storage. White card, 6 inches wide, 4 inches high. folder in which the correspondence with any individual or firm is filed. Fig. 43 shows the little slip which the file clerk writes when he hands out any file folder. When the folder is returned, he may either destroy the slip or hand it to the party who made the withdrawal as a receipt for the return of the folder. The folders are most generally kept in " vertical" filing cases, and their contents are retired to transfer storage cases according to some definite rule. For instance, it may be decided that at the begin- ning of each month the correspondence of the corresponding month of the previous year shall be retired from the current file. As correspondence is apt to fall out of folders that are carried about a good deal, it may be found desirable to use stout roomy envelopes instead of the open folders. In order to keep down the OFFICE MANAGEMENT 139 expense of preparing a folder and indexing letters from transient correspondents the alphabetical system of filing may be applied to all new names until at least three or more letters and replies have been received. In order to prevent correspondence becoming disarranged the SN-SY NAME DATE OF LETTER SUBJECT DISPOSITION FILE NO. FIG. 42. Alphabetically arranged cross-index or finding card for finding the number of the folder in which correspondence is located. White card, 6 inches wide, 4 inches high. folder may be punched, and the letters also punched and fas- tened to the folder by McGill fasteners. The letter bearing latest date should always be filed on top. Different departments or bureaus may advantageously be provided with file folders of different distinctive colors. Carbon copies of letters for filing purposes should be written on buff, lemon or canary-colored paper, instead of on the thin white sheets usually used for this purpose. The yellow color immediately calls attention to the fact that it is a copy of an out- FILE FOLDER NO.. DELIVERED TO _ DATE FIG. 43. File clerk's record of with- drawal of folders by various depart- ments or individuals. When folder is going letter. The thin sheets returned this slip may be handed out of poor quality usually used as a receipt. White paper, 5 inches have the disadvantage of not wide > 3 inches hi s h - standing alone, of folding, wrinkling or tearing easily, and not being as easily recognized as copies of outgoing correspondence as those on yellow paper. In certain lines of business it is important to have a copy of the signature of the person signing letters. Where such is the case the roller press copy will be preferable to carbons. As an 140 FACTORY ORGANIZATION AND ADMINISTRATION additional precaution, the press copy bound book may be used for a second copy besides the roller copy. 153. Relative Location of Offices. Where a local telephone exchange is in use, the telephone operator can be placed so as to receive all persons making calls. One of the most serious defects where this system is in force is the failure to provide suitable waiting or reception rooms for callers. In many cases well-to- do establishments provide a single bench in a very small place, making it necessary for all sorts and conditions of callers to be crowded into cramped quarters. A separate calling place should be provided for all applicants for factory employment, and such applicants should be promptly directed to that place by the telephone operator or reception clerk. For other callers a neat room provided with the company's publicity matter does much to secure their good-will. It is apparent that the general office, and especially the filing department, must be centrally located. Those department offices should be located nearest the reception room, whose man- agers are most likely to receive a considerable number of business callers. Such offices would be those of the purchasing agent, the sales manager, and the cashier. The designing of a set of offices or of an administration building deserves careful attention, and a good plan to pursue in planning new offices is to cutout templets representing each desk and piece of furniture and to place these into trial positions, and then to cut out templets representing the various offices, placing those offices together which are likely to have the. greatest inter-communication. Partitions between offices should be low for the sake of good ventilation, with cathedral glass or similar translucent glass in the upper portion, and with the name of the department plainly lettered on the door. It is preferable to erect partitions in sec- tions so that they may be easily removable. 154. Desks. Some executives prefer to use flat-top desks so that all papers are certain to be put into their proper files, rather than getting into pigeon-holes. The putting of flat-top desks in a position where the occupants must face each other, or the using of double flat-top desks, is apt to be annoying to the persons occupying them, as privacy and concentrated thought are interfered with by having to look constantly at another per- son, and perhaps being drawn into conversation that would best be omitted. OFFICE MANAGEMENT 141 However, it must be borne in mind that wall space can be as a rule better utilized as a back to filing devices than as a back to desks, and with some ingenuity desks can be placed in such positions that they are not against walls, and also so that the occupants of desks are not facing one another. Of recent years types of desks have come into use in which the old-style storage drawers have been replaced by vertical files and card-index drawers All drawers containing company business should be accessible at all times to department heads. Personal storage drawers should be so marked on the outside, and to these drawers the desk occupant may be given a private key. It is desirable to keep the private offices of the more im- portant officials and department heads free from files, the secretary or stenographer bringing in and removing all papers required. The table on which such papers are put during discussion or dictation should be separate from the official's desk. The sales department is not here considered a part of the general office. Hence no mention is made here of follow-up and other systems in connection with sales, since we are con- fining ourselves to the functions of the general office in so far as they affect the factory administration. REFERENCES CAHILL AND RUGGERI: "Office Practice." PARRY: "Office Management." DICKSEE AND SLAIN: "Office Organization and Management." SCHULZE: "The Modern Office." HUDDERSLY: "Indexing and Filing." CHAPTER XI THE ORDER DEPARTMENT 155. Functions of Order Department. The order is the start- ing point of activity in the factory. It is the basic authority upon which is built the entire structure of cost statistics. There must be a regular routine for the proper authorization, classifi- cation, and record of all orders issued, and for the dissection of such general orders as require it into the sub-orders or individual operation instructions which form an essential part of an accurate factory system. This dissection into elemental steps is, however, beyond the immediate control of the order department, and is a function of the production department, whose duties are distinct from and additional to those of an order clerk or order depart- ment. The order department's sphere is limited to the issuing of general orders, and turning them over to such departments as must execute the work, such as the production department, the shipping department, etc. It is the duty of the order depart- ment to properly classify all orders, and to determine from time to time the progress of orders issued. This last process may in some cases be well delegated to a distinct department known as the order tracing department, whose duty it will be to consult with the production department and such other departments as may be necessary, and collect such data as are necessary to a definite periodical report of the condition of every order in the factory. In some cases the order clerk may act as tracer himself so far as customers 7 orders are concerned, provided this does not interfere with his accounting or statistical duties, or the function may be assigned to some particular individual. This man's duties are distinct from those of the production department's tracer, whose duty it is to follow up the progress of individual parts. For instance, in an automobile factory the order department's tracer would follow up John Smith's order for a car having a special reduction gear, special springs, special battery box, and special body, while it would be the particular function of the pro- duction department's tracer to determine what parts need over- 142 THE ORDER DEPARTMENT 143 time work to get out the transmissions on time for Shop Order D. 5100 calling for twenty-five cars. Naturally the owners of the business or their most direct repre- sentatives will be the initiating authority in the issuing of general orders, based either on customers' orders or on the providing of a stock on hand of the manufactured product. The filing of all orders received, and their proper classification, is a function by itself, to be assigned to an order clerk or order department. The departmental laying out of the working system of a factory must not be construed as meaning a distinct office, or many clerks as belonging to what is called a " department." A department may consist of but one man, or one man may carry several depart- ments. In small establishments it is just as important as in large ones that the distinct departmental duties of every man be defi- nitely laid down. The place and relations of the man and the department in the staff organization, and of the records, statistics, and accounts, must be made perfectly clear, preferably in a graphically charted manner, as referred to elsewhere in this work. The order department will necessarily have more work in an establishment receiving numerous small orders for a variety of product than in one making a limited range of a standard product sold in quantity. 156. Classification of Orders. It is sometimes found advan- tageous for the clerk or department receiving and recording cus- ' tomers' orders to have a strictly consecutive record of all cus- tomers' orders arranged in order of seniority, irrespective of classification, according to what the orders call for, giving the orders a record number in addition to any class letters or numbers which may be assigned them subsequently by the production department. The most satisfactory arrangement of orders is one in which all work of the same general class is put together into a series by itself. The orders belonging to each series are best written on cards or loose leaves to be filed in some modern binding device, per- mitting of the easy insertion or taking out of any leaf, and pro- vided with a lock so that only authorized persons may make such removals or insertions. 157. Manifold Copies of Orders. The book typewriter, also known as the billing machine or flat-bed machine, is almost 144 FACTORY ORGANIZATION AND ADMINISTRATION indispensable in the rapid duplication of cards or loose leaves involving tabulation, with as many carbon copies as may be needed. It will be necessary that a set of copies of orders be provided the production department. A set of copies may also be required respectively by the superintendent and the works manager or such corporation officer as devotes his particular attention to the internal working of the factory. The cards or sheets representing live or uncompleted orders are of course kept in a group by themselves, distinct from the files of dead or completed orders. It is advisable to have each distinct order series printed on paper of a distinct color. The order department will index by customers 7 names, and, if desirable, by styles and sizes of product, the orders in each series. 158. Example of Order Series. As an illustration of the grouping into series, "A" orders will call for complete product items which have to be built to order; "B" orders for repair parts which have to be built, and "C" orders for any apparatus which can be shipped immediately out of stock. These three classes of orders will generally be all that are needed to classify customers' or agents' orders. The issuing, filing, and tracing of these classes come properly under the head of an order depart- ment, which should be distinct from the factory production department. This order department issues all of its orders or instructions to the production or planning department. The latter department must be the point of centralization, or clearing- house of all orders to do work in the factory proper. As an example of the form of orders issued by an order depart- ment, the following examples are given, representing a combined invoice and shipping order with manifolds serving various pur- poses, as used by a company manufacturing electrical dynamos and motors. The set of forms shown are used only for complete machines, a separate series being used for supply or repair orders. One distinct order is used for each distinct machine. In this way invoices are promptly mailed for partial shipments where a customer orders more than one machine. Fig. 44 shows the form which serves for original order, and also for invoice by the billing department. There are two additional forms identical with this original, excepting that they bear in the upper right-hand corner in heavy type the notations, respectively, " Duplicate Invoice," and "For Shipping Department Duplicate File." THE ORDER DEPARTMENT 145 ORIGINAL. INVOICE NO. SOLD TO ADDRESS DATED DELIVERY, F.O.B. ORDER RECD. WANTED SHIPPED TO TERMS DAYS NET. ROUTE AT 1 VOUR~ ORDER rf OFF FOR CASH IN DAYS. MACHINE NO. FRAME PULLEY X STYLE FEET Payable ID Funds at Par in New York, Indianapolis or Chicago, without Expense to us. FIG. 44. Example of manifold order, one copy serving as original invoice, one copy as duplicate invoice, and one copy as shipping record. Additional manifolds with slightly different typesetting, and serving further purposes, are shown in succeeding figures. Light blue bond paper, 9 inches wide, 6 inches high, ruled in red. FOR ENGINEERING DEPARTMENT ONLY. ORDER RECD. WANTED ROUTE ADDRESS SHIPPED TO FOREMAN'S SPECIAL INSTRUCTIONS. CONSTRUCTION DELIVERY CREDIT SHIPPING APPROVED BY DATA SHEETSLARMATURE SHUNT SERIES RHEOSTAT Return this Order to the Office with Following Data and All Necessary Information (on back hereof)Complete when Shipment is Made. Get Completion Order for Any Missing Farts. Note Any Special Features on Back Hereof. FRAME PULLET RUSHES TESTED -REMARKS- STYLE FEET. _SPEED_ -COMPLETION ORDER FIG. 45. Fourth copy of manifold order. A number of similar mani- folds go to various shop departments. White bond paper, 9 inches wide, 6 inches high. 146 FACTORY ORGANIZATION AND ADMINISTRATION Fig. 45 shows the fourth copy, which is marked, "For Engineer- ing Department Only," and contains same items as original, omitting accounting department's financial memoranda, and adding technical memoranda. The reverse of this copy is a drawing list, and is shown in Fig. 46. The fifth copy is the same as the fourth, excepting that it is marked " For Shop Only." Its reverse is the same as the reverse of the fourth copy. While the particular company using the order form illustrated preferred to use a separate sheet for every machine, such a pro- Frame, . . . TV. No. Skids, . Dr. No. Field Cores, Pr, No T Rock. Arm., Dr. No. Pole Shoes, . Pr, N, B. Holders, Base, , Pr, No, Studs, Dr. No. F. Bearing, * . , TV No. Rock. Ring, Pr No, B. Bearing, . TV No. R.R.Bracket, TV. No. Bear. Caps, p,, No, Hand Wheel, Dr. No. Pedestal* , Pr No. Dr. No. Arm. Assembly, . Dr. No. Con. Ring Dtls., Pr, No r Arm. Space Blks., . Dr. No. Con.Ring Assy., . Pr No. Arm. Spider, - Pr, No B.H.Cables, Arm. Heads, , Dr. No. B.H.Cable Terms, . No. Shaft, Con. Boards, Dr. No. Commutator . TV. No. No. Field Spool, -. , Dr. No. Equalizer Terms, . No. FIG. 46. Reverse of No. 4 and succeeding copies of manifold order giving data for engineering department and various shop departments. Light blue bond paper, 9 inches wide, 6 inches high. cedure is not at all necessary. Order and invoice may be simul- taneously written on a flat-bed typewriter, there being two col- umns, one column for items ordered, another column for items shipped. When the first partial shipment is made, entries are made into the column headed "Items Shipped," and one copy of the several which are simultaneously written is used as an invoice, and shows the exact status of the order to the customer. The unshipped items are then transferred by being copied to a new set of blanks upon which entries are made as soon as the second partial shipment has been made. It is customary to have THE ORDER DEPARTMENT 147 an invoice mailed at the time a shipment is made, even if such shipment is but partial. The order system of an establishment which makes up goods in quantity for stock, of which it carries a considerable variety, will be quite different from the order system that would' be best for an engineering works. A form in such a case would have spaces for the name of the customer, his address, the railroad or express company by which to ship. This sheet is filled out by the salesman when he takes the order, with the foregoing items, and 'also the proper items opposite salesman's name, date sold, terms, quantity, list num- ber, article, and price. On its receipt at the company's office the order is given a number, and is properly indexed or registered. Proper acknowledgment of the order is then made; it next goes to the credit department; thence to the warehouse de- partment, where each item is signed by the individual put- ting up that item; it is then inspected, and receives the inspec- tor's check; the goods are next packed and the order is checked by the shipper; it next goes to the billing department, and the billing clerk puts his check after the words, "Billed by"; it is next examined and rechecked for corrections of prices, exten- sions, etc., and signed opposite the words, "Examined by," and is now ready to go to the bookkeeper, who fills in the ledger folio. Mail orders, and orders brought in directly by customers, are transcribed on to the regular order form as described. In this type of business salesmen's records may be made up from order copies. In cases where it is desirable to keep a careful time-check on each event in the handling of orders, a time-stamp may be used to advantage, space being left on the order blank for all such 'time-stamps which should appear on any one copy. Where the billing machine is used for writing out the order, a large number of other forms may be made at the same writing, the bunch or pad of forms being stitchecj at the left-hand margin, and each form printed on a different color of paper. At one writing, for instance, we may have order, original, and duplicate invoice, statement, memorandum of draft, posting record, ship- ping clerk's record, cost department's record, various shop depart- ment copies, and acknowledgment to customer. 159. Instructions as to Order System. Below is given a sample of instructions regarding classification of shop orders, 148 FACTORY ORGANIZATION AND ADMINISTRATION which it is desirable to issue at the time of inaugurating a classi- fied order system : All orders emanating from the office will pass through the production department office before being distributed in the shop. The production department is responsible for the proper distribution, tracing and follow- ing up of all orders as to location and condition. Before distributing orders, production department has shop superintendent note orders, securing his initials or those of his assistant, cut with conductor's punch, punched through all copies. As regards the classification of orders inside the shop, these are as follows: General series, without letter prefix, covering new parts for standard machines. Manila-colored tag. "A" series, covering repair or other parts called for by shipping orders and requiring work in the shop, bearing different serial numbers from the general series and yellow tracing tag. "B" series (tool-room series), covering new tools, jig, dies, and other tools made in the shop. Record book kept by foreman of tool depart- ment, bearing superintendent's " 0. K." after each order in book. Tool- room foreman sends book daily to production department, to have proper tags and orders written. Tool-room foreman keeps stub of tag on file till work is completed, entering on stub list of material used, and sending same, when work is completed, to production department. Salmon tag. "C" series patterns. Orders and tags issued by production depart- ment on receipt of request for order from department foreman. Green tag. "D" series plant additions, including fixtures. Blue tags issued on authorization of works manager. Standing non-productive orders. See separate sheet for detailed list of these orders. Special tags headed Standing "Non-productive Order." In many classes of business the furnishing of repair parts is an important feature of the business, so that the order depart-* ment may need to be divided into two sub-departments or two distinct departments, such as the contract department and the supply or repair department. The latter department will then handle all correspondence in regard to supply orders, stamping the original customer's order with a time-stamp indicating date received, when and by whom approved for credit, supply order number, when order written, by whom checked, and when and by whom acknowledged. The head of the supply department must be well enough versed in the details of the business to edit the original orders, THE ORDER DEPARTMENT 149 i.e., he must see that the items ordered by the customer are in- serted in correct form for clear understanding by all in the factory who are to handle the order. A single item asked for by the customer may require the collection or manufacture of a numl of component parts or items; in such cases a detailed list of ponent items will be made out on the supply department by the head of that department. The supply order will have to be written in manifokjT similar to a regular or contract order. As an instance of hAw many copies will be required the following typical case will serve to illustrate : (1) One original copy. This goes to billing clerk as soon as order is written. (2) One yellow copy to be held in supply department until goods are ready for shipment of either part or all. It is then sent to shipping department, which sends it to billing clerk when shipment of either part or all is made. In case of partial ship- ment, billing department sends the yellow copy back to supply department, where it goes through the same routine as before until shipment is completed. (3) One blue copy. This goes to stores record department. Stores record department marks with small rubber stamp, "In stock," all items regularly carried in stock, and "To be taken from Stock Order No "all items which are regular stock, but of which there is not a supply in the stock-room. (4) One fawn copy for stock-room. Head storekeeper of finished parts will get out all parts which are ready to ship, checking same off his copy of the supply order, keeping the un- filled copies on one file board, the partially filled ones on another, and filing away the completely filled ones. Head attendant in finished parts storeroom puts the items for any one shipment into a bin by themselves. When he has all items in the bin which he can get, he designates this by put- ting a tag marked "Complete," or "Partial," into the bin, to- gether with a tag bearing the order number. Some one regularly delegated from the supply department calls several times a day to see these bins, taking with him the supply department's file board of all yellow copies of supply orders, and leaving with shipping department the copies of orders for which goods are ready for either entire or partial shipment. However, head storeroom attendant will not depend on these personal calls 150 FACTORY ORGANIZATION AND ADMINISTRATION from supply department as the only means of advising that goods are ready for shipment, but will send a daily report to supply department of all orders ready for complete and for partial shipment. Supply department decides whether or not partial shipment is to be made at once, and attends to any correspondence with customer which is necessitated by inability to ship entire order. (5) One pink copy of order for a continuous numerical file in supply department for reference. (6) One white copy for continuous numerical file in contract order department, which needs sometimes to know about cus- tomers' supply orders. This can be included or omitted as the conditions of the business may demand. 160. Special Orders. For all items not regularly carried, the stores record department writes a request on production depart- ment to issue "Special Manufacturing Order," covering such parts as have to be specially made. SPECIAL MFG. ORDER ISSUED BY STORES RECORD DEP'T. A/C SHIPPING ORDER No. FOLLOWING ITEMS NOT REGULARLY IN STOCK ARE TO BE MANUFACTURED FOR ABOVE SHIPPING ORDER IN ACCORDANCE WITH DETAILED SPECIFICATIONS AND MATERIAL LIST AS BELOW: ORDER No. FIG. 47. Form of "special manufacturing order" which selects from a shipping or supply order only those items which have to be made in the shop especially for this shipping order. It omits all items with which the shop is not concerned and bears the same number as the complete shipping order. Salmon colored bond paper, 81/2 inches wide, 7 inches high. The stores record department will also issue requisitions on the purchasing department for any items which have to be purchased on the supply order. The castings record clerk of the department will put in the requisition for any castings re- quired, and the head of the stores record department will put in the requisition for other purchased items. Fig. 47 shows the general form for the "Special Manufac- turing Order," which is a sub-order bearing same number as the THE ORDER DEPARTMENT 151 supply order on whose account it is issued. One copy of each "Special Manufacturing Order" is sent to stock-room. A form is also used for notifying the production department to hurry through stock orders covering any parts regularly stock parts, for which there is a stock order in the shop, but no pieces in the stock-room. All the above details are attended to by the stores record department. 161. Changes in Orders. Changes in orders should be written out on regular order forms, bearing same number as original order, with the word "Change" printed diagonally across the form in large, open-skeleton type of red color. They are then filed with the original order by all departments receiving same. The above outline covers the duties which should be assigned to an order department or order clerk and a supply department. The detailed issuing of the sub-orders which are necessitated by the issuing of a general or main order for complete machines, and the following up of such orders, are matters described in detail in subsequent chapters. REFERENCE COOK: "Factory Management," Chapter VH. CHAPTER XII BILLS OF MATERIAL 162. Bill of Material Defined. The bill of material for a manufactured product, whether that product be a machine or a piece of furniture, is a list of all the individual component pieces which, when properly put together, constitute the finished article. In an establishment which makes to order many different machines or complex articles, the preparation of bills of material is a far more extensive work than in factories making but few different types of product and shipping from stock. In either of the above-mentioned classes of product, however, the purchas- ing of the necessary raw materials and manufactured purchased parts, as well as all the manufacturing processes, are greatly simplified and facilitated by the prompt preparation of accurate and complete bills of material for the use of all departments which need to know fully and exactly all the component parts of the finished product. 163. Grouping of Parts. The bill of material or list of parts, in order to be most useful in various departments, needs some- times to be arranged in various ways. For instance, for most convenient use in the purchasing department the list is best arranged according to classes of material, the steel castings being listed in one group, the iron castings in another group, brass castings in another, bar stock in another, etc. For the produc- tion department, if it has its stock records arranged by mark numbers of individual pieces, the list may more advantageously be arranged according to mark numbers. For the various shop departments, a bill arranged according to sequence of building of the various assembly and sub-assembly groups will be most satisfactory to work from. The last type of bill of material is the arrangement most generally in use if but one arrangement is to be followed. The bill of material must be specific and complete in regard to dimensions and materials if these points are not covered by a drawing specified in the bill. It is necessary that the man in 152 BILLS OF MATERIAL 153 charge of making bills of material have a full knowledge of the exact materials that are required in each case. He needs also to know what materials are standard commercial articles, and what sizes and dimensions, are most commonly in stock in the general market. It is important that the head of the bill of material department be a man whose opinion will be respected by the drafting and designing departments, so that he may be free to make requests for modifications of the items specified by draftsmen and designers in order to secure conformity with commercial practice or to the standards already in use in the par- ticular establishment in which he is employed. 164. Special Parts. It is very desirable that the stores department furnish the engineering and drafting and bill of material departments from time to time lists of unused special castings, large shafts, large forgings, etc., which might possibly c L D ->. MATERIAL Lis DRWG. NO.. N0..8HEE T nunpR NO, SHFFT t T8 TI F m [ DCATIOf 1 rfO*. APPARATUS ncTA-n OATF LINE &m NAME OF PART DRWQ. 3YMB. FILE NO. DESCRIPTION 1 2 3 4 5 6 7 8 - ">^^ ^ ^... - -, ~- ^-^ v FIG. 48. Simplest form lor material list. White bond paper, 81/2 inches wide, 11 inches high, red and blue ruling. be specified in bills of material as substitutes in place of new purchases or new designs. In many an establishment there will be found parts in stock which it is desirable to adapt for use for a particular job, and which can be used without in any way inter- fering with standardization. Card records covering any such items will be found useful, and when the items are allotted they are marked off the cards. In order to make this system of using up special parts easily workable, it is advisable to mention on the card the location of the item in the buildings or yards. A symbol or number may also be painted on the piece and recorded on the card. A sketch showing any special features may also be shown on the card record, also any defects. It may be advisable to use a separate card for each separate piece if the pieces are large and special. 154 FACTORY ORGANIZATION AND ADMINISTRATION Fig. 48 shows a typical form for bill of material. The first column is merely a consecutive numbering of the lines and affords a concise system of reference to any items in the bill. 165. Departmental Bills of Material. Where a factory is divided into departments whose work is quite independent of each other, it may be found advisable to issue separate material lists for each department, such departmental list covering only such items as the department in question needs to be advised of. For instance, there may be distinct and different bills prepared respectively for the pattern department, the group assembly. DRAWING NO. PATTERN NO. QUANTITY REQUIRED NAME OF PART SHOP ORDER TAGS NO. PIECES | DATE 3ATE WORK DATE WHEE~L GROUP V-1321 B.N.F. 407 2 Front hubs, 4/1 V-1321 B.N.F. 408 2 Front flanges, 4/2 1 5-3/4' ' balls 2 Inner ball cups & ret . 4/3 V-1349 15-5/8" " 2 Outer ' ' " " " 4/4 1/2-24" 2 Oil caps, 4/5 V-1326 B.N.F. 409 2 Dust caps, 4/6 V-1317 B.N.F. 404 2 Rear hubs & brake drums 4/ 7. V-1317 B.N.F. 405 2 ' ' flanges, 4/8 3/16x3/16x 1-1/2 2 Keys, 4/9 i; -3/4" balls 2 Inner ball cups & ret .4/10 V-1340 15-5/8" " 2 Outer " 4/11 1/2-24 ' ' 2 Oil caps, 4/12 V-1327 B.N.F. 410 2 Dust caps, 4/13 * ^ 2 Felt washersj^.^^ 4/15 FIG. 49. Bill of material as used in automobile work, dividing the machine into groups and designating each part by a symbol indicating the group into which it belongs and the number of parts in each group. White bond paper, 81/2 inches wide, 11 inches high. department, and the erecting department, each of these separate bills of material covering pnly such items as are needed for the complete information of the department in question, in order that the work in that department may be correctly done. 166. Assembly Groups. Fig. 49 shows a bill of material in which the parts are arranged by groups as used in automobile manufacturing. In this list it will be noted that a further identi- fication or mark number is mentioned immediately following the name of the part. For instance, the front hubs, in addition to being identified by the drawing number and the pattern number, are known as 4/1, meaning Part No. 1 in Group 4 of this type of car. BILLS OF MATERIAL 155 A similar bill of material in which the parts are arranged by assembly groups, as used in a dynamo and motor factory, is shown in Fig. 50. In this bill an attempt was made to desig- nate materials by different styles of type, the heavy block type signifying cast iron, the heavy italics specifying cast brass, and the light type signifying articles made of bar stock or purchased. This plan is as a rule not satisfactory, however, as it may be desirable in special instances to use steel castings instead of cast iron, bronze or malleable iron in the place of brass, nickel steel Account o/_ tn'a_ .Type. H.P.K.W. To be completed, Remarks: R.p.m. Size Armature Net Weiaht .. Weight Size Patten No. Weigh Drawing No. Cost of Time Time Coat of Men Boja SPIDER, SHAFT AND RINGS Spider niid Sleeve Flanged King End Ring Ventilating Ring Steel Rinss(Discs) Brass Strip Steel for Shaft Armature Keys Commutator Keys Pulley Keys Hex. bd. Cap Screws FIG. 50. Bill of material as applied to dynamo and motor manufacture. Components arranged by groups, tracing and cost record columns on same sheet with list of parts. White bond paper, 81/2 inches wide, 11 inches high. in place of machinery steel, etc., and it is simpler to leave a col- umn for material to be filled in in each particular bill of material. 167. Bill of Material as Tracing or Cost Record. The last two examples of bills of materials also contain columns for use in tracing or following up purchases or manufacture of material in the shop, and in the last example, columns for figuring costs of the separate parts. As a general rule it is undesirable to make the bill of material fill so many different purposes, as it crowds too much into a small space and confuses departments who have no interest in the following up or figuring of costs. It will gen- erally be found desirable to have separate forms printed for use 156 FACTORY ORGANIZATION AND ADMINISTRATION by the cost department, the tracing department, and any other departments that might have to use the bill of material in con- nection with their work, such forms being printed on sheets of such size that they may be bound in with sheets of material, and opposite the respective sheets listing the material items. (See Figs. 92 and 152 as examples of such insert sheets.) 168. Changes in Bills of Material. One of the most vexing problems in manufacturing is that of changes or corrections in bills of material. It is seldom that a machine or any apparatus consisting of a considerable number of parts is completely and correctly described in the first bill of material, because as a rule it is necessary to get the apparatus started and some of the lead- ing items ordered in the shop or outside before the entire bill can be completely checked and crystallized. Changes in the way of insertion of omissions do not usually cause much incon- venience or loss provided they are not allowed to pass unnoticed until the order is well under way. The type of alteration that does cause loss almost invariably is a change in design inaugu- rated after a bill of material has been sent out into the shop and work started. This type of change should be most carefully guarded against. It is easy for a designing department to get into the bad habit of making changes after work has been started. The persistence in this practice of making changes in this way may be a matter of sufficient seriousness to ruin a manufacturing establishment. Not only does this practice entail enormously increased costs of manufacture, but it results in so many different types of machines being sold that the supplying of repair parts becomes a most complicated problem, necessitating the most careful and complete records of each machine sold, and either the carrying of an enormous variety of repair parts, or else making the customer wait for a long time for a repair part when he has a break-down, and making the part cost him so much on account of its being made as a single piece that he becomes dissatisfied with the delay and high price. One way of recording alterations is to issue a separate sheet of the bill of material for each set of alterations. A form for use with this method is shown in Fig. 51. In case this method is used, it is necessary to draw a line through the changed item or inter-line for omitted items, and make small notes referring to the alteration-sheet. Another way of recording changes is by binding the bill of BILLS OF MATERIAL 157 material in a cover of plain tough manila paper, and entering on inside of cover a rubber stamp every time a change is made, such rubber stamp bearing the date the change was made and any other necessary data, and then entering a reference to the rubber stamp impression covering the correction or omission in its proper place on the original bill of material by inter-lining. In case it is necessary to recall bills of material from various departments for the purpose of entering changes, such recalling must be done in a systematic manner with the full knowledge of the departments from which the bills are recalled. A system of receipts may be desirable for this purpose, and a department should be permitted to finish any entries that may be in process rr> rn RREC.TIUN ORDER No. Drwg. NQ, Sheet No, SERIAL LIST FILE No. App, ^Order No- Locafioi Written ! MA hy Date No. of Pieces. NAME OF PART. 1 File No. DESCRIPTION. JOB. Matl. Reed, or Deld. Weight. Iss. btr. sa ___J- 1 1 =d-Z -^~^~ This order to bear consecutive number (l,2,3,etc..) for Correction Orders, issued on any Shop Order. State definitely why it was necessary to issue this Correction Order. FIG. 51. Correction sheet for bill of material. White bond paper, 10 inches wide, 9 inches high, ruled in red and blue. of being made at the time the bill is recalled before the bill is taken away from that department. 169. Getting Work Started before Completion of Bill of Material. The preparation of a complete bill of material may be a matter requiring several days, and perhaps several weeks. In the latter case it may be desirable to get some of the work under way before the bill of material can be completed as a whole. This would be particularly likely in the case of purchased items, which require prompt ordering so as to save every possible day of time. For this reason it may be desirable to have the head of the bill of material department initiate the ordering of such items by having him make out a list of these items on a sheet which constitutes a request for the immediate issuing of requisitions for same, proper notations being made on the bill of material that such requests 158 FACTORY ORGANIZATION AND ADMINISTRATION | 9 uj C i -~ P 'c _J o 5 o 1 1 I ? Q. If - : O 'El 1 t u M! S Q J u o o o ^o E S Q d _ h o WI ,, 10 s LL H t u WD IS u. 1 p. t J Q c i t fl m W U O li. 1 v QC z 1 PH o DC U. h g O H - h 2 5 >, | 03 u o - '^ D u '^ O DC o P U o> _ O* oc ro 2 O (H a 1 O/S 1 w ^_ ft ^ 3T O < *^ OQ O 3 rr OL ^ p s I o o cu o ^ 1 " t _i OC u *~^ ^ z S 1 S b 1 i B c^i t w .= 10 o 5 IS O H- Mil & bo &* S - for requisitions were made. This in order to prevent the duplication of purchase orders for these items. If the head of the stores de- partment is the person who regularly orders all mater- ials, then the procedure takes the form of a request on the head of the stores department to make re- quisitions on the purchas- ing agent for the items in question. Fig. 52 shows a form used in this manner in order to expedite the order- ing of necessary materials before the completed bill of material is issued. The head of the stores department should have a system of annotating the various items in the bill of material so as to designate what disposition he has made of them, such as ordering the necessary ma- terial or withdrawing the items from finished stock on hand, etc. As before stated, it is preferable to provide separate sheets for keeping these annotations referring to stores and stock records, production de- partment records, tracing records, etc., such sheets being of dimensions easily bound in with a copy of the -bill of material. CHAPTER XIII THE DRAFTING DEPARTMENT 170. Functions of Drafting Department. The drafting de- partment usually includes the designing department in most manufacturing establishments, excepting in a few large concerns where the designing is done by a separate department which furnishes sketches and the results of calculations to the drafting department. The work of the drafting department will usually be divided into such work as designing, drawing, tracing, blue-printing, indexing, and filing. The designing of tools or the making of tool drawings in accordance with the sketches or instructions of the head of the tool-making department may constitute another subdivision of the drafting department. 171. Numbering Parts. It is generally desirable to designate all parts by "mark number" or "part number." This system necessitates the keeping of a consecutive number record of parts, in which is given a brief definition of the piece together with refer- ence to the drawing number, and the pattern number if there is a pattern. There should also be a consecutively numbered pattern record in which is given also a definition of the piece, the drawing number, and the mark or part number. In order to avoid dupli- cation of drawings and of patterns, and also in order to avoid giving different mark numbers to the same purchased finished parts, such as bolts, screws, etc., there must be an alphabetically arranged record of concrete names of parts in which may be found the corresponding mark numbers and pattern numbers. Most drawing rooms give no attention to indexing as above suggested. The natural result of this neglect is that the same part is drawn over and over again, and that separate patterns are made for parts for which some existing pattern could have been used. 172. Standardization of Parts. There is hardly a machine of any kind in which there will not be found certain details which recur again and again in similar forms on other machines. If a draftsman follows the whim or inspiration of the moment he is 159 160 FACTORY ORGANIZATION AND ADMINISTRATION PULLEYS. WIDTH FACE STYLE FACE DIA. HUB BORE WEB ARMS STYLE DRAW. NO. BUSHING. LENGTH BORE THICK DIA. DIA. LENGTH FIGS. 53 and 54. (Upper card): Record of pulley drawings, giving style, pattern number, and dimensions; (Lower card): Similar record for bushings. White cards 5 inches wide, 3 inches high. PITCH GEAR. OUTSIDE DIA. PITCH LINE DIA. NO TEETH- W.DTH HUB o ^H ZZS, WEB ARMS PATT. NO. DRAW No. DATE REMARKS: FIG. 55. Drafting department record for drawings of gears. White card, 5 inches wide, 3 inches high. THE DRAFTING DEPARTMENT 161 likely to make a number of different designs of such details, necessitating different patterns, different castings, and different tools for machining, when by a little foresight and system a single design of each detail, with but a single pattern, one variety of casting, and one set of tools, would have answered for all purposes. Among such parts might be mentioned gears, bushings, levers, pulleys, bearing brackets, collars, bolts, nuts, and washers. If a card index record is kept of the above-named parts, recording briefly the dimensions adopted whenever such a part is designed, and this index is referred to whenever it becomes necessary to embody such parts in a design of any machine, considerable BEARING BRACKET. HIGH.*A. 1 ^ ^ J.T- 1 n < I LE h F 'T I * i _L k Z^ H o j B c D E F 6 REMARKS. PATT. N^ DRAW. N^ DATE FIG. 56. Drafting department record for drawings of bearing brackets. White card, 5 inches wide, 3 inches high. saving will result, due to the fact that the minimum variety of such details is maintained. The two forms herewith given are such as are used for this purpose by a firm of leading printing-press builders, who take a particular pride in the fact that although they build intricate machines, these machines are composed of detail parts which appear over and over again through their whole line of designs, thus keeping down their expense for patterns, tools and store- room space and records. 173. Recording Data for Standard Detail Parts. Fig. 53 is a record of pulley drawings which gives all the dimensions and 162 FACTORY ORGANIZATION AND ADMINISTRATION details as to style. Other blank spaces show the file number of the drawing and the pattern number. By reference to this card, which is filed in an alphabetical index, it can be ascertained at once whether the drawings on hand will fill the present need. A similar file card for bushings is shown in Fig. 54. The details for filing are the same as on the pattern card, and the dimensions of the body, flange, and nose are given. These are samples of but many varieties of index cards which can be used in a convenient system of filing drawings. Fig. 55 shows a form for recording data for gears, and Fig. 56 a form for recording bearing brackets. Temporary drawings or sketches should never be used. It will take but a short time longer to get out a tracing and blue- COMPILED BY -.. DATE INSPECTED BV DRAWING LIST No,__ SHEETS SHEET NO NOT COMPLETED FIRST MADE FOR NAME OF DRAWING DRAWING OR LIST NO. GROUP OR PtftT NO. NO. OF PARTS DT[ ' AODCD DATE CHANGIO <^^-^" - ' ^=^131 FIG. 57. Form for drawing list covering all drawings pertaining to any one machine or order, a briefer reference than the complete bill of material. Pale green bond paper, 81/2 inches wide, 11 inches high. Thin paper. print, and then there will be no risks run of losing the drawing or of questioning its having been tampered with. 174. Drawing Lists. While the bill of material for a complete machine may give a list of all of the drawings, it is usually de- sirable to prepare for any one machine a complete drawing list, such list being confined only to the articles for which drawings are made, and serving an entirely different purpose from the bill of material, which lists minutely every item in the machine. A form for drawing list is shown in Fig. 57. 175. Filing Tracings. A fireproof storage vault needs to be provided for the filing of tracings. The most convenient methods of filing will be a matter for deciding in the especial manufactur- ing establishment concerned. In some cases it might be ad- vantageous to file tracings wholly by consecutive numbers, THE DRAFTING DEPARTMENT 163 irrespective of dimensions. In other cases it will be desirable to file by class or dimension of sheets, and in still further cases it might possibly be desirable to have tracings for any one machine filed together. The last-named method, however, will generally conflict with the principle of using the same tracing and the same part in a number of different machines, and the same purpose is answered by the drawing list previously referred to. The most common device for filing tracings is a shallow vertical drawer with triangular metal corner pieces in the far inside corners, to prevent the tracings from curling up, and a piece of bent wire swinging in screw eyes inserted in the inside of the front of the drawer to act as a light weight. Sometimes a sheet of galvan- ized steel is used as a weight. 176. Stock of Blue-prints. A stock of blue-prints is often desirable in order that there need be no delay in furnishing a blue- print when asked for. Such blue-print stock does not need to be in any fire-proof location, and can be kept in drawers similar to those described for tracings, in cabinets of a height such that the top of the cabinet forms a handy place for laying out a blue-print when consulting it. 177. Changes in Drawings or Patterns. In changing drawings and patterns it is best to use an entirely new number for the changed drawing or pattern, and not to use any system of pre- fixes or affixes. The latter method merely complicates matters. When a drawing is changed a notation should be made referring to the number of the new drawing, and on the new drawing a notation should be made referring to the old one. In the case of patterns, if the old pattern is to be altered in order to make the new one, the pattern record must show such alteration. The alteration should always be made, if possible, in such a manner that the omission or addition of certain pieces will permit of the making of the casting of the old style. The reason for these policies in connection with changes is that it may be necessary to replace pieces of the old style, and it is not desired to carry any in stock, but. it may be desirable to make them on short notice in accordance with the old style. 178. Blue-prints for Shop Use. Blue-prints for shop use are usually carried in stock in a blue-print issuing room adjacent to the tool issuing room, and in many shops it is desirable that such blue-prints be mounted. They may be mounted on tar- board, and made washable and water-proof by giving them 164 FACTORY ORGANIZATION AND ADMINISTRATION first a coat of white glue and then a coat of white Damar varnish. Curling may be prevented by pasting a blank piece of paper on the back of the mount. In place of tar-board galvanized steel may be used. The necessary smoothing off of the burr on the edge and the heavier weight of the steel make it dis- advantageous in some respects, though it will outwear the tar- board as a mount. 179. Titles of Drawings. Titles of drawings should contain sufficient information to tell all about the drawing without need of referring to any index. The title should designate the name of the complete machine or article which the drawing represents or of which it is a part, and should state also the name of the indi- vidual piece or pieces shown. It should designate the scale to which the drawing is made, the date drawn, by whom drawn, by whom traced, by whom checked. BLANK MACHINE MFG. Co.. CHICAGO, ILL. DRAWN BY TRACED BY SCALE DATE FIG. 58. Title printed on small piece of tracing cloth, 41/2 inches wide, 21/2 inches high. A lot of time is wasted in many drawing rooms in making titles and border lines by hand. If border lines are wanted, they should be printed on all standard size tracing sheets. The title plate should be printed in on the lower right-hand corner, in order that it may be easily seen when the drawings are filed away in drawers. If there is considerable occasion to use tracing sheets of sizes other than standard, it may be found advantageous to have title form printed on small pieces of tracing cloth or tracing paper, and paste these on the lower right-hand corner of the special sized sheet. Fig. 58 shows a title blank printed on tracing cloth to serve this purpose. 