WORKS MANAGEMENT LIBRARY EXPERIENCES IN EFFICIENCY BY BENJ. A. FRANKLIN NEW YORK THE ENGINEERING MAGAZINE GO. 1915 Copyright, 1915 By THE ENGINEERING MAGAZINE CO. INTRODUCTION Mr. Franklin's book is offered in answer to a many- voiced inquiry for specific examples of efficiency methods. It shows the employer or manager, strug- gling with problems of increasing cost of operation and diminishing returns, how other men discovered and used a road to success out of similar difficulties. It is a concise record of "leading cases." The ma- terial is selected from the author's wide and success- ful experience and represents a diversity of .situa- tions in a variety of industries. In each case the story is reduced to its simplest elements, but it still shows clearly the character of the problem attacked and the nature of the solution found. It tells what was done, why it was done, and how it was done. Most of the chapters appeared originally in THE ENGINEERING MAGAZINE. As here reprinted they are revised, adapted, and marshalled in sequence so as to constitute a logical and progressive survey of practice, following the order in which it demands the manager's attention. It begins with the thing which is generally uppermost in a manufacturer's mind the handling of labor. Four chapters are given to methods of increasing both output and quality of direct production ; the fifth extends the same princi- Eles to the treatment of clerical, or "non-productive," ibor ; the sixth enlarges the same applied ideas so as to include the entire force. In the seventh chapter ill v INTRODUCTION we pass from the individuals to the organization; in the eighth we attack a reduction of factory ex- penses; in the ninth we develop an efficiency cost system, and in the last chapter we find all the preced- ing measures connected to and based upon the fun- damental necessity of "efficiency will" as a driving force in the establishment of efficient practice. CHABLES BUXTON GOING PEEFACE The methods employed even in the most efficient plants are, in the main, after all but the methods, possibly somewhat modified, tried and found effective here and there in different places in the manufactur- ing and business world, and passed along consciously or unconsciously. The successful executive, after all, is essentially or even generally not an originator of new ideas, so much as he is an assimilator and an adapter inspired by what he sees, hears and reads. What is successful in one plant, with proper change, adaptation, and modification will be success- ful in another, if the basic principle of its operation is understood. These three principles have emboldened the author to recite the few experiences herein enclosed, with the hope that here and there they may offer that in- spiration by which so many efficiencies find their be- ginning. BENJ. A. FRANKLIN CONTENTS PAQB CHAPTER I. A SUCCESS SECURED BY STUDY OF WORK- MEN'S TENDENCIES. Why Labor is most Frequently the First Point of Efficiency Attack A Case where Savings Ex- ceeding $30,000 a year were Effected The Scene Laid in a Large Leather Factory Conditions Surrounding the Work How Inefficiency was Manifested The Workmen's Influence on Out- put An Incentive to Increased Production De- termined Upon Dangers of Loss of Quality by Increasing Output Increased Inspection must Accompany Increased Piece Kates The Prelimi- nary Studies The Rates Determined Upon The New Methods Outlined The Results Described. 1 CHAPTER II. A PROBLEM OF QUALITY OF WORKMAN- SHIP. Quality Requirements Always Present Quality does not Depend upon Day Work or Piece Work, Slow Work or Rapid Work Quality is a Mat- ter of Systematic Insistence Three Weaknesses of Human Nature which Tend to Lowering of Quality Description of the Plant in which Qual- ity of Output was to Be Improved Character of Production, Arrangement of Departments, Man- ufacturing Practice Abuses which Existed How the Delays and Losses were Investigated What the Causes were Found to Be What Methods were Installed Inspection and Report System Adopted Organization of the Inspection Depart- ment Cards and Forms Used How the Better- ments were Introduced What Results were Se- cured 14 vii Vlll CONTENTS PAGH CHAPTEB III. WASTE SAVING THROUGH QUALITY PIECE WORK. Where Quality is Insisted on the Men will Work to it A Plan by Which Quality Require- ments are Automatically Secured A Mill where Waste was Considerable under Day- Work Plan How Quality was Raised by a Piece-Work Sys- tem How Rates were Fixed, Limits of Waste Determined, and a Bonus for Savings Introduced The Results The Three Requirements for a Successful Quality Piece-Work System 3? CHAPTER IV. GANG PIECE WORK. Prevalence of the Piece-Work Method Its Re- lations to Efficiency