180. Detail Drawings for Shop Use. It has been found advantageous in many establishments to prepare distinct draw- ings for the shop, such drawings showing only the dimensions which are absolutely necessary for the shop to know in order to do the work that has to be done on the piece. Such shop draw- THE DRAFTING DEPARTMENT 165 ings are most advantageously made to show but a single piece on one tracing or blue-print, and should specify limits of accuracy, gages to be used, etc. Some shops have found it to be a good practice to send a blue-print from the production department with each production tag, such blue-print and tag following the work through the shop. In order to keep the print and tag clean they may be put into an envelope of tough paper, such envelope bearing on the outside merely the shop order number, the mark number of the piece and the number of pieces. In this way the tag and blue-print will not get nearly as oily and Tap for %"Scr. NAME OF PIECE Back Gear Shifter Level [P. & C. Hd.l QUANTITY 4 U> 1C. 1 SYMBOL Of MACHINES USED C P 22, G 24, H 27 TR. B.S.3-21-10 CH. H.R.4-13.10 THE LODGE & SHIPLEY MACHINE TOOL CO CINCINNATI, OHIO, U S.A. UPERSEDES DBAWIN8 SUPERSEDES BY DWS PIECE NO 117 10659 FIG. 59. Shop blue-print gummed to inside cover of traveler. Approx- imately 6X8 in. dirty, nor are they as likely to become lost, as would be the case without the use of the envelope. Fig. 59 shows a shop detail blue-print as used by the Lodge & Shipley Machine Tool Co., and pasted into each shop " traveler- book" along a gummed edge on the inside of the cover. The " traveler-book" contains a number of slips bound together in proper consecutive order, each slip being a work order for a specific operation, and serving when torn out and clock-stamped, as a record of the workman's time on that operation. The size of this blue-print is approximately 6 in. by 8 in., so that when 166 FACTORY ORGANIZATION AND ADMINISTRATION the 8-in. length is folded in half it fits standard filing devices for 4-in. by 6-in. cards. The " follower-book " is 4 in. by 6 in. 181. Specifying Limits of Accuracy. Each drafting room should agree with the proper shop authorities on a standard FERRACUTE MACHINE CO. PIECE NAME..C E _^T?? i .^A' I ?.:. i ?9A L .?.:^....P.IECE SYMBOL AN I3ai3__. CUSTOMER Fenwiok Freres ATERIAL 1.0. WEIGHT, ROUGH WEIGHT, FINISHED DESIGNER O.Bmith rsMAN C.Tajlor APPKOVED L.C.M. 12800-C FIG. 60. Shop blue print specifying limits of accuracy. Red cross-section lines as well as black border and printed matter at bottom of sheet are printed on the standard size tracing sheets. table of ordinary clearances to be used in machine-tool work, and all machinists should be furnished with a table specifying these clearances. Standards should be agreed on for drive, press, or shrink fits, running fits, and special fits peculiar to certain products. THE DRAFTING DEPARTMENT 167 In order that there may be no mistake as to clearances and tolerances it is well to specify them not only on tables, but also on shop blue-prints. Fig. 60 shows a blue-print as used by Frederic A. Parkhurst at the Ferracute Machine Co., showing proper fits. 182. Making and Issuing Blue-prints. For printing purposes the cylindrical arc light printing machine is the most dependable process. It is well to provide sunlight printing facilities, how- ever, for emergency use. An outdoor platform or balcony on to which trucks containing the printing frames can be run, and set so that the frame may be tilted in any direction, will be found much more convenient than the usual method of running tracks out of a window to hold the truck supporting the frame. Facilities should be provided in every first-class drafting room for photographic development and printing. It is desirable to post all requisitions for blue-prints received from various departments and individuals on to a permanent record, in which a separate card is used for each tracing. On this card will be recorded the date on which any print was issued, and to whom it was issued. This record serves not only as a check on what persons received blue-prints, but is also a guide as to how large a stock of prints of each tracing should be carried on hand ready for issuance. It is important that the recording and clerical part of a draft- ing department be kept in excellent order. 183. Checking Drawings. The checking work should not be delegated to the chief draftsmen, but should be the duty of one man, whose first duty it must be. He should check not only from the standpoint of dimensions, but from a standpoint of ease of processing. The policy of standardization should always be borne in mind. The drafting department must be supplied with as many lists as may be necessary of the shop's standards as to reamers, taps, etc. Designing should always be done in such a way as to consider cheapest and most efficient methods of machining, assembling, and processing in general. There should be a system of collecting and recording all criti- cisms of drawings made in machining, assembling, or erecting departments. Where there is any discrepancy apparent in the drawing the best rule is that work should be stopped and the drawing taken at once to the drawing room for correction or interpretation. 168 FACTORY ORGANIZATION AND ADMINISTRATION 184. Time-cards in Drafting Department. Time-cards should be turned in by draftsmen to show the relative cost of drawings. A record of the results of these time-cards should be kept not only in the cost department, but also in the drafting department, so that the head of the drafting department may have some knowl- edge of costs of drafting work based on actual records of perform- ance. Not only the order number should be recorded on the time- tickets, but also the nature of the drawing, its number, and whether the work done was designing, sketching, tracing, etc. Standing non-productive orders should be issued, to be closed monthly, to determine the cost per month of filing, blue-printing, and other maintenance expense of the drafting department. 185. Chief Draftsman. The head of the drafting depart- ment needs to be relieved of as much routine work as possible, outside of that connected with the time at which drawings for certain orders should be completed. In this respect he should be as thoroughly posted as the head of the shop production depart- ment. He should be provided with a list of all orders for which drawings are required, and also a complete list of all draw- ings which have to be made, together with the date at which they are to be ready. He should hold department meetings and con- sultations at stated times, in order to have the output of his department correspond as nearly as possible to the requirements of the business. The head of the drafting department should be a man with knowledge of machinery used in his line of work, and of the best methods of foundry and machine-shop practice in general. He should be constantly going over current product with a view of having ready plans for redesigning, to be put into effect the mo- ment the policy of the company as to adhering to standards once established will permit of putting the improvement into effect. REFERENCES PERRIGO: "Modern Machine-shop Construction, Equipment and Man- agement," Chapter XIX. CARPENTER: "Profit Making Management," Chapter IV. PARKHURST: "Applied Methods of Scientific Management," pp. 27-36. CHAPTER XIV THE PATTERN DEPARTMENT 186. Orders to Make Patterns. Orders to make new patterns usually come direct from the drafting department or the bill of material department to the pattern-making department, in case the factory has its own pattern-making department. If patterns are not made in the factory, but are bought outside from a jobbing pattern shop, then the shop order will be replaced by a requisition on the purchasing department or a request on the stores depart- ment to make a requisition on the purchasing department. Fig. 61 is a form for an order to make a pattern in the shop. PATTERN DEP'T. PATTERN NO, / NEW WORK. Job Order for j Qr Special Work> Report all materials used on back hereof. On completion of work the Foreman will date, sign and return this Order to General Office. Foreman will see that all Time Slips are marked for the above Pattern No. only. If Pattern No. is not given then mark Time Slip for Order No. below. Drawing or Sketch Nc -ORDER NO.. FIG. 61. Form for pattern order. Manila card, 5 inches wide, 3 inches high. The pattern-making department is furnished one copy of this order. Another copy is sent to the cost department. The amount of material used is posted by the pattern-maker or the foreman of the pattern-making department on the back of this order card. Fig. 62 shows the back of the card as used for reporting materials consumed in making the pattern. When the pattern is completed, it is sent with the order card to the pattern storage department, where the pattern storage clerk records it in his record of patterns, and assigns it a place in the storage 169 170 FACTORY ORGANIZATION AND ADMINISTRATION vault or building. The pattern storage clerk fills out a record similar to Fig. 63, which describes the pattern, shows where it is located in the pattern storage racks, and he then sends the order MATERIALS USED. State No. of feet of lumber of each grade for pattern, its loose pieces, core boxes, etc., draw plates, letters, figures, etc., etc. Lum Patte Draw ber-ist grade, fret, h.m. 2 nd Common it ft of Plate Plates; No. user! p ? t \Tr> FIG. 62. Reverse of form shown in Fig. 37. Pattern-maker's report of material used on an order. Manila card, 5 inches wide, 3 inches high. on to the cost department, showing that he has received the com- pleted new pattern. 187. Time-keeping System in Pattern Shop. It is sometimes desirable to have the time-keeping system in the pattern depart- ment different from the general time-keeping system, as the PATTERN NO. DRAWING NO. WHEN MADE FIG. 63. Pattern storage record. White card, 5 inches wide, 3 inches high. department is apt to be a small one, and in an isolated location some distance away from larger shop departments where a differ- ent time-keeping system may.be preferable. There will always be more or less repair work on patterns and flasks going on in the THE PATTERN DEPARTMENT 171 pattern-making department, which fact will be a reason for the over-head or operating expense rate of the pattern shop being quite heavy. Fig. 64 shows a time-card to be filled out by each pattern-maker, which provides spaces for filling in the pattern- maker's non-productive time. The pattern-making foreman will NAME ri nr.K No. TOTAL HOUR =; FLASK A. PATTERN No. OF HOURS DESCRIPTION OF WORK. 1 Making New Wooden Flasks. Repairing or Replacing Old Flasks. 3 Handling Flask Lumber and Supplfes*.. 4 H Pattern < u Pattern No. it , n it New Patterns for "Pipe fipeciate. u it it a it 5 Repairing or Replacing Old Patterns fi Carrying Patterns. 7 Cleaning Shop and General Labor. a General Helping at Flasks. 9 Patterns. DROP IN ro i IME BOX EVERY DAY AT QUITTING TIME. FIG. 64. Time-card for pattern-maker. Manila card, 3 1/2 inches wide, 6 inches high. have to spend some time in looking over these time-cards, to see that the time is correctly distributed. 188. Recalling or Altering Patterns. Where an establishment gets its castings from a number of different foundries, as is very often the case in a concern using many steel castings, the matter of recalling or altering patterns is one which will involve con- sideration of a number of questions affecting production. These 172 FACTORY ORGANIZATION AND ADMINISTRATION considerations are fully set forth in the form shown in Fig. 65, which is a request to recall or alter a pattern. This request emanates from the drafting department, which states the nature of the change or the reason for the recall, and also states whether the change will affect interchangeability and how. The form next goes to the purchasing department, which department, in the establishment in which this particular form was used, had REQUEST TO RECALL OR ALTER PATTERN Date T.o Purchasing Dept. Pattern NO. "Mark Nn_ Ahvo Pattern is to be Will change affect interchangeability of castings as previously .made? If so how? FOLLOWING TO BE FILLED BY PURCHASING DEPT.: No. castings fiom present pattern now i> stock For Drafting Department No. finished parts from No. castines due from present pattern No. castings required for production orders No. finished parts shipped in preceding 6 months SUPERINTENDENT TO FILL FOLLOWING: Shall current foundry orders be filled before recalling pattern For Purchasing Department Shall any additional castings from present pattern be ordered before recalling pattern-? Pattern Recalled: Date Superintendent When completely disposed of Purchasing Department will return this form to Drafting Department Purchasing Agent FIG. 65. Authorization for pattern changes or recall, inches wide, 11 inches high. White paper, 9 charge of the pattern storage department. The purchasing de- partment looks up the stores records, and fills out the blanks, specifying the number of castings from present pattern now in stock, the number of finished parts from present pattern now in stock, the number of castings required for production orders, and the number of finished parts shipped in preceding six months. When the purchasing department has filled in this information, THE PATTERN DEPARTMENT 173 the form is sent to the superintendent, who answers the questions, "Shall current foundry orders be filled before recalling pattern?'* RECEIVING DEPT. TO ATTACH ONE OFTHESE TAGS TO EVERY PATTERN RECEIVED. DATE PATTERN RECD. FROM _ KIND OF PAT. NO. CORE BOXES DATE OF NOTIFICATION _. BY _ TO BE FILLED BY DRAFTSMAN: DATE AND HOUR CHECKED _, IS PATTERN TO BE REPAIR!D?- CHECKED BY__. TO BE FILLED BY PURCHASING DEPT. SHIP TO DATE TO BE FILLED BYSHIPPING DEPT. DATE AND HOUR RECVD __ DATE SHIPPED DETACH AND HANDTO RECVG. DEPT. WHEN PATTERN IS SHIPPED. TO BE FILLED BY PATTERN STORE MAN! DATE RECVD. _._ STORED IN BIN NO. BY. DETACH AND HANDTO PURCHASING DEPT. WHEN PATTERN IS STORED. FIG. 66. Pattern tag attached by receiving department, giving record of disposition and finally filed in purchasing department to show location of pattern. Manila tag stock with reinforced eyelet, 3 1/8 inches wide, 6 1/2 inches high. and " Shall any additional castings from present pattern be or- dered before recalling pattern?" This method puts the responsibility of tying up production 174 FACTORY ORGANIZATION AND ADMINISTRATION on the shop superintendent, and relieves the drafting department of any authority to hold up delivery of castings by reason of changes in patterns. 189. Checking Patterns and Recording Their Travel and Loca- tion. Where patterns are continually coming in and going out from and to various foundries, a pattern tag, similar to Fig. 66, will be found very useful. This pattern tag is attached by the re- ceiving department to every pattern received. The receiving department fills in the first section of the tag, which designates the pattern number, the date the pattern was received, from whom it was received, the kind of pattern, the number of core- boxes, and the date on which the receiving department notified the drafting and purchasing departments of the receipt of the pattern. As soon as the drafting department receives notice from the receiving department that a pattern is in (such notice being on a separate notification slip shown in Fig. 134), a representative of the drafting department is sent to check the pattern. The drafts- man fills in the result of his checking on the tag in the second space, specifying whether the pattern needs to be changed or repaired. The purchasing department next sends a representa- tive to the pattern, or better, a representative from the purchasing department makes daily visits to the receiving department and fills in the third space on the tag designating where the pattern is to be shipped. If it is to go to pattern storage, he so designates in the space. The next space is for the shipping department to fill in in case the pattern is to be shipped out. The shipping department then sends the tag to the purchasing department. If the pattern, instead of having to be shipped out, is to go to pattern storage, the shipping department space is left blank, and the pattern storage man fills in the last space, designating when he received the pattern and where he has stored it. The tags as returned to the purchasing department are there filed, according to numbers, in two boxes, one box representing patterns out at various foundries, the other box representing patterns in the storage department at the shop. This enables the purchasing department to state the location of any pattern in current use at a moment's notice. REFERENCE PERRIGO: "Modern Machine-shop Construction, Equipment and Man- agement," Chapter XXX. CHAPTER XV THE PURCHASING DEPARTMENT 190. Functions of Purchasing Department. The functions of the purchasing department in a manufacturing establishment may be stated as follows: First. To secure the most satisfactory material, such material including raw and finished material required in the manu- facturing processes, equipment, and general supplies. Second. To secure the most desirable delivery of the material, keeping complete and accurate record of all unfilled purchase orders. Deliveries and mistakes must be kept account of. Third. To obtain the best terms of payment and the lowest prices. Fourth. To record and classify all materials, equipment, and supplies used by the establishment, list for easy reference the names of all firms supplying these goods, and all purchases made. The order in which the above functions have been mentioned is usually the order of their relative importance. 191. Qualifications of Purchasing Agent The successful accomplishment of the first function demands that the pur- chasing agent shall be a man who has a working knowledge of the particular industry for which he is to buy material. If he has in addition a knowledge of the fundamental principles of the resistance of materials, of metallurgy, and of machinery, so much the better, for he will be able to make practical application of such knowledge. That the purchasing agent be the possessor of practical manu- facturing knowledge is just as essential in an establishment which refers its tests of materials to a testing laboratory, or to its engi- neering department or superintendent, as in a smaller establish- ment which does not conduct such tests. If care is exercised to obtain a man of the qualifications indicated to fill the position of purchasing agent, there will be far less liability to the error, frequently made, of buying material good enough in itself, but not exactly adapted to the particular purpose for which it is desired. 175 176 FACTORY ORGANIZATION AND ADMINISTRATION It is assumed at the outset, that persons other than the pur- chasing agent will have specified the exact physical or chemical properties of the articles that are the most important constitu- ents of the manufacturing product of the establishment. But there is no manufacturing process so simple that it does not require the purchase of a great variety of minor articles, the examination of each one of which by the engineering department would be a useless burden. And it is here, as well as in the pur- chase of general supplies, that the purchasing agent's training and experience come into active play. To salesmen, the ignorant, affable young clerk who has been promoted to the position of purchasing agent is a familiar type. He is frequently the cause of a salesman's prolonging his stay in a city several days, until finally he sees the man with whom he can have an intelligent conversation. It is quite evident that, where this is the case, the young man is a hindrance from an economic standpoint, since the additional cost of sales departments on account of prolonged stays is sufficient to increase materially the unnecessary expense connected with the placing of an article on the market. The securing of the most desirable delivery involves a knowledge of business methods and forms, in which, unfortunately, purely technical or shop men have generally had but little training and this fact is the excuse for the common practice of appointing as purchasing agents, clerks who have had but little technical or shop knowledge. A thoroughly systematic conduct of the purchasing office, such as is absolutely essential to insure the proper attention to this very important matter of delivery, is much facilitated by the use of certain forms. Some examples will be cited of such forms, which must, however, be modified to suit the requirements of any particular case. 192. Requisitions on Purchasing Department. It is very customary for other departments to lay the blame for delays in manufacture upon delays in receipt of material. Hence it is important that a written record be kept showing the originating dates of all calls for materials. In many establishments the first step in connection with the making out of a bill of material is the issuing of the requisitions for such material as it is known must be purchased. The purchasing department should be supplied by the general THE PURCHASING DEPARTMENT 177 manager with a list of all departments authorized to make requi- sitions direct on the purchasing agent, together with a statement as to the nature of goods for which such department may make requisition. For instance, it is usually desirable to confine the ORDER ON STORE-ROOM THIS REQUISITION WILL NOT BE ACCEPTED IF CHARGED TO MORE THAN ONE ORDER OR IFORDER NO. IS OMITTED, OR IF NOT SIGNED BY FOREMAN. ORDER NO. QUAN- TITY MARK NO. OFT SIZE NAME OF MATERIAL WEIGHT FOREMAN'S SIGNATURE DATE FIG. 67. Order on storeroom used to authorize withdrawal of supplies and components not issued with regular production tags. Yell6w bond paper, 3 inches wide, 5 inches high. making of requisitions for equipment to a certain department, making of requisitions for materials to certain other departments, the making of requisitions for general supplies to another depart- ment, etc. Hence separate series of requisitions are useful, desig- STORE-ROOM CREDIT ORDER NUMBER MADE OUT BY DATE ACCEPTED FIG. 68. Storeroom credit. Turned in to storeroom with unused sup- plies, bulk material, bar or sheet stock of which only a portion has been used on a given order. Pink bond paper, three inches wide, 5 inches high. nated by different prefix letters and printed on different colors of paper. It is not desirable to permit shop foremen to make requi- sitions direct on the purchasing agent. They should make requisitions on the storeroom for such materials or supplies as 12 178 FACTORY ORGANIZATION AND ADMINISTRATION they need, such requisitions being usually called " Order on Store- room," and bearing the order number of either productive or non-productive series to which the items are to be charged. Usually small tools are reported on a separate form or " Order on Tool-room," to cover withdrawals of new tools, such as files, drills, etc. Fig. 67 shows a form for " Order on Storeroom," and Fig. 68 a form for credit-slip to be used in returning excess material, such as bar stock of steel or brass after having cut off a piece. Where a production department exists, which sees that the necessary material is provided for all production orders ORIGINAL. SPECIAL REQUISITION R...N..50355 TO pupc-inr. nrp-r OATC ._ .. PURCHASING nnnrn Mr, ORDER THE FOLLOWING MATCRIAl FROM QUANTITY DESCRIPTION PPOVI FIG. 69. Form for requisition on purchasing agents. White bond paper, 8 inches wide, 5 5/8 inches high. and delivered to the shop when the order is ready to have work begin on it, the orders on stores will have a tendency to narrow themselves down to factory supplies and tools. They may also serve as requests for delayed material. When used for this pur- pose they must be distinguished in some way from the other store- room orders so as to avoid posting them by mistake as store- room withdrawals. Fig. 69 shows a form for requisition on purchasing agent. This is usually best written in triplicate. In departments that have to write a good many requisitions, the autographic register THE PURCHASING DEPARTMENT 179 is frequently found useful in writing, viz., a machine in which the paper is fed in rolls and the carbon is fed crosswise as it wears out. The original is sent to the purchasing department, as is also the duplicate, the triplicate being kept on file. When the purchasing department has filled in the purchasing order number, the duplicate is returned to the department in which the requisi- tion originated. In making requisitions and purchase orders for castings it will be found most satisfactory to issue a separate requisition and separate purchase order for each separate pattern number. At first sight this would seem like a great many useless orders, but experience has demonstrated that partial deliveries are far more easily checked off on an order referring to castings from but a OUTWARD ORDE .R No GENT IN CAF VIA. PLEASE SHIPTO IE OF THE FOLLOWING MATER ALS, ALL DELIVERED 3F (voyq QUOTATION < F.O.B. CAR!? . PRICE $ NOTE ACKNOWLEDGE, GIVING PROBALE DATE OF SHIPMENT. \ r\\lf ORDTR NUMBER NO ALLOWANCE FOR BOXING, PACKING OR CARTAGE. ^ ON ALL CORRESPONDENCE WE DEDUCT FREIGHT ON DEFECTIVE MATERIAL. / AND INVOICES. FIG. 70. Form for purchase order. White bond paper, 81/2 inches wide, 11 inches high. single pattern than if a given order carries partial deliveries on a variety of patterns. It also enables one to remove at once all orders for castings from a given pattern as soon as the deliveries on that pattern are completed. 193. Purchasing Department Order Form. As to the form of the purchase order itself, there are still a good many houses using the old-style bound book of orders with stubs, for the reason that then there is one place where there is a bound set of all orders. This method necessitates the writing of an index book. The more general method is to typewrite all copies, there being usually at least three, filing one set of carbon copies alphabetically, and the other serially by numbers. A further reference file is a large card index arranged alphabetically bp materials, and so ruled as to allow the entering of all purchase orders for a given kind 180 FACTORY ORGANIZATION AND ADMINISTRATION and size of material, and with spaces permitting of partial de- liveries. Such a large card record serves as an entry record of all invoices, and also for all prices paid for a given article, as well as a guide to the time that was taken to make delivery after orders were placed. Fig. 70 is a form for purchase order. On the bottom of the sheet are printed the terms on which the order is placed. From a legal standpoint it is usually best to place these terms between the name and address at the head of the order and the body of the order itself, thus making the terms form an integral part of the communication. An additional carbon copy of the purchase order is usually sent to the receiving department. Some firms prefer to send a notice to the receiving department which does not specify the quantity called for, so as to insure the actual counting of goods delivered on the part of the receiving department. 194. Following up Deliveries. The Shannon type of prong file or a loose leaf binder is usually used for filing the copies of pur- chase orders. If a firm has a great many purchase orders, extra long prongs may be used on the files, and a number of different sets of boards may be used, each file-board containing only a part of the entire series. As soon as a purchase order has been com- pleted, it is taken off the file-boards containing uncompleted orders, and transferred to the file-boards of filled orders. Some firms attach one of the copies of the completed purchase order, together with the requisition, to the voucher. This system involves some complications when invoices are approved which cover only partial deliveries on a given purchase order. In such cases extra copies may have to be typewritten of the purchase order and the requisition, for the purpose of attaching to the voucher, the originals remaining on file until the last delivery on the order has been made. Where a factory has a number of departments to which pur- chased articles have to be delivered, the copy of the purchase order which is sent to the receiving department should bear a notation stating to which department the goods are to be deliv- ered, also the requisition number which it fills. A simple method of securing promises of delivery is to enclose a printed post-card acknowledgment of order, with blank for promise of delivery. Fig. 71 shows a form of such post-card promise. To keep track of promises it is very convenient to have THE PURCHASING DEPARTMENT 181 a set of thirty-one pigeon-holes, each pigeon-hole representing a day of the month, and each hole containing the postal cards or other memoranda of all shipments which should arrive on that day. This file affords a systematic method of stirring up delin- quent shippers, the additional promises being noted on the mem- oranda as they are transferred from one pigeon-hole to another. Where an establishment is located in a large city, and many orders are local, it is best to separate the city orders from the others, so that they can be followed up by telephone instead of by mail. For this purpose it may be well to have a separate series of purchase orders for local use, distinguishing them by some convenient prefix letter. GENTLEMEN: WE CALL YOUR ATTENTION TO OUR ORDER No. CALLING FOR- PLEASE ADVISE WHEN SHIPMENT WILL BE MADE, ON THIS CARD, RETURNING SAMETO US. YOURS VERY TRULY, FIG. 71. Return post-card for promise date of shipment of purchase order, 51/2 inches wide, 31/4 inches high. 195. Securing Favorable Terms. As to the third function of the purchasing department which was mentioned, namely, that of securing good terms and low prices, much depends on the shrewdness 'and tact of the purchasing agent. Courteous attention to salesmen is always desirable, and can be accorded without loss of time, if nothing but strictly business conversation is indulged in. The mere request for a little more liberal cash discount than is usually given will frequently result in its being allowed, and the same is true of securing deferred payments, where they are de- sired. The cash-discount system, if applied to all purchases, however small, will result in a considerable annual saving. It is well worth remembering that cash discounts are obtainable on small amounts as well as large. 182 FACTORY ORGANIZATION AND ADMINISTRATION 196. Recording and Classifying Material, Equipment, and Supplies^ The fourth function, that of recording and classifying all materials, equipment, and supplies used by the company, and knowing who the suppliers are, and what are their prices, demands the keeping up of several additional indexes and files. A card index of quotations and prices, arranged alphabetically by names of materials, with sub-cards for various sizes, will be found desirable. Sometimes pocket editions, abridged, of this price- list, made in alphabetical pocketbook form, will be desirable, so that they may be carried about in the pocket, out of the office. The large card record of invoices posted on material cards, as already referred to, serves as a record of prices actually charged for goods actually purchased, as a distinct record from the quo- STORFS RrrOBn. ARTICLE SIZE MATERIAL DRAW. NO. UNIT MAXIMUM MINIMUM FLOOR ROOM RACK CASE SHELF BIN DATES VERIFIED BY INVENTORY ORD ERED RECEIVED DELIVERED IN STOCK ORDERED NUMBER ORDERED INVOICE RECEIVED RECEIVED COST ISSUED ORDER NUMBER QUANTITY ISSUED DATE QUANT ON H "ITY ^ND VALUE .. *~ ^^_ _^ - -> FIG. 72. Combined purchase order record. Invoice record, and stores record, serving also as material price catalogue, for use in small establish- ments. White card, 6 inches wide, 4 inches high, red and blue ruling. tation and price index just described. In a small establishment this invoice record may also serve as a stores record. A form for such combined record is shown in Fig. 72. A catalogue cabinet will have to be provided with card indexes by class of material, and by name of supplier. With a double index of this sort it is immaterial in what order the catalogues are arranged, an arrangement by size of catalogue being usually the most satisfactory. 197. Returned Goods. Wrong or unsatisfactory goods must be promptly returned. For this purpose a notice should be sent to the shipping department, and a copy sent to the billing de- partment. Fig. 73 shows a convenient form for this purpose. Where a considerable number of contracts are made for mate- THE PURCHASING DEPARTMENT 183 rials and supplies, a separate contract file or safe will be found desirable. 198. Freight, Express and Drayage. Separate accounts are usually kept by the purchasing department of such matters as drayage, freight, express, insurance, and other special matters, as the nature of the business may require. In the matter of dray- age, freight, and express, it is very important that close scrutiny be kept by the purchasing department, so as to avoid needlessly large expenses in these directions. Requisitions must be made in sufficient time to avoid express shipments. Also the pur- GOODS RETURNED SHIP TO- VIA- FOLLOWING GOODS FOR CREDIT DATE CREDIT MEMO AMOUNT CREDIT MEMO.. WHY RETURNED P. D. No DATE : PER , FIG. 73. Notice by purchasing department to accounting department of goods returned for credit, 6 inches wide, 4 inches high. Thin white paper. chasing department may find it desirable to lump orders with a jobbing supply house occasionally, to reduce cost of freight and drayage that would be entailed by placing a lot of small orders with various manufacturers, thus getting in one package, and with one charge for freight and hauling, a lot of items that might make twenty or more packages if bought direct from the various manufacturers, necessitating the paying of freight and haulage on each of the twenty packages. Moreover, a jobbing-house is often apt to make quicker delivery on small orders than the manufacturer, who will fill his important orders first and let the minor orders wait. 184 FACTORY ORGANIZATION AND ADMINISTRATION 199. Checking Invoices. It is the duty of the purchasing de- partment to check invoices as to correctness of quantity and price. Invoices should not be sent to the receiving department to check, but should be kept in the purchasing department. A record book should be kept of all invoices received, showing date received, and when and to whom they were sent. In some establishments it is very desirable that the purchas- ing department make a daily estimate of the value of all goods ordered during that day, or rather during the previous day, with estimated dates at which payments will become due. REFERENCES GOING: "Principles of Industrial Engineering," Chapter IX. ENNIS: "Works Management," Chapter V. BRISCO: "Economics of Business," Chapter X, COOK: "Factory Management," Chapter III. RINDSFOOS: "Purchasing." TWYFORD: "Purchasing." I CHAPTER XVI STORES AND STOCK DEPARTMENT 200. Classification of Materials. After the bill of material has been prepared, and the necessary drawings and patterns have been provided for, the next steps in the manufacturing process are those dealing with the getting in of the materials of construction and the making of the finished parts in the shop. Raw materials purchased outside, and which have to have work done on them in the shop before they become finished parts, are usually designated as "Stores," and the records dealing with this class of material are called " Stores Records." Parts which have all the work done on them necessary to make them ready for assembling into machines or into assembly groups of machines are usually designated by the name "Finished Parts," and the records dealing with this class of parts are frequently called "Finished Parts Records." The last-named parts are sometimes designated by the word "Stock," and the records called "Stock Records." The term "Stock" is most generally used to designate finished product ready for shipment. Perhaps the most definite way of designating all materials is as follows : (a) "Stores," consisting of raw material which must go through or enter into some manufacturing process in the shop. In this class would come pig iron, coal, castings, bar steel, paint, etc. (b) "Purchased Finished Parts," consisting of all parts ready to use in assembling or as repair parts, which are purchased out- side the shop in their finished state. In this class would come standard bolts, screws, etc., or radiators, tires, etc., in an auto- mobile factory. (c) "Manufactured Finished Parts," consisting of all parts which must be manufactured in the shop. (d) "Finished Product," . consisting of the stock of com- pletely assembled machines or other manufactured article, and sometimes of a stock of assembled groups in excess of such groups 185 186 FACTORY ORGANIZATION AND ADMINISTRATION as are required for manufacturing and assembling machines, such as extra armatures, etc. (e) " Supplies," including all materials not entering directly into manufactured product, but necessary in the conduct of the business. It is the custom in some establishments to designate the articles in classes (b), (c), and (d) above as " Stock." It will be found, however, that a differentiation of departmental records in accordance with the classification given above will generally be advantageous even though the accounting department's double- entry books may carry only a single "Materials" account. 201. Perpetual Inventory of Castings. Fig. 74 shows a form for keeping record of castings. At the left-hand upper portion of the record are spaces for the name of the part for which the casting is used, and the name of the machine of which it is a part. At the right are spaces for designating the pattern number, the kind of material, the mark number, the drawing number, and the average weight of the castings; also the minimum stock, the purchasing quantity, the maximum stock in excess of orders, the bin number in which the castings are located in the castings warehouse, and the time usually required to get castings in from the foundry. There are five sets of columns in the accounting part of the record. The first set deals with the number of castings ordered through the purchasing department. The first column in this set is headed "Requisition Number," and in it is entered the number of the requisition which the castings clerk makes on the pur- chasing department when he finds it necessary to order castings. The second column is for the date of the requisition, the fourth column for the quantity called for by the requisition, and the third column for the purchase order number. This third column is filled out when the castings clerk receives back from the purchasing department an extra carbon of his requisition with the purchase order number on it. So long as this third column is vacant it shows that the purchasing department has not placed the order for the castings. This may be due to negotiations with foundries or to new pattern or change in pattern. The second set of columns is a record of castings received. Postings are made in this set of columns from the receiving de- partment's reports of castings received. The third set of columns is a record of castings reserved for production orders which make STORES AND STOCK DEPARTMENT 187 a draft on the stock of castings. Reservation entries are made in these columns from the stores department copy of each pro- duction order. Whenever pro- duction orders are finished, the tags which accompanied the fin- ished goods through the inspec- tion department are sent to the stores office. The clerks in the stores department use these tags bearing the inspector's stamp as their authority for canceling the numbers referring to live production orders. In this way only those numbers which do not have lines drawn through them represent production or- ders which are still in process of manufacture. The fourth set of columns is a record of cast- ings used, and is posted from the castings warehouse-man's re- ceipt forms for castings drawn from his department. The fifth set of columns is a record of the actual balance on hand in the warehouse, together with the balance after deducting castings in reserve for use on production orders already issued, but for which the castings have not yet been taken from the castings warehouse. The balance by ac- tual count can conveniently be reported for all castings of which the stock on hand does not exceed 10 or 15, every time a withdrawal is made, such balance by actual count be- ing noted on castings ware- ii H < d z OL z C5 a z s 5 2 ca I- < < O o z u- 188 FACTORY ORGANIZATION AND ADMINISTRATION house-man's receipts for castings issued when he turns them in to the castings record clerk. For castings of which a consider- able number in excess of 10 or 15 are carried, the castings ware- house-man makes a systematic practice of making actual counts and reports in the intervals which he has between issuing, receiv- ing, and arranging castings in the warehouse. In this way balances by actual count can be continuously turned in on a con- siderable number of castings, so that there is a constant checking and correcting of the castings clerk's records by actual inventory. Such checking will be found almost indispensable, as the falli- bility of stock clerks and castings warehouse attendants is far more common than infallibility of records. When 'discrepancies are discovered there is no need for internal dissension. It is desirable, however, that some person in authority make a careful and possibly secret investigation in case there appears to be a continual shortage of the more valuable kind of castings, such as those made of copper and brass. The castings warehouse will usually have to be equipped with hoists or cranes for handling heavy castings. Trolley tracks for hoists running into the aisles between the bins will be found convenient, and for extra heavy castings room may be provided underneath a crane constructed of an I-beam with a circle * track, a hoist running radially along the I-beam. This arrange- ment makes it possible to cover any point within the circle. If the shelves and other storage places become crowded, it may be policy to retire to outdoor storage such castings as appear to be becoming obsolete. As a general rule, it is best, however, to keep all castings under cover except where a special point is to be made of accumulating a coating of rust for the purpose of making the first machining easier. The records for raw material other than castings and for purchased finished parts may take practically the same form as the castings record shown. 202. Perpetual Inventory of Manufactured Parts. The record covering manufactured finished parts will usually have to be kept in a somewhat different form from the records covering the castings as already described. A form for keeping record of manufactured finished parts is shown in Fig. 75. In the upper right-hand corner are stated the part number and the material of which the part is made. In addition to these data the sheet or card specifies the name of the STORES AND STOCK DEPARTMENT 189 part, the drawing number, the pattern number if the piece is made from a casting, the maximum and minimum stock, the manufacturing quantity, also the location of the stock of finished parts in the finished parts warehouse. The accounting part of the finished manufactured parts record is divided into five groups of columns. The first group of columns is a record of stock orders entered, giving the date of the production order, the number of pieces, and the shop-order number. The second set of columns is a record of the number of finished pieces received by the finished parts warehouse-man from the shop (usually through the inspec- tion department), giving the production order number, the number of pieces received, and the date they were received. As soon as a production order listed in the first set of columns is completed, as shown by the finished parts having been received by the finished parts warehouse-man, a line is drawn through that stock order number in the first set of columns. In this way the live unfinished orders for parts will always be those through which no lines are drawn. In any shop it is likely that the tag or other form of identi- fication which accompanies the pieces through the shop may become accidentally lost, or pieces may be taken from lots of work in progress through ignorance or intentional violation of the shop system by men in assembling, erecting, shipping, or other departments, thus causing an apparent shortage or dis- crepancy. Whenever an order in the first set of columns, there- fore, looks suspiciously old, or when it is suspected that the number of pieces turned into finished parts warehouse, though not the entire lot, is likely to be all the pieces that will be turned in on the order in question, it will be desirable for the head of the manufactured finished parts records to start an investigation through the proper channels with a view to striking off his records any orders as dead or completed for which the material cannot be found in the shop. This sort of condition should happen very rarely in a well-managed shop, and it is important that every case of this sort be most carefully traced with the end in view of discovering who was responsible for the irregularity. The third set of columns is a record of the reservations of finished manufactured parts called for by bills of material and supply shipment orders. Entries in this column are canceled as soon as the parts are actually withdrawn, as shown by the ware- 190 FACTORY ORGANIZATION AND ADMINISTRATION 43 | 1 ^ o S5 o 1 1 1 z 1 M & d 1 "^ 0) PH I ? t> 1 , rf* ^3 *T^ I <1 .2- i |e5 'S r i * * U 0) ^ fl S A ^ 2 1 M , 1 0} S o X H Q U 10 & > oc cu Q d i k LU (0 U oc ORDER N W fc a s ? "o vTJ tf*-' . H . j i J U2 s a g p M 1 hH fa 1 1 Q bl LJ No. PCS. a 1 1 O U OC g 1 I o 0) g SQ EH ft i ou CE OC . O U 5Z i ^0 CM &D O S -s a * 1 1 I 1 s u H s s 1 fej Q ^rf t h a . *- t J c { r H K u S t < c ? ; : J- o o z H bl o kl i 5 1 h t _j z g U 1 c c K- u a. I E n u t- z 3 | u U > h a. o Z j- H u (C O H t O z Z H (0 3 3 H O o Q. L i o U t O Ul I \ DC j LABLE < * . z t y; -J I a H 0. ^ I FORM E STORE ! DESCRI i MINIMU 1 T STORES AND STOCK DEPARTMENT 197 tain item to get too low are in this manner caught by the store- room help. 207. Monthly Balances Showing Money Value as well as Quantity of Stores. The stores and stock record sheets described heretofore afford means for knowing at any time the balance on hand of all materials. Should it be desired to express the value of this material in dollars and cents, as will be the case at inventory time, or as is the case in companies making quarterly or monthly statements, it will be found necessary to specify cost data on the stock record sheets or cards. In any event the stock records form a very convenient place for having these costs, because then the costs are available and ready for use, and found in the MONTHLY COMPARISON OF STOCK MATERIAL BALANCES. MONTH OF September, 1909 CLASS OF MATERIAL Month of Sept. 1909 Compared with Month of Aug. 1909 Increase Decrease Axles Bearings Bolts and Nuts (etc.) 820.49 620.35 200.14 615.26 600.15 15.11 2126.15 2237.26 111.11 FIG. 81. Monthly comparison of money value of leading material balances. White bond paper, 81/2 inches wide, 10 1/2 inches high. same place as the balances on hand. Fig. 80 is a typical card used in a system in which monthly statements are made. The upper right-hand corner of the record gives full data as to manufacturing costs. It may be found desirable to collect various material items into groups and compare the money value of the monthly bal- ances, showing increase or decrease in each class. Fig. 81 shows a form used for this purpose. 208. Use of Tabulating Machine in Obtaining Money Value of Daily Material Receipts and Disbursements. Fig. 82 shows a tabulating machine punch card for transcription of storeroom 198 FACTORY ORGANIZATION AND ADMINISTRATION o MATE i-i CJ eo RIAL ^ 10 t- CO bursements ! O rH t- 00 o o i-l CO i-i N CO TJ1 10 ^i U3 t- CO CJ c- 00 o K3 T3 c c3 o i-< N eo ^t O O C- 00 3 Quantity ^ 0 ' f oo o> c- oo o c- co o ? IQ. 82. Tabulating machine punch card for transcription of store-room records of rec Dimensions approximately 3 1/4X7 1/2 inches. 1-1 w eo *H Of ) TJ< 10 ,f IO o t- CO O f 00 I c ,0 H w 3 3 5 g 3 3 o O Q I iH d CO rH N CO m 10 o rjt 10 C- 00 0> C- 00 o r-l CM CO ^. 10 C- OO O 41 Q < r-l ^ 10 *# 10 c- co o t- CO t- oo o o o rH M CO 1-1 w co n< 10 o -1< kO t- 00 t- 00 * ^ J g Tf to CO C- 00 t- 00 t- CO iH d CO * , ^ 10 ^ >0 CO t- 00 t- CO O 1 I H= 4J -t-> > Hi (H ^ Ant. Fia. 83. Another form for requisition on storeroom. (See also Fig. 67.) Manila card, 4 inches wide, 6 inches high. Under no circumstances should production be stopped pending adjustment of technicalities as to quantity of material. REFERENCES GOING: "Methods of the Santa Fe," Chapter II. GOING: "Principles of Industrial Engineering," Chapter IX. ENNIS: "Works Management," Chapter V. COOK: "Factory Management," Chapters VII and VIII. PARKHUBST: "Applied Methods of Scientific Management," Chapter V. KIMBALL: "Principles of Industrial Organization," Chapter XII. CHAPTER XVII PLANNING AND SUPERVISING PRODUCTION 210. Title of Department Controlling Production. In Mr. Taylor's original functional organization he separated planning from production. Under the planning group he listed four principal divisions in the office and four principal divisions in the shop. In the office the divisions were as follows: 1. The Route and Order of Work Division. 2. The Timestudy and Instruction Card Division. 3. The Time and Cost Division. 4. The Disciplinary Division. In the shop the divisions were : 1. The gang boss or shop foreman. 2. The speed boss or demonstrator. 3. The repair boss or maintenance man. 4. The inspector. In explaining division of production activities along functional lines that would be natural, it has been suggested that the func- tional divisions' duties could best be denned by answering the following questions: 1. What shall we make? 2. Where shall we make it? 3. When shall we make it? 4. How much will we have to pay to have it made right? 5. How much will it cost? 6. How must we handle our labor to get the best results? In the earliest concerns adopting the Taylor organization, we find all of the functional divisions designated as divisions of the planning department. If the writer were to make a choice between " planning or "production" as the name of the de- partment including functional control, he would prefer the latter as all of the functions have to do with production even though the individual functional division may deal with planning, prepa- ration, scheduling, or inspection, and there might be a fifth division dealing with production records. 201 202 FACTORY ORGANIZATION AND ADMINISTRATION With the evolution of the principle of functional control we find these functions apply today not only to the manufacturing group but also to the sales, financial, and personnel groups. In order to appreciate the modern organization, it is necessary, however, ti survey its development from Mr. Taylor's original outline. Mr. Taylor outlines the functions of the planning department as follows : A. The complete analysis of all orders for machine or work taken by the company. B. Time study for all work done by hand throughout the works, in- cluding that done in setting the work in machines, and all bench, vice work and transportation, etc. C. T me study for all operation done by the var.ous machines. D. The balance of all materials, raw materials, stores and finished parts, and the balance of the work ahead for each class of machines and workmen. E. The analysis of all inquiries for new work received in the sales depart- ment and promises for time of delivery. F. The cost of all items manufactured with complete expense analysis and complete monthly comparative cost and expense exhibits. G. The pay department. H. The symbol system for identification of parts and of charges. /. Information Bureau. J. Standards. K. Maintenance of system and plant, and use of the tickler. L. Messenger system and post office delivery. M. Employment bureau. N. The shop disciplinarian. 0. A mutual accident : nsurance association. P. Rush order department. Q. Improvement of system or plant. Mr. Parkhurst employed at the Ferracute Machine Company an organization slightly different from that indicated by Taylor. His organization for the planning department is as follows: A. Production Clerk. J. Time Clerk. B. Shop Engineer. K. Schedule Clerk. C. Stores Clerk. L. Factory Mail Clerk. D. Cost Clerk. M. Time Clerk. E. Route Clerk. N. Inspector. F. Order-of-work Clerk. O. Stores Keeper. G. Shipping Clerk. P. Move Material Boss. H. Receiving Clerk. 211. Reasons for Functional Control. Functional control came in answer to a call for help from the business owners and PLANNING AND SUPERVISING PRODUCTION 203 managers of industrial establishments who were becoming nervous wrecks because of the need of constant running from one department to another for information which could not be half given. They began to realize that the cost of their own time and energy, and the lost time of the army of emissaries they were constantly sending to the shop, amounted to a large financial aggregate. The absolute knowledge of the condition of the manufac- turing department its percentage of uncompleted work, the condition of this work, and the factory's capacity for further orders -has a financial value. The cost of production has been shown to be lowered after shops have instituted a well-managed production department. More than this ; after some months' run- ning of the production department, the work of the office, sales department, time-keepers, correspondents, shipping department, and cost clerks has been known to become so much simpler that not only was the operation of these departments much more efficient, but it could be done with less help. What are the functions and duties of this department? In "") general, its task is to lay out in detail all work to be done in the I factory, to keep perfect record of progress of work on all orders, / and to see that foremen and other executive officers are kept / closely advised of all conditions requiring their special attention. / It will readily be seen that by centering all of the record and statis- tical routine into a distinct department, foremen and superin- tendents are left far more free to do real executive work than under the old-fashioned systems in which they carried the entire burden of recording and following up all work in a shop. In the majority of shops to-day the production record follows the actual production. There is no systematic issuing of detail jobs in advance. An effective shop production system always involves the writing out in detail of all jobs and the specifying of all operations or " routing" necessary to complete every item, together with instructions as to the details of each operation. The providing of such an advance stock of job order tickets, and furnishing them to the shop, with definite instructions as to the sequence in which the jobs are to be worked on, enables foremen to plan and lay out their work, providing they have the ability to do this an essential quality to a good shop fore- man. A well-managed production department is of great assist- ance to a foreman in making such plans. 204 FACTORY ORGANIZATION AND ADMINISTRATION Without such a department it is next to impossible for depart- ment foremen to keep their orders and work in systematic shape. From this results delay in getting out orders; failure to discover shortages or incompleteness until a piece of work is ready for shipment; inaccurate time and cost returns, and general loose- ness of methods. 212. Carrying the Functional Organization into the Shop. This is accomplished by having in each shop a functional staff of overseers. These overseers are responsible as to policies and methods to the heads of their respective functional departments. They are responsible as to results in their particular shop to the shop foremen. If the shop is small one overseer may represent more than one function. Some of the typical duties of these functional representatives in the individual shop are as follows: The planning overseer receives the particular shop's copies of all work orders, sees that all necessary paper work for operating all of this work in the shop is prepared, covering time tickets, stores issues, etc. He will maintain record of employees and their efficiency, look after assignment of piece rates or day rates, and all matters pertaining to payroll. He must check all time and material tickets. The preparation overseer must see to it that all materials, tools, and machinery maintenance of the shop are taken care of. The scheduling overseer will maintain such schedule boards, trays, or other devices as are used in maintaining and recording all operations and their relation to schedules. He will also keep a complete record of the balance of work in process. He will report any interferences with the schedule. The production overseer must be capable of doing the things which Taylor assigned to his speed boss. He must be able to set up the work, adjust tools, regulate feeds and speeds, and make demonstrations to show that the work can be done in accordance with instructions developed by the time study department. The inspection overseer's duties are self-evident. 213. Qualifications of Head of Production or Planning De- partment. The production superintendent must be a man of considerable capacity. He must be able to make the best use of recording sj^stems, and at the same time be a man who can see things with his own eyes in the shop. He confers daily with the works manager and brings up all matters in connection with condition of orders, getting out of work, and capacity of the PLANNING AND SUPERVISING PRODUCTION 205 shop, at foremen's meetings held regularly. The importance of such foremen's meetings cannot be over-estimated. . The man in charge of the production department needs to be given such intelligent assistance as may be required, to make every job ticket or tag that goes into the shop as clear a guide as possible to foremen, workmen, and time-keepers, and to pre- vent inaccurate returns to the cost department or other depart- ments. With a well-managed production department there is no need of any clerical work by shop foremen. The production FIG. 84. Classification of the functions of the production department under five heads. Some organizations include time-keeping, time-study, and rate-fixing with these duties. department does away with the necessity for shop clerks and foremen's clerks; neither must the foremen do any clerical work. The head of the production department should have no other duties than those connected with that department, the special functions of which are the tracing of work in progress, the pre- paring of detailed individual job orders, or routing, preparing instruction cards, fixing time standards, determining the order of precedence of each job (sometimes called scheduling), and the keeping of a record of all work in progress. 206 FACTORY ORGANIZATION AND ADMINISTRATION 214. Relation of Production or Planning Department to Other Departments. The chart shown in Fig. 84 indicates the functions usually assigned to the production department although other functions have been added in some establishments, some com- panies preferring to include time-keeping and time-study, to- Order Dept. One Copy of Order Drafting Dept. < O^Sy Production or Planning >/^ * * >v Dept< ^4$* otorcs ^ 1 Route 1 Purchasing 1 CP ' I Checked M ,tl. withdr'l Slips 1 Clt j rk ' Pur <** se B ^ Material withdrawal Slips Route Sheet Bill of Material Drawi ig List Drawings uisltions Dept. Instruction Card Clerk 1 All Previous Papers and Instruction Cards Rate Fixing Clerk All Previous Papers and Tim'e Cards Y Order of Work Clerk | All Papers | Production Clerk or Order Tracer 1 Orders and Papers as Required FIG. 85. Relation of production or planning department to other depart- ments, and path of an order through the production department. gether with rate-fixing, as also parts of the work of a production department. The production department is not intended in any way to lessen the power of the shop superintendent. It is intended to relieve the superintendent, and to assist him by constituting a certain place of responsibility for accurate knowledge as to all PLANNING AND SUPERVISING PRODUCTION 207 matters of production. When thus fully posted, the superin- tendent is free to use his executive authority, and to be often about the shop. The responsibility of tracing and keeping before the superintendent and foremen all matters of precedence and urgency rests wholly with the production department. Many shops throw this responsibility on a variety of persons connected with the sales, correspondence, and general office management, resulting in a multiplicity of bosses and considerable useless running around. That it may work to best advantage, it has been found desir- able to take the shop production department from under juris- diction of the shop superintendent. By this arrangement the department has no hesitancy or timidity about keeping strongly after any delays or failures to realize promises or estimates. Fig. 85 shows in detail the relation of the Production De- partment to other departments. It shows how the Order De- partment sends one copy of the order to the Drafting Department, and one copy of the order to the Production Department. The Drafting Department sends the drawing list, drawings and bills of material to the Production Department. The particular individual in the Production Department who receives the orders from the Order Department and the papers designated from the Drafting Department is the Route Clerk. 215. Routing. The route clerk makes up a route chart for every order. In case the order is for a machine, he lays out the chart so as to show what groups must be completed before general assembly or erecting can take place. He also indicates what pieces must be completed before any one group can be assembled. He must be familiar with the equipment and processes of the shop, and should have at hand general process maps and models of the shop showing departmental lay-outs and equipment. The drawings, drawing lists and bills of material which he receives from the drafting department aid him in preparing his route chart. The route clerk, on receipt of the bill of material from the drafting department writes out or has an assistant write out the withdrawal slips or orders on storeroom for any needed materials. These he forwards to the stores department where the stores record clerk or balance of stores clerk, as he is sometimes called, checks the requirements up against his perpetual inventory and designates what production orders need to be entered for 208 FACTORY ORGANIZATION AND ADMINISTRATION The Penn. State College. Industrial Engineering Dept. Instruction Card for Students. Sheet No. 1. Description of Operation, Laying out Centers and Turning Eccentric. Name of Exercise. Eccentric. Drawing No. 503 Item Detailed instructions Time 1 Change cards. 2 Learn what is to be done. 3 Chip fins or gate from casting. 4 Grind scale from end of piece. 5 Get V blocks and place on surface plate. 6 Put piece in V blocks. 7 Chalk ends of piece. 8 Find approximate center with surface gage. 9 Scribe line across both ends with surface gage. (Say line A). 10 Use the square and draw line intersecting the scribed one (Say B). 11 Pass the piece through 180, square line B with square. 12 Scribe second line on one end lightly (Say line C). 13 Reset surface gage midway between A and C. 14 Scribe a sharp line across both ends (Say line E). ' 15 Turn piece through 180. 16 Make line A come straight with square. 17 Scribe line across both ends of piece. FIG. 86. First page of a "typical Instruction Card." 8 1/2X10 1/2 white mimeograph paper. PLANNING AND SUPERVISING PRODUCTION 209 quantity manufacture of small parts, together with the manu- facturing quantity. The balance of stores clerk also indicates what requisitions for purchased material should be issued, and sends the material order slips, with the information indicated, back to the Route Clerk. In this way all orders on storeroom are written out in correct form beforehand, and mechanics do not lose any time in writing out such orders or waiting for them to be written. These orders and all other papers referred to as The Penn. State Collage Industrial Engineering Dept. Tool List Drawing No. 503 Description of Operation. Laying Out Centers and Turning Eccentric Pieces Name Size Tool Symbol Note: This exercise must be drilled and countersunk on speed lathe equipped for this purpose. 1 Surface gauge 12" M.G.U.S. 1 Square 6" M.L.T. 2 V Blocks C.S.V. 1 Dividers 6" M.C.D.S. 1 Scale 6" M.S.S. 1 Carrier 194" C.C.S.N. 1 Turning Tool H" P.R.S.C. 1 Side >? H" P.U.S.G. 1 Finishing 5 / 8 " P.S.F. FIG. 87. Typical "tool list" to accompany "instruction card." 81/2X 10 1/2 white mimeograph paper. having come from the drafting department and referred to here- after as being written out in the production department are stored in a portfolio of fiber-board paper in which pockets of proper size are prepared to hold every type of paper necessary for the order. 216. Instruction Cards. The route clerk passes all papers connected with the order over to the next individual in the Production Department who has to deal with them namely, 14 210 FACTORY.ORGANIZATION AND ADMINISTRATION the Instruction Card Clerk. This man must be able to specify in minute detail each step to be taken to perform every opera- tion. He writes out these instruction cards for each piece and every operation, as well as a tool list to accompany each instruc- tion card. He also fills out a work order or time-card for each part of the process that is to be done by a separate workman, and for each work order or time-card he prepares a detailed instruction card as heretofore indicated. He turns the time-cards over to the rate-fixing clerk, together with all other papers in the order portfolio. Fig. 86 shows an example of the instruction card as used at the Pennsylvania State College Department of Industrial Engineer- ing. Fig. 87 is an example of the tool list that accompanies the instruction card. 217. Rate -fixing or Time Clerk. This clerk affixes the standard times in which the elementary steps indicated are to be performed, also any premiums, bonuses or piece rates. The non-clerical or research work of rate fixing is described in a later chapter on this subject. 218. Order-of-work Clerk. The order-of-work clerk receives from the rate-fixing clerk the order portfolio containing all the papers heretofore indicated. He must designate the order of precedence of the various work orders. He has charge of the Main Bulletin Board in the Planning Department office, and the local departmental bulletin boards in the shops, each board bearing hooks on which are cards designating the work for each man and each machine in advance. He sends all papers on to the Production or Tracing Clerk. 219. Production or Tracing Clerk. This clerk writes out or has assistants write out any tracing tags or follower-books which are to accompany material through the shop. He sees that all the papers he has received go to the proper persons in the shop. The tracing function of the production department involves the following up of a number of distinct sets of activity by means of records and processes that have to be adapted to each set. 220. Tracing Individual Parts. A record on which track may be kept of the individual part production orders is shown in Fig. 88. This record is arranged by part numbers and covers only live orders in the shop, a separate tracing record sheet for each separate production order for a given mark number. For in- stance, there may be three live production orders in the shop PLANNING AND SUPERVISING PRODUCTION 211 issued at various times for stock lots of a given mark number. Then there will be three of these tracing sheets filed back of that mark number. The tracing sheet bears a heading giving the necessary infor- mation as to name of part, drawing number, pattern number, TRACING AND ROUTE SHEET FOR INDIVIDUAL PART Part f Production Or Date of Productior Nam* of P^rt PRODUCTION ORDERS: Jup-|hfir Jftr Nn, i Ordfir i Drawing Number Pattp rn Number Matflrlal NO Wanted Drawincr Finished _ Foreman > s mess age to every workman's change of tracer in production department, job approved or clock stamped Light green paper, 4 inches wide, 6 at the window of an office in inches high, which the man in charge of the tracing records receives these time slips every time a man changes jobs. 221. Moving Work in Process. The jurisdiction over the mov- ing of parts in process from one department to another may be made a function of the production department, such transfer of parts being dependent on separate instruction memoranda, issued to a head stock-mover by means of a form similar to that shown in Fig. 90. This slip tells the head stock-mover from which department he is to take a lot, and to which department he is to deliver it. When he has executed the order given him in this slip, he signs it at the lower right-hand corner after the words, "I have moved the material checked above," and returns the slip to the production department's head tracer or transfer clerk. For shortage see Shortage Report No. Date (Signed) Foreman Dept. PLANNING AND SUPERVISING PRODUCTION 213 Similarly, separate inspection slips may be used for tracing inspection, in case inspection of processes before final completion is the method of inspection employed. A further refinement of the tracing of the individual production orders which is possible in some shops consists of the securing of a promise date for completion of each operation and awarding a bonus for the highest percentages of living up to estimated dates of completion. The record of total estimated time in any given department, and various deferred promises, may be kept IN ORDER NUMBER DATE MOVE THE FOLLOWING MATERIALS AS DIRECTED DESCRIPTION OR SYMBOL FROM FLOOR TO FLOOR woman N'S NAME ft lAN'S NO ROUTE SHEETS PAY SHEETS COST SHEET 1 HAVE MOVED THE MATERIALS CHECKED ABOVE RlfiNFD FIG. 90. Instructions from production department to move stock from department to department. Manila card, 4 inches wide, 4 inches high. on the bottom of the tracing and route sheet for individual part production orders (Fig. 88), the form being modified so as to carry the additional data. Columns must be provided for the estimates of total hours of labor to do the jobs in any one depart- ment, also a column for first promise date of completion and further columns for deferred promises. 222. Rush Orders. In case it is desired to give especial pref- erence to certain pieces, a "Rush Order" slip similar to Fig. 91 may be used. Such "Rush Order" may be written in duplicate, 214 FACTORY ORGANIZATION AND ADMINISTRATION one set being kept on file in the production department, the other copies going to the shop. 223. Tracing Groups of Parts or Complete Machines. Thus far the methods described for tracing have referred only to the RUSH ORDER NEEDED FOR ORDER NO. Following parts covered by orders now in shop are needed at once. If this order is stamped "Rush" in red, it is especially important that extra preference be given. Regular "split" or "detachment" tag must be made out to cover any work advanced ahead of the full amount by reason of this rush slip. Foreman's copy of this slip must go from one foreman to next with the parts rushed. NO. PCS. NEEDED AT ONCE TO BE ADVANCED FROM FOLLOWING ORDER- DATE TAG WRITTEN ORDER NO. No. PCS. STARTED (St Back of Tag lor Detachments) ARTICLE DELIVK.R TO Ready Drawing No. Mat'l Del'd to Shop To be Finished. Shop Depts. Involved Promise Dates of Completioft FIG. 91. Rush order slip sent to shop to hasten one or more pieces being made on a stock order for components. Thin white paper for easy carbon manifolding, 4 inches wide, 6 inches high. class of shop orders which call for a quantity of a single piece. The tracing through of an order for one or more completely assembled groups of parts constituting a complete machine or several machines, or other articles consisting of a consider- able number of parts, can be taken care of by binding in with PLANNING AND SUPERVISING PRODUCTION 215 M CL, W O i S* uoos SB nmnioo stq uj ami q3 jpsqo I .-2 4-3 C *H O 1 1 bC 73 T3 O 3 T; pi o "c fc _C ^3 d IS the bill of material a "Tracing Sheet" form. Fig. 92 is an example of this kind of a form. The first column in this form is headed "Tracer only" and is to be checked when the item on the cor- responding line in the bill of material has been completely dis- posed of. The next group of columns re- fers to finished parts, the first three referring to parts made in the shop, and the remain- der of the group to parts purchased out- side, excepting cast- ings. The headings in the columns referring to manufactured parts made on stock orders give data of stock or- der, its number, and the number of pieces. The columns referring to purchased parts other than castings cover date of requisi- tion on purchasing de- partment, the requisi- tion number, the pur- chase department number, its date, and date of receipt of ma- terial. The next group of columns refers to cast- 216 FACTORY ORGANIZATION AND ADMINISTRATION ings. The left-hand group under this heading gives dates of req- uisitions for making patterns (the shop in question having its patterns made outside by a pattern job shop), the number of the pattern requisition, the purchase department order number, its date, and date pattern was delivered to foundry. If the pat- tern is already made a horizontal line is drawn through all col- umns excepting the one headed " Pattern delivered to foundry." The next group of columns gives the date and number of the purchase order for castings; and the dates and amounts delivered from the foundries. The next columns headed, "Tags," refer to the tags accompanying material belonging to shop production orders in the shop. Entries are made in these columns from each day's tags, as they are written, indicating the date that the tags to go with the material have been written, also the date that the material is ready. In case material is not ready by reason of castings or other raw material not being in, the tags are kept in waiting boxes, either in the production or the receiving depart- ment, and proper date entries put into the column headed "Date material ready" as soon as the tags are ready to be lifted from the waiting boxes and sent to the shop by reason of the arrival of the needed material. The last two columns refer to drawings and to manufactured parts. As soon as drawings are known to be ready, that column is dated, and as soon as parts manufactured on shop production orders are known to be finished a date is entered in the last column. 224. Hastening Purchased Items. Fig. 93 shows a form used in urging the purchasing department to hasten material urgently needed. The form is self-explanatory. Carbon copies are filed in the production department, back of guide cards, designating order numbers. Weekly meetings for the discussion of production problems are an absolutely essential accompaniment to systematic control of production. At such meetings there should be present not only shop foremen, but heads of all departments whose work deals with matters related to production, such as head of stores record department, head of purchasing department, and in some cases heads of sales department or some representative of the department. At these meetings summaries are presented detail- ing items on which promises of delivery have not been realized. Such lists may be advantageously made in manifold, a copy being PLANNING AND SUPERVISING PRODUCTION 217 given to each person concerned at some time previous to the holding of the meeting at which these questions are discussed. A further refinement possible in some factories is the making of graphical curves, showing the hours work to be accomplished in a given department during the next four, eight, or more weeks plotted as one curve ; also the number of available working hours in that department during the same period, based on the product of the number of employees multiplied by the number of hours per week that each man works. MATERIAL URGENTLY NEEDED FOR PRODUCTION ORDER No. DAXE Of. THIS NOTICE PURCHASE ORDER NO. PURCHASE ORDER DATE PATTERN NO. NAME OF PART' QUANTITY TO BE RUSHED! PURCHASED FROM REMARKS:BY TRACING DEFT.': ABOVEIWANTED BY EXPRESS-FREIGHT IS_TELEGRAPHIC INFORMATION REQUIRED AS TO DELIVERY? (SIGNED). PURCHASING DEPT'S REPLY: (TRACING DEPT. TO COPY THIS ON THEIR copy AND THEN RETURN ORIGINAL TO PURCHASING DEPT. WHO WILL KEEP. IT ON FILE AND FOLLOWED UP UNTIL FINAL DELIVERY) FIG. 93. Form used by production department in urging purchasing department to hasten delivery of most badly needed items. Medium weight manila paper, 6 inches wide, 4 inches high. 225. Weekly Report for Foremen's Meeting. A form for weekly report at foremen's meeting is shown in Fig. 94. Such report is useful only when it is made the basis of systematic and determined united action on the part of all concerned. The mere rendering of a weekly report to a superintendent or works manager soon becomes a perfunctory matter of but little value. It will be readily seen that the production department as outlined requires for its head a man of firmness as well as amia- bility, and that each of his record clerks must be decidedly high- grade men from a standpoint of accuracy and knowledge of shop routine. 218 FACTORY ORGANIZATION AND ADMINISTRATION 226. Shop Tags. Reference has been made several times to the shop tag or tracing tag which accompanies a lot of goods through the shop. This tag is written as soon as the shop pro- APPARATUS ORDER RECEIVED CONTRACT 1 TO BE DELIVERED PRELIM. INFO M. 1 i DRAV INGS BILLS OF MAT ERIAL COMPLETE IN -ORM. ADDITIONAL 1 FORM. M DRAWINGS SPECIFICATIONS REVISED INFORM. n BILLS' OF MAT. ti DRAWINGS PATTERNS ORDERED PATTERNS FIN. it NO8. CHANGED IRON CASTINGS REC'D STEEL i ) OR'D STEEL REC'D BRASS i I TEST PIECES NO OR YES M ., PF OMISED it M R C'D SUPPLIES OR' , tl PR< ' RE< MI8ED 'D FIRST SHIP'G PROMISE DELAYED BY SECOND SHIP' G PROMISE DELAYED BY SHIPPED ERECTED SPECIAL CONTRACT FIG. 94. Form for weekly report at foremen's meeting, inches wide, 11 inches high. White paper, 8 1/2 duction order is written, and is issued to the shop only when the material is ready. A form for such tracing tag is shown in Fig. 95. PLANNING AND SUPERVISING PRODUCTION 219 The reverse of the tag is shown in Fig. 96. It is usually advis- able to use different colored tags for different classes or series of orders; for instance, a buff-colored tag may be used for bill of material items, such as special castings, etc., which would not be made in stock-order lots. A yellow tag might be used for stock orders, a salmon tag for tool department orders, a manila tag for items to be charged to standing non-productive orders, a blue tag for plant addition orders, etc. The form shown contains spaces for insertion of the following: number of pieces started, the material, the name of the article, to what department it is to be delivered, the mark number, drawing number, pattern number, when material was ready, when it was delivered to shop, when it is to be fin- ished, and a list of the opera- tions to be done, such list being written in advance on the tag, together with depart- ment which is to do each operation, and the time al- lowed for each of the opera- tions. Where detailed in- struction cards are supplied, the tag need contain only the general routing, and refer- ence to instruction card and tool lists by number. At the bottom of the tag is the "Warehouse Coupon/' or receipt, containing the same heading items as the main tag, and bearing on its reverse following instructions: "This coupon must be signed by party receiving material and proper date entries made in spaces headed 'Material delivered to shop,' on both main tag and coupon. Coupon must then be immediately de- tached and returned to department which issued material." 227. Detachments or Split Lots. On the reverse of the tag /FOR STOCK /""X ORDER \ DATE TAG WRITTEN ( O ) ORDER No. \ NO. PCS. STARTED MATERIAL ( SEE SACK OF TAS FOR DETACHMENTS) DELIVER TO MARK NO. DRAWING NO. PATTERN NO. MATERIAL READY MAT'L DEL'D TO S HOP TO BE FINISHED OPERATIONS DE PT. HOURS T ME MINUTES - . , , 1 [ 1 AFTER ABOVE OPERATIONS COMPLETED 01 LIVEH TO INSPECTOR WAREHOUSE COUPON DATE TAG WRITTEN ORDER NO. NO. PCS. STARTED MATERIAL ARTICLE MARK NO. DRAWING NO. PATTERN NO. MATERIAL READY MAT'L DEL'D TO S HOP TO BE FINISHED WEIGHT (blgi ature of Party Receiving ) Fro. 95. NO. PCS. DETACHED BALANCE REMAIH Partial Deliveries to i DATE PART'L DEL'Y NO. PCS. DELIVERED BALANCE TO FOLLOW PARTIAL DELIVERIES TO CASTINGS WAREHOUSE AS FOLLOWS NO.DELIVERED 220 FACTORY ORGANIZATION AND ADMINISTRATION there are provisions made for splitting the lot or making detach- ments in the shop. For such detachments exact copies are made of the original tag, excepting as to number of pieces, on a " Detach- ment or Partial Delivery Tag." This tag is just like the regular tag, excepting that instead of being printed in black type it is printed in red type, which immediately calls attention to the fact that the lot is a "Split lot" or "Detachment." The tag shown provides for the possibility of five dis- tinct detachments being made by the shop, owing to the rushing of individual lots on a stock order, giving the date of the detachment, the num- ber of pieces detached and advanced, and the balance re- maining with the original tag. Next follows a record of partial deliveries to the shop in case only part of the cast- ings or other raw material have arrived, and it is decided to send this partial supply out into the shop. In this case the receiving department furnishes the production de- partment the information of receipt of only part of the material, and the production, department decides whether or not to have the partial de- livery tags written, and retain the main tag in the receiving department office until the NO.TO FOLLOW INSPECTOR'S REPORT DATE INSPECTED NO. REJECTED NO. ACCEPTED FINISHED STORE ROOM RECEIPT DATE RECEIVED AMOUNT RECEIVED BALANCE IN STOCK FINISHED STORES 8. THIS COUPON MUST BE SIGNED BY PARTY RECEIVING MATERIAL, AND PROPER DATE ENTRIES MADE IN SPACES HEADED "MAT'L DEL'D TO SHOP" ON BOTH, MA|N TAG AND COUPON, MUST THEN BE IMMEDIATELY DE- TACHED AND RETURNED TO DEPARTMENT WHICH ISSUED MATERIAL. FIG. 96. Reverse of form shown in Fig. 60, showing "splits" or "detach- ments," also inspector's and storeroom reports. last lot is received by them and delivered to the shop. In case the receiving department is accumulating raw material by sending it to stores until the full supply is in, which would be the normal condition, it being preferred to send out the regular manufacturing quantity, the next set of spaces is used, which is headed, "Partial deliveries to castings warehouse as follows, PLANNING AND SUPERVISING PRODUCTION 221 for which no partial delivery tags issued." This set of mem- oranda keep the receiving department posted as to the number of castings they have received and must expect before they may let the tag go out. Next follows a space for inspector's report which is filled in after all the operations have been done, and the pieces come to the inspection department for approval before being turned into stores. Then follows an indorsement by the storeroom, giving date and amount received with the tag, also the balance in stock, including this lot and by whom counted, furnishing a balance by actual count. The tag is sent from the storeroom to the stores record clerk, who posts it in his stores record of manu- factured finished parts. 228. Transfer Clerk. In several successful manufacturing establishments, the head tracer of the production department has his headquarters in the very center of the shop. He has charge of all of the "stock-movers," or truckers, who haul work in process from one department to another, and whenever such interdepartmental transfer takes place the stock-mover passes with his truck and its load of work in process and the accompany- ing shop tags past this head tracer's or " transfer clerk's" post, stopping there so that the transfer clerk may get the record. In this way the head tracer or transfer clerk actually sees the pieces themselves as they go from department to department, and can shift cards in index boxes or in grooves, or hang tags or checks on hooks in a manner indicating the travel of each lot of pieces of work in process, from department to department, so that he has positive and instant information as to the exact location of each lot. From these card indexes or grooved trays or check-boards, the tracing department can then accumulate for collective groups or complete machines the record of progress, posting same on a bill of material or other record form. 229. Estimate of Times of Completion. After a tracing system is in thorough working order, and it is possible to tell the exact location of any piece or group of pieces, it is but a step further to inaugurate a system of estimated times of completion of each lot in each department. One of the large electric manu- facturing companies has brought this system of promised dates of completion to a state of high efficiency, by keeping a monthly record of each foreman's percentage of correctness in estimating 222 FACTORY ORGANIZATION AND ADMINISTRATION the time of completion. Prizes and promotions are accorded for the highest percentages, and whereas at the beginning of the system the highest percentage was below 60, after six months' operation a number of foremen were able to bring their percent- ages over 90, a state of affairs which seems almost incredible to the ordinary factory superintendent. 229a. Efficient Scheduling. It must always be borne in mind that our whole production system fails of its purpose if, instead of actual centralized control, we instal merely a paper history or duplication of uncontrolled or erratic production. It is only a useless expense to have order of work boards and assignment boards and another record somewhere else following up the ticket changes on these boards with beautiful graphs if the work done and its sequence is not based on intelligent predetermina- tion. This predetermination is absolutely dependent on a knowledge of (1) all operations necessary to do on each com- ponent; (2) the machinery equipment, small tools and fixtures necessary and available for each operation; (3) the time it takes to do each operation including inspection and moves; (4) the remoteness from assembly if there is assembly, at which each component must be started in order to secure availability of all components at assembly time; (5) a graphical lay-out of all available equipment and men each day with a uniform dis- tribution of the work so as to secureuni form employment of the proper number of men and machines necessary to carry out the predetermined manufacturing schedule; (6) a tie-in of this manu- facturing schedule with financial scheduling so as to avoid paying out more money for wages, tools and materials than can be afforded, and thus avoid piling up a high inventory of work in process at seasons when there is difficulty in raising cash. f The segregation of scheduling and planning into distinct V divisions, while it may possess some advantages in a large ) organization, is always fraught with dangers of duplication of / such records as balance of stores and balance of work in process \ and times required for various operations, which duplication of ' records is a needless over-head burden that could be avoided by merging scheduling and planning into a single division. Finally the entire production system will fail unless actual work done in the shop is controlled by the head of the production department. There are three choices as to who shall control PLANNING AND SUPERVISING PRODUCTION 223 the actual shop production: (1) the old-time ruthless driver type of superintendent who is apt to look on the production system as a plaything of the boss, to be tolerated with apparent enthusiasm but with plenty of internal contemptuous mental reservations; (2) the system man with no human leadership; (3) a real human engineer, technically and economically educated who is alert but not a driver. I have seen each of the three types. The first actually has the confidence of the management until he steers the business into financial reefs; then they veer towards the second type, and finally the choice will fall on a man of the third type. A man of the second type will often work for and under a man of type (1). A man of the third type cannot work under type (1). REFERENCES TAYLOR: "Shop Management," Pars. 258-311. GILBRETH: "Primer of Scientific Management," Chapter III. PARKHURST: "Applied Methods of Scientific Management," Chapter III. DUNCAN: " Industrial Management," Chapters VII to IX. THOMPSON: "Scientific Management," Pages 313 to 380. CHAPTER XVIII FOUNDRY SYSTEMS 230. Castings Requisitions. Inasmuch as the foundry is in many establishments an integral part of the factory, the follow- ing outline of foundry systems is given, more with a view of the foundry as a shop department than of the foundry as a job shop. The requisition for castings emanates from a stores record clerk who initiates such requisition for one of the following rea- sons: 1. As he enters reservations for production orders or ship- ping orders, he finds that his balance on hand, deducting reserve, falls below the minimum stock as specified on his stock sheet. He thereupon writes out a castings requisition. Where the estab- lishment has no foundry of its own, this castings requisition goes to the purchasing department. Where the foundry is a shop department, this requisition is sent to the foundry foreman. CASTINGS REQUISITION. n. TF IM HOP ORDER CLASS NO. OF PIECES DESCRIPTION. PATTERN No. DATE DUE FOUNDRY JOB NO. , -^ FIG. 97. Requisition to make castings. White bond paper, 81/2 inches wide, 11 inches high, ruled in red and blue. Fig. 97 shows a form for such castings requisition. This requisi- tion bears columns headed as follows: " Class," "Number of Pieces," " Description," "Pattern Number," "Date Due," "Foundry Job Number." The foundry foreman's clerk assigns the foundry job numbers consecutively as they are received, beginning with number one as the first order of 'the year. One copy of the castings requisition is sent to the pattern shop, and two to the foundry. One of these foundry copies is returned to the stores record clerk with the foundry job numbers inserted. 231. Moulders' and Coremakers' Order Copies. On receipt of the castings requisition the foundry clerk makes out two 224 FOUNDRY SYSTEMS 225 similar job cards, viz., Fig. 98, " Moulder's Duplicate." and Fig. 99, " Coremaker's Duplicate." Both of these cards are attached MOULDER'S DUPLICATE. Name JOB Nc . No. of PCS. - Date of Issue Pat. Nos. Da1 Due PC .e. s. No. Pieces Moulded. Include Helpers Number on Job. m 0. 6 z o To o 1 z X FIG. 98. Moulder's card, copy of order to make castings with tracing record on same. Manila card, 5 inches wide, 3 inches high. to the pattern shop's copy of the castings requisition, and are sent to the foreman of the pattern shop. The foreman of the pattern shop hands them to the pattern carrier with instructions COREMAKER'S DUPLICATE. JOB NO. Oae Piece means one full set of Cores required to make one casting Name r- No. Of PCS. Date Pat. of Issue Nos. DC Due p< te. ;s. No. of Sets of Cores Made. 5 2 I z o FIG. 99. Coremaker s card, copy of c record covering cores made. Manila to get the patterns that these cards call for. He tacks the Moulder's Duplicate to the pattern itself, and sends the pattern 226 FACTORY ORGANIZATION AND ADMINISTRATION ^ d }i 3 8 re re o n 1 5 QJ JH O 03 2 d u f-i en T-H W T-H Ul ft oT i S k! o DC .s O (N ll 00 o Q S ^ DC 3 o ft a ^ 1 cc sanojj 1 -J II o5 CO ^ a ^^, t DC Q 1 s to t> 1 5 to \ * o >% fa ^ I 1 Pi 6 ! H " 1 - I i | s 9 CQ 1 O 1 5 'o E 3 ' I" O N C] a O J3< |x^ 1 W 6 M 6 to the foundry. In case the pattern has to be made, the moulder's duplicate card is kept on file in the pattern shop, remaining at- tached to the pattern shop's copy of castings requisition until the pattern is made. The core-maker's du- plicate is handed to the foreman of the core- room. 232. Daily Record of Work Done. As the foundry work is com- pleted the foundry time-keeper collects the card orders and turns them back to the foun- dry clerk. The foundry clerk makes up, for his own guidance from these returning cards, a daily record of work done (Fig. 100), such record bearing columns with the following head- ings: "Help" (this col- umn containing check number and time of moulder and helpers), "Shop Order No.," "Foundry Job No.," "Number of Pieces," "Time," "Weight" (scrap, if any, being specified), "Pattern Number, " " Descrip- tion." The foundry UNDRY SYSTEMS 227 2 . *J j i j / ^ \ ^ ^bjD .1 ^3 J ii O 1-H cT T3 p 1 4 1 Q .-,t<- ^ bate Irs. 31. 31. 31. 31. 31. 31. 31. 31. 11. II. 11. H. I'. C. - C. 31. H. 31. 31. 31. 31. 31. 31. II. H. 11. Jl. C. C. (J. o 31. 31. 31. M. 31. 31. 31. ~^- 31. FIG. 102. Foundry clerk's consecutive job list. White bond paper, 81/2 inches wide, 11 inches high, ruled in red and blue. to the production department, one copy going to the machine shop, and one copy being retained in the foundry. The general headings on this foundry delivery record are "Date" and "Page." JOB No. NANLE_ DATE KIND_ .SIZE. No. Pieces Made No. Pieces Del'd No. Pieces Lost Pattern No. Drw'g or Sketch Shop or Stock Date Completed Shop Clerks O.K. Time must be checked every day by Foreman, and O.K'd upon completion, and completion notice returned to office without delay. FIG. 103. Foundry clerk's tracing card. Gray card, 5 inches wide, 3 inches high. The vertical columns are headed "Shop Order Number," and a column for checking, "Foundry Job Number," and a column for checking, "Number of Pieces," and a column for checking, "Weight," "Description" and "Pattern Number." There FOUNDRY SYSTEMS 229 is also a blank column at the extreme left which is used for enter- ing a reference to subsequent deliveries on the same order number. After filling out the foundry delivery sheet, the foundry clerk returns again to the castings requisition sheet, and posts in the column headed "Description" the date of completion and num- ber of pieces completed. As soon as any one castings requisition sheet is filled out showing that all items have been delivered, this sheet is retired to a file of completed castings requisitions. 234. Consecutive Job List. The foundry clerk also writes out daily a Finding List or index sheet, using for that purpose a sheet entitled "Foundry Consecutive Job List," shown in Fig. 102. MATERIAL SCRAPPED FPUNDRY DEP'T. jOn PIECES DESCRIPTION SYMBOL Shop Order No. ON ACCOUNT DEFECTIVE CASTINGS MISTAKE IN PF.P'T MADE BY KEY No. NAME Time Lost on Scrapped Castings. State Below Why Castings Were Lost. Key No. Moulders Houra Help Core MW Hours ' Foreman Will Stamp and Send to Office. FIG. 104. Record of defective castings, filed back of cards shown in Fig. 68, a duplicate going to superintendent and another copy to production department. Yellow bond paper, 5 inches wide, 3 inches high. The columns in this list bear headings as follows: "Date," "Job Number," "Number of Pieces." "Description," "Shop Order Number," "Class of Labor" and "Time." 235. Foundry Tracing Card. The foundry clerk prepares also each day a number of cards (Fig. 103) for the purpose of answering any questions as to the date of delivery of castings, number of castings scrapped, and state of completion of any job. These cards are filed back of guide cards showing job number, and are written up at the same time as the writing up of the cards entitled, "Core-makers' Duplicate," and "Moulders' Duplicate." 230 FACTORY ORGANIZATION AND ADMINISTRATION Entries are posted on these cards from the " Foundry Delivery Record" (Fig. 101). 236. Scrapped Material. To the back of each of these cards are attached by "clips" notices of defective castings, where such have occurred; these notices (headed " Material Scrapped") are NAME CIOCK NO TOTAL HOURS Moulders Md Helper! Cor. Makers & Helper* JOB No. Description Hourg Pieces Mould- ed *% Made HOURS DESCRIPTION HOURS DESCRIPTION 1 Blast Time. Gaggerg Clampg, ) Flasks and Bars. Cupola Repairs 2 and Attending. J Cleaning Castings 3 Unloading Material Repairs and Attend- ing Boiler, Engines, [ Blower. Handling Supplies 4 General Labor 3 Watching. DROP INTO TIME BOX EVERY DAY AT QUITTING TIME. FIG. 105. Foundry workman's time card. Manila card, 31/2 inches wide, 6 inches high. made out on a form similar to Fig. 104, a copy of this form being sent to the production department. On receipt of scrap notices a new order is entered on a foundry requisition to cover the loss. 237. Clerical Help Required. In a foundry employing thirty or forty moulders, six to ten core-makers, eight to ten men in the cleaning-room, and six to eight men in the yard, a foundry clerk FOUNDRY SYSTEMS 231 TOTAL TOTAL CM CM 5 CM CM 0) CO pt CO CO CO N CO N CO CO CO in o in I QC o ^ o o CO CM CO LU 1C 00 CM CO LU O QC - CO 2 X 05 CM < _l o v 0) CO CM 0. 3 o CO N CM >- QC ^ h- CD CM 1 CD in CM Tt t good castings made REMARKS: FIG. 108. Reverse of Fig. 79. charge sheet, a form for which is shown in Fig. 106, are summarized into a daily cupola report; shown in Fig. 107 and a "Record of Castings Made," shown in Fig. 108 which are simply a condensa- tion of the separate items entered on the previous forms. In cases where there is a possibility of the weight of castings fluctuating from a desired standard to which it is intended that the foundry shall adhere strictly, it is desirable that the standard weight be entered on orders and job tickets so that these weights are noted by the foundry employees. 241. Weekly Cupola Reports. A summary is made of the daily cupola reports once a week, such weekly summary being made in triplicate, one copy remaining on file in the foundry, 234 FACTORY ORGANIZATION AND ADMINISTRATION CUPOLA RFPORT WEEK ENDING 191 Kind and Grade of Pig Iron Used. No. of Pounds. Per Cent. No. Pig Iron No. Pig Iron No. Pig Iron New Scrap Foundry Scrap TVT -1 r - NEW M. Shop Sciap OLD Total. Remelt Scrap Total iron to Cupola* No. pounds Coke used in Cupola- No. pounds Manganese used in Cupola Castings made but not delivered Good Castings delivered Foundry Scrap M. Shop Scrap Gager and Clamps Flasks and Bars Total Castings made Loss in Cupola [Excluding Remelt.] REMARKS: NOTE: Per cent\ o Per cent, o Castings d '. iron based on total charge. Castings based on Castings made. FIG. 109. Weekly cupola report. White bond paper, 5 1/2 inches wide, 8 1/2 inches high. FOUNDRY SYSTEMS 235 one being sent to the shop superintendent, and one to the works manager. Fig. 109 shows a form for such weekly cupola report. REFERENCES KNOEPPEL: " Maximum Production." Chapters IV to XIV. PERRIGO: "Modern Machine-shop Construction, Equipment and Manage- ment," Chapter XXI. CHAPTER XIX THE MACHINE SHOP AND TOOL DEPARTMENT 242. Arrangement of Machines. The arrangement of the various machines in the machine shop will depend somewhat upon the general tendency of the sequence of operations. Such a general tendency cannot be established from a few parts of the product, but can be ascertained only by a careful study of the processing and most advantageous routing of all of the compo- nent items involved in the output. In addition to leaving room enough for working and storing a considerable supply of work in process, room should be left for the installing of additional machines with each group of the same kind of machines. 243. Foremen and Gang Bosses. Most machine shops are insufficiently officered. The foreman of the machine shop is compelled in many well-equipped and otherwise well-organized shops to do all of the following up of orders in his department, to act as an expert in processing, to design new tools, and to hire labor. Under such conditions anything like reasonably high effi- ciency is unthinkable. The general foreman of the machine shop should be assisted by an assistant foreman, who has charge of the strictly machine work processes, another assistant foreman to act in charge of the strictly bench and vise work and group- assembling part of the machine shop, and still another assistant foreman in charge of erecting work. In addition to these as- sistant foremen, there should be a sub-foreman or gang boss for each group of machine tools, and for each specialty in assembling and erection work. These gang bosses, who are the expert mechanics in each group, spend most of their time in direct productive work themselves, and about one-fourth or one-fifth of their time in indirect work in instructing and helping others in their group. 244. Tool Room Independent of Machine Shop. The tool- room should be either a department independent of the machine shop, or, if under the supervision of the general foreman of the machine shop, there should be a separate foreman of the tool 236 MACHINE SHOP AND TOOL DEPARTMENT 237 department. The foreman of the tool department in turn should be relieved of all duties pertaining to storage of tools and blue-prints. This work should be in the hands of a competent assistant in the tool department so that the foreman of the tool- room may devote practically his entire energies to questions having to do with the making and purchase of tools. 245. Relieving Foremen of Clerical Work. If the general machine-shop foreman is provided with a competent staff of assistants, as above outlined, he will be able to confer intelli- gently with the head of the production department and tracers, and may be expected to make reasonably accurate statements as to time of completion of work in process. He can never have his orders well in mind or well in hand, however, if he is over- worked, as most machine-shop foremen are, with a multitude of various responsibilities beyond the mental capacity of one man. The issuing of shop orders and following them up are duties which in the best shop organization are delegated to the produc- tion department, a department entirely independent of the ma- chine shop. Similarly, workingmen's time records belong to the time-keeping department. Records of employees are kept in the employment department. The fact that these last-named records are kept in a separate department does not in any way lessen the authority of the department foremen in approving or disapproving of the men in their charge or sent them for final decision as to employment. The data for filling in efficiency records must, of course, be obtained from the department foreman. The keeping of records is work of a nature, however, that is so different from the regular routine of a department foreman that the necessary records will almost certainly fail to be kept up unless the labor of recording is centered under separate supervision. When all of the above duties have been removed from the machine shop, the general foreman will have opportunity to look around the shop. While it is sometimes impracticable to have the desk of the general foreman so located that he can have a clear view of all of the shop territory under his control, it is almost always pos- sible, and certainly desirable, to locate sub-foremen in such a way that they can at all times have a full view of all of the men working under them. 246. Moving Work in Process. It will usually be found advisable to have one or more laborers assigned to the work of 238 FACTORY ORGANIZATION AND ADMINISTRATION stock-moving. It is the stock-mover's business to see that a piece of work, finished in any one department, is quickly taken to .the place where the next operation is to be performed, and to its proper destination as soon as the last operation has been per- formed. It is the stock-mover's duty to assist the inspection department in seeing that all articles requiring inspection are promptly brought to the attention of the proper person delegated to do such inspection after each set of operations involving inspection. 