of Operation How Piece Work may be made Efficient What Gang Piece Work Means Its Differences from the Contract System An Example Taken from an Envelope Factory How Gang Piece Work Solved the Problem, with its Advantages to both Factory and Men An Example from a Plating Room How Gang Piece Work Secured Economies where Individual Piece Rates were Impossible An Example from an Assembling Department How Gang Piece Work Stimulates Co-operation and Works toward Greater Total Efficiency 42 CHAPTER V. THE PROBLEM OF CLERICAL LABOR. Executives Fear Efficiency Methods because they Apparently Increase Non-Productive Ex- pense How a Factory Employing 600 People Minimized Expense in its Cost Department In- creased Statistical Information was Needed with- out Increase in Number of Cost Clerks, as the First Step was to Be Placing the Statistical De- partment on the Time-Note System What the Time Notes were How they were Received by the Clerks How they were Studied by the Head of the Department How they Led to Better Dis- tribution of Work and Use of Time How Indi- vidual Time Schedules were Made up How they Began to Stimulate Individual Efficiency The Lessons Applied to General Problem of Clerical Labor How Clerical Labor can be Made Actu- ally to Pay under this System 53 CONTENTS ix PAGH CHAPTER VI. INCLUDING THE WHOLE FORCE IN LABOR REWARD. Labor Yields Most Readily to Intelligent Ef- fort Increased Production Reduces the Ratio of Expense Burden Efficiency of Labor may be In- creased in Three Principal Ways: Substituting Machinery, Re-modeling the Executive Organiza- tion, or Rewarding Labor According to Results The Three Plans Compared All Fall Short be- cause they Reach Only the Direct Producer A Story of a Plant where even the Office Force were Paid on the Incentive Basis The Situation Described What the Weaknesses Proved to be What Measures of Importance were Deter- mined upon How the "Squeeze Point" was Lo- cated How Standard Rates were Fixed How the Gang Piece Work was Applied to Store- keepers, Labelers, and Shippers How Expense Standards were Determined How the Bonus Rates were Fixed The Gains at the End of Six Months and of a Year 66 CHAPTER VII. PRODUCTION LARGELY INCREASED BY SIMPLE REORGANIZATION. An Example from a Rubber-Goods Manufac- turing Plant The Situation Described Difficult Conditions Imposed by Seasonal Demand, Trade Customs, and Character of Goods How These Affected Unfavorably the Efficiency of the De- partment How Reforms were Inaugurated How a Simple Planning Department was Or- ganized to Relieve the Foreman How the Work of the Production Clerk was Laid Out How Working Schedules were Compiled How the Work of the Various Departments was Co-ordi- nated How the Central Production Department was Formed The Favorable Effects upon Out- put, Wages, Customers, and Volume of Business. 79 CHAPTER VIII. REDUCING THE FACTORY EXPENSE. The Logic of Efficiency and the Reluctance of the Executive The Manager's Fear of an In- creased Expense Account How Total Expense and Ratio of Expense to Unit Production Costs were Reduced with Increased Efficiency The X CONTENTS PAGE Example of a Light Manufacturing Plant Em- ploying 1200 Hands The Expense Conditions in this Establishment Its Old-Fashioned Form of Organization How this was Left Unimpaired and a Cost Department, Inspection Department, and Production-Planning Department were Add- ed How Expense was Analyzed How the Ex- pense Figures were Interpreted How Changes were 'Decided upon Item by Item How Econ- omy was Applied to the Use of General Supplies Methods Employed in Introducing a General Store-Room How Repair Expenditures were Re- duced How Non-Productive Labor was Cut Down How Tool Expenditure was Lowered What Results were Secured in Six Months What General Advantages, Both Financial and Moral, were Secured 94 CHAPTEB IX. BUILDING A COST SYSTEM. Knowledge of Costs now Considered to Be Necessary The Cost Problem as it Appeared in a Machine-Building Plant Comprising Three Departments and Employing 125 Men What Controlling Figures the Executive Wanted What the Human Equipment was: a Bookkeeper and an Assistant The Detailed Costs were Di- vided as Usual into Material, Labor, and Ex- pense Expense Figures were Attacked First How they were Analyzed How the Expense Fig- ures Startled the Executive Objections Encoun- tered among the Workmen How their Opposi- tion was Overcome How Material Expense was Attacked Description of a Simple Store-Room System Description of the Material Journal How the Cost Figures were Utilized How Analy- sis of Weekly and Monthly Statements Led to Economies The Favorable Results at the End of Eight Months 121 CHAPTER X. THE NECESSITY OF EFFICIENCY WILL. Many Executives are Still Suspicious of the