247. Call Bells. It has been found useful in many shops where the yard gang or casting cleanings force constituted the main supply of laborers, to have an annunciator located at those places in charge of some one man, this annunciator being connected to push buttons located at various parts of the shop where they are pressed when a laborer is wanted. A similar call-bell system is used in many shops for calling boys from the tool-room to get tools, drawings, requisitions, etc., the men pressing their push buttons some little time before the article is needed, and in that way avoiding any loss of time. One push button will answer for a considerable floor area. When the boy arrives at the area corresponding to the number of his call, he simply calls out, " tool-room boy," so as to attract the attention of the man who wanted him. A better plan is to have the tool room prepare boxes or portable stands supplied with tools as per tool lists for each day's jobs in accordance with the bulletin board showing order of work such tools being furnished to each man prior to his beginning his next job. It must be borne in mind that the mere running of machine tools at their best feeds and speeds is not in itself any guarantee of most efficient production, since delays between operations constitute the greatest loss of time. It is these delays which are cut out by the use of well-managed premium or gain-sharing wage systems, good methods of routing, scheduling, and stock moving, and orderly arrangements. 248. Issuing Blue-prints. The head of the tool storage and blue-prints issuing room should be constantly following all blue- prints and tools so that, unless they are in current use, they are promptly returned to storage. Blue-prints drawn by foremen should not be given out by them to the men. There should be an office set of blue-prints bound together in sets, each set represent- ing all of the drawings required for" a certain product. These MACHINE SHOP AND TOOL DEPARTMENT 239 sets should be kept for reference in the machine-shop office only, and not be taken away from that office. Blue-prints for use by workingmen should be kept in the tool storage room and drawn on checks or issued with tool lists the same as shop tools. This practice results in the prints which are in the shop office always representing complete sets. The systematic arrangement of the record sets is thus not interfered with. It is desirable to enclose separately by a grating, and keep under lock and key such part of the tool-room as is wholly devoted to storage and issuing on checks of tools and blue- prints. This separate grating is in addition to the general grating or partition which encloses the machinery engaged in tool-making work. 249. Repairs to Machinery and Transmission Apparatus. In most small or medium-size shops, it will be found conven- ient to have the repair and maintenance work of the machine shop on transmission equipment and machinery as one of the duties of the foreman of the tool-room. He in turn may have one employee in his department whose specialty is such repairing and maintenance work, and he may have to call a considerable number of machinists and laborers to his assistance at times. At such times he should, of course, confer with the foreman of the machine tool department and the man who has general charge of the laborers. In a small establishment a single standing order will suffice, to which all labor and material for repairs and maintenance of shafting, belting, etc., may be charged. In larger factories it will be found desirable to have separate standing orders covering the repairs and maintenance of transmission apparatus in each department, so that this expense may be properly localized in determining the operating expense of each department. Orders covering repairs or alterations to machinery are best taken care of by letting each order bear the number which is on the number-plate fastened to each machine, and which number appears on the card inventory of machinery. The orders of this series should emanate from the tool-room, where a brief description of the nature of the repair or alteration is stated in the wording of the order, so that this brief statement may be transcribed on to the inventory card, after the cost department has turned in a record of the cost of time and material. The actual doing of repair work on machines need not wait for the 240 FACTORY ORGANIZATION AND ADMINISTRATION TOOL ORDER Date. No. " T " NAME OF TOOL AND NATURE OF WORK formal typewriting of the order by the order department, since such repair work on machines is usually an urgent matter. The only object in having the order department typewrite the order is for the purpose of having the record of the nature of the repair. 250. Orders for Making Tools. In the chapter on the Order / v Department, it has already ^ \ been stated that it is advisable to have a separate series of orders for the tool-room. The foreman of the tool-room should be provided with a form on which he may write a request for the issuance of an order. Prompt attention must be given to these re- quests by the head of the plan- ning department, who should give instructions to the opera- tor of the billing machine on which shop orders and accom- panying shop tags are written, that such tool-room orders and tags be promptly type- written and delivered to the messenger without delay. In a small establishment, the tool-room foreman may him- self write out the tags which accompany tool-room jobs, in- stead of having a separate order form. Fig. 110 shows a form for such tool-rcom or- der tag. He may keep a book TOOL ORDER- (STUB) O Date QUANTITY Date Completed LIST OF MATERIAL STOCK As soon ae Tool Is oompleted.send this Stub to Shop-Office FIG. 110. Form for tool order tag. Stub kept in tool department till order is completed. Salmon tag stock, rein- forced eyelets, 41/8 inches wide, upper portion 5 inches high, lower portion (stub) 6 inches high. in which he writes a descrip- tion of the consecutive orders. He should have the general foreman or superintendent enter his initials opposite each of the items in this book, designating that it has been duly authorized. It is also very advisable to have a column in this book in which is entered the tool-room foreman's estimate of cost as he makes it at the time of asking the approval of the general foreman or superintendent, and an adjacent column MACHINE SHOP AND TOOL DEPARTMENT 241 in which is posted the cost department's report of the actual cost of the tool or fixture after it has been finished. These columns will serve as a very good basis for improving the efficiency of the head of the tool-room as an estimator of probable costs of tooling equipment. Where the tool-room foreman writes out the tag which accompanies the tool or fixture in process of manu- facture, it is advisable that he keep a stub of this tag on file, on which he enters material issued with the order or subsequently drawn for it. If it is drawn from his own stock, shop tags accom- panying tool-room work will, of course, be of a separate color from tags on other order series, and when a tool-room job is sent into the regular machine shop, the shop tag should of itself be sufficient authorization for the doing of the work. The tag accompanying such work should bear the signature or rubber stamp authorization of the general machine-shop foreman, show- ing that he has approved the order for work outside of the tool-room to be done on it. 251. Record of Small Tools. The record of files, small tools, etc., that are drawn from a tool-room ought to be localized to individual workmen and summarized for monthly comparison. The reason should be written on each requisition on the tool storage room for the issuing of new tools or tool replacement. A proper system of standing non-productive orders will provide data for comparison of these accounts from month to month with a view to encouraging economy. 252. Repetition Work by Tool -makers. In a tool-room of considerable size there is apt to be a good deal of duplicate work, such as the making of hardened bushings for the holes in drilling jigs, etc., which can be put on a premium, bonus, or gain-sharing wage basis. The same is true of similar jobs occurring often, and so nearly alike that they are practically the same. The head of the tool-room should compile the cost data of recurring jobs in just the same manner that the works manager is considering the manufactured product. 253. Tool Steel Tests. The head of the tool department should compile the results of tests of tool steel with a view to determining what kinds of tool steel are best for the various kinds of work in the shop. If there are men in the shop em- ployed to do time-study work for the purpose of establishing premium, bonus, or piece rates, such men's observations may be made to cooperate in securing the necessary data wanted in 16 242 FACTORY ORGANIZATION AND ADMINISTRATION connection with tool steel tests. Fig. Ill is a form used for recording the data of an individual test of tool steel. Fig. 112 is a form used for summarizing the results of a number of indi- vidual tests. Some authorities argue that it is totally incorret to base any conclusions on the amount of work that can be done with one tool without regrinding. Mr. F. W. Taylor bases his speeds and feeds on the maximum to be gotten out of a tool in an hour and a half without regrinding. If replace- ment of cutters requires a long, slow-grinding process, and occa- TOOL STEEL TEST NAME OF STEEL DEPARTMENT KIND OF TOOL PART FINISHED. KIND OFMETAL.FINISHED DATE CONDITION OF METAL NO. PIECES FIN. WITH ONE GRINDING . NO. P.IECE8 FIN. WITH ONE TOOL CUTTING SPEED PER MINUTE FEED PER REVOLUTION LENGTH OF PIECE FINISHED SIZE OF TOOL PRICE OF TOOL. OPERATION TIME TAKEN FOR OPERATION . WORKMAN'S NAME. FIG. 111. Form for recording tool steel test. White bond paper, 81/2 inches wide, 51/2 inches high. sional reforging, then a relatively slower speed must be chosen than where facilities are at hand for quick replacement and regrinding of cutters. 254. Scheduling Machine-shop Work. The Production or Planning Department must have planned long before a man is through with a job what that man is to do next, so that there is no such thing as a workman standing around and waiting for a job or being given something merely to keep him from being idle, and then being compelled to change his job as soon as the foreman finds something that is more urgent. The practice is becoming more and more general of having a sub-foreman in charge of only a limited number of men or machines, and giving him a board on which there is a hook or peg to represent each machine or work- MACHINE SHOP AND TOOL DEPARTMENT 243 ing man in his department. On this peg he must have hanging, every evening, a sufficient number of duplicate shop order tags to provide the working man whom the peg or hook represents, with a full day's work on the following day. To be sure, when the next day comes the order of work may have to be slightly modified, but where this system is put into practice it will be No. of test No. of part finished Workman's number Department number Operation Time taken for operation Kind of metal finished Condition of metal Size of piece finished Name of tool steel used No. of pieces fin. with one grinding Speed in feet per minute Feed in inches per revolution Price of steel per Ibs. Cost of Steel used per 100 pieces Price of operation per 100 pieces Wages this man averages per day Years production Saving per 100 pieces Net saving per 1 yrs. production ^^__ .^ ^ ^ . ^=== == ^====^^ :: ^=^==^^ ^===^=^=^ :==:= ^=z=^ : ^ FIG. 112. Form for summarizing tool steel tests. White bond paper, 81/2 inches wide, 11 inches high. found that there will be less need of dropping a job and changing to another than without such systematic planning. 255. Tool Lists for Manufactured Parts. The head of the tool-room should have a card index arranged by names, and mark numbers of product. On this card he should record all tools necessary for the complete tooling of the part in question. A form for such record is shown in Fig. 113. (See also Fig. 244 FACTORY ORGANIZATION AND ADMINISTRATION 87.) It will also be found convenient for the tool-room fore- man to have a cross index of the machinery inventory, ar- ranged by kind of tool, so that he may know where the machines of any one kind are located, and the total number of each kind of machine in the entire plant. A form for such record is shown in Fig. 114. T DOLING RECORD F^R PART No. OPERATIONS TOOLS REQUIRED FIG. 113. Record of tools, jigs, etc., required to machine a given part. White card, 6 inches wide, 4 inches high. 256. Identifying Different Brands of Tool Steel. The dif- ferent brands of tool steel are best identified when the steel is still in the bar stock by running narrow strips of paint length- wise along the bar and having a board hung up in the tool-room KIND OF M RI7F ACHINE DEPT. INVENTORY No. MAKE FIG. 114. Record showing location of all machines of any one kind and size. White card, 6 inches wide, 4 inches high. on which is listed the name of the brand of steel, corresponding to each colored line or combination of colored lines. After the bar stock has been formed into cutting tools, it is desirable to have the brand of steel and the shape of the tool stamped on the tool itself, using certain symbols or numbers to designate MACHINE SHOP AND TOOL DEPARTMENT^ 245 the various brands and shapes. These stamped symbols^ num- bers or letters, must be placed on some part of the tool where they will not be obliterated by grinding on re-forging. Detailed instructions as to the heating and quenching of each brand should be permanently posted in that part of the shop where this work is done, and strict adherence to these instruc- tions should be enforced. 257. Check System. In keeping track of withdrawals of tools by employees, the double brass check system as suggested by Mr. Perrigo will be found better than the single check system. In the double check system, there are two hooks provided for each employee; next to these two hooks is a label holder in which can be slipped a small strip of paper or card bearing the name of the employee, corresponding to a certain tool-check number. When an employee first reports for work, he is given a supply of, say, 10 round brass tool checks, and 10 square checks bearing the same number are hung on one of the hooks opposite his name. As soon as he calls for a tool, he presents one of his round checks. This is hung on the vacant hook. At the same time one of the square checks is taken off and placed in the tool rack, case, or drawer from which the tool is taken. When he returns the tool, he is given back his round check, and the square check is taken from the rack, case, or drawer into which it had been placed as a substitute for the tool. This system enables the tool-room foreman to tell by the number of round checks hanging on any man's hook just how many tools he has out. In the single check system, only a single check is used, and is substituted for the tool. In this 'system the foreman cannot tell how many tools a man has out without 'looking practically through the whole tool- room or keeping an additional written record. 258. Bolts, Clamps, Washers and Nuts for " Setting Up." It is desirable to keep the floor and benches in the machine shop clear of bolts, washers, nuts, and clamps used in setting up pieces in the machine tools. A good method of identifying all such bolts, clamps, etc., is to have them painted a bright color, such as red, blue, or green, which immediately designates them as tool equipments. Many shops allow these bolts, washers, and clamps to be thrown indiscriminately into drawers of benches or shelves. A much better plan is to provide specially designed storage places for them. Fig. 115 shows a tool-room section so designed, as used by the Tabor Manufacturing Company of 246^ ^FACTORY ORGANIZATION AND ADMINISTRATION FIG. 115. Tool-room section made up of tiers of racks, and each com- partment subdivided with boxes labeled with brass plates, giving the size and symbol of the bolts contained therein. Particular attention is called to the method of stocking the bolts; the sizes and lengths of the bolts regulate the sizes of the boxes. Pegs are provided on the front of the bottom beveled edge for the workman's checks. MACHINE SHOP AND TOOL DEPARTMENT , ,,.247 FIG. 116. Tool Room section made up of racks of Standard Shelving with Standard attachment to care for the widely varying stock found in Store Rooms. Note the check hook and label holder provided for each compartment. Particular attention is called to the sloping shelving used in the upper portion of the rack which takes care of such tools as drills, reamers and taps of which only a small working quantity are carried in stock. Note how the sloping shelf keeps the tool at the front part of the compartment where it is in plain sight and can be quickly reached. Each compartment is provided with a check hook and label holder. Arrangement of the shelving with the less used material at the top of the rack, small and more used parts at a height where they can be quickly reached and the heavier parts near the floor where they can be handled with a minimum amount of effort, makes it very efficient. 248 ' FACTORY ORGANIZATION AND ADMINISTRATION FIG. 117. Tool Room Section made up of Standard Shelving with sliding panels for snap gauges, lathe dogs, milling cutters and similar equip- ment. Panels are equipped with hooks and with label giving the number of the various tools. Check hooks are provided for carrying the workman's check. These sliding panels give a much more compact arrangement for carrying snap gauges, milling cutters, and the like, than the usual method of hanging these on boards along the wall. Another feature of this rack is the special section for plug gauges as shown at the end of the rack. MACHINE SHOP AND TOOL DEPARTMENT 249 Philadelphia. This company keeps all of these parts in the tool-room. 259. Storing Tools. The problem of storing a large number of tools into a small space, at the same time making it possible to get a rapid and comprehensive view of all of the tools, is one which can be met by the designing of special fixtures for holding the tools. This problem is also well met by the Lyon Metal- lic Mfg. Co. in the construction of racks of standard shelving with check hooks and label holders as shown in Figs. 116 and 117. In general, the principle of concealing as little as possible from sight in a' tool-room is one which should be observed in designing fixtures for tool storage, hence it will be advisable to avoid closed drawers for storage purposes, and to utilize open shelves as much as possible. Shallow shelves with partition strips separating the tool compartments, and a slope toward the front, facilitate the removal and return of the tools. Space should always be provided for the workmen's checks as sub- stituted for tools withdrawn. 260. Selection of Machines. In the matter of machine tool equipment there needs to be constant study in the shop as to when it is best to use a general purpose non-automatic machine, when to use a semi-automatic general purpose machine, and when to use single purpose non-automatic or single purpose automatic machines. The question of when to use one or the other types of machines can only be settled after a careful investigation of cost of machines of various types that will answer, and the cost of tools required with each type, as well as the time in which each type of machine will do the work. As regards the use of special machines, there is no doubt but what their adoption enables manufacturers in the United States, producing articles made of iron and steel, not only to com- pete with foreign makers but to export. The high price of labor in America, as compared with wages abroad, forms a constant incentive to American manufacturers to look for appliances that will reduce their cost of production. The result is that fre- quently machines that are first introduced as special finally in some cases become standard, as a result of modifications in various ways. Within recent years, machines used. in connection with press 250 FACTORY ORGANIZATION AND ADMINISTRATION working of metals and the working of hot metals have undergone a development fully equal to that which has taken place in machinery of the strictly machine-tool class. Presses of various types are now found in all improved shops, and are indispensable if the output is a standard article and produced in large quanti- ties, such as sewing-machines, typewriters, agricultural imple- PROPOSITION FOR NEW MACHINERY. Proposition No. __ - Date Name of machine to be To be used in _ _ _ Department In the manufacture of _ , _ _ - Part and operation to be performed Present method Present piece work price . Proposed " " " Expected saving per year. Based on a production of_ Correct Cost of machine estimate - bid To be designed by To be built by Time required to complete - deliver. Suggestion by Estimated reduction of cost, on above basis is correct Cost Department. Required - desirable 1 - for production Production Department. Inspection Department. FIG. 118. Page 1 of proposition to introduce new machinery. White bond paper. Four-page folder, each page 81/2 inches wide, 11 inches high. ments, parts of automobiles, etc. A few years ago the use of presses was confined to the manufacture of sheet metal goods, and while most of the presses now in use are still cutting or form- ing articles from the sheet or strip, the scope is broadening, espe- cially in the direction of forming bar metals, thereby simplifying and cheapening operation of special presses. MACHINE SHOP AND TOOL DEPARTMENT 251 261. Proposals for New Machinery Equipment. Figs. 118 to 120 inclusive illustrate a form used in a large manufacturing establishment in considering proposals for introducing new ma- chine tools or special machinery. Figs. 118 and 119 are printed on the inside of a four-page folder of about the proportions and shape of a foolscap sheet, and are Page 2. PROPOSITION FOR NEW MACHINERY. TOOL DESIGNING DEPARTMENT Remarks: GENERAL FOREMAN Remarks:. FOREMAN Remarks:. .ASSISTANT FOREMAN Remarks:. WORKMAN Re,marks:_ NOTE: Please return this sheet without delay to the Tool Designing Department. FIG. 119. Page 2 of proposition to introduce new machinery (see Figs. 118 and 120). a record of the anticipated advantages which would accrue from introducing the new machine. It will be noticed that opinions are asked for from a number of individuals and departments, including cost department, production department, inspection de- partment, tool-designing department, general foreman, assistant foreman, and the workman. After these complete expression? 252 FACTORY ORGANIZATION AND ADMINISTRATION of opinions, some of which may, of course, be prejudiced and must be taken for what they are worth, the report is submitted to a committee which selects from the various proposals those which seem to be most advantageous. Fig. 120 is printed on the outside front page of the folder. SUMMARY AND DISPOSITION OF PROPOSITION FOR NEW MACHINERY. Proposition No. Machine Proposition approved Special Order Issued - Special Order No Requisition issued Drawings approved Patterns ordered Patterns completed Castings and materials ordered Machine installed Experiments completed New Piece Work ticket issued Former earnings Present earnings Inspection Dept. Report. Filed File No._ Approved. FIG. 120. Summary and results of proposition to introduce new machinery. (Outside cover to Figs. 118 and 119.) (See Figs. 118 and 119.) REFERENCES Tuck School Conference on Scientific Management, pp. 155-175. EVANS: "Cost keeping and Scientific Management," Chapter XIII. PARKHURST: "Applied Methods of Scientific Management," Chapter VI. CARPENTER: "Profit-making Management," Chapters V, VI and VII. PERRIGO: "Modern Machine-shop Construction, Equipment and Man- agement," Chapter XXIX. CHAPTER XX SHIPPING AND RECEIVING DEPARTMENTS 262. Relation of Shipping and Receiving to Other Depart- ments. In most establishments shipping and receiving are under the same general head. In others purchasing and receiv- ing are under the same department, while in still others the re- ceiving department is an independent department reporting direct to the factory manager. 263. Copies of Orders to be Sent to Shipping Department. The shipping department should receive a copy of every order which the department is expected to ship, such copy containing all the information necessary to get out and pack all items belong- ing to that order.- The shipping department's files of unfilled orders will be classified according to the order classification scheme of the company. Thus there may be contract orders on one file, supply orders on another, etc. Usually the shipping depart- ment will want to put express orders on a separate file board from freight shipments. All reference orders or changes or addi- tional information should be written on blanks bearing the same order number as the original order. 264. Notice of Items Ready for Shipment. The shipping department should be furnished a weekly list of large orders or contract orders which it is expected to ship the following week if the business is one involving the shipment of large contracts, so that proper arrangements can be made for ordering in cars. 265. Stores and Inspection Records Prior to Shipment. In order to keep complete stock records it is necessary that all parts should pass into stock and be recorded as having been received from the shop before they are shipped out. When items on any order sufficient for a shipment are ready, the stock depart- ment sends its order copy to the shipping department, with a check opposite the items that are ready for shipment, together with date. If the parts are not inspected parts sent in quantity into the stock-room, but represent large machines or groups of 253 254 FACTORY ORGANIZATION AND ADMINISTRATION parts which do not actually go into the stock-room but are shipped direct from the shop floor, then the stock-room copy of the order should be stamped by the floor inspector. The shipping depart- ment must see that for all articles shipped direct from the shop floor there is an inspection record. In some factories the inspec- tor's report is sent to the shipping department as a notice that goods are ready for shipment. Orders for small supplies and repair parts coming direct from stock warehouse are not usually marked "Inspected," as these parts are usually inspected in quantity by an inspection department which examines all lots of small parts just before they are turned into stock. 266. Packing Rooms. It is well to provide a room or space with a number of bins of various sizes closely adjacent to the packing and loading space. The stock department puts into these bins the items which they have ready for shipment for various orders, hanging a tag on each bin, with the order number marked on these tags, and a large tag marked "Ready" on such bins as contain goods ready for shipment. When the shipping department receives the' stock-room's copy of an order, indicating that the goods are ready to ship, the ship- ping department order copy is removed from the regular file and put into a temporary file, the stock department's copy is stamped by the shipping department and is then returned to the stock- room. The shipping department's stamp does not necessarily mean that they have shipped the goods that day, but indicates that they have noted that the goods are ready and are proceeding to the best of their ability to get them shipped. When shipping department is ready to begin packing, a shipping department clerk takes the shipping department order temporary file, goes to the bins in the storeroom and to the shop floor if necessary, and checks off by items all material called for. He then has the packers bring the material to the loading-room or platform and endorses on the order how it is packed, viz., the number of boxes, barrels, or crates. If the order is complete, he so marks it and turns it over to the clerk who writes out the railroad receipts and packing lists, or, in a smaller establishment, does this himself. Packing lists are usually written out in manifold as are also railroad receipts, there being usually three copies. 267. Packing Cards and Lists. In each package there is inserted a packing card similar to Fig. 121. This contains customer's order number, shipper's order number, date packed SHIPPING AND RECEIVING DEPARTMENTS 255 and by whom packed, and give full information as to what to do in case of shortage or breakage or claims covering defects. Fig. 122 shows a form for packing list, one of which is placed in the package, and one sent by mail to the consignee; another copy goes to the production department, which vise's same, and then sends it to the stores department. Fig. 123 shows a form for freight receipt which is signed at the THESE GOODS WERE GHEGEED BT PACKER AND THEREFORE KNOWN TO CONTAIN ALL THAT THE BILL CALLS FOR. Please see that each bale, box or 'package is delivered to you in good condition by transportation company before receipting for goods. If short- age is shown, require the freight agent to note same on expense bilL IF YOU ACCEPT SHIPMENT SHORT OF MATERIALS SHOWN ON PACKING LIST AND BILL OF LADING, YOU SHOULD NOT EX- PECT US TO ASSUME THE RISK Attention to above will work to our mutual protection. UNPACK WITH CARE Many shortages arise from goods being left in packages, or thrown out "with packing. Your own experience will confirm this. RETURN THIS CLAIM CARD with letter advising particulars in case of disagreement with invoice, or other complaint, as packer must be held responsible. These articles have been checked by inspector, and shipped in perfect condition. If not as ordered, return this packing card. RETURNED GOODS When returning goods for any reason, please be careful to mark package plainly with your name and address, and consign goods to Enclose IN PACKAGE complete list of articles, and state why returned, even though this has been previously explained in correspondence. Customers' Order No. Date Our Order No.. Packed by FIG. 121. Packing card. Yellow card, 7 inches wide, 9 inches high railroad receiving depot, and is followed by the railroad com- pany's regular bill of lading. 268. Shipping Records. As soon as packing lists have been written, entries are made into a shipping record book of form, similar to that shown in Fig. 124. This book contains columns showing date of shipment, number of sheets to the order, how shipped, car number, whether freight was prepaid, date paid, 256 FACTORY ORGANIZATION AND ADMINISTRATION PACKING LIST NO. DATE SHIPPED To. ORDER NO._ CAR No. VIA. SHIPPING DEPARTMENT RECEIPT No. NO. PKG. CONTENTS WEIGHT PACKED BY PLEASE CHECK THIS LIST IMMEDIATELY ON RECEIPT OF SHIPMENT AND NOTIFY US _PROMPTLY OF ANY ITEMS NOT RECEIVED. FIG. 122. Packing list. One copy goes to consignee by mail, one copy is placed in package, and another copy goes to production and stores depart- ments. White paper, 61/2 inches wide, 81/2 inches high. No. F Gonsignt FREIGHT RECEIPT. SHOP NO... B. L. NO_. DATE- teceived from >d to By the 7?.;?. in apparent good order, the following goods, as marked and described below, which are to be delivered in like order, without delay. Subject to all the Conditions of Company's Bill Lading. No. Pkgs. DESCRIPTION OF ARTICLES WEIGHT OWNER'S RISK. ORIGINAL. FIG. 123. Freight receipt. Buff paper, 6 1/2 inches wide, 8 1/2 inches high. SHIPPING AND RECEIVING DEPARTMENTS 257 name of consignee, whether a test column for completed shipments and one for partial shipments, and a column showing the date on which the packing list and order copy were received by the billing department, and by whom they were received. The packing lists, as pre- viously mentioned, are made out in triplicate. One copy is at- tached to the shipping depart- ment's order copy, and, if a freight shipment, is retained in the shipping office until railroad receipt comes back. Packing lists for express shipments are sent to billing department the same day as the shipping de- partment order copies. Those for freight shipments are not sent to billing department until railroad receipt is returned to shipping department. If part of a company's sales are filled by direct shipments from some other party to the consignee, the following routine will serve to keep the shipping records complete: All shipping memoranda and bills of lading covering direct shipments to customers from outside suppliers are sent by the general office to the shipping department as soon as received. A packing list form is then filled out in the usual manner, excepting that it is en- dorsed, "Direct Shipment," to- gether with date of shipment and from where shipped. The record was written or not, a 1 g y % * 3 fei b| T3 PQ a g Q 1 U M M 3 rt s p C 3 W " *H i 5 s> en (J tn 1 o .S Q ig g| pi CO ^ > Q 1 a bO c '> K S : u 'a ex en 1 < a 1 s Q 1 S SfnN rj< (M T I W O | s 258 FACTORY ORGANIZATION AND ADMINISTRATION order copies are then handled in exactly the same manner as for shipments made from the shop. 269. Shipping Program for Carload Shipments. Mention has already been made of the fact that the shipping department should receive a weekly advance shipping program covering carload shipments, such programs being prepared by the order department as a result of consultation with the production CAR LOAD SHIPMENTS TO MACHINES CAR DATE ROUTF. CAR INITIAL NO. FIG. 125. Record of car-load shipments. White bond paper, 8 inches wide, 10 1/2 inches high, ruled in red and blue. department. As soon as the shipping department has ordered a car an entry is made in a book entitled "Carload Shipments." This book may conveniently be of the form shown in Fig. 125. It has a column covering "Shipped to," "Machines," "Car Ini- tials and No.," "Date Ordered," and "Date Left." The first date in the date column indicates the date the car was ordered. CAR RECORD CAR DELIVERED ON OUR SWITCH SET LOADED OR UNLOADED TAKEN OUT SHIPPED TO OR RECEIVED FROV REMARKS INITIAL NO. . ^_ FIG. 126. Record for all incoming and outgoing cars. White bond paper, 8 inches wide, 10 1/2 inches high, ruled in red and blue. This item is important as it usually takes some days to get a car in. As soon as the car is "set," entries are made showing the car initials and number. The date on which the car comes in is not provided in the form shown, but may be a desirable record. A second entry is made in the date column, indicating the date the car left. A column is also provided for the route, and one for the kind of car. SHIPPING AND RECEIVING DEPARTMENTS 259 270. Car Records. A separate record is kept in another book entitled "Car Record," covering all cars coming in and going out. This record is useful for reference in matters of demurrage, etc. A form for this record is shown in Fig. 126. It has columns for car initials, car number, date 'delivered on switch, date "set," date loaded or unloaded, date taken out, party shipped to or received from, and a column for remarks. Cars going out may be distinguished from those coming in by entering the name in the column headed "Shipped to or Received From," in red for out- going cars and in black for incoming ones. In some cases the same car that has come in is used for an outgoing shipment. In such cases two entries one in red and one in black are made in the column headed "Shipped to or Received From." One set FREIGHT PAYMENTS. "INCOMING." DATE OK NOTICE MONET BANDED TO DBIVEH DATE PAID WEIGHT EATE AMOUNT/ B.B. ORDERED TBOlf OB SHIPPED BY BHOP'P.D OB MATB'L. PLACE SHIPPED FROU BEC'DIN OFFICE Date By Whom FIG. 127. Record of freight payments on incoming goods. White bond paper, 8 inches wide, 10 1/2 inches high, ruled in red and blue. of entries in all the other columns will serve for both shipments. The "Remarks" column is used for entering the purchase order numbers on any carload items coming in on a purchase order, and for other memoranda. 271. Freight Payments. Freight bills are entered in a book called "Freight Payment Book." This has the opposite pages headed respectively "Incoming" and "Outgoing" (see Figs. 127 and 128). On the "Incoming" page there is a column for date of notice, one for date the money was handed to driver (where such is the case), one for date paid, one for weight, one for rates, one for amount, name of railroad, ordered from or shipped by, shop or purchase order number to which material applies, also column covering date received in office and by whom. On the "Outgoing" page there are columns covering way- 260 FACTORY ORGANIZATION AND ADMINISTRATION bill, date, date money handed to driver, date paid, weight, rate, amount, shipped via, shipped to, order number, destination, and a column headed "Date Received in Office and by Whom." This book serves to keep track of all bills in drivers' hands, and also serves shipping department as a receipt from the office for freight bills. Items covering material shipped direct by other companies are entered in the same manner as shipments from the factory, with some designating mark to show that the shipment was not from the factory, but was a direct shipment from an outside company. As soon as shipping data are received covering such direct shipments, memoranda of such information as shippers' order number, route, and amount of freight paid, are entered on the shipping department's office copy of packing list. FREIGHT PAYMENTS. "OUTGOING" W /B DATE MONEY HANDED TO DRIVES DATE PAID WEIGHT EATE AMOUNT SHIPPED VIA SHIPPED TO SHOP NO. DESTINATION EEC' DIN OFFICE Date By Whom ' FIG. 128. Record of freight payments on outgoing goods. White bond paper, 8 inches wide, 10 1/2 inches high, ruled in red and blue. 272. Record by Serial Numbers of Machines Shipped. The shipping department usually keeps a record also by serial numbers of machines of various types, showing to whom the machine of a certain serial number was shipped, when shipped, reference to test record, etc. Another record usually kept in the shipping department is a record of shipping weights of machines or other products of various types. 273. Routing, Classification and Rates. The head of the shipping department should be sufficiently relieved of clerical routine to enable him to devote some time daily to the matter of classification and routing of shipments, matters which most establishments are inclined to leave to the railroads. Proper files for taking care of railroad tariffs, and a careful study of them by the head of the shipping department, are likely to result in saving of freight charges and avoidance of delays in shipment. A follow-up system should be used in connection with any freight claims, so that a claim is never neglected for any consid- SHIPPING AND RECEIVING DEPARTMENTS 261 erable period by the company, even though the railroad may be inclined to pigeon-hole it. 274. Receiving Department. As before stated, in most manu- facturing establishments the receiving of incoming goods is handled by a man or a group of men who come under the super- vision of the shipping department. Some factories make the receiving department a part of the purchasing department. Some others make an independent department of the receiving department. The last-named method is perhaps preferable to making receiving subordinate to purchasing. Where receiving and purchasing are one department, there is a tendency to be somewhat lax in checking up incoming goods by reason of the easy access on the part of the receiving clerks to purchase records and invoices. The receiving department is usually provided with a carbon MATERIALS RECEIVED* PAGE , DATE Consignor. Date of Shipment and No. of Outward Order d No. of Parts Weight in Pounds DESCRIPTION g For Shop Order No. FIG. 129. Receiving department's report of form in which receipts from various sources are listed on one sheet. White bond paper, 8 1/2 inches wide 11 inches high. copy of all purchase orders. For convenience in checking in items such as castings, etc., of which a large number and variety are purchased from one source of supply, it is usually desirable to have the purchasing department write separate orders cover- ing each pattern number rather than to specify a number of differ- ent patterns on the same order. This makes it easier to endorse partial deliveries on the receiving department's copies of the pur- chase orders, and makes it simpler to remove completed orders from the receiving department's file of orders representing goods still to be received. 275. Reports of Material Received. Fig. 129 shows a form of receiving department report covering materials received, which is the form such report usually takes when the items re- ceived are all listed on a single report. A better plan is to write out a separate receipt slip covering each consignment. Fig. 130 262 FACTORY ORGANIZATION AND ADMINISTRATION shows such a form as prepared for use with an autographic register machine. The form shown is written in quadruple, one copy being sent to the purchasing department, one copy to the stores department, one to the production department, and one remaining on file in the receiving room. It will be noted that in this form there are spaces printed for the date, the name and address of the shipper, the purchase order number, the production order num- ber, two columns for checks, the first being headed " Partial Delivery," the second headed " Completed Order/' and a wide space for listing the items, weights, etc. 276. Reports of Castings Received. Fig. 131 shows a similar form as used in recording castings received. This form provides TRIPLICATE. MATERIAL RECEIVED. ^O 291 The following goods have been received: Dat* From PURCHASE ORDER No. PRODUCTION ORDER No. Partial Delivery Complet' Order \3\ FIG. 130. Receiving departments report of form in which a separate report is made of each vender's shipment or delivery. White bond paper, 8 inches wide, 5 3/4 inches high. space for date, and columns headed respectively, "Number of Pieces," "Pattern Number," "Material," "Purchase Order Number," "Foundry," "Production Order Number," two col- umns for checks, the first being headed "To Shop," the second "To Warehouse " ; and two columns headed "Warehouse Report, " the first of these being headed "Bin Number, " the second headed "Balance on hand, including this lot." The receiving clerk puts a check in the column designating whether he has sent castings to the shop or to the castings warehouse. The receiving depart- ment sends one copy to the purchasing department, one copy to the production department, retains one copy for itself, and sends one copy to the stores record clerk; this last copy going first to SHIPPING AND RECEIVING DEPARTMENTS 263 the castings warehouse where the warehouse-man enters the number of the bin into which he has put the castings, and the balance on hand, including this lot He is instructed to make an actual count on such castings as he receives a new supply of. In this manner the stores records are checked by actual count. 277. Express Charges. Fig. 132 shows a form used in report- ing express charges to the accounting department by the receiv- ing department. This form gives the name of the shipper, the nature of the package, the date, the route, charges, purchase order number, and by whom received. In manufacturing establishments where many of the produc- [ j ORIGINAL CASTINGS RECEIVED. NO g2 r>At* h No. fee. Pattern No. Mat'l P.O. Order No. Foundry For Production Order No. Check Which Warehouse Report Shop To Ware- House Bin No. Balance on FIG. 131. Receiving department's report of castings record, paper, 8 inches wide, 5 3/4 inches high. White bond tion orders cover work on castings which come to the receiving department in small lots at a time, it is convenient to make the receiving department the storage place for the tag production orders which are awaiting arrival of castings before work can be done on them. The receiving department will arrange these tags in filing boxes according to the name of the foundry from whom the castings are to come, and under the foundries will arrange the tags by pattern numbers. As soon as a lot of castings arrives, the- first thing the receiving clerk does is to look over the tags under the guide card bearing the name of foundry in question to see whether he has shop production tags on file covering any of the castings received. In case he has tags on file and sufficient castings as called for by the tags, 264 FACTORY ORGANIZATION AND ADMINISTRATION he will send the castings into the shop instead of into the storage at the castings warehouse. In case there are not enough castings to fill the order the normal procedure would be to send the cast- ings to the warehouse, noting on the production tag in the space provided for that purpose how many castings have been received, and when sent to the warehouse. In case there is a rush slip attached to the production tag, the production department is notified at once, and that department will decide whether a par- tial delivery is to be made to the shop, such partial delivery being accompanied by a detachment tag, the writing out of which is EXPRESS CHARGES NOTICE FROM RECEIVING OEPT. TO AC( RECEIVED FROM BBL. REEL DATE CHGS. O. NO RCO. BY. PROD. ORD. No FIG. 132. Receiving department's notice to accounting department of express charges. White bond paper, 6 inches wide, 4 inches high. noted on the regular tag on the place provided therefor. De- tailed illustrations will be found in the chapter on " Production or Planning Department." 278. Returned Goods. In many establishments an important phase of the business is that which has to do with goods returned for repairs or for exchange or for credit. The following system was devised to take care of such cases: The receiving department tags all returned goods with iden- tifying tags (which show name of shipper), and writes out a re- turned goods ticket, shown in Fig. 133 in triplicate, entering on this ticket the following information: the date, the party return- SHIPPING AND RECEIVING DEPARTMENTS 265 ing the goods, what the goods consist of and quantity, whether transportation was paid by shipper or by consignee, and if by the latter, the amount of payment. The original ticket is then sent with the goods to the inspection department, who will state the condition of the goods on the ticket. In making this statement the inspection department will specify, first, whether goods are equal to new stock in their present condition; second, whether by doing work on them they may be made equal to new; third, whether, if neither of the above conditions exist, they have any value as second-hand goods; fourth, whether- they should be scrapped. The inspection department then sends original ticket RETURNED GOODS. RECEIVED FROM , . . , 1*0 iMPEcrori ncpoir CONDUCT DEMI OISPOSITIOH " - .... . . FIG. 133. Returned goods ticket. White bond paper, 8 1/2 inches wide, 5 inches high. to the general office, and places the goods into a space provided for that purpose, such space being under the supervision of the stores department. A duplicate ticket follows the same course as the original, except that it is sent finally to the head of the supply department instead of to the general office. The trip- licate copy remains in the book in the receiving department, and all endorsements as to disposition, which appear on the original, are copied on to the triplicate in the receiving department as soon as the original is returned to the receiving department. Disposition of these goods may involve either the rendering of a credit memorandum, the issuing of a shop order, or the con- 266 FACTORY ORGANIZATION AND ADMINISTRATION duction of further correspondence by either the general office or the supply department. As soon as the general office deter- mine on disposition, such disposition is entered on the original copy which is sent to receiving department, who, after making triplicate agree with original, return original to general office for file. Whenever the disposition of the returned goods involves work on the part of the shop, regular production tags are to be written out by the production department. On presentation of such tags, the goods will be delivered by the stores keeper. When the goods have been put into condition to put in stock, the inspector makes proper indorsement on tags accompanying the goods; this tag going with the goods into the stock-room, and thence to the stock entry clerks. Such parts as are rejected by the inspector, or such parts as are marked to be scrapped, are put through the regular routine of rejected parts. RECEIVE PATTERN PATTERNS RECEIVED > FROM DATE As FOLLOWS VIA RECEIVED BY PATTERN NO. MATERIAL NO. OF DRAFTING DEPT. REPORT PURCHASING DEPT. DISPOSITION FIG. 134. Receiving department's report of patterns received. Blue bond paper, 8 1/2 inches wide, 4 1/2 inches high, ruled in red and blue. The returned goods ticket, it will be noted, has a space at the extreme right hand, on which is noted the word "Disposition." This column is filled in the general office, and the ticket is then returned to the receiving department. Such goods as are marked "Repair" on the receiving tag are held in the storeroom space provided for returned goods until regular shop-production tags are sent there. For such goods as are marked "Put in Stock," the stock- keeper will write out a regular production tag, having the in- spector endorse it on the back just as though it were a part received from the shop. The tag will then be sent to the stock entry clerks for record. 279. Patterns Received. Patterns received are reported to drafting department, purchasing department, and production department, on carbon copies of a form shown in Fig. 134, the SHIPPING AND RECEIVING DEPARTMENTS 267 original of which is kept on file with entries as to checking by drafting department, and disposition as designated by purchas- ing department. See also Fig. 66, and accompanying text in Chapter XIV. REFERENCES SCHULTZE: "The American Office," Chapter XXII. BRISCO: "Economics of Business," Chapter VIII. LASALLE EXTENSION UNIVERSITY: "Course in Traffic Management." CHAPTER XXI TIME-TAKING 280. Time-clocks and Numbering Men. Practically every factory uses a time-clock for the purpose of registering the time of arrival and departure of employees. There is a con- siderable variety of time-clocks, some using cards and some using strips. There, are clocks on the market which have auto- matic shifts which designate lateness or irregular time by prints of different color or similar designation. Where cards are used in a clock, it is very desirable to use an addressing machine for printing the date, check number, and name of the em- ployee on the cards. Such addressing machines may be used also for printing the same information in the upper right- hand corner of the time-sheets covering observational data taken by shop time-takers where this system of recording men's labor is in vogue. The same addressing machine may be used, omitting the date stamp, to make up a pay-roll list, such pay-roll list being arranged by departments. This necessitates the allot- ting of a certain excess quantity of men's clock numbers to each department, in order to allow for an increased number of em- ployees in any one department. It is desirable to have consid- erably more numbers available than theje are employees. This may necessitate the use of one or more additional time-clocks in order to provide for all the numbers. There are many advan- tages in the system, however, which will usually compensate for the additional cost of clocks. One advantage which will be apparent at once is the ease with which the total pay-roll, number of employees, and average wage rate, can be calculated for each department where the check numbers for one department are all close together; for instance, numbers from one to fifty may be lathe hands, fifty to seventy-five, boring-mill hands, etc. 281. Clock Card used as Job Ticket. The clock cards are used in some factories for recording the nature of the work done by the men. A system for this purpose is as follows: Each workman has a tin box in which he keeps his time-tickets. 268 TIME-TAKING 269 The same ticket is used for time-stamp by the time-clock, and for entries describing the work made by the workman him- self. One side of the ticket is used for clock stamps, the other side is used for postings by the man. On this latter- named side there are rulings for three days with spaces for a number of entries on each day. A yellow time-ticket is used on Monday, Wednesday, and Friday, and a red ticket on Tuesday, Thursday, and Sat- urday. On alternate days the time-tickets are turned in to time-posting clerks, who keep all time-postings up to date. In such a system it is difficult to expect workmen to observe their time more carefully than to the nearest half-hour. An office boy collects the men's time-tickets the first thing in the morning before starting time. At the time of collect- ing the yellow tickets, say on Tuesday morning, this boy puts into each workman's box his red ticket, these red tickets having been delivered to the same office boy after posting on the evening of the day on which they were posted. Fig. 135 shows the front of a form of time-card as used with this system. The back (not shown) is ruled for three days' work entries. In most shops each workman changes jobs a number of times Week endin No. Name pr DAY IN LOST OR OVERTIME OUT OUT IN 8 A.M. P.M. M A.M. P.M. T A.M. P.M. W A.M. P.M. T A.M. P.M. F A.M. P.M. S A.M. P.M. Total i Rntpj im.fi, . hrs. Total wages for week, #_ FIG. 135. Clock time-card with work- man's record of orders worked on listed on back of card. Two sets of cards, one yellow and one red, are used, the same card being used on alternate days in the shop and kept in the office for posting on the other alternate days. Brick red card, 2 5/8 inches wide, 7 inches high. 270 FACTORY ORGANIZATION AND ADMINISTRATION a day, and the clock card will hardly allow sufficient room for the record in such cases, where a single card is used for entries covering an entire week, or even a half-week with the system where cards are changed every other day. The manufacturers of time-clocks have suggested as a way to get around this diffi- culty the use of job cards in addition to the clock card for attend- ance. In this system the production or planning department or the foreman or department clerk or time-keeper writes out individual operation or job cards for each workman's labor on each component order, the starting time of one operation being the stopping time of the operation next preceding it. A form of clock card used with this system is shown in Fig. 136. ORC DAT EMF ART STY NO. OPE ER N ORDER N DATF . > ORDER N DATE 1 LOYE F NO, EMPLOYE ARTICLED NO EMF ART 8TV LOYE ICLE : MO LE STVIF 1 P OF P RATI Mm NO. OF P OPERATIC FPES NO. OF P OPERATIC ECER 1H N N M. M. M. T. T. W. W. Th. T XL. F. F. S. S. S. B. TOTAL HOURS M RATE N TOTAL HOURS M RATF M TOT RAT AMO AL HOURS M, AMOUNT AMOUNT IN T o c FIG. 136. Individual operation clock card used as a job record. In this case the ticket shown in Fig. 107 serves only as a pay-roll basis. Manila cards, each 3 inches wide, 5 inches high. In this system, as in all systems using time-stamps, it is necessary that the time-taker or the foreman be on the spot to stamp the clock card at the instant of changing jobs, in order that the time record may be accurate; otherwise the clock-stamping will have to be left to the workman himself, which is impracticable in cases of piece-work where a check on the workman's record is necessary. 282. Time-stamps. Recently several kinds of secondary time-stamps, operated from a central Master Clock, have been put on the market, which provide for the workman stamping a job ticket near his tool or pressing a button making a record at a distance. These devices have been suggested as means for doing away with the delay necessitated by the man's hunting up the TIME-TAKING 271 clock operator and wait- ing to get his job ticket stamped a source of delay in most time- stamp systems. As a general thing it is expensive and unreliable to have workmen post their own time for the purpose of making a rec- ord of the time spent on various jobs or orders. A mechanic will spend at least ten minutes a day on such time-post- ing, which will amount to one hour's time for each employee in a shop every week. For the same cost, a number of time-takers can be em- ployed, one time-taker for every forty or fifty men, whose business it will be to take a record of all time on shop opera- tions. A good Produc- tion or Planning Depart- ment will provide job cards already written out on which the only thing necessary to be inserted is the workman's num- ber and the clock stamp. 283. Weekly Time- Sheet. Fig. 137 shows a form of weekly time- sheet as used with a system where the time- taker records operations. This sheet is ruled up into columns headed as follows: "Shop Order Nu mber, " " Quantity, ' ' CHECK NO. DEPARTMENT WEEKLY TIME SHEET REMARKS x ^ ;RS ARTMENT ONLY 5ENERAL (NO SPECIFIC DEPT 1 l j o i g 1 0. I -' -J UJ 2 . .2 .5. * ^ 3 < < z * 6S |g P o > - g ! ;r p I U 1 = ^r fj :? 5a f. z a 2 ^ si * ij 5 = P Z . J5j 0) * LJ > H t I o" 1 i s 1 g 1- 1 1 o 03H \ -Mid ON s* 3 !sl H - 1 * 03 ( 1 ||S ^ < o 1 S 1 p OPERATION p TIME CHECKED i 1 c 6 1 z [ i i" NAME OF PART ^=H Z OT ON MACHINE TOOLS: i H $ 3 s J I ii s g P u i j 1 272 FACTORY ORGANIZATION AND ADMINISTRATION "Name of Part," " Mark Number," " Operation," " Machine Tool Number," " Number Started," "Number Finished," "Time Started," "Time Spent on Operation." Then follow a number of columns which apply when a premium or bonus system is in vogue. These columns are headed as follows:. "Total Time Not on Standard" (the word "Standard" in this case having the same meaning as premium or bonus system), "Total Time on Standard," " Standard Time," "Success," "Gain," "Failure," "Loss," and "Remarks." The column headed "Time Started" is used to enter the time by the clock at which each operation is begun, the finishing time of one operation being the beginning time of the next. The next column, namely, the one headed "Time Spent on Operation," is sub-divided into seven sub-columns, one for each day of the week, provision being made for Sunday in case of emergency work. In these columns is entered the total time required for the operation. If an operation extends over more than one day, a horizontal addition along the line on which that operation is entered will give the total hours and minutes spent on that operation. This total is entered in the column headed "Total Not on Standard," if it is a job for which no standard time has been established. If it is a job on which there is an established time standard, the total is entered into the next column, namely, the one headed "Total on Standard." The following column gives the time allowance for the specified number of pieces. If the time in which the work was done was within the time standard, it is entered into the column headed "Success." If it was done in less time than the time standard, the amount by which it was less than the time standard is entered in the column headed "Gain." If the operation exceeded the time standard, it is entered in the column headed "Failure." The* amount by which the time exceeded the time standard is entered in the column headed "Loss." 284. Instructions to Time-takers. The following copy of instructions to time-takers will indicate how they are to do their work: 1. Do not take more of workman's time than is actually necessary to get the necessary information. 2. If workman is engaged in handling or setting up heavy work in his machine, do not call him away from same. See him at some later time. TIME-TAKING 273 3. The following questions should suffice to secure all informa- tion needed for time-taking: " When did you start this job?" "How many pieces did you finish on the previous job?' 7 "Where is the tag for your present job?" "Name of operation on job engaged on?" 4. Always bear in mind that the starting time on one job is the stopping time of the previous job. Make no allowance for time spent in setting up machine. 5. In cases where workmen have no tag for job worked on, notify department foreman, and in case he does not provide a tag, notify shop tracer. 6. Instruct workman to hang tag for job on which he is work- ing in some convenient place for you to see same. In passing about, look at both his tag and his work, so as to make sure he has not changed jobs. Familiarize yourself with the work going on through the department to which you are assigned, as that is a great aid to accurate time-taking. 7. The following information must be correctly given as called for on the time-sheet, i.e., shop order, amount of pieces in lot called for by tag, name and number of part, name of operation or operations, number of pieces started, number of pieces finished, time started, time finished. Insist upon men reporting correctly the number of pieces finished whenever a break in a lot occurs. 8. You can be of some aid to the foreman in your department by informing him in advance that a man is likely to be out of a job at a certain time. It will be well to notify foreman about thirty minutes previous to the time a man will finish the job he is working on. This will give him a chance to look up the man's next job. 9. All time for jobs on which there is no regular shop order is covered by a list of standing orders. You must govern yourself according to this list in charging such time. Be sure to specify fully the nature of any such work; when there is any doubt as to what standing order number to charge this work to, consult head of cost department. The weekly time-sheet as described possesses the advantage of easy checking against time totals independently taken from the clock cards. It also facilitates the posting by weeks on to cost sheets, and makes it possible to add up the entries for a giver* 274 FACTORY ORGANIZATION AND ADMINISTRATION week against all of the shop orders, and making a sum total of these entries to check them against the week's pay-roll. In the lower left-hand corner of the time-sheet, as shown, is a summary of time on machine tools with the total hours done on each separate machine tool separately reported. This summary makes it easy to total up the total working hours of each machine tool, information which is needed where it is desired to establish an hourly machine rate for each machine. In the center of the sheet, at the bottom, is a summary covering attend- ances and overtime work, in which summary are listed for each ORIGINAL. S.O.. A nit. Namt Oper. FIG. 138. Individual operation slip filled by time-taker. t White paper, 6 inches wide, 31/2 inches high, perforated at lower edge, where it is attached to duplicate filled at same writing by inserting piece of carbon paper and folding back. day: "Time Late or Off Duty/' "Absent," "Overtime," "Addi- tional time paid for on account of overtime, v a check mark show- ing that the time was checked with the clock record, and the total time to be paid for for each day. In the extreme right- hand lower corner is a distribution showing the relative time spent on productive orders and on non-productive orders, the non- productive time being again subdivided so as to show whether non-productive time was put in in the department in which the man was listed, how much non-productive time was on account of other departments, such departments being specified, and how much non-productive time was for account of the shop in gen- TIME-TAKING 275 eral. This summary is for the purpose of facilitating the estab- lishment of a local hourly expense rate of operating, being inde- pendent of a further rate based on fixed charges; these fixed charges including such items as interest, insurance, etc. 285. Individual Operation Time-slips. Another method of time report in which a separate time slip or card is written out every time a man changes operations is shown in Fig. 138. The example shown is written in duplicate by the time-taker, who hands one copy to the workman; the latter being in this way provided with a means for checking his gains under the premium system. In the example shown the time-takers write in the time. TIME EMPLOYED COMMENCED Date Job No. MACHINE SHOP Workman No. Boring Drilling Grinding Planing Time Allowed Tapping Chipping Facing Milling Roughing Premium Credit Threading Cutting Off Filing Mounting Shaping Foreman Turning Quantity Total Timp Rate f^ost FIG. 139. Calculagraph individual operation ticket. White card, 5 inches wide, 3 inches high. These slips are sometimes bound in booklets of fifty or more, the booklet being intended to last a week. The front cover of the booklet serves as a time-card for registering starting and stopping time. The individual pages represent job tickets, and are torn out daily as filled and filed by job or order numbers. The back cover serves as a distribution of labor into productive, non-productive work on machines, work not on machines, etc. 286. Time -slips for Clock Stamping. Fig. 139 shows a some- what similar form in which the time-taker uses a calculagraph for stamping the time begun and time consumed. When the man is assigned a job, the time-card is written out and the first calculagraph impression is stamped on the card. As soon as the 276 FACTORY ORGANIZATION AND ADMINISTRATION TICKET NO. PART NO. PAT. NO. 8 t NAME OF PART 1 g OPERATION NO. NAME OF OPERATION MADE ON MACHINE NO. NO. PIECES STARTED No. PIECES COMPLETED KIND OF MATERIAL MISHAP REMARKS MATERIAL WAS BOUGHT OF REGULAR TIME OVER TIME ORDER NO. FIG. 140, Time-card for use with time-stamp. Yellow card, 6 inches wide, 4 inches high. COST DEPT. Order Nn. MAPHINF HFPT A//0 1 Drawing Nn. PAnr.k Nn. Rate Amount Name 111 2s 3s 4s 51 6s 7s 8s 9s 10s 11s 12s 13il4!l5*16il7 3 M8i19i20!21i22i23*24i Armature " Coil Support Nut Oil Guard START. UNUSUAL OPERATIONS. OPERATION " End HeadF.,R. Belt Tighteners Pawl Pedestal F.,R. Assembling Bolt, Stud Pins Babbitting Brush Wobbler Rail Bell-Boy -foke Res'tance Cages Boring Bushing Pipes Centering CaporCov'rP.,R. Collars Ring Rocker Arm . Chipping Clerk Coupling Roller Cutting Clevis Bushing Drilling " Block " "(Eccentric) Facing " Screw Coil Former Collector Ring Screw Adjusting " Cap-Fil.Hei. " Jacks FINISH. Filing & Fitting Finishing Helping Commutator Shafts Nut Spacing Pieces Laborer Ring Spider Laying out Sleeve Wing Milling Cont oiler Drum Starwheel Planing frame Sub- Base t Repairing Handle Swivel Shaping Handwheel Yoke, Upper Slotting Housing F..R. Lower Tapping Beadplate Threading/ Turning,!/ FIG. 141. Time slip having principal parts and principal operations in any department printed. (For use with clock stamp.) Blue paper, 6 inches wide, 4 inches high. TIME-TAKING 277 man has completed the job the time-taker stamps the second impression on the card, the second impression showing the time consumed. In order to use a calculagraph or clock stamp, it is necessary that the time-taker be on the spot all the time. This system always requires some of the workman's time to be spent in taking his card to the time-clock. Fig. 140 shows a similar form for use with a time-stamp. 287. Time-slip with Ordinary Operations Printed On. Fig. 141 shows a time-slip in which the ordinary operations are printed in the extreme right- hand margin, with the name of the commoner parts on which work is done, in the ex- treme left-hand columns, a blank column being provided for entering in writing unusual operations, and further blanks being provided for clock stamps showing time of starting and time of finishing. A still further form for use with the clock stamp or calcu- lagraph is shown in Fig. 142. 288. Tabulating Machine Systems. Within the last few years the tabulating machine has come into use to some ex- tent in connection with keep- ing account of workmen's time. In order to use a working card in the tabulating machine it is necessary to designate every- thing numerically, the record being formed by punching the digits in columns of figures printed on the card, such punch- ing being done by a special machine. The punching may be done as a transference of records taken originally in pencil. The parts are designated by numbers, operations are desig- nated by numbers; departments, machines, order number, the time, and the amount in dollars and cents to which the time is equivalent are all punched in the ticket. The tickets for a given day are put into a sorting machine which will classify them according to the same numbers in any column; for instance, all Operation OrHpr Nln. Hours y Ra+g = 4-_ Quantity^ Cnst Each BEGAN ENDED - V FINISHED CONTINUED (SCRATCH OUT ONE WORD) CA RIED FIG. 142. Another form. White card, 4 51/2 inches high. calculagraph inches wide, 278 FACTORY ORGANIZATION AND ADMINISTRATION tickets may be assorted by departments, by operations, by men, by order numbers, etc., depending upon which column is being used for the purpose of assorting. After the assorting process LA ^ co en h- 00 en I o o o i- CM CO i- CM CO T- CM CO * 10 to i*- co en I P C * s 2 1 9 o o *- CM CO T- CM CO i- CM CO rt- lO to ^t- 10 to 'I- 10 to I s - eo en f- co en r- oo en 1 o o T- CM CO T- CM CO rj- 10 to J- 10 to h- co en r-- co en CO * T- CM 5 T- CM CO T- CM CO rf 10 to h- oo en O r- s <- CM CO * to -+- CM r- T- CM CO "fr 10 CO Z88V r- oo en % i has been finished, which is done at a very rapid rate by the machine, the cards are put into the accumulating or adding machine, which adds up the hours and minutes and dollars and cents total for any package of tickets. TIME-TAKING 279 Fig. 143 shows a card as used with a tabulating machine system as above described. The tabulating machine method makes it possible to post time and wages much more rapidly than any other method. 289. Pay-roll Distribution and Lo- calization of Departmental Expenses. In order to localize operating ex- penses by departments and to indi- vidual workmen, it is necessary to have some form of pay-roll distribu- tion. A form for recording such dis- tribution is shown in Fig. 144. A sheet of this sort is written out for each shop department. Opposite each employee, designated by his check number, is given his rate of pay, his time on each class of produc- tive orders or direct labor. Then fol- lows a summation of his total produc- tive hours and the money value of his productive time. After this follow thirteen columns for non-productive standing orders. Although a factory may have about a hundred different standing orders to which non-pro- ductive work, operating expense, in- direct labor, etc., may be charged, it is likely that thirteen columns will suffice for the different orders in any one department to which time will be charged in any one pay-roll period. After the detailed distribu- tion of non-productive time follows a summation of the entire non- productive time of each employee and its cost in dollars and cents. The last column represents the total pay envelope of each em- ployee. PH o S , O s a 280 FACTORY ORGANIZATION AND ADMINISTRATION This sheet, made out for each department, serves as the basis for departmental summaries, showing local departmental ex- penses, affording at the same time complete data for analysis of the causes of these expenses. CHAPTER XXII COST DEPARTMENT 290. Competition and Costs. The natural basis of selling prices is the shop cost. Competitors' prices must be considered, it is true ; but no matter what these prices are, the shop cost must always be a positively known quantity. The competitive system, by the necessity of meeting the prices set by rivals, has brought about pronounced economic advan- tages, when reductions in selling prices have followed similar reductions in cost through the introduction of labor-saving ma- chinery or greater simplicity in design. On the other hand, many failures have resulted from blindly meeting prices set by others before actually reducing the shop costs of machines. This has been notably the case in the manufacture of electrical machin- ery. Some years ago the establishments manufacturing machines of large capacity for street railway power and municipal lighting plants demanded high prices for machines of low capacity. This opened the way for numerous small factories, which for some years were able to sell the small machines at prices considerably lower than the large corporations, and were able to prosper not- withstanding the admitted fact that the large corporations could not meet their prices on small machines without loss. In some cases, it is true, inferior machines were put on the market, by the smaller establishments, but in many cases the lower-priced machines were efficient and well designed. The result was that the large corporations beset themselves to redesign their smaller machines, spending large sums in experiments for the purpose of obtaining cheaper insulating materials, for reducing the weight of the more expensive metals employed, and for winding and insulating coils by machine. The result was that some years later the large corporations were able to put on the market ma- chines of lighter weight and more compactness than they had originally built, and, with improved methods of manufacture, were able to undersell the smaller manufacturers. Several of the small factories endeavered to meet the reduced prices, fur- nishing their heavy machines with expensive insulation and hand- 281 282 FACTORY ORGANIZATION AND ADMINISTRATION windings, and were unable to stand the pressure. On the other hand, other small shops gradually worked up new designs and new methods until they were again in the field with machines practically identical with those of the large corporations, which they could afford to sell without loss, at competitive prices. 291. Importance of Cost Department. It is apparent that during such transitional periods a well-conducted cost-keeping system is indispensable. No progressive shop can allow the figuring of costs to drag for months behind actual operations. It is necessary to know costs accurately and immediately. If the work of cost-keeping is turned over to an underpaid and over- worked clerk, who has to expend all of his vitality and energy in calculations of multiplication and addition, and has no time left for. comprehensive comparisons, accurate and valuable cost statistics cannot be obtained. The cost department work is of such importance in a factory that it should receive the attention of the very best intellect obtainable. This fact has been recog- nized by one of the largest American electrical corporations the present general manager of which is a man who some years ago had charge of the cost department. And here it will be well to consider the advantage of departmental organization of clerical and accounting work, as well as of the factory proper. The head of the cost department and the purchasing agent will be hampered in many ways if they are made subordinate to a book- keeper or superintendent, as is the case in many shops. A depart- mental separation has been found to be productive of far more accuracy, since the heads of the various departments will feel perfectly free to present matters just as they appear to them. 292. Duties and Qualifications of Head of Cost Department It is extremely important that the chief cost clerk or manager of cost department have time to think and to compare. In a small establishment he may be able to do a considerable amount of calculation work, such as extension of costs of material, but there are few machine-manufacturing establishments of any magnitude which would not find it a decided advantage to have available the comparative data that are obtainable if the whole time and energies of a man can be devoted to the work of intel- ligent arrangement and comparison of costs of individual pieces and entire machines. 293. Cost System Must be Adapted to Product. Costs may be figured on the basis of cost per pound or unit of bulk, this cost COST DEPARTMENT 283 being subdivided either by cost per department, cost per class of material, or cost per process. For continuous processes such as steel mills, rolling mills, cement mills, flour mills, linseed oil mills, etc., the aboye methods of calculating costs are the ones to use. On the other hand, in shops making an assembled product com- posed of many pieces, such as furniture or machinery, the cost system must seek to secure costs per individual order and per component part. 294. Development of a Cost System. Generally the first cost system installed in a shop does not seek to secure costs of individual pieces nor to locate expenses by departments; the object is usually only to figure out the cost of labor and material spent on any given order. The next step toward individual costs is usually the obtaining of costs on groups of work as, for instance, in an electrical machine, the next natural step will be to secure separately the cost of the armature and of the fields. Then the armature costs will want to be divided again into the cost of commutator, cost of core, and cost of coils. As the cost department develops it will usually be considered desirous to obtain the cost of the labor on each separate heading in the various shop departments. Thus we might have under the heading of Armature Core, the labor items, "D $3.49," and "A $2.20," meaning that the work of section D, or the punching department, amounted to $3.49, and the labor of section A, or the machine shop, amounted to $2.20. Naturally the final development of a cost system is the figur- ing of the cost of each individual piece as well as of each operation on that piece. Most of the individual pieces will be built on separate stock orders, the manufacturing quantity being regulated so as to be not too small a number of pieces on the one hand, thus making the cost of getting ready, getting tools, blue-prints, setting up machine tools, etc., a relatively small item compared with the total cost of the lot. On the other hand, the number of pieces put through on any one stock order must not be so large as to interfere with the uniform flow of all component parts through the machine tools to the assembling and erecting departments. When a suitable number of individual parts costs have been secured, the cost columns in a bill of material are easily filled out by inserting the latest or most accurate individual piece cost opposite the various parts and listing the labor spent in assembling, erecting, testing, cleaning, boxing, etc. These 284 FACTORY ORGANIZATION AND ADMINISTRATION items are usually listed in a summary at the close of the bill of material. 295. Merging Cost Records into Regular Double Entry Ac- counts of Accounting Department. This subject. is treated in Chapter V on Factory Accounts, in which the fundamental underlying philosophy of the subject is given. The following brief summary is here again given: For the purpose of merging all cost records into the financial accounts, proceed in the following manner: Let A represent the value of all labor, material, and total of all expense percentages spent on work in process up to the beginning of the period. Let B represent the value of all material, labor, and expense per- centages spent on work in process during the period. Let C represent the value of all material, labor, and percentages spent on orders completed during the period. Then A+B C repre- sents the value of the work in process at the beginning of the next period. "Work in Process" is Debtor to "Material," "Labor," and "Expense," respectively, to the extent of the totals charged to incompleted orders during the period on the individual cost sheets. These amounts can be collected from the cost sheets by means of an adding machine. "Finished Product" or "Stock" is debtor to "Work in Proc- ess," to the extent of the sum total of all orders completed during the period. The unclosed balance of the "Work in Process" account, represents the inventory value of the work in process. "Finished Product" or "Stock" is credited with the cost of all orders shipped during the period. The unclosed balance of the "Finished Product" account represents the inventory value of the finished product. The unclosed balance of the "Material" account represents the inventory value of material, and if proper records of store- room receipts and withdrawals are kept, the balance of this account should not vary by any wide percentage from the value obtained as the result of an actual inventory. In case the general accounts carry the entire pay-roll in the "Labor" account, it may be necessary to have intercharges be- tween "Labor" and "Expense." The solution of the problem of merging the cost records into the general accounts is, however, not nearly as hard as is gen- COST DEPARTMENT 285 erally supposed. Using the above-suggested scheme as the basis for a working-plan, the problem can be worked out without any great difficulties, provided the head of the cost department and the head of the general bookkeeping department work with a determination to co-operate and appreciate each other's points of view. 296. Material Costs. The basis for entries of material costs consists of the " orders on storeroom" or " withdrawal slips" or stubs on the tags accompanying the raw material into the shop, such stubs being receipted by the party getting the raw material, torn off by the man delivering the material, and by him turned into the stores department. The stores department, after mak- ing entries on the stores records, turns withdrawal slip or the stub over to the cost department. RAW MATERIAL COSTS ARTICLE DATE OF INVOICE PURCHASED FROM SIZE QUANTITY WEIGHT PRIC : PEK ; RICE ACH FIG. 145. Record of raw material costs. White bond paper, 9 1/2 inches wide, 12 inches high, ruled in red and blue. Each of these withdrawal slips or order on stores or stubs of shop tag must bear the proper order number to which the ma- terial is to be charged, and all of them are preferably written out in advance of work being done, such writing out in advance being done in the Planning or Production Department. These orders on stock are turned in daily to the stores clerks, and go from them to the cost department. The cost department files all these orders on stock and stubs of tags by order number, and when the order is completed they are taken out and com- pared with the bill of material if there was such a bill of material written for the order in question, and the cost of material figured. 297. Raw Material Costs. Fig. 145 shows a form for keeping record of raw material costs. It is very important that the cost department keep an up-to-date record of raw material costs. A simple way of doing this is for the purchasing department to let 286 FACTORY ORGANIZATION AND ADMINISTRATION the cost department have for a short time every day all invoices for materials. The cost department makes entries from these invoices in the form shown. This form, it will be noted, has vertical columns headed "Date of Invoice," " Purchased from," "Size," "Quantity," "Weight," "Price per," and "Price Each." 298. Costs of Manufactured Component Parts Made in Quan- tity on Stock Orders and Drawn from Storeroom. In most shops the majority of the individual component parts are made up separately on stock production orders, and as a result, when a machine or contract order for which a bill of material has had to be made, is finished, the majority of component part costs can be taken as the cost per piece of the latest lot of components made in the shop. Component parts not made on stock order, but made on the bill-of-material order number, should have labor and material posted on individual component cards or sheets filed back of the guide card bearing the bill of material order number, thus providing individual component costs for the larger parts. Care must be taken in entering costs of parts manufactured in quantity and drawn from stores to see that the Burden or Expense Percentage or Rate is not added twice. 299. Current Value of Actual Invoice Price as Basis for Mate- rial Costs. The question has sometimes been raised as to whether the material cost should be applied at the original pur- chase price of the material, at the prevailing market price, or at the average prices. If the chief object of the cost is to establish a selling price, then prevailing market price of material should be used. If the chief object of the cost is to balance all manu- facturing accounts, then the original purchase prices of the ma- terial should be used. 300. "Material Burden." Some cost accountants prefer to segregate from General Expense all items connected with cost of purchasing, receiving, handling stores and stores accounting, lumping these items together with Freight and Express and Drayage on incoming goods, to make a total Material Burden or Percentage on Material to be added to flat material costs in figuring total costs. 301. Labor or Time Postings on Cost Records. Postings are usually made from the workmen's time-tickets or the weekly time-sheet on to labor sheets, similar to Fig. 146. In the upper right-hand corner of this form are spaces for entering the sheet number, order number, and mark number. There should be a COST DEPARTMENT separate labor sheet for each piece bearing a different mark number. The sheet bears vertical columns headed : " Check Number," " Opera- tion," "Machine Number," "Hours," "Minutes," "Labor Cost," and "Machine Cost." As soon as all the labor done during any one week has been posted on the labor sheets, the total labor cost for each week is added and inserted on each sheet. The total on each sheet is then listed on an adding machine and checked against the total pay-roll. This necessitates the adding of all indi- rect labor charged to standing or- ders to the direct labor charged to specific production orders. Where individual job or opera- tion slips are used they may be conveniently filed in envelopes of standard card-index size, which are kept in card-index drawers. The envelopes may have a sum- mary of cost printed on the face. Where a weekly time-sheet is used the extension in dollars and cents of the time spent on the various operations and various or- ders can be adjusted so that the total dollars and cents are the same as the men's weekly pay envelope. Such an adjustment must be pro- vided for where separate slips or cards are used for each change of job, or where costs are extended in- to dollars and cents from daily time- cards. In the latter cases, owing to the difference of extensions on account of figuring and carrying LABOR SHEET SHEET N ORDER No. MARK No. Ul z% < 1 \ ii z I A I Is OPERATION Ii Ul 2t- |9 LABOR COST | 4 cc X So I z 1 |o 288 FACTORY ORGANIZATION AND ADMINISTRATION fractional cents, there is always some discrepancy between the payroll total of dollars and cents, and the cost clerk's distribu- tion of dollars and cents which will have to be adjusted. The time-posting clerks should be provided with a card- index record of employees' names, arranged numerically in con- secutive order of check numbers. On each card is given the man's name, the date of starting, and his hourly rate. When the man quits, this is noted on the card, and if another man is assigned this check-number, entry is made on the same card of the new man's name, his rate, and the date of starting. J 302. Checking Labor Postings against Pay-roll. It is en- tirely feasible to check the labor cost postings as made against Carious orders, against the . weekly pay-roll, thus assuring (that all labor paid for is posted against orders. Where a weekly /time-sheet is used this process is facilitated. I 303. " Non-productive " or " Indirect " Labor. "Productive " (of better, "Direct" labor is usually such labor as is directly I spent in making a given article. All other labor which is of I a general character, no matter how essential to production, but I which cannot be definitely assigned to a given tangible piece, or I the making of inventoriable tangible assets, is designated as I "Non-productive" or "Indirect" labor. There are also many I supply materials which are designated as ' ' Indirect " or " Expense" I materials. / 304. "Standing Orders." "Non-productive" or "Indirect" / work is usually taken care of by a series of "standing" orders, ' which are closed monthly. A man assigned to so-called "non- productive" or "indirect" work is told to charge his time to Standing Order Number so and so. In addition to the regular standing orders which are closed monthly, it may be found desirable to issue special specific orders for non-productive work whose cost it is desirable to segregate. It is desirable to have a distinct series for this class of orders, so that they can be easily distinguished from the productive shop orders and included in the monthly total of non-productive work. 305. Plant Additions, New Equipment and Fixtures. Items which instead of being maintenance expenses are manifestly im- provements, should be built on a special order series so that they will be duly listed as assets instead of as manufacturing expense. 306. Typical List of "Standing Orders." The following is a typical list of "Standing Orders": COST DEPARTMENT 289 Standing Order No. 1 Repairs to Tools. Standing Order No. 2 Repairs to Shafting and Belting. Standing Order No. 3 Repairs to Lighting Equipment. Standing Order No. 4 Repairs to Patterns. Standing Order No. 5 Cleaning Shop or Tools. Standing Order No. 6 Weighing or Handling Material. Standing Order No. 7 Overseeing. Fig. 147 is the reverse of a time-card as used in the shops of the Pennsylvania State College, showing the standing orders in use at that institution: A uselessly detailed and complicated system of standing orders is frequently installed by consulting cost accountants. The best ^f There is an order number for every job. You should be given same by Foreman when he gives you the work. Standing orders are as follows: 1 Carpenter Shop maintenance and repairs. 2 Wood Machine Room maintenance and repairs. 3 Forge Shop maintenance and repairs. 4 Foundary maintenance and repairs. 5 Machine Shop maintenance and repairs. 7 Clerical and drafting. 9 Clipping, Filing and Pipe Fitting Shop maintainance and repairs. 10 Wood Turning Room maintenance and repairs. 11 Extra Janitor work. 12 Extra Teaching. 13 Thesis work. 14 Office maintenance and repairs. 15 Apprentices' time learning trades. 16 Plumbing Shop maintenance and repairs. FIG. 147. List of standing non-productive orders printed on back of time slip. Yellow paper, 3 inches by 5 inches. way to stop leaks is to prevent them by good management. De- tailed cost accounting with hundreds of standing expense orders will not stop wastes. 307. Items Constituting Expense Burden. Manufacturing expense properly includes such items as expense of supervision, namely, salaries of foremen, salaries of draftsmen, salaries of men in time and cost departments, salaries of men in pur- chasing department, salaries of men in stores department, salaries of men in shipping department, salaries of all men in tool- making and repairing department, salaries for engineers, firemen, truckers, elevator men, and packers. Wages of such help as car- penters and painters ought to be applied to specific shop orders, 19 290 FACTORY ORGANIZATION AND ADMINISTRATION such shop orders being of the productive series or of the non- productive series. Manufacturing expense will include such items as rent, taxes, insurance, water, light, fuel, pattern material, and wages, packing material, patent costs, law costs, mem- bership in societies, experimental work, and miscellaneous factory expense. A committee on uniform cost accounting of the National Machine Tool Builders' Association made the following recom- mendations as to the placing of certain manufacturing expenses: In the matter of freight, express, and drayage they recommend including these items in the manufacturing expense rather than adding them to material costs, preferring the plan of diffusing such costs. In the matter of factory supplies the question was raised about the purchase of supplies for each month. These should be charged directly to the expense for the month or on stores account. The committee recommended the adoption of an average for each month high enough and based on past expe- rience. Under this plan such purchases could be charged to suspense, and each month an equitable amount could be credited off to expense. The safe plan is to charge the purchases direct to expense except in certain cases where a large stock is pur- chased ahead. In the matter of Factor of Safety, the committee recom- mended as follows: With the greatest possible care in details there will always be contingencies of one kind or another arising, and to insure against such unforeseen yet possible differences a Reserve Account is suggested. Each period a proper charge, possibly 2 per cent, should be made to manufacturing expense, based on the total of such manufacturing expense as it appears before the element of safety is applied. This is intended to take care of general wastage throughout the shop, material leakage, breakage of material in warehouses, obsolete castings, etc. This does not refer to castings spoiled in the shop. These are charged direct to shop order as an extra material item. Under the heading of Interest, the committee considers it incumbent that an amount should be charged into the burden element of the cost of each month equal to a fair interest of the value of ground, buildings, and plant equipment, viz., 1/12 of say 5 per cent. We cannot commence to figure profit until this interest charge is first added to the cost. The manufacturer who does not own his buildings and ground will charge rent instead of COST DEPARTMENT 291 interest on these values into his costs. As to the plant equip- ment, the mere fact that a manufacturer has this paid for does not relieve him of charging an interest on it into his costs, any more than if he had out interest-bearing notes given in payment for it, or an issue of interest-bearing stock to cover this plant equipment. If he never earns more than a fair interest on his total investment, then he is practically earning no profit by his business transactions, since he could get this interest on his money without going into business. Therefore this interest should be added into the cost before we put on the profit which should establish the selling price. 308. "Fixed Charges." Those items of manufacturing expense which can be predetermined with accuracy for the ensuing year, and which do not change from month to month are frequently designated as "fixed charges." These charges include such expenses as interest on capital invested, depreciation, taxes, rentals, and insurance. The other items of manufacturing expense are sometimes designated as the variable charges. 309. "Percentage on Labor" Method of Apportioning Expense Burden. This method is by far the most prevalent method of apportioning the expense burden. If the output and wages are practically the same year in and year out this method will not be far from right. If such is not the case, however, the results as to total costs should be compared with results given by other methods of apportioning expenses. In determining the expense percentage to be added to the cost of labor as shown by the time records, the simplest process, and the one most generally used, is that of adding a uniform per- centage to the cost of labor on all classes of work. Thus, if the entire expense account of a factory, including the cost of unpro- ductive labor, interest, insurance, depreciation, etc., is to the cost of productive labor as 150 is to 100, then one and one-half times the cost of labor on any article built in the shops will be added to its cost as shown by the bill of material and time records, in order to obtain the total cost. 310. Use of Separate Expense Percentages for Different Depart- ments. The foregoing.method, while simple, is objectionable be- cause it does not differentiate articles in the manufacture of which the more inexpensive machines of a plant are employed, from articles involving the use of very expensive machinery. On the other hand, it adds a very great amount to the necessary clerical 292 FACTORY ORGANIZATION AND ADMINISTRATION work if a definite percentage is determined for each tool, and added daily to the operator's time. 311. Expense Percentage Different for Different Kinds of Prod- uct. A compromise between these two extremes will be found in the differentiating of the output of a shop into several groups, and, by carefully examining the purchase cost and expense of operation of the tools employed in the manufacture of each group, similarly differentiating the expense percentage, so that a different per cent, will be added to the flat cost of machines involving greater expense in their manufacture than to the group in which less expense is involved. Thus, let us suppose that the total annual cost of productive labor in a shop is $100,000, and that the total expense, including unproductive labor, interest, insurance, depreciation, etc., amounts to $150,000. We might determine the actual total cost of each machine now by adding one and one- half times the cost of labor as shown by the time records. But suppose we draw a line- between the kinds of machines manufac- tured, putting all the larger and special machines in a group by themselves, and all ordinary small stock machines into another group, and find now that the labor on the large machines amounted to $50,000, and the expense item on the same machines amounted to $100,000, while in the case of the smaller machines the labor cost amounted to $50,000, and the expense item for this group was $50,000. It is evident that we would cover our total annual expense item if we added twice the cost of labor as shown by the time records in the case of the larger machines, and once the cost of labor for the smaller machines. It is evident that the addition of one and one-half times the cost of labor to all machines would have been misleading, inasmuch as it would have represented the costs of the smaller machines as being higher than they actually were, and would have shown the costs of the larger machines at too low a figure. The addition of the single percentage would be quite likely to lead the management to the fallacious conclusion that they were unable to build small machines at as low a cost as some of their competitors, who confined their efforts altogether to the smaller type, and might cause them to allow their efforts toward selling the smaller machines to flag, and thus lose a line of business which would be in reality profitable. 312. Hourly Expense Rates. The progressive tendency now- adays is to charge, in the form of hourly rates, all factory operat- ing expenses outside of productive labor. The following example COST DEPARTMENT 293 will show why it is more accurate to charge operating expenses by the hour than as a flat percentage of the productive labor cost : Suppose a piece of work takes a man 30 hours, and that this man is receiving 20 cents on hour; the flat labor cost of the work is $6. Suppose our operating expenses are 100 per cent, of our productive pay-roll expense, then we must add 100 per cent, of flat labor to cover expense, or $6, making the total actual cost of the work $12. Suppose now we employ a more skilful man who does the work in 20 hours at 30 cents an hour; the flat labor cost will be $6 as before, and the 100 per cent, added would make the total manu- facturer's cost $12. If, however, we had divided out total annual expense by the total number of productive hours put in during the year, and had found that the hourly expense rate was 20 cents an hour, we would figure the above work as follows : 1. In the case of a man getting 20 cents an hour we would have: Flat labor cost, 30 hours, at $0.20 or $6.00 Operating expense, 30 hours, at $0.20 or 6.00 Total manufacturer's cost $12 . 00 2. With the more skilful man we would have : Flat labor cost, 20 hours, at $0.30 or $6 . 00 Operating expense, 20 hours, at $0.20 or 4.00 Total manufacturer's cost $10. 00 It is evident that by using the hourly operating expense we show, that the higher priced mechanic, who did the work in less time than the poorer mechanic, made the job cost $10, whereas the poorer mechanic, to whom we paid the same wage amount, made the job cost us $12, because he occupied the shop floor space and used the machinery, power, and tools a longer amount of time than the skilled man. A great step toward accuracy is taken when a shop once establishes an hourly operating expense, such operating expense being based on a grand total of all items in the expense account, divided by the total productive hours taken from all the pay- rolls during the year. 294 FACTORY ORGANIZATION AND ADMINISTRATION 313. Departmental Hourly Expense Rates or Local Burden Rates. Naturally the next step toward more accurate cost- finding will be to establish a general hourly operating rate which applies to all departments in the factory, keeping out of this rate all expense items which are strictly local departmental expenses, and making out of these local departmental expenses distinct hourly rates, applying to certain departments only. The establishment in this way of local burdens, as well as a general burden rate, will go far toward putting the expense of operating high-priced and heavy-power machinery where it belongs, instead of diffusing it on bench work and other work which ought not to carry the expense of the machinery at all. 314. Hourly Machine Rates. This brings us to the next point in development of accurate cost-finding ; namely, the estab- lishing of an hourly rate for each separate machine, such rate being distinct from and in addition to the wage rate of the man. A number of different considerations enter into the estab- lishment of the hourly machine rate. Among these are the fol- lowing: (1) the interest and depreciation on the purchase price of the machine; (2) the annual cost of repairing the machine and keeping it supplied with belts, lubricants, and cutting tools; (3) the floor space occupied by the machine and the stock lying about it; (4) the power consumed by the machine; (5) the number of men required to operate the machine. With the previous year's expense accounts as a basis, an estimate is made of the total amount to be charged to the owner- ship, operation, and maintenance of all machines. Out of this grand total or budget each machine tool is given a certain definite allowance or allotment for the coming year. A card is then writ- ten out for each separate machine tool, and after determining ap- proximately the number of hours that the machine will run during the year, its hourly operating rate is established by dividing the total budget by the estimated total hours that the machine will run. Every time that the machine is used it is credited .with its hourly rate, the amounts being posted on the card record for that machine tool from the cost department's records, show- ing amount of time machine has been used. If at the end of a quarterly or semi-annual period it is found likely that the post- ings on any card will over-run or fall short of the amount allotted the given machine, such changes in various machine rates as are manifestly equitable and necessary should be made. COST DEPARTMENT 295 A good deal of confusing and unnecessary detail has been gone into by several writers on cost accounting in describing hypo- thetical methods of incorrectly figuring machine rates on the basis that the machine rate included all of the factory expenses and was the only expense burden added. The machine rate has been in use many years before these writers were born, and has been pretty accurately worked out independently of the other expense charges in such establishments as planing mills or job machine shops. 315. Machine Rate should always be Separate and Inde- pendent of Other Expenses not Connected with Ownership and Operation of Machines. When the machine rate is used, it is always desirable to use a separate local departmental burden rate for all charges of a strictly local departmental nature and not connected with machine operation. In addition to the local departmental rate, there should be a general expense burden rate which includes all expenses non-local or general in their nature and not connected with either machine operation or depart- mental expenses. 316. Wide Variation in Costs in same Establishment shown by Applying the above Different Methods of Apportioning Expense Burden. Popular fiction has fascinated the average reader by the statement that modern cost accounting is so re- fined that a fluctuation in the third decimal point marks the divid- ing line between profit and loss. How absurd such statements are can easily be demonstrated by applying the above-described various methods of computing the expense burden to the same flat labor and flat material costs. 317. Importance of Manufacturers in Same Industry using Same Methods of Apportioning Expenses in their Cost Systems. The machine tool builders, realizing the senseless competition that arises from ignorance of real costs, agreed to use a uniform system of apportioning expense burden. It would be well if other industries were to follow this example. 318. Co-operation between Accounting and Cost Departments. In the matter of establishing the various burden rates or expense percentages, it is vitally essential that there be har- monious co-operation and mutual understanding between the chief accountant and the head of the cost department, a result which may require the exercise of great diplomacy for its accom- plishment. It is necessary that the chief accountant recognize 296 FACTORY ORGANIZATION AND ADMINISTRATION the desirability of local departmental expenses, and the segre- gation in the cost system of the portion of each department's pay-roll, which is indirect labor, as well as the material items chargeable to local departmental up-keep. He will also have to come to an understanding with the head of the cost depart- ment as to each month's shop production that constitute new assets in the way of standard drawings, standard patterns, standard machine tools, standard and special portable tools, office and shop fixtures, line shafting, and other plant additions. The above matters are the most difficult to adjust and agree on, but if the chief accountant will approach the matter with a desire to understand and co-operate with the chief cost-keeper, and the chief cost-keeper will approach the matter in the same spirit, neither scoffing at the other's ignorance or stupidity, satisfactory agreement can and must be reached. Having settled the portion of pay-roll and material which will have to go to local departmental indirect accounts, the next step is the agreement on what shall be the monthly factory bur- den. This burden consists of the indirect charges not chargeable to any one department, but chargeable to the shop as a whole, and includes such items as interest and deterioration, super- visional salaries, rent, machine depreciation, and power not included in hourly machine rates if the hourly machine rate pre- vails, and if it does not prevail, all rents, power charges, and machine depreciation; also light and heat, shop supplies, perish- able and semi-perishable tools, defective workmanship, drayage and freight, boxing and crating, and other miscellaneous factory expenses already referred to. In order to see whether the burden rate charged is sufficient to meet all the expense items, it is only necessary for the cost department to keep a large card on which are recorded the amounts of burden assigned to each order as completed, these amounts being totaled each month. If the totals fall below the accounting department's record to date since the beginning of the fiscal year, an advance in the rate will be necessary to secure a balance at the end of the year, and vice versa. Right here is where experienced cost accountants are likely to disagree with men whose experience has been confined to commercial book- keeping as the latter are apt to call this burden rate adjustment "juggling" or "doctoring" of accounts. However, it appearsto be the only way of securing a balancing of cost and stores records COST DEPARTMENT 297 h z Z" S < O Z < i 3 E | rtRHER NO. _l R* S COST" > < I I I 2 D 0) J I S ; (0 O (A Z -i i o < I o u S z S S h B 1 5 1 - z j 4 i cc 1 | " 5 i ? n" i 8 = u _i o fe TOTAL < 2 c b. TOTAL ON MACHINE TOO "c 1 TOTAL NOT ON MACHINE "Burden" t > M M RAW MATERIAL M ,i PERCENT MAN'FD ITEMS TOTAL "M-F-R'S COS < (0 < c o n 5 -a I PQ 208 FACTORY ORGANIZATION AND ADMINISTRATION with the commercial accounts that is consistent with a rational cost of conducting stores and cost records. 319. Notification of Completion of Orders. The cost depart- ment should receive some systematic and prompt notice of the finishing of every shop order and every shipping order. The cost department is usually the final destination of the tracing tag which accompanies a lot of goods through the shop to the inspection department and storeroom, the tag going first to the stores record clerks, and from them to the cost depart- ment. Similarly, a copy of the packing list covering every ship- ping order, such list designating whether the shipment is partial or complete, goes first to the stores record clerks, and from them to the cost department. 320. Cost Summaries. Whenever an order is closed in the cost department, the labor sheets covering such order are removed from the files and turned over to a cost-figuring clerk. He makes out a cost summary similar to Fig. 148. Drawing 1 Part No. Order No. Date Quantity Labor Material Expense Cost Ex Average Cost Selling Price FIG. 149. Comparative total cost record of individual parts. White card, 8 inches wide, 4 inches high. This cost summary gives the name of the article and the order number. The labor, listed by operations, is divided into two classes, the first being labor on machine tools, the second labor not on machines. The labor report is listed on the left-hand side of the summary sheet, the right-hand side being reserved for a report of cost of raw materials and manufactured items. In the lower left-hand side there is a recapitulation giving the total labor on machine tools, total not on machine tools, and total burden or operating rate, also a summary of material, giving total of raw material, total per cent, added to actual cost of raw material, total cost of manufactured items, and total manufac- turer's cost. These summaries are briefly transcribed on to card records, one card for the billing department and one card for the cost department; such card records being filed by the number of the part. A form for this card is shown in Fig. 149. It bears col- COST DEPARTMENT 299 umns headed "Order Number," "Date," "Quantity," "Labor," "Material," "Expense," "Cost Each," and "Average Cost." 321. Comparative Individual Part Costs. The foregoing card serves as a comparative cost record as well as a catalogue or price list of individual parts, and is useful in billing orders for supply parts or in inserting prices of individual parts when figuring cost of a total machine, as per individual items listed on the bill of Comparative Labor Costs Description Piece Number Opera tioD No. OPERATION Dept. No. P W D W Vrstiur No. OPERATION Dept. No. PW D W FIG. 150. Comparative individual operation cost record. 7 3/8 inches wide, 5 inches high. White card material. An individual operation comparative cost card is shown in Fig. 150. Fig. 151 is arranged to contain a compara- tive cost of individual operations localized still further in that it reports the man doing the operation as well as his regular and premium wages on the operation. For all shipping orders the shipping department's order copy Dwg. No. Pat. No, Part Order No. Sub-order No. OPERATION No. PCS. No. of Man TIME Premium Date Est'ed Saued ^ ~~ -~ - =^v^ ^ FIG. 151. Comparative individual operation cost record giving data contained in form shown in Fig. 120, and specifying in addition the number of pieces made, the man performing the operation, his rate and premium. White card, 6 inches wide, 4 inches high. is sent to the billing department with the book previously referred to, in which book each order is receipted for. The billing clerk inserts on this order copy all selling prices which he has on record in the card index referred to. If there are any items on which he has not as yet costs, and consequently probably no selling prices, he confers with the cost department, who give especial attention to getting; these prices figured immediately. 300 FACTORY ORGANIZATION AND ADMINISTRATION 322. Use of Bill of Material as Cost Record. As previously stated, it is advisable to provide for bills of material separate insert cost sheets, so that the bill of material proper is not burdened with cost columns, which will be used in only one copy of the bill of material, whereas a number of copies of the bill will go to various shop departments to serve as a list of parts MAT'L LIST RE RECORD COM C'D pLETFn COST ORDER No. SHEET SHEET TOTAL CHECK No. File No._ -n RY Fp BY MATERIAL ORDERED MATERIAL RECEIVED WEIGHT MATERIAL COST LABOR MRS. LABOR COST TOTAL SHIPPED DATE OR OR B^L. ISS. NUMBER P, l , 2 2 3 4 5 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 1C 10 17 17 18 18 10 10 20 20 21 21 22 22 23 23 24 24 25 25 2C 20 27 27 28 28 29 29 30 30 31 31 FIG. 152. Insert cost sheet for bill of material covering contracts or complete machine orders. White bond paper, 8 1/2 inches wide, 11 inches high, ruled in red and blue. and assembling and erecting guide. Fig. 152 shows an example of insert cost sheet as used for reporting the individual com- ponent part costs on a bill of material. At the end of the bill will be reported the assembling, erecting, testing, painting, packing, etc., not chargeable to any individual component. After all extensions of costs of material and of labor have COST DEPARTMENT 301 been entered on the bill of material, it is turned over to the mana- ger of the cost department. If the bill of material system has been carefully followed out, and all discrepancies in material attended to at once, as soon as they were made evident by the storeroom entries, there need be no delay in arriving at the total costs, the only operations necessary being the entering of labor costs and extensions of costs of material, so that complete cost bills can be had within a day, or at most two or three days, after completion of an order. The complete bills of material with cost entries are conven- iently filed in "document file cases," or in tariff files, a separate case being used for each order series, viz., the bills of material for "A" orders being filed in numerical succession by themselves; similarly the "B" orders, etc. 323. Comparative Complete Machine or Assembly Group Costs. For quick reference to all machines of similar type and size, a card index should be kept, each card representing Order No. Complete From Production Oept. To Time Clerks From Time Clerks To Manager Returned Filed FIG. 153. Cost department's record of location of bill of material cost records. White paper, 71/2 inches wide, 10 inches high. one certain type and size of machine, the order numbers being entered as machines of that particular size are completed. As there will be room on the cards for more than simply the order number, other brief entries may be made, which will frequently save reference to the complete bill. For instance, total weight, total cost capacity, and speed, might be entered on the same lino after the order number. On receiving the complete cost bill, the cost clerk looks up several similar machines on his card index, and gets the bills covering these from the document files. A careful comparison, item by item, is now made with the new bill just turned in. Any discrepancies are investigated and accounted for, and a note giving the result of the investigation is attached to the bill of material, which is now sent to the general manager, being noted by him and returned again to the cost department to be filed away. In order to prevent delays, and to enable any bill of material 302 FACTORY ORGANIZATION AND ADMINISTRATION to be located at any time, little record books may be kept by the cost clerk one book for each order series in which are noted the dates on which the bills of material are received and turned over to the various departments or clerks, the books being ruled in accordance with Fig. 153. 324. Cost Service Division. In a large industrial establish- ment, it will be found desirable to establish a Cost Service Divi- sion, whose duties will consist of the furnishing to each depart- ment or shop a complete analysis and distribution of all cost factors affecting that shop, presented in the manner best adapted to that particular shop or department. In some cases this will involve the use of graphic presentations and graphs in addition to tabulations. In some cases it will mean comparative data by operations; in others by pieces, and in others by orders. This information should be furnished to the various departments or shops at the end of each four weeks or monthly period. Facilities should be provided whereby if a department or shop head wants a further break-down or analysis of the reports which the Cost Service Division furnishes, such break-down can be promptly furnished. One of the functional overseers in each shop should be designated as the connecting link between the Cost Service Division and the shop in question. 325. Competitors' Prices. Careful comparisons need to be made between the cost records of a shop and competitors' prices on complete machines and individual parts. The sales depart- ment should constantly be accumulating such data of competitors 7 prices from their bids. In all cases where it has been quite posi- tively determined that prices have not been "cuts," and it is found that they are below what the shop can afford to quote, it is proper to investigate and see if some means cannot be found of meeting the competitors' prices. It is not a general rule that the members of a sales department are in position to ferret out for themselves the methods of meeting such competition. It is per- fectly proper that the sales department should not confide its own selling prices nor those of its competitors to any other depart- ment of the shop. It is, however, of extreme importance that absolute truthfulness be observed in report-ng to the technical departments the percentage by which a competitor has underbid the shop. A collection of competitors' prices may demonstrate that certain machines or lines of machines are costing the shop more than they ought to. It then becomes necessary to use COST DEPARTMENT 303 every proper effort available to bring down the cost of the machine, and if the cost is cut down by legitimate means, an economic advantage has been gained not only for the shop, but, in a small way, for the trade at large. The constant reduction of prices of all manufactured commodities is by no means a sign of a demoral- ized condition of trade, but is a necessary essential to the world's progress. If this condition is met in a spirit of ill temper and haste, it is likely to result in business failure; but if it is taken hold of with intelligence and caution, it means success and pros- perity to the manufacturer. REFERENCES BRISCO: " Economics of Business," Chapter VI. GUNN: "Costs" in Humphreys "Lecture Notes on Business Engineering." ENNIS: "Works Management," Chapter II. REDFIELD: "The New Industrial Day," Chapters II, IV and V. EVANS: "Cost-keeping and Scientific Management," Chapters I- VII in- clusive. EMERSON: "Efficiency," Chapter VII. GOING: "Principles of Industrial Engineering," Chapters V and VI. CHURCH: "The Proper Distribution of Expense Burden." CHURCH: "Production Factors in Cost Accounting and Works Manage- ment." DAY: "Accounting Practice," Part II. WEBNER: "Factory Costs," Chapters X-XXVII inclusive. NICHOLSON: "Factory Organization and Costs," Chapters III and IV. BUNNELL: "Cost-keeping for Manufacturing Plants." BAUGH: "Cost Accounting," Pages 135 to 158. WILDMAN: "Cost Accounting," Chapters XI to XIV. FACTORY TRADE COMMISSION: "Fundamentals of A cost System for Manufacturers. ' ' CHAPTER XXIII AIDS IN TAKING INVENTORY 326. Advantages of "Perpetual" Inventories. In an estab- lishment of sufficient magnitude to justify the employment of a full and capable clerical force to handle the records of the cost and stores department, stock-taking is not as formidable a matter as in smaller concerns. But in many large and prosperous manu- facturing establishments the taking of an inventory is looked forward to as the most onerous task of the year. It is frequently months after the date on which the work of inventorying is begun before the final results are announced. In factories where labor cost postings are balanced against the pay-roll, where stores withdrawals are expressed in money value as made, and where Raw Material, Work in Process, and Finished Product accounts are charged and credited as described in Chapters V and XXII, it is feasible to have the books closed and inventories taken as often as monthly. The question as to how extensive a factory must be in order to justify the employ- ment of such a full clerical force is naturally one which depends upon the complexity of the manufacturing processes, and also upon the margin of profit. It is, however, true that the com- plete cost analysis revealed by a full clerical force may be in itself the very means of increasing the margin of profit. I had occasion to be shown the cost and stores system of a factory whose output amounted to about $250,000 of annual sales. The number of persons doing the clerical work in the establishment amounted to about 10 per cent., numerically, of the entire work- ing force of the company, and it is fair to assume that their sala- ries represented at least an equal percentage of the total wages ex- penditure. At first I said this clerical force seemed dispropor- tionately large, and yet I was assured by officials of the company that since the introduction of this system they were able to adjust their prices with a feeling of confidence that they had never before possessed. The books are closed, and a complete report of the company's business is rendered to the directors on the tenth of each month for all business done during the preceding 304 AIDS IN TAKING INVENTORY 305 month. The company has been able to meet the prices of all competitors and to maintain a high degree of mechanical excel- lence, and to declare exceptionally good dividends. The success- ful application of the complete cost and stores system to an estab- lishment of this size, employing only about 100 men, has strength- ened my conviction that the more general adoption of these methods in smaller factories will surely come, and will be accom- panied by more general confidence and satisfaction on the part of both employers and employees. There are, however, many factories that are not quite pre- pared to go so fully, or as they would put it plunge so deeply into shop-accounting systems, but with even an office force of minimum size the matter of inventory taking may be simplified by the use of properly arranged systems. 327. Classification of Items to be Inventoried. In general the inventory may be divided into the following classes: (1) Plant; (2) Equipment; (3) Supplies; (4) Raw Materials; (5) Work in Process; (6) Finished Stock; (7) Obsolete Stock; (8) Defective, Second-hand, or Returned Goods. The items coming under the head of "Plant," if properly recorded, can be inventoried in a very short time. Under this heading will be included real estate and buildings. Under Equipment will be included such items as power-plant apparatus, transmission apparatus, piping, wiring, fixtures, machinery, patterns, drawings, special jigs, and special tools. Under the heading of Supplies will come all such articles as do not enter into the product or if they do enter into it, cannot be definitely measured for a given part of the product, but which are incidental to the processes of manufacturing, such as files, sand-paper, emery cloth, machine oil, soda, belt dressing, etc. Under Raw Materials will be listed all materials that enter into the manufactured product. Work in Process includes all manufactured or partially manu- factured parts which are found on shop floors or benches at the time of taking inventory. Finished Stock includes all finished parts found in a finished parts warehouse. Also all finished groups of parts or complete articles ready for shipment found in the stock warehouse. The other items are self-explanatory. It is usually desirable to shut down the works at the close of 20 306 FACTORY ORGANIZATION AND ADMINISTRATION business on a fixed date for the purpose of taking inventory, the works to remain shut down for as many days as experience has shown to be the minimum time to take inventory satisfactorily. It is always best to take the work in process first, so that in the event that the number of days provided for in advance may not prove sufficient, the checking of the completed stock and raw material will be left to the last, to be gotten hold of after the works have resumed operations, as this plan has caused the least inconvenience. 328. Tag System of Taking Annual Inventory. It is desirable to provide a large number of consecutively numbered tags, these tags to be given out in bunches of 100 to 500 tags, in such numbers as may be required, to the parties in charge of the stock-taking on each floor or in each department of the works, and it will be the duty of these parties, after weighing or counting the stock, to securely fix these tags to every bin, box, or rack, or piece of material. These tags will be provided in different colors cor- responding to the classes above outlined. When all the stocks, after counting or weighing, will have been tagged in this way, checkers will collect the tags. A record must be kept of all tags given out and to whom, and all tags, whether spoiled or used or not, must eventually be returned to the checkers. 329. Checking Inventory. The manner of taking the inventory must be most thorough in every respect, so that reliable results will be obtained; actual weight, quantity, or measure must be applied in every instance possible. The foreman of each depart- ment and a checker should superintend the weighing and counting of all material in that department, and will see that same is correctly entered on the inventory tag. Where weighing or counting is not practicable and estimates only can be obtained, the foreman and checker should agree upon the proper figure, and they should both put their initials on the tag, which should be marked "Estimate." It rests with the foreman and checker to determine what mate- rials can or cannot be estimated according to the existing conditions, and no set rule can be laid down. The purpose and intention should be to count or weigh everything possible. As far as possible all material should be collected and piled up before taking inventory, with a view to facilitating a correct and expeditious count. AIDS IN TAKING INVENTORY 307 While the inventory is in progress no stock may be moved from one department to another. 330. Material in Transit. If it is found after taking inventory that material was in transit for which invoices were rendered bearing date of shipment previous to date of inventory, such material will be included in the inventory. On the other hand, INVENTORY TAG. Dept.. Bldg. -Tag No. Jloor Cat. .No. Job No. No. of Pieces- Weight Description of. Article: Class Sub-Class- No, of Hrs. Labor Counted by -Checked by_ FIG. 154. Form for inventory tag. Colored tag. Stock, 41/8 inches wide, 7 inches high. care must be taken that no goods are booked or billed as " Shipped Out" from the factory which are all ready to ship and then included as stock on hand. Iff may be necessary to ship goods on an order during the course of the inventory, but a note will be made of same and the item included in the final inventory properly annotated. 308 FACTORY ORGANIZATION AND ADMINISTRATION 331. Classification of Work in Process and Finished Product A further differentiation of work in process of manufacture and finished stock is usually desirable by classes of product. For instance, a concern manufacturing electrical mining machinery might have the following classifications: Class A, Chain Mining Machines; Class B, Locomotives; Class C, Generators; Class D, Long Wall Machines; Class E, Drills; Class F, Standard Motors; Class G, Switch Boards; Class H, Hoists, etc., etc. The designation of the material according as it comes under one of these classes must be clearly designated on the tag. A form for such inventory tag is shown in Fig. 154. 332. Units of Measurement. In recording raw material and supplies, care must be taken to see that the proper unit of measure is entered on the tag, in stating the quantities on hand, that is, the unit of measure by which the article is usually priced and sold, whether pounds, feet, dozen, etc. 333. Shop Order Numbers for Work in Process. In reporting the work in process, it is important to give the shop order number as well as catalogue or part number, and to state clearly the con- dition of the order as to the value of labor and amount of material expended to date, such information being obtained usually from the cost department records. All parts found on the shop floor or benches must be considered as orders representing work in process, whether there appears to be any labor performed or not on the job. Where the number of parts by actual count, found on an order in process, is different from the number called for by the order itself, the inventory should give the actual weight or unit of measure, and an estimate must be made as to the value of labor and material, such estimate possibly differing from the records in the cost department. 334. Depreciation on Obsolete Goods. A percentage of de- preciation must be agreed upon for obsolete or unsalable stock. 335. Collecting Inventory Tags. The inventory having been taken, the tags will be collected by checkers and sorted in nu- merical order, to determine that none are missing, the last tag being clearly marked "Last Tag, Number " The shop must be carefully divided into divisions, and men definitely assigned with checkers to each division. 336. Sold Goods. Completed machinery, etc., that has been billed to customers, and that is being held subject to their orders, AIDS IN TAKING INVENTORY 309 must be specially designated by a notation in red pencil or in some similar manner on the tag. 337. Classifying Materials. For convenience in cataloging, it may be found desirable to classify all tags by class of material, the material when thus grouped or lumped being copied from the tags on to large sheets, the number of the tag being referred to in EQUIPMENT INVENTORY CARD. NAME OF INSTRUMENT, MACHINE OR FIXTURE NAME OF MAKER FROM WHOM PURCHASED MAKER'S NUMBER )UR NUMBER DATE INSTALLED FIG. 155. Equipment inventory card. (Front.) White card, 6 inches wide, 4 inches high. each entry on these sheets, and all tags after all entries are made being again rearranged in numerical order, each tag having been marked with some sign or stamp to designate that it had been en- tered on the inventory record. 338. Equipment Inventory. It is usually desirable to preserve DATE w PURCHASE PURCHASE VALUE COST FREIGHT COST NSTALLING COST FIXTURES COST REPAIRS DATE REPAIRS TOTAL COST CHARGE ( DEPREC AMOUNT )FF FOR ATION DATE VALUE DATE ^ FIG. 156. Equipment inventory card, reverse. (See Fig. 126.) White card, 6 inches wide, 4 inches high, ruled in red and blue. a permanent card record covering equipment items, a distinct card being kept for each equipment item on which is recorded such description as "Symbol," "Maker," "From whom bought," "Date put in use," "Improvements or Repairs," as may be advisable. A form for such record is shown in Fig. 155, and the reverse of the form is shown in Fig. 156. 310 FACTORY ORGANIZATION AND ADMINISTRATION 339. Depreciation and Repairs on Equipment. On the reverse as shown are recorded cost of repairs or amount of annual de- preciation, and the balance showing latest inventory value. ORIGINAL INVENTORY TAG DEPT. No.. B'L'D'G _ JTAG No,_ .FLOOFL _SEC'N_ CAT. No.. _SIZE_ NAME. No. P'C'S. .MUL'PJ MATERIAL OPERATIONS PERFORMED. ARE PARTS ASSEMBLED! ASSEMBLING .OPERATION WEIGHT (LBS.) AVERAGE. CROSS PC'S TARE POUNDS NFT Wt. per 100 Pr_'s COUNTED BY- ENTERED IN RECORD BY- N.B.-AII Tags Must be Accounted for. FIG. 157. "Original" or upper sheet of inventory tag. Fastened to "duplicate" tag shown in Fig. 158 by reinforced eyelet and perforated along line A-B. Original buff bond paper ,4 1/2 inches wide, 7 3/4 inches high. 340. Duplicate Inventory Tags. Some appraisal companies use a tag with a perforated, removable, duplicate strip attached, AIDS IN TAKING INVENTORY 311 writing the tags in duplicate with a piece of carbon, and remov- ing the perforated strip immediately after writing out the tag. o DUPLICATE. INVENTORY TAG DEP'T No. B'L'D'G JTAG No. _FLOOR_ .SEC'N. CAT. No. .SIZE. NAM! No. P'C'S. JVIUL'EJ MATERIAL OPERATIONS PERFORMED. ARE PARTS ASSEMBLED?- ASSEMBLING -OPERATION- WEIGHT (LI GROSS TARE. NET- PC 'S- -Wt. Per 100 PC'S COUNTED BY. _A.PP'D BY_ _F'MAN ENTERED IN RECORD BY_ IM.B.-This Duplicate Must Not be Detached from Stock. FIG. 158. "Duplicate" inventory tag. Fastened together with "orig- inal" by reinforced eyelet. (See Fig. 157.) Manila tag stock, 4 1/2 inches wide, 7 3/4 inches high. This lessens the liability of errors due to lost tags. A form for such a tag is shown in Figs. 157 and 158. 341. Proper Percentage of Depreciation. The proper per- centage of depreciation to be used for various classes of equip- 312 FACTORY ORGANIZATION AND ADMINISTRATION ment is a matter which has been discussed at length by various writers. Experiments have been made to determine the average life of various tools. It is evident, however, that the length of life and rapidity of deterioration of machinery and trans- mission parts will vary widely. Where trustworthy data based upon a number of years of observation are not at hand, it has been customary to allow a general depreciation of 10 per cent, per annum on all machines. On belting and transmission apparatus in general, a slightly larger depreciation is sometimes charged, varying according to the service. Buildings kept in good repair are often charged with a very low percentage of depreciation. 342. Inventorying Patterns and Drawings. The real value of patterns and drawings as an asset is a matter over which there is considerable difference of opinion. Special patterns and drawings are charged to the particular order for which they are made, and then can be of no value except as scrap. On the other hand, standard patterns and drawings have a real value which should be subject to considerable depreciation. Where the value of standard drawings and patterns is not kept for each piece, but all work on such patterns and drawings is charged on a standing order number, the total cost of all new standard patterns and drawings for the year is given by a stand- ing order, and this total added to the properly depreciated value of the standard patterns on hand at the close of the previous year will give the current value. This method, of course, does not assign a definite price to each individual pattern and drawing. The valuing of goods is facilitated by the cost department having on hand lists of all standard materials with the prevalent net price reduced to a price per unit of measure or weight. 343. Perpetual Inventories to be Verified by Actual Count. At the beginning of this discussion it was stated that the tak- ing of an inventory is greatly facilitated by the keeping up of accurate stores records. It must not be assumed that the stores records may be taken as inventory values. All systems of mathematical record need to be checked annually by an actual count. Such actual count may be made the basis of just as thorough an inventory as could be taken by an outside appraisal company. In fact, where it is customary for the sake of furnish- ing what would appear to be absolutely unprejudiced and un- biased values by employing an outside appraisal company, the AIDS IN TAKING INVENTORY 313 work of such appraisal company is made much easier and more accurate in establishments where inventories taken by the regular force of the company have been thorough and systematic. 344. "Replacement" Values. In attaching values to factory fixtures, special tools and other items which are essential parts of the plant, it is customary to value them at what it would cost to replace them in their present condition, and to consider their worth on a basis of what value they would have to a com- pany engaging in the same line of business on the same premises, and not the figures that articles would bring if sold at a forced sale. 345. Cost System as an Aid to Inventorying. The accuracy of the inventory prices attached to finished and unfinished parts depends upon the cost-calculating system employed. If a company's cost records are known to be correctly kept, then the rational way to obtain the cost of unfinished parts would be to close up to inventory date all time and material records on all unfinished orders. With a cost system in which the costs of individual parts have been built up, recorded, and compared, these costs serve as the basis of accurate inventory valuation. 346. Congested and Disorderly Stock-rooms. One of the greatest disadvantages from which inventory taking usually suffers is that due to extremely congested stock-rooms and stock floor. Another great disadvantage will be found in lack of promptness in identifying items on the shop floor and leaving them without identifying tags. The mere issuing of instructions to foremen to see that floors and benches are cleaned up and stock neatly arranged is not sufficient ; it may be necessary to hire special help to see that this work is actually carried out. Previous to inventory time as much useless material as possible should be scrapped. The person in charge of each department and the checker for that department must, under no circumstances, let a piece pass by without tagging it, with the idea that they will look it up afterward. 347. Precautions Regarding Inventory Taking. The following list of precautions will be found serviceable in connection with inventory taking: At a period of time not later than two months previous to the date of the inventory, every bin and every class of article in every warehouse and stock-room must be labeled with its 314 FACTORY ORGANIZATION AND ADMINISTRATION proper name and mark number, if there is any; pattern number, if there is any; also, where two units of measurement are required, such as number of feet and pounds, the label or tag must bear the weight per foot, or whatever the conditions require. (1) The head stock-keeper will, at the time above indicated, check up each bin and item, and see that these labels are pro- vided, so that the stock-taking can be done by any clerk copying the information on the bin labels or tags. (2) A complete finding list must be provided by the head stock-keeper at this time. This finding list must catalogue all material, whether it is purchased finished stock, or whether it is stock manufactured by the company, such finding list giving, after each item, the number of the bin in which it is located. The preparation of such a finding list will prevent articles of the same class being stored in different bins. (3) The shop foremen must get under benches and into pigeon- holes and get out all unlabeled and unidentified material. The shop floor must be cleared of everything, except work in process. The personal co-operation of the shop disciplinary heads must be used to see that this is done. Unless vigorous steps are taken to enforce this clearing up, it will be extremely difficult to take stock accurately. (4) Method o] Taking. The method of taking the inventory" shall be as follows: (Use copying pencils in making all records.) Squads. Each overseer shall appoint a number "of squads (as many as necessary) to each portion of the factory under his charge. Each squad shall consist of a " Counter, " a "Recorder" and a " Checker, " together with as many laborers as shall be deemed necessary for trucking, weighing, etc. Duties. The duties of these men shall be as follows: Counter. The Counter shall do or shall supervise all of the counting and weighing necessary for the inventory, and shall call off all figures, descriptions, and other data to the Recording Clerk. Recorder. The Recorder shall do all of the recording, making his entries on the Inventory Card as the Counter calls off to him. As each item is completely recorded he shall leave the Inventory Card with the article which has been inventoried. Where possible he should verify as he records. Checker. It shall be the duty of the Checker to follow the AIDS IN TAKING INVENTORY 315 squad collecting the Inventory Cards that have been placed with the items inventoried by the Counting and Recording Clerks. He shall inspect each card and shall check each notation specified with the article it records. If in checking Location, Article, Description, Quantity, etc. any errors are discovered these shall be carefully corrected. As he removes the Inventory Card he shall leave in its place an Inventory Taken Slip on which he shall place the number of the Inventory Card which he has re- moved. He shall check the cards which he has taken up to see that none have been overlooked] and shall take immediate steps to recover any which he shall find missing. He shall not work immediately with the squad but shall remain behind and work independently. (5) The head of the cost department will receive the num- bered inventory tags, and put them under lock and key. When he issues these tags he will take a written receipt from each person to whom he issues them. He will issue these in lots not to exceed 500 at one time. (6) These inventory tags will have carbonized slips with the same printing on them as is on the face of the tag, stitched to the tag. These carbonized tags will be torn off as the tags are written up and kept on file by the person detaching the tags. This will secure a duplicate of the tag being on file, so that, in case any tag is lost, it will be known what was written thereon. (7) At a period not later than one month previous to the figuring of the inventory, a complete price catalogue should be in readiness, such price catalogue containing the very latest prices of all raw material. This catalogue should list every item appearing in the last preceding inventory. (8) The shop costs must be figured up to date on all completed and uncompleted orders, so that it will not be necessary to esti- mate the time spent on work in process. (9) At a period not later than thirty days before stock-taking, every order which the records show to be a "live order" must be checked in the shop so that there is a certainty of its being in actual existence in the shop. (10) In order to distribute the work of stock-taking in such a manner as not to over-burden any one department, the work should be allotted as follows : The head cost clerk will be in gen- eral charge of the inventory; the receiving department will take stock of all raw material; the stores department will take 316 FACTORY ORGANIZATION AND ADMINISTRATION stock of all supplies and finished stock; and the cost department will take stock of all work in process. (11) The men who wrote certain inventory tags will accompany the checkers who collect these tags; they will have their dupli- cates to assist them in accounting for any missing tags. (12) Work in process should be figured from the cost depart- ment records. Articles on the shop floor nevertheless should be tagged and the tags collected just as soon as all items have been tagged and checked. This will permit of a check of the work in process, as shown by the tags, against the same as shown by the cost department records of uncompleted orders. (13) All figuring of prices, weights, etc., should be done on the tags themselves. Also all arrangements of lists of stores, by sizes, etc., previous to any copying on the sheets, are to be the result of sorting of tags. (14) The transcribing should be done very carefully in ink on the permanent record sheets, to be placed in a substantial binder. This will constitute the permanent inventory, and may be copied on the typewriter in manifold. REFERENCES PARKHTJRST: "Applied Methods of Scientific Management," Chapter V. BRISCO: "Economics of Business," Chapter VIII. WEBNER: "Factory Costs," 235. CHAPTER XXIV INSPECTION METHODS IN MODERN MACHINE SHOPS 348. General Classification of Inspection. The work of inspection naturally divides itself into two groups : (a) That having to do with raw materials and purchased parts. (b) Inspection having to do with manufactured .product. 349. Inspection of Raw Materials and Purchased Items. In order that raw material and purchased parts may be satis- factorily inspected, it is necessary that the purchaser's require- ments be specifically set forth. This consideration demands the preparation of specifications. The preparation of such speci- fications for a given shop is a matter which requires a careful investigation of past experiences. The person writing such speci- fications should consult all possible sources of information as to what has been past experience with respect to troubles and diffi- culties in connection with any given material or part. This is necessary in order that the specifications may be not only correct from a theoretical standpoint, but in order that they may be practical as well. A draftsman, foreman, or a salesman may be able to give useful information in connection with the preparation of specifications for purchased material. If the establishment is large enough to have a testing labora- tory of its own, such a laboratory will prepare these specifications in conjunction with the various engineers of the company. In the inspection of raw material we have to cover two general features : (1) Quality as depending on composition. (2) Quality as to dimensions. Inspection as to composition may come under four classes of requirements : (1) Physical. (2) Chemical. (3) Magnetic or electric. (4) Metallurgical. 317 318 FACTORY ORGANIZATION AND ADMINISTRATION Inspection as to dimensions and form would apply more par- ticularly to castings or finished parts which must coincide with drawings or other specifications. Raw material purchased in large quantities may sometimes be best inspected, as to composition and manufacture, at the plant of the maker, so far as physical qualities are concerned. Chemical, magnetic, or electric qualities are best tested in a laboratory which may be part of the organization of the company making the specifications, or it may be done in a commercial laboratory conducting testing for outside clients. Such articles as bar, sheet, and other stock may be inspected in the receiving department as to quality, size, shape, and general appearance of material. This class of inspection, although usually conducted by non-technical help, is about all that can be done with regard to materials received in small quantity, as the cost of technical inspection would be too high. 350. Inspection of Manufactured Product. The inspection of manufactured product divides itself up into : (1) Dimensional inspection during the course of manufacture. (2) Inspection of groups of parts. (3) Erection inspection. (4) Electric or magnetic inspection and testing. (5) Final inspection and testing of complete machines. 351. Dimensional Inspection. Some few American shops make a dimensional inspection after every machine-shop opera- tion. Where this is the practice it is necessary to have a repre- sentative of the inspection department visit every leading factory department at regular intervals. The record of the inspection is made by having the. inspector write his name or initials after the operation which the inspection covers, as listed on the routing tag accompanying the pieces during their process of manufacture. In some shops the inspector accompanies the "move material men," motor trucks being used. In many shops, however, it is not necessary to conduct a dimen- sional inspection after every operation, nor, indeed, is it necessary to inspect all parts. In many cases it will be satisfactory if only such parts as are subject to renewal are inspected when all machine-shop operations are finished. Such parts may be desig- nated by the engineering department on the bill of material. As the routing or tracing tag is usually copied from the bill of material the tag will call attention to the required inspection. INSPECTION METHODS IN MODERN MACHINE SHOPS 319 352. Floor Inspection. In addition to the floor inspection of such pieces as require inspection during process of manufacture, this requirement being designated on the bill of material and shop routing tag, as indicated, it is advisable that all manufactured parts, before going into a permanent stock-room of finished parts, or into a temporary stock, from which they may be drawn for assembling or erecting purposes, should pass through an inspec- tion department which will check the parts with the blue- prints with such degree of accuracy as the judgment of the head inspector will dictate. 353. Verification of Inspection. Small articles made in quan- tity and going into the stock-room may have the inspection of the lot verified on the routing tag. In case of larger pieces these should be stamped individually with a steel stamp bearing the inspector's distinct symbol. Stock-keepers and assemblers must not accept pieces on which inspection is required, without proof of inspection. The with- drawal of a part from a stock-room naturally assumes that such piece has been inspected before it was accepted in the stock- room. It is important that such pieces as go direct to assem- bling or erection, without first going to a stock-room, have the inspector's symbol stamped upon them, or upon the tag accom- panying them. 354. Altering Inspected Parts. Assemblers and erectors must be prohibited from using files or other tools to alter parts already finished and supposed to- be correct. If parts will not assemble, the inspection department must be notified. 355. Inspection of Assembled Groups. As regards the in- spection of groups of parts it may be necessary in many cases to have an inspector inspect all the component parts of a group previous to assembling into groups. Such groups and speci- fied component parts should be designated on the bill of material by the engineering department. Such parts of groups as must be accurate in order to make assembling possible without alteration by assemblers must be designated as to the required inspection on the bill of material. 356. Erection Inspection. In regard to erection inspection it is necessary that an inspector exercise close scrutiny over machines while in process of erection. He must report defects to the de- partment foreman, and the department foreman and workman 320 FACTORY ORGANIZATION AND ADMINISTRATION must lend any assistance necessary for the proper performance of the inspector's duty. 357. Electrical Inspection. As regards electrical inspection, all parts having electrical functions are best tested as independent parts before assembling. This applies to such parts as windings, coils, resistances, etc. In order to be doubly sure, and in order to prevent dissatisfaction on the part of customers ordering repair parts, it is often advisable also to apply alternating current, high voltage to all electric current carrying parts, prior to their ship- ment as renewals, and also to make a magneto test of armatures and commutators prior to shipment, so as to locate any possible short-circuits. The same precautions as to an additional test at the time of issuing of electrical parts from a stock-room to shop for assembling may be considered advisable. As regards the inspection of assembled groups of electrical parts as to accuracy of connections, where such inspection is advisable, inspectors should be furnished with diagrams showing the connections, such diagrams to be made by the engineering department. 358. Metallurgical Inspection. In all manufacturing in- volving heat treatment, punching or drawing of steel or brass or other alloys, it is customary to have a metallurgical division of the inspection department, which carries on metallographic tests with the aid of microphotography. The organization of the metallurgical division and its records will have to be planned so that the complete test record or history of each unit such as an ingot, forging, etc. can be studied. This history would involve a comparison of chemical, metallurgical, and physical test data. In addition to the micro-photographic data, it is desirable to have on file the charts of recording pyrometers in the various heat treatment furnaces, so that the resultant strength and elas- ticity of materials can be compared with the speed and intensity of heating and cooling, as well as crystalline structure indicated by the micro-photograph. In the steel industry the history usually begins with the heat of the furnace, which is assigned a number; also a record of the ingots which are assigned numbers, all subsequent forgings or rolled bars being stamped so as to identify them back to the ingot and heat from which they originated. 359. Final Inspection and Test of Complete Machines. The final inspection and test of complete machines should be con- INSPECTION METHODS IN MODERN MACHINE SHOPS 321 ducted in accordance with instructions furnished by the engi- neering department, who should also prepare complete data sheets and log sheets covering the final inspection and test. 360. Organization of Inspection Department. As regards the organization of the inspection department, it is pretty generally agreed that this department must be independent of any shop control. If the inspection department must be either under the shop superintendent or the chief engineer, it is far better to have it under the chief engineer, because if the inspectors were part of the shop organization, the tendency would be to conform to the ideas of the various department foremen rather than to the letter of the specifications. In inspection work all specifications must be so worded that there can be no difference between the letter and the spirit of the law. This means that drawings and bills of material must specify very carefully the degree of accuracy required so far as relates to dimensions which require special care, and also that a general written code of requirements be prepared by agreement between the engineering department, the shops, and the inspec- tion department, and all parties involved co-operate to live up to the letter of this code. 361. Qualifications of Inspectors. The class of labor em- ployed in the inspection department will depend altogether on the duties of the individual inspector. The inspection of such an article as steel balls, made in quantity, may be satisfactorily conducted by a mere apprentice. Dimensional inspection of machined pieces will require a man of the capacity of a good vise-hand machinist. Electrical inspection of parts may in many cases be done satisfactorily by an apprentice electrician. On the other hand, a final electrical test may demand the services of a technically educated man. In a large shop the personnel of the inspection and testing department would include men of various degrees of experience and education. It will evidently take a man of executive ability and tact as well as a good engineer to fill the position of chief inspector. He will be able to do his duty most satisfactorily if his department is responsible only to the works manager, and neither to the shop superintendent nor to the chief engineer. 362. Errors and Defects. As an example of how to take care of defective workmanship and material developing in course of 21 322 FACTORY ORGANIZATION AND ADMINISTRATION manufacture, the following instructions as used in a machinery manufacturing establishment will serve: "Standing orders have been established as follows, covering o V ERRORS OR rtATF DEFECTS. PART Nn Nn pns DFFFCTIVE MATFRIAI Order NO. on which Material originated Time lost as per list on other side and Material lost, (if any) to be charged as follows; time taker check which. If Omissions involving no Extra work, Regular Order as above If Shop Error involving Extra work, Standina Order No. 18 If Drafting Dept. Error involving Extra work, Standing Order No. 19 If Additions or Alterations involving Extra work, _ Standing Order No. 20 If Due to Defective Material Standina Order No. 21 DFFFCTS OR FRRORS |N PFTAII DISPOSITION MATERIAL TO BF RFPl AHFD ORDER TO BE CLOSED WITH SHORTAGE AS (CheckWh.cn) INSPECTOR (OVER) FIG. 159. Error or defect tag. (Front.) Manila tag stock, 4 1/8 inches wide, 7 inches high. defective castings or material oi any kind which is defective, also all extra work on account of errors or defects : Standing Order No. 18. All labor and material lost on ac- count of defective workmanship in shop. INSPECTION METHODS IN MODERN MACHINE SHOPS 323 Standing Order No. 19. All labor and material lost on account of errors in drawings or designs. Standing Order No. 20. All labor and material lost on ac- v_^/ TIME TAKER TO FILL FOLLOWING ONLY IN CASE OF DEFECTIVE OR SPOILED MATERIAL. Emp. Tool TIME COST No. No. Mrs. Min. $ C Emp. Tool TIME COST No. No. Mrs. Min. $ C ORDER ON WHICH MATERIAL ORIGINATED {NOT^TO^E} CREDITED WITH THIS AMOUNT. TIME TAKER. RECEIVING DEPT. TO FILL OUT FOLLOWING IN CASES OF DEFECTIVE MATERIAL: PATTPPN No. .. WEIGHT TRANSPORTATION EXPENSE RECVG CLERK. WHEN MATERIAL DISPOSED OF AND ANY NECESSARY ENTRIES MADE IN STORES RECORDS, SEND THIS TAG TO COST DEPT. FIG. 160. Error or defect tag. (Back.) (See Fig. 159.) count of additions or alterations due to changes in instructions from purchaser, or improvements in design, conceived during building. Standing Order No. 21. All labor and material lost on account of defective material delivered on purchase orders. Proper credit 324 FACTORY ORGANIZATION AND ADMINISTRATION to be made to this order, of such amounts as may be secured in credits from companies responsible for this loss." "Errors and Defects" tags (Figs. 159 and 160) are to be used in the following manner: Where material is to be scrapped or returned, this point to be decided by chief floor inspector, the tag will be used in the following manner: If ordered scrapped on account of some shop error, no defect being in casting, chief floor inspector will write " scrap" on error tag, and will have department time-taker enter time on back of error tag in place provided for same. He then sends a laborer to the receipt window of the storeroom with the part or parts. The storeroom clerk removes the tag and sends same to stores record clerk at the same time that he sends in regular production Week 1 INSPECTOR'S REPORT SHEET. Ending- ] 190 Shop Order. Spoiled. Name of Part. Operation, or Reason for Rejecting. ^- _^^ FIG. 161. Inspection department weekly report. White paper, 8 1/2 inches wide, 11 inches high, ruled in red and blue. tags covering the day's receipts of finished parts from the shop, and sends the rejected material to the proper scrap bin. In case of defective material, the above procedure is followed, except that parts, instead of going to stores department, are sent to receiving department, where necessary entries are made in spaces provided for same on back of tag, and proper shipping tag is attached for return of material to party furnishing same, the error tag being then removed and sent to stores record clerk. Errors not involving scrapping or returning of material are handled as follows: Floor inspector will decide to which standing order extra time is to be charged, time-takers making such entries on current time records. In all cases where it is a matter of putting into acceptable condition parts which can be put in such condition, the time to be charged to the standing order will be only that INSPECTION METHODS IN MODERN MACHINE SHOPS 325 required to make the part acceptable. If extra work by reason of errors or defects is not discovered until extra time beyond what it should have taken has already been posted to a productive MOTOR TESTING RECORD. Motor Class HP_ Machine No Am Starting Box or Contrail Shunt Series Comp._ tature No. Spei er No Type. Standard Special Volts Amp. rf Rptiifnnrp ARMATURE || FIELD SHUNT SERIES REMARKS No. Sections UVb. Coils No. Coils Twrws per Coil Turns per Coil Gauge Wire Gauge Wire Wires Multiple Wires Multiple VI Weight of Coil Layers Wide Deep C.C. ofCoiKinsulated No. of Com. Bars .Res. per Coil Resistance \\Total Resistance COLD TEST. Time 1 Amp. Volts Speed i r:ik.- Brake E.H.P. M.H.P. Eft. REMARKS No load normal voltage Full load normal voltage RUNNING TEST 5 d | j HOT TEST g No load normal voltage K) Full load normal voltage Armnhire Riirfwe- End Connt ictiom . (^ o I C! c 1 'i oe I 1 o3 a 1 t -a 1 -a c 1 -3 e j If ^ i ^ Q i C ft! | s II It, I -M o3 > d O ^ o 3 "^ .s Q 1 .tian A7o Workmans* e and description of operation pheral speed t ncr minute) \ STEPS IN OP.E1 U 1 1 "S I Time per day spent in grinding t Time per day spent in adjusting Number of Tools broken per day. Amount charged workman for t Justifiable time per daynotacco Rcm.nrlfS No.pieces man should do per day Highest number reported done i', Day rate paid for this class of Lai Piece rate f.n ha nn.id J O bfl ,g ^3 ?H & J a f | 1 1 III o, o -^ w o fl i 2 RATE FIXING AND TIME STUDIES 337 observers is a matter of great importance. A carefully selected man can go into the works and take all the observations neces- sary, and at the same time have the good-will and friendship of both men and foremen. Another man doing exactly the same routine work might easily, and unconsciously to himself, be con- sidered offensive by the shop hands. The qualifications essential for such observers are, first, a sound and discriminating judgment based on an inherent sense of justice; second, ability to take and appreciate the value of precise observations, such as is developed in laboratory training; third, an unassumed spirit of democracy AUTHORIZATIO OR.GINAL NEW R OHANGE RATES To Rate Fixing Dept. From Dept. THE FOLLOWING CHANGES N SHEET AND OPERATIONS. <, n -tt l ftft _ ARE RECOMMENDED PIECE NUMBER CHANGES IN OPERATIONS PRICE PER 100 PCS. NEW OPERATIONS Enter only New Operation* in this column IN PLACE OF If New Operation replace. Old Operation Enter Name of Old Operation here OLD OPERATIONS Enter only Old Operation! on which rate is to be changed DISCONTINUED OPERATIONS Pw. f-w. uw. . _ - ^=^ . , . ' _ __ ^ * Remarks: Foreman Note: Send original and duplicate to RATE FIXING DEPT: Duplicate must be receipted and returned. FIG. 167. Sheet for changed rates and operations. The sheet is 71/4 inches wide and 11 inches high, white paper. A duplicate, pale buff in color, is attached directly behind the original. and modesty; fourth, ability to stand one's ground without creat- ing antagonism. In short, character and tact will be the chief requisites. 377. Computations and Statistics as an Aid to Observations. In addition to taking observational data, a rate-fixing depart- ment should prepare such statistical data and charts as will be valuable in predetermining and checking time standards. After taking such field notes as may be desirable, the observer goes to the department office and "works up" his notes; i.e., he deter- mines on what he considers a fair time standard for each opera- 22 338 FACTORY ORGANIZATION AND ADMINISTRATION tion observed, and investigates also the statistics on file, using the statistical information as secondary and not primary refer- ence. After he has thoroughly worked up the results of his study, the observer visits the foremen of the departments in which he took observations, with a view to co-operating with the foremen in establishing new standards. 378. Notice of New Rates. The foreman's interest and co-operation is always essential. Hence the authorization sheet should be signed by the foreman, and its arrival in the office of the rate-fixing department should be evidence that the rates have been sanctioned by both foreman and observer. A form sug- gested for this authorization sheet is shown in Fig. 167. A card index of all piece rates is kept in the rate-fixing de- partment office by postings from the observation and authoriza- tion sheets. The general form and arrangement of this card index will depend upon the nature of the business and product. The regular routine of the work of the department would consist of a methodical review of all existing rates, accom- panied by a continuous system of notices of all new work under- taken. Notices are sent by the head time clerk to the rate-fix- ing department of any new pieces on which work is begun, and on which new rates are desired, and an observer from the rate- fixing department responds at once to this call. 379. Time Study and Rate Fixing to be Permanent Rather than Temporary. A regular routine system as above laid out will be far preferable to an occasional and more or less disconnected series of observations used merely as a stimulus to greater accu- racy on the part of foremen. There is danger of the foremen regarding the work as less authoritative, and considering that it is being done in a half-hearted way, unless it has the impetus and swing of a regular routine system. The number of men to be employed in instituting a work of this kind will depend wholly upon the number of pieces to be investigated, and their similarity. The qualifications of the men are such that they are likely to be as high salaried as the best foreman. While the employment of additional so-called non- productive labor is not in line with any policy of retrenchment, it is evident that present conditions in many large factories are such that the right kind of men working on time standards and rate fixing could save their salaries many times in a year. RATE FIXING AND TIME STUDIES 339 380. Abridged Time Studies for Transient Work. The form presented in the preceding discussion for recording observational data (Fig. 168) presumes that a great many pieces will be made identical with the one upon which the observation data are taken. Herein lies the only justification for going into such minute detail It is frequently desirable to secure time-study data for the pur- pose of establishing premium or bonus times where the num- ber of pieces of one kind is not large enough to justify the ex- pense of going into such minute detail. Under these circum- NAME OF PART TIME STUDY DATA MARK NO. MATERIAL DRAWING NO. OPERATION MACHINE NO. FEED, SPEED OR OTHER \ CONDITIONS AFFECTING WORK t STEPS 1 IN OPERATION AS FOLLOWS TIME OBSERVATIONS CONTI. TIME INDI. TIME CONTI. TIME INDI. TIME AVERAGE TIME 2 3 4 5 . ORDER NO. NO. PIECES COST DEPT. RECORD ON ABOVE OPERATION TIME FOR THIS OPERATION Machine No. Employe Mo. Date Work Done FIG. 168. Short form for time-study data. Yellow bond paper, 6 inches wide, 4 inches high. stances an abridgment, which need be none the less accurate, is suggested in Fig. 168. Whenever the time study is to be the basis of an instruction card, however, the motion analysis should be worked out in complete detail. 381. Overcoming Objections to Time Study. Among those who are inclined to criticize the taking and use of time study, one of the most prevalent misconceptions is that one of the paramount aims is the accelerating of muscular movements on the part of the worker. As a matter of fact, this feature is the least frequent, and least profitable of all improvements resulting from time study. 340 'FACTORY ORGANIZATION AND ADMINISTRATION REFERENCES GILBRETH: "Primer of Scientific Management," Chapters I and II. EARTH: "Slide Rules for the Machine Shop," A. S. M. E., paper No. 1010. TAYLOR: "The Art of Cutting Metals," A. S. M. E., paper No. 1119. GILBRETH: " Motion Study." GANTT: "Work, Wages and Profit," Chapters I and II. KNOEPELL: "Installing Efficiency Methods," Chapter XI. GILBRETH: Psychology of Management," Chapter IV. GANTT: "A Bonus System of Rewarding Labor," A. S. M. E. paper, 928, Vol. XXIII. CHAPTER XXVI WAGE SYSTEMS 382. Wage System Must be Adapted to Conditions. The object of this discussion is to present briefly the various methods of remuneration for labor that are currently in use. It will be the endeavor to demonstrate to what conditions each method is best applicable, and to suggest for each method an outline for a system of management and statistics which will produce the highest efficiency in each method. Although there is a great variety of methods of compensation, all of these methods may be grouped clearly under three heads, namely, day work, piece work, and gain-sharing methods. 383. Fixed Hourly or Day Rate. Remuneration by a fixed daily wage assumes that there is a current market rate for com- petent services in any certain craft. The day rate

u u<\ DFP-T wiriF B/^JE : GAIN SHARING RATE ORDER NO. NO. PIECES NAME OF PART OPERATION TIME LIMIT TIME TAKEN GA OR (+ LO&(-: GAIN $ CTS- ' 1 TOTAL TIME W'K'B -pup W'K'n y/i T nf>^T LIMIT TIMF 1 OST TOTAL GAIN Fm. 173. A report of the week's gain or loss in time. White card, 6 inches wide, 4 inches high. The simplest way to take care of a premium or bonus pay-roll is to keep it entirely distinct from the regular pay-roll. Fig. 172 shows a card form used for collecting the time and figuring the premium pay-roll. 400. Notifications to Workmen of Gains or Losses under Premium or Bonus System. Fig. 173 shows a form used for collecting these same data on to a weekly slip. The weekly slip is written out in duplicate, one copy going to the man with his envelope of premium money, the other being filed in a loose leaf binder under the man's name, thus forming a record of the man's performances under the system. WAGE SYSTEMS 357 With either of the above forms a separate slip, as shown in Fig. 174, is used. This slip serves as a notification and record to the workman which he uses in checking his pay. One or more carbon copies can be made out at the same writing, and can be used as a comparative time record when filed under guides repre- senting parts. This form also serves a useful purpose in filing with regular cost-posting cards, in which time has been figured on the straight wage basis, to show the amount that must be added to individual part costs on account of premium pay. The NOTIFICATION TO WORKMAN OF GAINS ON STANDARD OPERATION WORK Employe No. Date Employe's Name Depx. Shop Order No. of Pieces Finished Name of Part Operation S.O.Time Actual Time on Job Mrs. Min. Time Gained Mrs. Mins. NOTICE : We are always glad to have our men make suggestions for changes in fixtures, appliances or tools to facilitate the work. If an idea occurs to you, write it out and put it in suggestion box. Prizes are offered for best suggestions. FIG. 174. Workman's notice of gains under premium wage system. Pink bond paper, 6 inches wide, 4 inches high. For failure a similar blue slip is used with the words "Time Lost" instead of "Time Gained." carbon copies filed by parts are looked over by the time-study and rate-fixing department. If there is a tendency to fail to do the work in the time limit, the workman is helped by dem- onstration and instruction to do the work in accordance with the instruction card built up from the time study on which the time limit was based. 401. Foreman's Participation in Bonus. The foreman's bonus has been one of the least considered and most hastily installed. incentives. If the foreman's bonus is based on the total bonus of all of the employees, without any modifying factor based on his departmental overhead expense, it is quite likely that the 358 FACTORY ORGANIZATION AND ADMINISTRATION wear and tear and general expense account of his department will be very high. If the foreman's bonus is based on the piece rate value of the production in his department and there is no factor modifying his bonus by reducing it if the labor turnover in his department is high, then he could keep his workers on day work, realize a good bonus, and lose money for his employers by a heavy labor turnover. During the war many a foreman's bonus based on the gross production turned out in his department resulted in ridiculously high figures, compensating foremen in amounts of money so large that they made higher salaried employees gasp in astonishment and disgust. It will be seen, therefore, that the foreman's share in efficiency reward must be limited by such factors as overhead expense and labor turnover in particular and that he be not rewarded for mere quantities of increases in production due to added men and added equipment, causing an increase in production for which the foreman is not in any way responsible. The foreman must help the poorer workers. This is secured by giving him an extra bonus if all his workers earn bonus. REFERENCES GOING: "Principles of Industrial Engineering," Chapter VIII. GANTT: "Work, Wages and Profit," Chapters III to VI inclusive. CARPENTER: "Profit Making Management," Chapters VIII to XI inclusive. EMERSON: "Efficiency," Chapters VI, IX, and X. Taylor: "Shop Management," Parts 93-201 inclusive. GILBRETH: Primer of Scientific Management," Pages 20-30 inclusive. ENNIS: "Works Management," Chapter IV. TOLMAN: "Social Engineering." SCHLOSS: "Methods of Industrial Remuneration." TAYLOR: "A Piece Rate System," A. S. M. E. paper, DCXLVII, Vol. XVI. HALSEY: "The Premium Plan," A. S. M. E. paper, CCCCXLIX, Vol. XII. TOWNE: "Gain Sharing," A. S. M. E. paper CCCXLI, Vol. X. GANTT: "A Bonus System of Rewarding Labor," A. S. M. E. paper, 928, Vol. XXIII . PARKHURST: "Applied Methods of Scientific Management," pages 166 to 180. EMERSON: "The Twelve Principles of Efficiency," Chapter XIV. EMERSON: Efficiency," Chapter X. TAYLOR: "Shop Management," Paragraphs 45 to 191. KNOEPELL: "Installing Efficiency Methods," Chapter XVII. CHAPTER XXVII PRINCIPLES UNDERLYING GOOD MANAGEMENT 402. Clear-cut Organization. The advantages of clear-cut departmental organization have already been set forth. Where each department head and each individual knows his exact duties and the limits of his authority, there will be no trouble due to misunderstanding of these matters. Purely mechanical con- trol through charts and written rules and regulations does not constitute good management. Strength of character, high ethical standards, human sympathy and sound psychologic insight are essential qualities of successful officials. 403. Mutual Confidence and Co-operation. Mutual confidence is absolutely essential to good management. This requires that officers and department heads must be honest with each other and with their men. One of the results of many years of industrial mismanagement is the attitude of suspicion of many workingmen toward employers and their representatives, whenever there is any change in department heads, methods of manufacture, or system, suspecting that something is going to happen that is detrimental to their interests, and ready to oppose in every con- cealed manner possible the new official, method, or system. There is only one way to get rid of these difficulties, and that is by actually making the best interests of the men identical with the best interests of the company. To men and managements embittered by long years of hostility engendered by mismanage- ment such a statement will seem puerile. It needs but a little investigation of the discussions and publications of employers' organizations as carried on to-day, and a comparison of these with similar discussions some ten or fifteen years ago, however, to prove that co-operation is taking the place of warfare to a won- derful extent. The co-operation must be honest. There must be no wishy- washy namby-pambyism. A lot of rah-rahing at a company baseball game is no sign that employees don't laugh up their sleeves at insincere patronizing. 359 360 FACTORY ORGANIZATION AND ADMINISTRATION Frequent changes tend to break down mutual confidence, hence the problem of employment should be handled in a most deliberate and capable manner so as to lessen the need of dis- charge to a minimum. On the other hand, while the establish- ment of a permanent .force of employees will carry with itself some of the spirit which results in the establishment of mutual confidence, it is necessary, where there is a working force in which there are many old employees, constantly to guard against accept- ing as correct and unchangeable any long-existing conditions of affairs. Records of what was the best performance in the past must not serve as a guide to what future performances will be, since materials and processes are always changing. Mutual confidence and co-operation cannot exist where the policy prevails of pitting departments against each other and encouraging hostile competition. A good executive will never employ the objectionable practice of asking men their opinions about each other and each other's work. Neither will he employ a scheme which was necessary during the war but which in peace time is wholly out of place; namely, a detective or intelligence service. A guard should be a guard pure and simple and not a carrier of gossip. If encouraged in the latter, there is always the possibility that he will make every effort to be delivering the goods, whether based on facts or not. 404. Officials to be Relieved of Petty Duties. There should be some officer in every manufacturing establishment who is free enough from routine duties to permit of his keeping constantly on the alert in the matter of improving the manufactured product, so that the company may always be prepared to make changes at the proper time and keep the product up to date. Manifestly the proper time is not when the shop is crowded with a heavy de- mand for a current design which is serving its purpose without any complaints from customers and without serious competition. It is always good policy to adhere to established standards as long as the market will permit, unless new standards mean a most decided advantage to the manufacturer. This officer should have charge of the record of all criticisms of product, and should arrange such matters for discussion by salesmen and factory officials who would be affected by changes in design. In most manufacturing establishments this matter of changes is not handled systematically. On the one hand, slight alterations of no decided selling advantage may mean loss of stock on hand, PRINCIPLES UNDERLYING GOOD MANAGEMENT 361 delays in manufacture, and increased costs. On the other hand, a lack of foresight in anticipating needed changes may result in heavy business losses. 405. Internal Harmony Essential. In the matter of dealing with men, managing officers should assume always that the best interests of all of the men are identical with those of the management. There should be no attention paid to talks of intrigue or inter-departmental knocking. At the same time the managing officials can easily locate jealousies and unwar- ranted ambitions on their own initiative if they are capable managers. It may be necessary to have plain talks with de- partment heads who are over-ambitious, and to explain to them wherein their course is in error, or why their ambitions can- not be realized. In some cases it may be best for all concerned if the management can find a better position elsewhere for some department head who is deserving of promotion, but for whom the management can find no promotion in its own organization. 406. A Successful Business the Accumulation of Many Men's Ideas. It must always be remembered that any successful busi- ness represents an accumulation of the ideas of many men. Hence, the endeavor should be to encourage the expressing of ideas for betterment of product, of methods, and of systems, by the rank and file and by the line and staff as well. There is no question but that the committee method tends toward bringing out good ideas. The same is true of good suggestion system with prizes or promotions for men making the best suggestions. 407. Suggestion Systems. In operating a suggestion system, care should be taken that the committee on awards are thoroughly capable of judging of the merits and demerits of the suggestions they consider. Suggestion systems are usually operated on the basis of an award each month consisting of three or five cash prizes, and mention of the names of others 'making good suggestions which did not win prizes. Much of the force of a suggestion system is lost if the suggestions for which prizes are given are not put into practice. Annual awards for those suggestions which have re- sulted in the greatest good during the year, in addition to the monthly awards, will tend to round out the suggestion system to still greater efficiency. 408. Shop Committees and Industrial Democracy. The com- mittee method and anything else connected with the shop management should be free of anything savoring of patronizing, 362 FACTORY ORGANIZATION AND ADMINISTRATION hence it is well to avoid calling the committees by fancy names, such as "Council," " Junior Council," etc. A condition of mutual confidence must be established, otherwise the committee meetings will contain men who are silent, being afraid to make criticisms, fearing to incur ill-will or displeasure, or unwilling to make suggestions for improvement for fear of their suggestions being ignored or having their ideas claimed by others. In recent years there has been a development of the committee system especially in shops not having any clear, good organization or functional control. In these shops there has been a tendency to let shop committees take the initiative in developing company policies and methods. In a well organized industry, men cap- able of developing policies and methods would have been recog- nized, selected and appointed to positions wherein they could direct such matters. The general adoption of the direct action type of industrial democracy whereby elected rather than selected workers direct methods, policies and management, is in the writer's opinion, in the majority of cases, apt to result in mis- government by the unfit. It is not conceivable that such a type of control can result in industrial efficiency in competition with plans of organization which carefully find and develop those whose physical, mental, and temperamental traits fit them for each specialty or function. Shop, committees have, however, a perfectly proper place in industry; namely, as advisory committees to let the manage- ment know what the employees think, to bring to light certain abuses, and to afford an opportunity for the management to explain its policies to the employees. Shop committees carried on in this way are quite different from management of a business through the industrial democracy by direct action idea, however. 409. Systematic and Scientific Selection and Placing of Men. Managing officers and heads' of departments should be endeav- oring to ascertain the natural aptitude of each individual, and put him into such a department and at such work as he is best fitted for. The most efficient line officers are declared by many successful managers to be men whose characteristics are unswerv- ing devotion to duty and dogged tenacity, rather than men of bright intellect, technical ability, and attractive personality. The last-named qualities are by no means disadvantageous, but they cannot take the place of the first-mentioned ones. In the matter of appointing department heads and foremen, it PRINCIPLES UNDERLYING GOOD MANAGEMENT 363 should be borne in mind that while a good spirit is engendered by promoting men from the ranks, it is necessary to appoint a certain proportion of men from the outside who have had wider experience than that which can be obtained in any one shop. At the same time, whenever a department head or foreman is taken into the company from outside it must be borne in mind that there is apt to be some one disappointed, whose good-will may be lost, hence an outsider appointed as a department head or foreman needs especially to possess ability to get along with men, and if there is any doubt on this score he should not be appointed, no matter what his technical ability may be. The foreman or department head is always looked upon as the com- pany's direct representative among the men, and the opinion of the men as to the company is based upon their opinion of the fore- man or department heads. 410. Justice in Wage Systems. All systems of piece work, bonus or premium w r age, must be just and reasonable. There is hardly any shop where the same system of compensation can be made to apply to all work, and to be able to say that all of the company's work is on piece work or on the bonus system is likely to be nothing at all to brag of. It would be far better to be able to say that all of the work which can be advantageously done on a piece-work or bonus basis is placed on that basis. In the matter of wage systems, much trouble can be forestalled by making it a rule that a certain piece rate, premium, or bonus time is established for each separate machine and process, and have this most. distinctly understood and specified. By distinctly specifying that a certain premium, bonus or piece rate applies to machine No. so and so and only to machines of the same type, style and condition, and driven in the same manner, there can be possible complaint if the rate is changed, as it should be, if a different type of machine is installed or machinery is driven in a different way. There can be only one rational basis for piece, premium, or bonus times, and that is an absolutely certain knowl- edge of conditions currently existing and applying to each separ- ate machine or method. Men experienced at rate-fixing can establish many such time standards from the records of observa- tions on similar work. However, the utmost caution should be observed in establishing standards without demonstrations, since nothing establishes confidence in the ability and justice of the management in a more satisfactory way than time stand- 364 FACTORY ORGANIZATION AND ADMINISTRATION ards, which are neither too low nor too high, but are eminently correct at their first announcement. An expert machine operator usually makes a poorer job of establishing time standards than a technically educated man used to taking and recording observa- tional data. On the other hand, if the expert machine operator or expert mechanic in other lines be used as demonstrator, and a man skilled at accurate observational records be assigned to do the timing, the results are far more likely to be satisfactory. It is impossible to secure a man who is an expert operator on all kinds of machinery, and it is utter folly to hire as a speed boss, or rate fixer, a man who claims to be such a prodigy. A man experienced at time-study work, using such mechanics for demon- strators as each department can furnish, these mechanics receiv- ing extra pay while on demonstration work, will secure correct time standards. If the time-study man claims to be a universal expert on all kinds of machinery, he may at once be set down as a quack and a man who will cause more friction than good. 411. Sufficient Clerical Force. Sufficient clerical force to get out all of the needed records and departmental reports does not necessarily mean many non-producers. The only use of records and departmental reports is as an incentive to action. There is absolutely no use of a transfer clerk or good tracing records if the shop superintendent or general foremen do not make use of these records. The same is true of all reports having to do with cost-analysis and comparative inventories. Certain defi- nite times should be set aside for meetings to discuss all such reports, and it should always be borne in mind that the object of such meetings is to find out what conditions are revealed by the reports based upon records, and what actions should be taken as a result of the revealing of these conditions. 412. Apprenticeship Systems. I come now to the most impor- tant as well as the most neglected of all opportunities in connection with good management, namely, the apprenticeship system. There is no gainsaying the fact that the manufacturing trades do not get their fair percentage of bright, ambitious, and serious- minded boys. The reason for this is that the boys are neglected, and far too often have to work in unsanitary and unnecessarily dirty surroundings, so that the most self-respecting are attracted by opportunities to enter mercantile pursuits whose managers seem to give more attention to the selection and developing of boys they hire than is the case with manufacturers. PRINCIPLES UNDERLYING GOOD MANAGEMENT 365 Each apprentice should have a certain course laid out, at least tentatively, when he starts in. This course need not and cannot be the same for each apprentice. In fact, it will probably have to be varied from time to time during his apprenticeship as close attention to him and his work reveals what are his best aptitudes. The old catch phrase, "We aren't running an edu- cational institution," which is told the apprentice boy all too often, will have to be retired if manufacturers want good apprentices, for that is exactly what they will have to make of their appren- ticeship system an " educational institution." The boy cannot be taught too much about the business during his apprenticeship years, and the teachers cannot be any too good. Talks during working hours by the very best men in each department, with demonstrations, as well as individual instruction, will result in advantage to the employer who uses such systems. 413. Industrial and Vocational Education -Continuation Schools. There is much talk nowadays of extension work in the way of the higher technical state institutions reaching out into the industries and teaching the employees, and of continuation schools in which the students who have had only six or seven years of public school life are given the benefits of further training as part of the regular public common-school system. The sooner this talk materializes into actual accomplishment the better, since such work will result not only in better intelligence among the workers, but in better habits and cleaner manhood. An employer can well afford to allow his apprentices to have an hour a day on pay to attend continuation school for the sake of making them better citizens, and he can afford to add to this hour another hour of technical instruction during the daytime. Whether this technical instruction is a sort that can be given in extension work by a state technical institution, or whether it must be so special- ized that it will require a teacher from the staff of the company itself, will depend wholly on the nature of the industry. Natu- rally it would be cheaper, where the number of apprentices are limited, and the technical branches are such as can be taught in general classes, to allow the students to attend extension classes, supported by either state, municipal, or employers' association funds, than to attempt to run a private school. The day schools have been found to accomplish definite results in a far better manner than night schools. When the school session is in the day, the boy can prepare his work at night, whereas with night school he has no time for such preparation. 366 FACTORY ORGANIZATION AND ADMINISTRATION To a lesser extent the neglect of the apprentice boy has its parallel in the neglect of the technical school and college graduate in special apprenticeship courses. A few of the larger electrical corporations are doing excellent work in giving systematic instruc- tion to this class of apprentices, with excellent results in their own favor, and their example could well be followed quite generally. 414. Bureaus of Vocational Guidance. A number of our large cities have begun to establish bureaus of vocational guidance whose purpose is to gather scientific data on the qualifications of individuals best fitted for certain occupations, and of the occupa- tions best fitted to individuals showing certain physical and psychological combinations. Such bureaus should be under the leadership of men with industrial experience, liberal education, and broad human interests. In the large cities the directors of such bureaus should be provided with capable specialists as assistants to conduct the psychologic and medical examinations, prepare the economic and statistical records, and conduct the clerical work. In the smaller industrial centers, the superintend- ent of schools should be aided by specialists from the state col- leges and universities assigned to such extension work, in starting proper systems of vocational guidance. 415. Educational Activities must not be Hampered by Fac- tional Influence brought to bear by Organized Business or Organ- ized Labor. H. L. Gantt states that "Our difficulty has been mainly with the commercial man, who often seems incapable of considering anybody's interest except his own, and has not yet recognized that the prosperity of all is directly helped by the pros- perity of each. As yet he has no idea of what real co-operation means. His idea of co-operation is that of the pack or the herd, whose co-operation is for attack or defense. Certain well-known leaders of manufacturing and labor organizations respectively are prominent public advocates of this kind of co-operation, which aims to despoil the outsiders for the benefit of those in the ring." Those leaders in industrial education who are earnestly striving for the benefit of all, are seriously handicapped by the activities of the representatives of labor and employers' organizations on the one hand and the old-school advocates of education for cul- ture only on the other. The employer frequently wishes indus- trial and vocational education to be an immediate tool for break- ing up trades unionism, and will lobby strongly for men who are in PRINCIPLES UNDERLYING GOOD MANAGEMENT 367 sympathy with this attitude. The labor union leader frequently will oppose in educational work any man who has been identi- fied with scientific management or efficiency movements, and will oppose any system of industrial education which in his opin- ion aims to give training which should be given by members of the trade to a limited number of apprentices. The classicist demands cultural subjects first and will not recognize culture in most modern practical industrial and vocational training. Between these three mutually opposing influences the educator who is timid and under-paid and afraid of arousing hostile influences, is frequently in a dilemma in which he needs the support of civic organizations which are thoroughly non-partisan. 416. Some Examples of Good Apprenticeship Systems. The Baldwin Locomotive Works have conducted three dis- tinct classes of apprentices for a number of years, and as their system has been eminently successful an outline of it is appended : BALDWIN LOCOMOTIVE WOKKS BURNHAM, WILLIAMS & CO. PHILADELPHIA Apprenticeship System In recent years manufacturing has tended so largely toward specialization that young men apprenticed to mechanical trades have been able in most cases only to learn single processes, and, as a result, the general mechanic has threatened to become prac- tically extinct, to the detriment of manufacturing interests gener- ally. In view of this fact the Baldwin Locomotive Works have established a system of apprenticeship on a basis adapted to existing social and business conditions. Apprentices are taken in three classes, as follows: Apprentices of the First Class The first class will include boys seventeen years of age, who have had a good common-school education, and who will bind themselves by indentures (with the consent of a parent or guar- dian in each case) to serve for four years; to be regular at their work; to obey all orders given them by the foreman or others in authority; to recognize the supervision of the firm over their 368 FACTORY ORGANIZATION AND ADMINISTRATION conduct out of the shop as well as in it; and to attend such night schools during the first three years of their apprenticeship as will teach them, in the first year, elementary algebra and geometry; and in the remaining two years, the rudiments of mechanical drawing. Apprentices of the Second Class The second-class indenture is similar to that of the first class, except that the apprentice must have had an advanced grammar- school or high-school training, including the mathematical courses usual in such schools. He must bind himself to serve for three years, and to attend night schools for the study of mechanical drawing at least two years, unless he has already sufficiently acquired the art. Apprentices of the Third Class The third-class indenture is in the form of an agreement made with persons twenty-one years of age or over, who are graduates of colleges, technical schools, or scientific institutions, having taken courses covering the higher mathematics and the natural sciences, and who desire to secure instruction in practical shop work. The indentures or agreement in each case place upon the firm the obligation to teach the apprentice his art thoroughly and to furnish him abundant opportunity to acquire a practical knowledge of mechanical business. The firm is also bound to retain the apprentice in service until he has completed the term provided for in the indenture or agreement, provided his services and conduct are satisfactory. In all cases the firm reserves the right to dismiss the apprentice for cause. The rates of pay in the different classes have been adjusted from time to time in accordance with prevailing wage con- ditions. In general the practice has been followed of making a- semi-annual increase of pay in each class. In addition to the regular rates of pay, apprentices of the first class each receive an additional sum of $125, and apprentices PRINCIPLES UNDERLYING GOOD MANAGEMENT 369 of the second class an additional sum of $100, at the expiration of their full term of apprenticeship respectively. By the course of training provided for in this system it is believed that a great benefit will accrue to the mechanic as well as to the employer. To young men who have received a thor- ough technical education, the two years' course in shop work is especially recommended. Further particulars will be given on application. The Westinghouse industries in the vicinity of East Pitts- burg have carried on extension and continuation work to a con- siderable extent. Following is an outline of their work which was given by Mr. C. R. Dooley (who is in charge of the educational division of the apprenticeship department of the Westinghouse Electric and Manufacturing Company) , in a paper read before the American Institute of Electrical Engineers in June, 1909 : The educational activities in the vicinity of the Westinghouse interests at East Pittsburg divide themselves into two general classes: 1. The training of the graduates of engineering schools. 2. The training of non-technical men. The training of non- technical men is further divided into two distinct lines: 1. The apprenticeship system, which includes a certain amount of sys- tematic class instruction given during working hours. 2. The night school, where attendance is purely voluntary. Both of these have a place in the training of non-technical men. The Apprenticeship System. In the shop a certain section is devoted to the apprentices. This section is fitted with a com- plete equipment to furnish shop practice in all branches of the machinists' trade. The boys are under the guidance of all- around mechanics taken from the shop organization and chosen for their interest in young men as well as for their skill as workmen. The boys remain in this section approximately two years. The latter half of their course is spent in the various sections of the shop. The class-room instruction is provided on the company's time, and is conducted throughout the four years of the course. Special rooms inside the works have been fitted up with suitable tables, desks, blackboards, etc., much the same as in an ordinary schoolroom. The atmosphere is hardly that of a school, but rather that of a class where the boys are given problems and explanations concerning the things with which they work every day, instead of problems in abstract mathematics. In connec- 24 370 FACTORY ORGANIZATION AND ADMINISTRATION tion with the character of the class work, there are three vital points: 1. The scientific principles underlying the subjects must be taught. 2. The scientific principles can best be presented through the working of practical problems dealing with the things of the boy's every-day life. 3. The same problem must teach him certain facts and specific knowledge concerning the things with which he is working, such as weights, costs, and strength of materials, gear speeds, pulley and belt speeds, etc. In fact, a knowledge of the things with which the problems deal and the facility afforded for thinking about these very ordinary things may be the most valuable feature of this instruction. There is another phase of the work without which all else will fail. For want of a better name, we call it spirit. It includes loyalty and enthusiasm, not only in the work and the future it holds for the boys, but also in all their daily relations with their fellows a spirit of service and willingness, confidence in all things and all people, and eternal optimism. The Technical Night School. Some years ago a technical night school was started in the vicinity of the manufacturing interests at East Pittsburg. Its management is independent of any com- mercial industry, though its activity is encouraged and fostered by the local organizations, including the public school board, the latter furnishing the building. In the beginning there were half a dozen teachers and a few dozen students who attended classes in drawing, elementary mathematics, and shop practice. At present there is offered an opportunity for systematic study in such fundamentals as mathematics, mechanical drawing, me- chanics, physics, theoretical and applied electricity, chemistry, shop practice in both wood and metal, theoretical and applied steam engineering, etc. There is a faculty of twenty-five instruct- ors and an enrolment of about three hundred students. The instructors are not only versed in the theory of their respective subjects, but each is also actively engaged during the day with his subject within the organization of a commercial factory. The opportunities for obtaining exceptionally trained teachers are therefore ideal. Attendance is voluntary, and a small tuition fee is charged. Admission is extended to all, regardless of occupation or previous education. The low educational entrance qualifications are cared for by a preparatory department. Practically all of the students are employed in the various shops in this vicinity. Of the forty- PRINCIPLES UNDERLYING GOOD MANAGEMENT 371 five men who have been graduated during the past three years, practically all have been steadily advanced in position and re- ponsibility, and forty are still with their original employers. Some of the students are doing high-grade engineering work in the engineering department and in the drafting office of the nearby electrical manufacturing company. Others are successful sales- men and many are doing responsible work in the erection depart- ment and in the shop organization. The engineering night school has a large field of activity. At the start its students have a clear idea of commercial practice such as is seldom possessed by the newly graduated college stu- dent. This early experience instils an appreciation of the value of time and of scientific training that tends to produce the most efficient student. They have learned several years earlier in life than the college student that scientific study and commercial practice not only go hand in hand, but that they should continue hand in hand throughout life, if the highest achievements are to be attained; that there never comes a time when the one can be laid aside and the other taken up. They also know the impor- tance of the routine of life, that from the office boy to the presi- dent, it is the fellow who gets the job done that gets the bigger job to do. 417. Co-operative Schools. An account of educational activities engaged in by manufacturers would be incomplete with- out mention being made of the co-operative work first initiated by the University of Cincinnati under the direction of Dean Her- mann Schneider. In this plan students prepared to enter the university are taken into the machine shops by the owners of the shops. The students spend alternate weeks in the shops and alternate weeks in the university. While in the shops they are visited by university instructors designated as co-ordinators, who note what they are working on, how they are doing it, and any other points of educational value in their surroundings, and dis- cuss them in a class devoted to this purpose during the week that they are attending the university. The course covers five years, eleven months of each year being put in during alternate weeks at the university, the remainder of the time being in the shops as regular workmen. The employers are thoroughly satisfied with the plan and state that it develops men who do not have the handicap of inability to conform to shop discipline, and ignorance of shop methods, which characterized a considerable percentage of 372 FACTORY ORGANIZATION AND ADMINISTRATION their university graduate apprentices formerly. The plan has also been adopted at the Fitchburg, Mass., and York, Pa. high schools and at the Lewis Institute of Technology in Chicago in co-operation with members of the National Metal Trades Association. 418. Employment of Industrial Engineers in an Advisory Capacity. It must be quite apparent to the progressive manu- facturer who has followed the development of industrial engi- neering and scientific management, that most of the work of factory planning, equipping and organizing requires exceptional experience and training. Most ability of this sort is one-man ability and cannot be syndicated. As soon as we have expert service of this sort take the corporate form with a large force of assistants, it means that the service is of the mimeographed, ready-made, correspondence-school standard. The personal servic'es of a well-educated well-trained mature expert at $100 a day and upward plus traveling expenses are frequently cheaper in the long run than syndicated expert services at lower prices. REFERENCES BRISCO: "Economics of Business," Chapter IV. DODGE: "The Spirit in Which Scientific Management Should be Ap- proached," Tuck School Conference Report. CARPENTER: "Profit-making Management," Chapter XIV. REDFIELD: "The New Industrial Day," Chapters VI-X. LODGE: "Rules of Management." GANTT: "Work, Wages and Profits," Chapter IX. CARLTON: "Education and Industrial Evolution," Chapters I-IV and VII-XII inclusive. DAY: "Industrial Plants," Chapter XII. BASSETT: "When the Workmen Help You Manage." COHEN: "An American Labor Policy." STODDARD: "The Shop Committee." GANTT: "Organizing for Work." COMMONS: "Industrial Goodwill." LEITCH: "Man to Man The Story of Industrial Democracy." CHAPTER XXVIII A BIBLIOGRAPHY OF WORKS MANAGEMENT 419. Reading and Study Necessary for the Man Who Aspires to Success in Business Administration and Industrial Man- agement. The application of scientific methods to the in- vestigation of problems of factory management has resulted in the accumulation of a bibliography of considerable extent having to do wholly with these questions. Fundamental prerequisites or accompaniments to the study of such a bibliography are the three branches of learning in which he who would train himself for the profession of works management should be thoroughly grounded, namely, engineering, industrial economics and in- dustrial psychology. It is noteworthy that the authors of the works hereafter referred to have been, almost without exception, engineers, who have added to their technical training and experience the essential knowledge of accounting, psychology, and economics, requisite to a comprehensive grasp of the problems of factory management. The ambitious engine tender has at hand several works of more or less merit on the steam-engine. He is a subscriber to some technical or trade paper from which he gains advice and inspiration. The same is true of the first-class pattern-maker and draftsman, and of any high-grade craftsman. The chief engineer and the master mechanic of a large industrial establish- ment usually have at hand a supply of high-class works of refer- ence. It seems singular that the same should not be true of commercial managers, or of engineers who have been drawn into positions of works management. To be sure, the literature of factory economics is not abundant. Yet there have been some very good works published. A reading knowledge of some of these works would be of great value to managers and their assist- ants in charge of departments. Such a knowledge might often result in the anticipation of plans and methods which would other- wise require years to mature. That this is true is evidenced by the frequent reproduction, in the most elementary form, of methods 374 A BIBLIOGRAPHY OF WORKS MANAGEMENT 375 thought new and original by those introducing them, when in fact the same methods have been far more completely worked out by others. A similar ignorance of current practice and of best methods on the part of the mechanical and engineering depart- ment heads would be considered unpardonable. 420. A Business or Shop Library for Managers and Employees. A certain evidence of the lack of reading along these lines by those who might profit therefrom is the ease with which an unscrupulous man who has made himself familiar with the litera- ture of works management is able to palm off, as originated by himself, charts, tables, and forms, and sometimes pages of dis- cussion, copied verbatim from standard works. It certainly would be a profitable investment for many a manufacturing corporation to provide a reference library of such standard works as would be of particular application to and bear upon the busi- ness concerned, and to encourage the employees to make use of this reference library in working hours for reference, and out of working hours for education. A. S. M. E. Papers. There are certain papers presented before the American Society of Mechanical Engineers which may justly be termed classics in industrial management. Most of these have been reprinted by the society and can be purchased in pamphlet form. The entire series should be bound together into a single volume for convenience in handling and to prevent wear and tear. These papers are as follows : Vol. X, Paper No. CCCXLI."Gain Sharing," a paper by Henry R. Towne, presented at the May, 1889, meeting of the American Society of Mechanical Engineers. This paper, and several others, will be listed among the books reviewed, since these papers well deserve the name of classics. " Webster defines profit as excess of value over cost, and gain as that which is obtained as an advantage. I have availed of this well-expressed though delicate distinction between the two terms, to coin a name for the system herein described, whereby to differentiate it from profit-sharing as ordinarily understood and practised. The right solution of this problem will manifestly consist in allotting to each member of the organization an interest in that portion of the profit fund which is or may be affected by his individual efforts or skill, and in protecting this interest against diminution resulting from the errors of others or other extraneous causes not under his control. Such a solution, while not simple, 376 FACTORY ORGANIZATION AND ADMINISTRATION is attainable under many circumstances, and attainable by methods which experience has shown to be both practical and successful." The plan advocated by Mr. Towne is the differentiating of all items affecting cost of production over which the operatives have any control whatever, and offering the operatives a share, say one-half, of any reduction per unit of product that they may be able to bring about in these items in the course of a year. Foremen and other responsible heads are to receive a larger pro- rata share of the saving effected than the rank and file. Mr. Towne presents tables showing the operation of the system for two years at the Yale and Towne Works. It is interesting to note that the company has discontinued the plan. The discussion by Mr. E. F. C. Davis is the first record pub- lished of the so-called premium plan. He cites an instance of a friend of his who announced to his workmen that he would allow a definite number of hours to do a certain machine-shop job, and that of any time the workman saved over that he would get one-half the benefit. Mr. Davis stated that after the work- men found that the offer was really made in good faith, the plan worked very well. Vol. XVI, Paper No. DCXLVII."A Piece-rate System" by Fred W. Taylor, a paper presented at the June, 1895, meeting of the American Society of Mechanical Engineers. In this paper, Mr. Taylor presents the first recorded recom- mendations in favor of a careful or scientific study of the subject of rate-fixing, and of the differential piece rate. Piece-work prices based on elementary rate-fixing differ from such prices as usually made, in that a careful study is made of the elemental times required to do each of the constituent steps into which the manufacturing operations of an establishment may be analyzed. These elementary operations are then classified, recorded, and indexed, and when a piece-work price is wanted for work, the job is first divided into its elementary operations, and the total time for the job is summed up from these elementary data. The differential-rate system of piece work consists of the offer- ing of two different rates for the same job a high price per piece in case the work is finished in the shortest possible time and in perfect condition, and a lower price per piece if it takes a longer time to do the job, or if there are any imperfections in the work. Mr. Taylor expresses it as his opinion, based on extensive A BIBLIOGRAPHY OF WORKS MANAGEMENT 377 experience, that the workmen in nearly every trade can and will materially increase their present output per day, providing they are assured of a permanent larger return for their time than they have been receiving, and that employers can well afford to pay higher wages per piece, even permanently, provided each man and machine in the establishment turns out a proportionately larger amount of work. The most formidable obstacle to the solution of the piece- work problem, Mr. Taylor states, is the lack of knowledge of the quickest time in which each piece of work can be done, the remedy for this lying in the establishment in every factory of a proper rate-fixing department. In closing the discussion of his paper, Mr. Taylor expressed regret that the elementary rate-fixing features of the system he described did not receive more attention by the members dis- cussing his paper, and stated it as his firm conviction that this question must occupy more and more of the attention of manu- facturers in the future. This paper of Mr. Taylor's, together with his later and exhaust- ive one delivered at the June, 1903, meeting (an abstract of which is given in this bibliography), deserve the most careful perusal of every manufacturer. Vol. XXIII, Paper No. 928. "A Bonus System of Rewarding Labor," a paper by H. L. Gantt, presented at the December, 1901, meeting of the American Society of Mechanical Engineers. The paper is a description of a system introduced by the author into the machine shop of the Bethlehem Steel Company. An instruction card is made out, showing in detail the best method (so far as knowledge and experience available can give it) of performing each of the elementary operations on any piece of work, specifying the tools to be used, and setting the time needed for each of these operations as determined by experiments. The sum of these times is the total time needed to complete the piece of work. If the workman accomplishes all the work assigned in any one day within the total time limits specified, he is paid a definite fixed bonus, in addition to the day rate which he always gets. If he fails, he gets simply his day rate. As the time for each detail operation is specified on the instruction card, the work- man can see continually whether he is going to earn his bonus or not. If he finds any operation which cannot be done in the time specified, he must at once report it to his foreman. If, on care- 378 FACTORY ORGANIZATION AND ADMINISTRATION ful investigation by the man making out the card, the work- man's statement is found to be correct, a new instruction card is made out, explaining the proper method of working, and allow- ing the proper time The foremen also receive, in addition to their day wages, com- pensation proportional to the number of their men who earn a bonus, and an extra compensation if all of their men earn bonuses. "As the instruction cards are made out by a skilful man, with the records at hand, they invariably prescribe a better method for doing the work than the ordinary workman or foreman could devise on the spur of the moment. ... "The system has many of the advantages of the differential piece- work method, by which the compensation is quite large for the maximum amount of work obtainable. Since it is impossible for men to earn bonuses when their machines are out of order, an automatic punishment is provided for breakdowns. . . . "Considerable training is necessary to teach the men, who, as a rule, are ordinary laborers, to follow the instruction cards. Having once given them this training, however, the advantage of having a first-class machinist to do the thinking, and to use for them the best results already obtained, produces an efficiency which would be absolutely impossible if the workmen were left to themselves." Samples of the forms used are given, as filled out in actual use. The author states: "If we have a thorough knowledge of all the conditions, and are able to introduce piece work, it is undoubtedly to be preferred. But we must remember that aside from the great injustice of it, there is nothing so demoralizing as cutting piece rates." The bonus system carries with it the advantage that if the time allowance is too easily reached, a limit is nevertheless set to any workman's daily gain, which can never be more than the fixed daily bonus. Vol. XXIV, Paper No. 1003 "Shop Management," by Fred W. Taylor, a paper presented at the June, 1903, meeting of the American Society of Mechanical Engineers. This exhaustive paper, which covers 150 pages of the society's transactions, is a record of some twenty years of genuine research work by the author. The compiler of this bibliography emphat- ically agrees with Mr. Henry R. Towne in his characterization of this paper as the most valuable contribution to this subject which A BIBLIOGRAPHY OF WORKS MANAGEMENT 379 has yet been made. As stated by Mr. Towne, it includes so complete a review as to constitute almost a history. It is clear- cut and comprehensive, written in a characteristic, vigorous, clear style. Mr. Taylor brings out again, and in greater detail than in his former paper of 1895, the importance of scientific time study as the foundation of the best management. In addition to the more detailed description of scientific rate-fixing, the other new features not brought out in his previous paper referred to are the use of the " Instruction Card" to accompany any system of compensation, whether it be Mr. Gantt's bonus, Mr. Taylor's differential piece rate, the premium method, or ordinary piece rate; also the system of functional foremanship. Functional management consists in so dividing the work of management that each man, from the assistant superintendent down, shall have as few functions as possible to perform. If practicable, the work of each man in the management should be confined to the performance of a single leading function. As example of this fuctional management, there are suggested in the factory office, the man in charge of order of work and routing department, the one in charge of instruction-card department, the time and cost clerk, and the shop disciplinarian, these four divisions making up what Mr. Taylor calls the " planning depart- ment." In the shop itself the functional foremanships are those of "gang boss," who has charge of the preparation of all work up to the time the piece is set in the machine, including the selec- tion and providing of jigs, templates, drawings, etc.; the "speed boss," who must see that the proper cutting tools are used, that the cuts are started right, and that the best speeds and feeds are employed; the "inspector," who is responsible for the quality of the work; and the "repair boss," who sees that each machine is kept clean by its operator and free from rust and scratches, and that it is oiled and otherwise properly treated. Vol. XXV, Paper No. 1010. "Slide Rules for the Machine Shop," by Carl G. Barth, a paper presented at the Dec. 1903 meeting of the American Society of Mechanical Engineers. In this paper Mr. Barth describes the methods to be undertaken in securing correct feeds and speeds and other matters connected with the machine tool equipment of a metal-working industry. He also outlines the mathematical theory on which he bases the construction of his slide rules by the use of which an experienced 380 FACTORY ORGANIZATION AND ADMINISTRATION machine-tool operator with mental capacity to understand the slide rule, or a technically trained man preparing instruction cards, can determine the correct gear and pulley combination to use in machining a given piece. Vol. XXVII Index. At the close of the 1906 volume there is an index of all papers on Works Management and discussions in the transactions of the society up to that date. This index in- cludes reference to several discussions not here mentioned. Vol. XXVIII, Paper No. 1119." The Art of Cutting Metals, " by Fred W. Taylor. This paper should be read and reread by every foreman, manager, or proprietor of an industry using machine tools, as well as by any person proposing to undertake the fixing of time standards or wage rates on machine tool work. It is a monumental piece of research work that has seldom been equalled even in the field of pure science. The paper is illustrated by a large number of charts, tables and photographs illustrating proper cutting angles, feeds and speeds, lubrica- tion, etc. Vol. XXXIV, Paper No. 1378. Report of Sub-committee on Administration on the Present Status of the Art of Industrial Management, presented at the December, 1912 ; meeting of the Society. The report of the committee itself is excellent and in- dicates marked progress toward the formulating of definite prin- ciples of the Science of Management. Unfortunately a good deal of the discussion does not directly bear on the report of the com- mittee but is a repetition of matter already presented to the public by the speakers. 421. A Bibliography of the Classical or Pioneer Literature of Works Management or Industrial Engineering prior to 1904. In the Engineering Magazine, Vol. XXVII, No. 4, July, 1904, the author of this text reviewed the bound volumes and A. S. M. E. papers published up to that time. This bibliography included a number of volumes not mentioned in the present edition of this work, as they are not representative of present-day practice. However to the man interested in the historical development of the subject the list given will be of interest. In the same number of the Engineering Magazine immediately following the paper just referred to, is a complete bibliography of the periodical lit- erature of Industrial Engineering up to and including May, 1904. 422. A Standard Reference Library of Industrial Management and Industrial Engineering. The following list is intended to A BIBLIOGRAPHY OF WORKS MANAGEMENT 381 include such works as the progressive industrial corporation should possess and encourage its employees to read : ALEXANDER HAMILTON INSTITUTE: "Organization and Management," by Lee Galloway. BABCOCK: "Taylor System in Franklin Management." BENTLEY: "Corporate F. nance and Accounting." BLACKFORD AND NEWCOMB: "The Job, the Man, the Boss.", BRANDEIS: "Scientific Management." BRISCO: "Economics of Business." BR sco: "Econom'cs of Efficiency." BUNNELL: "Cost Keeping for Manufacturing Plants." CARLTON: "Education and Industrial Evolution.' CARPENTER: "Profit-making Management." CHURCH: "Expense Burden." CHURCH: "Production Factors in Cost Accounting and Works Management." CHURCH: "Science and Practice of Management." COOK: "Factory Management." CONYNGTON: "The Modern Corporation. ' COWEE: "Practical Safety Methods and Devices." DAY: "Accounting Practice." DAY: "Industrial Plants." DIEMER: "Factory Organization and Administration.' DICKSEE AND B LAIN I "Office Organization and Management." DICKSEE: "Business Organization." DUNCAN: "The Principles of Industrial Management." DURELL: "Fundamental Sources of Erne ency." EMERSON: "Efficiency." EMERSON: "Twelve Principles of Efficiency." ENNIS: "Works Management." EVANS: "Cost Keeping and Scientific Management." FICKES: "Shop Expense, Analysis and Control." GALLOWAY: "Organization and Management." GANTT: "Work, Wages and Profit." GILBRETH: "Applied Motion Study." GILBRETH: "Motion Study." GILBRETH: "Primer of Scientific Management." GOING: "Principles of Industrial Engineering." HARTNESS: "The Human Factor in Works Management." HOXIE: "Scientific Management and Labor." KEMBLE: "Choosing Employees by Test." KNOEPPEL: "Maximum Production." LODGE: "Rules of Management." LODGE: "Shop Rules." MATHESON: "The Depreciation of Factories." MUENSTERBERG: "Psychology and Industrial Efficiency." PARKHURST: "Applied Methods of Scientific Management." 382 FACTORY ORGANIZATION AND ADMINISTRATION PARKHURST: "Symbols." REDFIELD: "The New Industrial Day." SCHLOSS: "Methods of Industrial Remuneration." SCOTT: "increasing Human Efficiency in Business." SHEPARD: "Application of Efficiency Principles." SULLIVAN: "American Corporations." TAYLOR: "Shop Management." TAYLOR: "The Art of Cutting Metals." TAYLOR: "The Principles of Scientific Management." THOMPSON: "Scientific Management." TUCK SCHOOL: "Conference on Scientific Management." TWYFORD: "Purchasing." TYRRELL: "Engineering of Shops and Factories." WEBNER: "Factory Costs." The above list includes most of the works mentioned as supple- mentary reading to the various chapters of this work and repre- sent an up-to-date private or company library. 423. A Comprehensive Library of Supplementary Reading for a School of Engineering or School of Business Administration or Public Library. The following list is in addition to the afore- mentioned works : Accounting and Cost-keeping. COLE: "Accounts." HATFIELD: "Modern Accounting." RIDGWAY: "Cost Accounts." ARNOLD: "The Complete Cost Keeper.' 1 ARNOLD: "The Factory Manager and Accountant." BENTLEY: "The Science of Accounts." GARCKE AND FELLS: "Factory Accounts." LISLE: "Accounting in Theory and Practice." DICKSEE: "Advanced Accounting." KEISTER: "Corporation Accounting and Auditing." MOORE AND MINER: "Accounting and Business Practice." SOULE: "New Science and Practice of Accounts." MACKENZIE ST. CLAIR: "The Modern Balance Sheet." "The Accountant's Library." Published by Gee & Sons, London. "Cyclopedia of Accounting." 8 volumes. Published by W. Green & Sons, London. BROWN: "History of Accounting and Accountants." "The Accountant's Manual." Published by Gee & Sons, London. DAWSON: "The Accountant's Compendium." RENN: "Practical Auditing." J. H. GOODWIN: "Bookkeeping and Business Manual." Business and Engineering Law. BURDICK: " Essentials of Business Law." PARSONS: "Laws of Business." WAIT: "Law of Operations Preliminary to Construction." A BIBLIOGRAPHY OF WORKS MANAGEMENT 383 BALL : ' ' The Law Affecting Engineers. ' ' HARING: "Engineering Law." JOHNSON: "Contracts and Specifications." BRENNAN: "Handbook of Commercial Law." SPENCER: 'Commercial Law." SULLIVAN: "American Business Law." TUCKER: "Contracts in Engineering." Commercial Geography. ADAMS: "Commercial Geography." CHESHOLM: "Commercial Geography." GREGORY: "Physical and Commercial Geography." MACFARLANE: "Commercial and Industrial Geography." MORRIS: "Industrial and Commercial Geography." TROTTER: "The Geography of Commerce." Economics of Workingmen. GUNTON: "Wealth and Progress." UNION: "Labor Legislation, Labor Movements and Labor Leaders." MARX: "Wage Labor and Capital." PETERS: "Labor and Capital." Rus: "How the Other Half Lives." ROBERTSON: "The Eight Hours Question." SCHOENHOF: "The Economy of High Wages." SHAD WELL: "Industrial Efficiency." SPAHR: "America's Working People." HOBSON: "Evolution of Modern Capitalism." MALLOCK: "Classes and Masses." COMMONS: "Selected Readings on Labor Problems." WEBB: "Industrial Democracy." British Royal Commission on Labor. Foreign Reports. (For histor- ical account of social efforts at amelioration of wage-earners' condition in different countries.) British Statutes (such as Friendly Societies Acts, Trade-Union Acts, and Workmen's Compensation and Trades Disputes Acts of 1906). Monographs on Labor Legislation in several States. (Massachusetts, Pennsylvania.) TOYNBEE: "Industrial Revolution." ASHLEY: "Adjustment of Wages." BOOTH: "In Darkest England and the Way Out." CHAPMAN: "Work and Wages." BRETANO: "The Relation of Labor to the Law of To-day." DRAGE: "The Unemployed, and the Problem of Aged Poor." GILMAN: "A Dividend to Labor." SCHULZE, GAEVERNITZ: "Social Peace." MITCHELL: " Organized Labor." ADAMS AND SUMNER: "Labor Problems," pp. 3-16, 502-547. LEVASSEUR: "American Workman," pp. 436-509. MITCHELL: "Organized Labor," pp. 391-411. "Twelfth Census." Special Report on Employees and Wages, p. xcix. "National Civic Federation, Industrial Conciliation," pp. 40-48, 141- 154, 238-243, 254-266. GLADDEN: "Working People and Their Employers." 384 FACTORY ORGANIZATION AND ADMINISTRATION "Workmen's Compensation," U. S. Dept. Commerce and Labor. "Workmen's Insurance and Compensation Systems," U. S. Bureau of Labor. ADAMS & SUMNER: "Labor Problems." CARLTON: "The Industrial Situation." COMMONS: "Industrial Goodwill." GANTT: "Industrial Leadership." HARTNESS: "The Human Factor in Works Management." HOBSON: "Work and Wealth." Karapetoff : "The Human Side of the Engineering Profession." MYERS: "Preventing Losses in Factory Power Plants." REDFIELD: "The New Industrial Day." Employment Management. BASSET: "When the Workmen Help You Manage." BLOOMFIELD: "The Vocational Guidance of Youth." BRAY: "Boy Labor and Apprenticeship." CLOTHIER: "Function of the Employment Department." COHEN: "An American Labor Policy." "Commissioner of Education Reports," Washington, D. C. COMMONS: "Industrial Goodwill." COOLEY: "Vocational Education in Europe." DAVENPORT: "Education for Efficiency." DAVIDSON: "Education of the Wage Earner." DAVIS: "Vocational and Moral Guidance." DOFF: "The Place of Industries in Elementary Education." GANTT: "Organizing for Work." GILLETTE: "Vocational Education." HANUS: "Beginnings in Industrial Education." KELLY: "Hiring the Worker." LEAKE: "Industrial Education." LEAVITT: "Examples of Industrial Education." LEITCH: "Man to Man The Story of Industrial Democracy." MAROT: "Creative Impulse in Industry ," New York, 1918. METROPOLITAN LIFE INSURANCE Co.: "Hiring and Firing," New York, 1918. National Association of Corporation Schools Publications, 15th St. & Irving PI., New York City. National Society for Promotion of Industrial Education, 140 W. 43rd St., New York City. PUFFER: "Vocational Guidance." ROBERTS: "Manual for Teachers." ROBINSON: "The Wage Earning Boy." RUSSELL SAGE FOUNDATION: "Boyhood and Lawlessness." SCHNEIDER: "Education for Industrial Workers." SNEDDEN: "The Problem of Vocational Education." STOOD ARD: "The Shop Committee." TAYLOR: "Handbook of Vocational Education." TEAD: "Instincts in Industry." "U. S. Federal Board for Vocational Education Bulletins." A BIBLIOGRAPHY OF WORKS MANAGEMENT 385 TRAVIS: "The Young Malefactor." U. S. Bureau of Labor Bulletins, Nos. 31, 54, 159 and others. WARE: "Educational Foundations of Trade and Industry. WEAVER: "Profitable Vocations for Boys." WRIGHT: "The Apprenticeship System and its Relation to Industrial Education." Finance, Banking, and Currency. ALDRICH: "Money and Credit," Chapters, I, II, V. BRYAN: "Credit, Its Meaning and Moment." WALKER: "Money." ZIMMERMAN: "Credits and Collections." HEPBURN: "Contest for Sound Money." KINLEY: "Money." JOHNSON: "Money and Currency." LEWIS: "The Credit Man and His Work." PRESTON: "Credits, Collections, and Their Management." WATSON: "History of American Coinage." DEWEY: "Financial History of the United States," pp. 34-59, 76-117, 224-246, 252-262. CATTERALL: "The Second Bank of the United States," pp. 1-24, 63-119, 376 map, 402-403, 464-477. BULLOCK: "Essays on the Monetary History of the United States," pp. 60-93. HAMILTON: ''Reports on Public Credit." Amer. State Papers, Finance, Vol. I, pp. 15-37, 64-76. KINLEY: "History of the Independent Treasury," pp. 16-39. SUMMER: "Andrew Jackson" (ed. 1886), pp. 224-249, 257-276, 291-342. Ross: "Sinking Funds," pp. 21-35. SCOTT: "Repudiation of State Debts," pp. 33-196. BOURNE: "History of the Surplus Revenue of 1837," pp. 1-42, 125-135. CONANT: "History of Modern Banks of Issue," pp. 3103-47. MITCHELL: " History of the Greenbacks," pp. 3-43, 403-420. NOYES: "Thirty Years of American Finance," pp. 1-72, 234-254 (73-233). TAUSSIG: "Silver Situation in the United States," pp. 1-157. DUNBAR: "National Banking System," Q. J. E., Vol. XII, pp. 1-26; printed also in Dunbar's "Economic Essays," pp. 227-247. HOWE: "Taxation and Taxes in the United States under the Internal Revenue System," pp. 136-262. "Tenth United States Census " (1880), Vol. VIIjBayley, "History of the National Loans,-" pp. 369-392, 444-486. WHITE: "Money and Banking." TAYLOR: "Chapters on Money." DUNBAR: "Theory and History of Banking." Industrial History of the Ur.ited States. COMAN: "Industrial History of the United States." TAUSSIG: "Tariff History." DEWEY: "Financial History." 25 386 FACTORY ORGANIZATION AND ADMINISTRATION HART: "American History as told by Contemporaries," Vols. Ill and IV. SEMPLE: "American History and its Geographic Conditions." BULLOCK: "Selected Readings in Economics." CAIRNES: "The Slave Power." CALLENDER: "Early Transportation and Banking Enterprises in rela- tion to the Growth of Corporation," in Quarterly Journal of Eco- nomics, Vol. XVII. NOTES: "Recent Economic History of the United States," in Quarterly Journal of Economics, Vol. XIX. DAY: "History of Commerce." HAMILTON: "Report on Manufacturers," in Taussig's State Papers and Speeches on the Tariff, pp. 1-79, 103-107 (79-103). BOLLES: "Industrial History of the United States," Book II, pp. 403- 426. BISHOP: "History of American Manufacturers," Vol. II, pp. 256-505. BABBENO: "American Commercial Policy," pp. 146-183. RINGWALT: "Development of Transportation Systems in the United States," pp. 41-54, 64-166. CHITTENDEN: "Steamboat Navigation on the Missouri River," Vol. II, pp. 417-424. SEMPLE : "American History and its Geographic Conditions," pp. 52-74. DONALDSON: "Public Domain," pp. 1-29, 196-239, 332-356. SANBORN: "Congressional Grants of Land in Aid of Railways," Bulletin of University of Wisconsin Econ., Pol. Sci. and Hist. Series, Vol. II, No. 3, pp. 269-254. HART: "History as Told by Contemporaries," Vol. Ill, pp. 459-478. QUAINTANCE: "Influence of Farm Machinery," pp. 1-103. BEMIS: "Discontent of the Farmer," J. Pol., EC., Vol. I, pp. 193-213. JOHNSON: "American Railway Transportation," pp. 24-68, 307-321, 367-385. Organization of Business Enterprises. BENTLEY: "Corporation Finance and Accounting." SULLIVAN: "American Corporations." VEBLEN: "The Theory of Business Enterprise." WOOD: "Modern Business Corporations." CONYNGTON: "Corporate Organization." FRANK: "Science of Organization and Business Development." KIRSCHBAUM : " Business Organization and Administration." SPARLING: "Business Organization." MEADE: " Corporation Finance." DUNCAN: " Principles of Industrial Management." HENDRICK: "The Power to Regulate Corporations and Commerce." RIPLEY: "Trusts, Pools, and Corporations." FLOY: "Valuation of Public Utility Properties." BURTON: " Corporations and the State." WHITTEN: "Valuation of Public Service Corporations." GREEN: "Corporation Finance." MEADE: "Trust Finances." COMMON: "Trade Unions and Labor Problems." A BIBLIOGRAPHY OF WORKS MANAGEMENT 387 WEBB: "Industrial Democracy." HOBSON: "Evolution of Modern Capitalism." ELY: "Monopolies and Trusts." Industrial Commission Report. Commissioner of Corporations: Report on the Beef Industry; Report on the Transportation of Petroleum; Report on the Petroleum Indus- try. MONTAGUE : " The Ethics of Trust Competition, in Atlantic," Vol. XCV. MONTAGUE: "The Transportation Phase of the Oil Industry," in Journal of Political Economy, Vol. XV. ADAMS: "The Relation of the State to Industrial Action," in American Economic Association Publication, Vol. I. WILLOUGHBY: "Integration of Industry in the United States," Vol. XVI, pp. 94-115. NOVES: "Recent Economic History of the United States," Vol. XIX, pp. 188-209. Twelfth Census, Vol. VII, pp. 110-214. Industrial Commission, Vol. XIII, pp. 5-18. BULLOCK: "Trust Literature," Vol. XV, pp. 167-217. ALLEN: " Business Employment." BLOOMFIELD: "Relations of Foremen to Working Force." BRISCO: ' 'Economics of Business." CADBURY: ''Experiments in Industrial Organization." CARPENTER: "Profit Making in Shop and Factory Management." DRESSER: "Human Efficiency." ENNIS: "Works Management." GOING: "The Principles of Industrial Engineering." HINE: "Modern Organization." JONES: "Business Administration." KELLY: "Hiring the Worker." KENT: "investigating an Industry." KIMBALL: "Principles of Industrial Organization." LINCOLN: "The Factory." McVEY: "Modern Industrialism." PARSONS: "Office Organization and Management.' PRICE: "The Modern Factory." Transportation. COOLEY: "The Theory of Transportation." JOHNSON: "American Railway Transportation." JOHNSON: "Ocean and Inland Water Transportation." HADLEY: "Railroad Transportation." MEYER: "Government Regulation of Railway Rates." RIPLEY: "Railway Problems." NEWCOMB: "Railway Economics." NOYES: "American Railroad Rates." MEYER: " Railway Legislation." "Industrial Commission," Vol. XIX, pp. 466-481. ADAMS: "Chapters of Erie," pp. 1-99, 333-429. DAVIS: "The Union Pacific Railway, Annals of the Amer. Acad.," VoL VIII, pp. 259-303. 388 FACTORY ORGANIZATION AND ADMINISTRATION VILLARD: "Memoirs," Vol. II, pp. 284-312. DIXON: "Interstate Commerce Acts as Amended," Vol. XXI, pp. 22-51. CHISHOLM: "Inland Waterways." Selling and Advertising. ATKINSON: "Psychology of Salesmanship." BRIDGE WATER: "Advertising." BALMER: "The Science of Advertising." BELLAMY: "Effective Magazine Advertising." BUNTING: "Specialty Advertising." BOWKER: "Copyright, Its History and Its Law." SHRYER: "Analytical Advertising." STARCH: "Principles of Advertising." System Co., "How to Write Letters That Win." SINGER: "Patent and Trade Marks Laws of the World." SWAN: "Patents, Designs and Trade Marks." THOMPSON: "Things to Know about Trade Marks." VARDAMAN: "The Master Salesman." CORBION: "Principles of Salesmanship." COLLINS: "Human Nature in Selling Goods." CASSON: "Ads and Sales." CALKINS AND HOLDEN: "Modern Advertising." COLEMAN: "Advertising Development." CHERINGTON: "Advertising as a Business Force." Copyright Office Bulletins. DAVENPORT: "Value and Distribution." DEWEESE: "Principles of Practical Publicity." FOWLER: "Practical Salesmanship." FARRINGTON: "Store Management." HIRSCHLER: "Art of Retail Selling." HESSELTINE: "Law of Trade Marks and Unfair Trade." JOHNSON: "Library of Advertising." KNOX: "Salesmanship and Business Efficiency." LENINGTON: "Seven Principles of Successful Salesmanship." LINDGREN: "The New Salesmanship." LAWRENCE: "Making Him Buy." MACBAIN: "Selling." MOODY: "Men Who Sell Things" Moran, "The Business of Adver- tising." MACDONALD: "Successful Advertising." PARSON: "Principles of Advertising Arrangement." PAGE: "Advertising." NEWELL: "Patents, Copyrights and Trade Marks." PIERCE: "Scientific Salesmanship." POWELL: "Practical Advertiser." Statistics. DAVENPORT: "Statistical Methods." MULHALL: "The Dictionary of Statistics." BOWLEY: "Elements of Statistics." r A BIBLIOGRAPHY OF WORKS MANAGEMENT 389 MEITZEN: " History, Theory, and Technique of Statistics." NEWSHOLME: "Vital Statistics." BERTILLON: "Cours Elementair." LEVASSEUR: "La population francaise." BLOCK: " Trait e de statistique." MAYO-SMITH: "Statistics and Economics." DEWEY: " Discussion of Wage Statistics in volume on Wages, 12th U. S. Census." Consular Reports (British and American). Publications of Census Bureau (and of other Departments on Labor, Trade, and Finance). British Board of Trade Publications. Journal of the Royal Statistical Society. Journal of the American Statistical Society (Articles by Mitchell, James, Bullock, etc.). Publications of the State Labor and Statistical Bureaus. Trade Unions. KIRK: "National Labor Federations in the United States." WEBB: "Industrial Democracy." COMMONS: "Trade Unions and Labor Problems." HOLLANDER AND BARNETT: "Studies in Trade Unionism." COGLEY: "The Law of Strikes, Lockouts, and Labor Organizations." EDDY: "The Law of Combinations." ELY : " The Labor Movement in America." HOWELL: "Trade Unionisin, New and Old." Mitchell: "Organized Labor." Peters: "Labor and Capital." SPEDDEN: "The Trade Union Label." U. S. Industrial Commission Reports. WEBB: "History of Trade Unionism." INDEX Accounting, 5, 51, 382. Accounting system, merging costs into, 51, 284. Addressing machine, use of in con- nection with pay-roll, 268. Advisory board method of factory control 47, 60, 361. Aids in taking inventory, 304. Air-spraying, 91. Air washer, 93. Alterations in bills of material, 156. Alterations in orders, 151. Alterations in patterns, 172. Alterations to machinery, 239. Analysis of pay-roll, 66, 279. Application for employment, 114. Appraisals, 21, 313. Apprenticeship systems, 127, 364. Arc lamps, 97. Authorization of piece-work rates, 337. Babbage, Chas., "Economy of Ma- chinery and Manufactures," 9. Balances in stock-room recorded on shop tags, 221. Baldwin Locomotive Works appren- ticeship system, 367. Banking, syllabus of works on, 385. Bearing bracket data, 161. Betterment work, 129, 359. Bibliography of Works management, 374. Billing machine, 143. Bills of material, 152. Bill of material used for posting cost records, 300. Bins in packing room, 254. Bins, numbering in storerooms, 193. Bin-ticket, 191. Blake & Johnson factory, 95. Blue-print machines, 167. Blue-print record, 167. Blue-print storage, 163. Blue-prints, mounting, filing, and issuing, 163, 167, 238. "Bonus System of Rewarding Labor," by H. L. Gantt, re- viewed, 377. Bonus system, time sheet for, 271. Bonus wage system, 351, 353, 354. Buildings, factory, 80. Burden rates, 53, 286-288. Bushing data, 160. Business and Engineering Law, syl- labus of works on, 382. Call-bell system, 238. Carbon copies of correspondence, 139. Card's machine tool recorder, 333. Car-load shipments, 258. Car record, 259. Castings, perpetual inventory of, 186. Castings received, report of, 262. Castings, record of foundry, 233. record of stock of, 187. requisitions and purchase or- der for, 179. requisition in foundry, 224. scrapped, 229. warehouse, 188. Centralized control in the factory, 24. Changes in bills of material, 159. Changes in design, 360. Changes in drawings, 163. Changes in employees, 360. Changes in orders, 151. Changes in patterns, 171. Changes in piece-rates, 335, 346. Charts, graphical, 63. Charts organization, 39-50. 391 392 INDEX Check numbers, assigning, 268. Checking drawings, 167. Cipher code for employees' charac- teristics, 123. City site for factory, 71, 74. Classification of shop orders, 143. Clean air, 91. . Clerical force, need of sufficient, 364. Clock -card used as work-card, 268. Coke air washer, 93. Commercial Geography, syllabus of works on, 383. Comparative individual operation costs, 299. Comparative time record for refer- ence in rate fixing, 337. Comparative total costs, 298. Competitors' prices, 302. Completion of orders, notice of, 298. Component part costs, 286. Concrete floors, 105. Concrete, reinforced, 106. Continuation schools, 365. Cooperation between accounting and cost departments, 295. Cooperation between employers and employees, 359. Cooperative engineering schools, 371. Core-maker's order copy, 225. Correspondence, 136. filing of, 137. interdepartmental, 137. Costs, comparative, 299-301. Cost department, 281. qualifications of head of, 282. reports, 63, 64. Costs, material, 285. Costs merged into accounting sys- tem, 284. Cost postings checked against pay- roll, 288. Cost record on bill of material, 155, 300. Cost system, adapting to premium or bonus wage systems, 356. Cost system, development of, 283. Country site for factory, 72. Credit for material returned to storeroom, 177. Cupola charge sheet, 231, 232. Cupola report, 232. Currency, syllabus of works on, 385. Day -rate of pay, field for, 342. Defects and errors, 321, 322. Defective castings, 229. Delays due to time-posting, 270. Delays in purchase orders, 180, 216. Demonstrators in rate fixing, 362. Departmental bills of material, 154. Departmental reports, 58. Departments, arrangements of, 85. Depreciation, 21, 308, 311. Designing factory buildings, 80. Designing department, 159. Desks, flat-top or roll-top, 140. Detached lots of stock orders, 219. Detail drawings, 164. Dimensional inspection, 318. Direct labor defined, 288. Direct shipments, 257. Distribution of labor, 279. Dooley, C. R., discussion of factory schools, 369. Double entry system, merging costs into, 51, 284. Drafting department, 159. Drafting department report, 61. Draftsman's time cards, 168. Drawing list, 162. Drayage, 183, 286. Duplicate work in tool department, 241. Economics of workingmen, syllabus of works on, 383. Educational extension work, 365. Education for factory management, 2. Efficiency records of workmen, 123, 237, 355. Electrical inspection, 325. Employment of labor, 109. Employment record, 115. Equipment, inventorying, 309. Erection inspection, 319. Errors and defects, 321, 322. Executive control in the factory, 40. , INDEX 393 Expense account, 53, 289. Expenses, hourly rate method, 292. localizing, 279, 294. manufacturing, items consti- tuting, 289. percentage method of adding to costs, 291. Express charges, 183, 263/290. Extension work in educating work- men, 365. Factor of safety, 290. Feeds and speeds of machine tools, records of, 331. Files, records of, 241. Filing catalogues, 182. Filing correspondence, 137. Filing orders in shipping office, 253. Filing purchase orders, 180. Filing tracings and blue-prints, 162. Final inspection, 320. Finance, banking and currency, syllabus of works on, 385. "Finding lists" in storerooms and warehouses, 193. Finished parts record, 188. Finished product, 185, 284. Fireproof vaults, 162. Fixing piece-work rates, 329. Fixtures, orders for, 148. Flaming arc lamps, 97. Floors, factory, 104. Floor inspection, 319. Foremen, selecting, 110, 363. Foremen's meetings, 60, 217. Foundry, consecutive job list, 220. Foundry's daily record of work done, 227. Foundry delivery record, 228. Foundry record of work in process, 229. Foundry systems, 224. Foundry time ticket, 233. Freight charges, 286. Freight claims, 260. Freight payments, 259. Freight receipts, 256. Functional control, 26. "Gain Sharing," by Henry R. Towne, reviewed, 375. Gain-sharing wage systems, 347. Gantt, H. L., "A Bonus System of Rewarding Labor," reviewed, 377. Gear data, 160. General office, 136. General office report, 60. Glass, 94. Glass, prismatic, 97. Good management, principles under- lying, 359. Graphical charts, 63. Group arrangement of bill of mate- rial, 154. Groups of parts, inspection of, 319. Health as affected by heating sys- tems, 91. Heating systems for factories, 89. Hiring labor, 109. Hot blast heating system, 91. Hourly expense rates, 292. Hourly machine rate, 294. Human element in manufacturing, 7. Humidifying air, 93. Ideals to be attained in manufactur- ing, 129. Illumination, 94. Incandescent lamps, 97. Indexing in drafting department, 159. Indirect heating pressure system, 90. Indirect labor, 53, 148, 288. Industrial agents of railroads r 75. Industrial engineer, employment of, 108, 372. Industrial History of the United States, syllabus of works on, 385. Inspection, dimensional, 318. electrical, 320. erection, 319. final, 320. floor, 319. Inspection methods, 317. 394 INDEX of Inspection of groups of parts, 319 Inspectors, qualification of, 321. Inspectors' report, 324. Instructions to time-takers, 272. Interdepartmental movement work in process, 212. Interest, as part of cost, 290. Inventory, aids in taking, 304. classifying materials, 305. precautions in taking, 313. Inventory tags, 306. Invoices, checking, 184. Job-card, 275. Labor account, 52, 274, 286. Labor conditions as affecting fac- tory site, 72. Land, cost of, as affecting type of building, 74. Labor cost, posting of, 286. Labor distribution, report of, 279. Labor efficiency records, 126, 339, 345, 355. Labor problems, 109. Labor, productive, defined, 288. Lamps, arc, 97. incandescent, 97. mercury vapor, 97. Laws of Business, syllabus of works on, 382. Laying out factory buildings, 80. Letters, filing, 137. Light in shops, 94. List of parts, 152, 300. Literature pertaining to works man- agement, 374. Localizing expenses, 279, 294. Locating a factory, 71. Location of lockers, 87. Location of power plant, 102. Location of wash-rooms, 87. Lockers, location of, 87. Loyalty of employees, 359. Machine rate, hourly, 294. Machine shop and tool department, 236. Machine tools classified, 249. Machines, arrangement of, 83. Machinery proposition for new, 251. Mail, opening of, 136. Management of factories, educa- tion for, 2. Management of factories, bibliog- raphy of works relating to, 374. Management, principles underlying, 359. Manifold copies of orders, 143. Manufactured parts, record of, 188. Manufacturing department report, 61. Market as affecting factory site, 73. Material account, 52. Material costs, 285. Materials, inspecting, 317. Materials received report, 261. Mechanical engineering, 7. Meetings of department heads, 28, 204. Merging costs into accounting sys- tem, 51, 284. Mercury vapor lamps, 97. Messenger system, 137. "Minimum" stock of standard parts, 191, 194. Monitor roof, 87, 97. Monthly stock balances, 197. Moulders' order copy, 225. Moulders' time card, 347. Mounting blue-prints, 163. Moving work in process, 212, 237. National Motor Vehicle Co., organi- zation, 44. Night-schools for workmen, 370. Non-productive labor, orders cov- ering, 53, 148, 279, 288. Non-productive travel, avoidance of, 80, 83. Notification to workmen of gains under premium or bonus wage systems, 350, 352. Numbering bins, 193. Numbering parts and patterns, 159. INDEX 395 Observational data as basis for rate fixing, 335. Obsolete parts, 308. Office employees, record of, 115. Office, general, 136. Officials, selection of, 6, 110, 344, 360. Opening mail, 136. Order department, 142. Order on storeroom, 178, 199. Order on tool-room, 240, 243. Orders, classification of, 143. delivery to foremen, 203. manifold copies of, 143. Orders to repair machinery, 239. tracing, 61. Organization charts, 2844. Organization of business enterprises, syllabus of works on, 386. Packing card, 254. Packing list, 256. Partial delivery of parts on stock orders, 219. Partial shipments, 146, 257. Parts, lists of, 152. numbering, 159. record of, 186-191. tracing of, 210. Passage ways, 83, 101. Pattern department, 169. Pattern makers' time-card, 170. Pattern material, 169. Patterns, numbering, 159. Pattern orders, 169. Patterns received, report covering, 266. Pattern record, 159, 171. Pattern storage, 169. Pattern-tag, 174. Pay-roll analysis, 66, 279. Pay-roll checked with cost postings, 272, 287. Pay-roll systems for various wage systems, 330, 336, 356. Perpetual inventory, 186, 191. "Piece Rate System," by F. W. Taylor, reviewed, 375. Piece-work, field for, 345. Piece-work rates, changes in, 338, 344. Piece-work rates, the fixing of, 329- 335. Pittsburg district, welfare work in, 370. Planning work ahead, 201, 222. Potter & Johnson factory, 106. Power plant, location of, 102. Premium systems described, 348- 356. Premium system, -efficiency record under, 355. Premium system, time-sheet for, 356. Press working of metals, 249. Price list of purchases, 182. Prismatic glass, 97. Production department, functions of, 201-211, 222. qualifications of head of, 204. report, 61. Production engineering, 7. Productive labor defined, 288. Promise dates of completion of shop orders, 210, 216, 221. Promises to fill purchase orders, 180. Pulley data, 160. Purchase order, 179. Purchase record, 182. Purchased finished parts, 185. Purchases, delivery of, 180, 205, 216. reports of, 67. Purchasing agent, qualifications of, 175. Purchasing department, functions of, 175. Purchasing important parts before completion of bill of material, 157. Railway industrial agents, as judges of factory sites, 75. Railway transportation, syllabus of works on, 387. Rate-fixing department, 329. Raw material as affecting factory site, 71. 396 INDEX Raw material costs, record of, 286. Raw materials, inspecting, 317. Raw material records, 186. Recalling bills of material, 156. Receipts of castings report, 262. Receipts of material report, 261. Receiving, 26. Reception room, 140. Reinforced concrete, 108. Release card, 1 25. Remington Typewriter Co. organi- zation, 41. Repair orders, 148. Repairs to machinery, 239. Replenishment of storeroom sup- ply, 194. Reports, cost department, 62, 65. departmental, 58. drafting department, 61. general office, 60. inspectors', 324. manufacturing department, 61. Reports of labor distribution, 279. Reports of purchases, 68. production department, 61. summarizing, 63. tracing department, 211. weekly, 60. Request for production order, 194. Requisition on foundry for castings, 224. Requisitions on purchasing depart- ment, 126. Requisitions on storekeeper, 194. Returned goods, disposition of, 265, 322. Returned purchases, 182. Roof, factory, 94-97. monitor, 94-97. saw-tooth, 94-97. Rowan sliding scale wage system, 349. Rules, booklet of, 133. Rush orders, 213. Sanitation, 99. Saw-tooth roof, 94-97. Scheduling machine-shop work, 210. Schneider's plan for cooperation be- tween engineering school and industries, 371. School-work in factories, 365. Scrapped castings, 229. Scrapping defective parts, 321. Selling prices based on shop costs, 281. Shape of factory buildings, 85-88. Shipping, 253. Shipping and Receiving Depart- ments, 253. Shipping record, 255. Shipments, carload, 258. direct from other factories, 257. Shipments direct from shop floor, 320. partial, 146. Shop drawings, 1 63. "Shop Management," by Fred W. Taylor, reviewed, 378. Shop orders, classification of, 144. Shop tag, 218. Single-floored factory buildings, 87. Sites, factory, 71. Skylights, 94. Slow burning construction, 106. Social betterment work, J 29. Speeds and feeds of machine tools, records of, 331. Special manufacturing order, 150. Specifications covering inspection, 317. Splitting orders of work in process, 219. Spraying air, 93. Standardizing drawings, 159. "Standard Operation," time sheet for, 271. "Standard Operation," wage plan, 348. Standing orders, 148, 279, 288. Statistics, syllabus of works on, 387. Stock balances, monthly, 197. Stock defined, 185. Stock-moving, 212, 237. Stock-room methods and systems, 185. INDEX 397 Stock-taking, 304. Stop-watch, use of in rate fixing, 332. Storage of work in process, 83. Stores and stock departments, 185. Suburban site for factory, 76. Suggestion system, 128, 251. Summarizing reports, 63. Summary of cost, 297. Superintendent as related to produc- tion department, 206. Supplies defined, 186. Supply department, 148. Tabulating machine used in time- taking, 277. Tagging materials for inventorying, 306. Tags for tracing work in process, 218. Taylor, Fred W., 5. "A Piece-rate System," reviewed, 376. "Shop Management," reviewed, 378. Telephone operator, 140. Templets of machinery, use of, 84, 85. Temporary bin-ticket, 193. Testing assembled machines, 319- 320. Testing department report, 61, 326- 328. Test record, 326. Tests of tool-steel, 241. Test tag, 327. Time-card for calculagraph, 275. Time-card for each job, 275. Time-card for tabulating machine, 278. Time-card of pattern-makers, 170. Time-cards for draftsmen, 168. Time-cards of foundry employees, 230. Time-clock, 268. Time-estimates of completing orders, 213. Time-posting, delays due to, 271. Time-sheet, weekly, 271. Time-stamps, 130, 270. Time-study data, recording, 335. Time-taker, 271. Time-takers, instructions to, 272. Time-taking, 268. Tipless incandescent lamps, 98. Titles" of drawings, 164. Tool department, 236. Tool orders, 148, 240. Tool room fixtures and storage de- vices, 245. Tool room orders, 240. Tool steel, identifying different brands, 244. To.ol steel tests, 241. Tools, records of those required to make any part, 243. Tote boxes, 102. Towne, Henry R., 1. "Gain Sharing," reviewed, 375. Tracing assembled groups, 214. Tracing department report, 217. Tracing function of production de- partment, 210. Tracing individual part orders, 210. Tracing interdepartmental move- ment of work in process, 212. Tracing orders, 142. Tracing parts and groups to make up complete machines, 214. Tracing patterns, 174. Tracing progress of orders in foun- dry, 229. Tracing purchased items, 216. Tracing record on bill of material, 215. Tracing tag, 218. Tracings, filing and storing, 162. Trade unions, syllabus of works on, 388. Transportational facilities as affect- ing factory site, 72. Transportation in shop, 99. Unsatisfactory purchased goods, 182. Valuing for inventory, 313. Vault for tracings, 162, 398 INDEX Wage systems, 342. Washing air, 93. Wash-rooms, location of, 87. Weekly meetings, 217. Weekly reports, 59. Weekly time-sheet, 271. Welfare work, 130. Western Gas Construction Co., or- ganization, 46. Westinghouse industries, educa- tional activities in vicinity of, 369. Wood, use of in factory construc- tion, 104. "Work in Process" Account, 53, 284. Work in process, room for, 83. Works manager, duties of, 40. UNIVERSITY OF CALIFORNIA LIBRARY BERKELEY Return to desk from which borrowed. This book is DUE on the last date stamped below. REC'D 'SDec'SS- APR '< 198! AUTO. DISC. APR 6 1989 CIRCULATto LD 21-100m-9,'48XB399sl6)476 YC U.C. 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