Efficiency Engineer His True Relation to his Clients Every Business has Two General Divi- sions, one is Special to the Business, the other is General to all Business. It is in this Second Di- CONTENTS XI PAGE vision that the Efficiency Engineer should Exer- cise his Functions The Story of Three Metal- Working Establishments in which an Efficiency Engineer was Successful First, a Concern with Weak Executive Organization Second, a Case of Strong and Energetic Dual Control Third, a Case of Shrewd but Superannuated Proprietor- ship with Divided Authority in Second Command How "Efficiency Will" was Inspired in all Three Cases with Happy Results in Every In- stance * 148 EXPERIENCES IN EFFICIENCY CHAPTER I A SUCCESS SECUKED BY STUDY OF WOKKMEN'S TENDENCIES TN American business life, especially in the * manufacturing division, there has arisen almost a hue-and-cry for methods of higher efficiency. This demand is in no sense tempo- rary, nor is it illogical. It is the reasonable outcome of three well-known conditions. It is, first, the natural corollary of the forward movement of the last few decades in science and invention, of which an enor- mous increase in efficiency by machinery has been a feature. Secondly, the high cost of living has been persistently demanding an antidote, and greater efficiency apparently offers some hope of remedy. Thirdly, the constant demand by labor for increase of wages, meets, on the part of 1 2 EXPERIENCES IN EFFICIENCY capital, an offset in a demand for higher efficiency; and there are those who hope to see, finally devised and developed into uni- versal practice, some method or methods of efficiency and reward which will go far towards solving the problem of proper jus- tice and balance between these two warring elements. The methods of efficiency most often and most spectacularly attack labor. This is so because this element possesses the most elas- ticity in its efforts, can be quickened into more efficient action with the least expendi- ture in surroundings, and of course is the most oft-recurring element in production and in the cost of manufacture. The results obtained in this attack are sometimes almost magical in effect. The magician sets out his stock in trade, rolls up his sleeves, and explains how ordinary and usual are all the conditions. A few graceful motions, and lo! the unexpected and appar- ently impossible has taken place, and we wonder and admire the result. But back of every wonder-production lies a simple expla- nation, a definite plan, the skill of practice and experience, and a knowledge of human limitations and tendencies. PROFITING BY WORKMEN S TENDENCIES 3 So, exactly, is the case with some examples of efficiency work, although often results, which in the end are remarkable in compari- son with the conditions at the start, may take some time six months or a year or even longer in arriving at their fullest val- ues, and faith and patience are necessary in their moulding. And often there come by- product results well worth while, if unex- pected. Such a case, where in the work of a gang of a dozen men on one operation over $30,- 000 a year is saved, may be cited as an ex- ample. The scene is laid in a large factory where leather in various finished shapes is the prod- uct. Now leather is a very valuable material in the finished state, especially in certain ar- ticles of large and fine quality, but it de- creases in value very rapidly when it be- comes waste. Therefore waste is to be fear- fully avoided. But it must be noted that Nature, abetted by certain careless handlings en route to the final process, has not ar- ranged that the bovine hide shall always be perfect, of uniform thickness, or each one like every other. The hide must therefore be cut into different parts for different uses, 4 EXPERIENCES IN EFFICIENCY and the different parts trimmed according to their particular conditions. And this makes waste. At one stage of the preparation of certain leather for a final use, the operation consists in trimming off, from the ends of certain long heavy strips, that portion which (be- cause of thinness or other defects) is unfit for the purpose of the strips. The volume of business at this operation causes the employment of about a dozen men, working on the day-work basis: i.e., being paid a fixed amount per day or hour. These men are instructed to trim the strips accord- ing to their judgment, somewhat trained, and one inspector looks over all the strips when finished, turning back to the workmen any strips not properly trimmed. Leather left on the strips is worth on the average 50 cents per pound. The leather waste, cut off at this point, is worth about 10 cents per pound a very decided loss. Thus the stage is set and the conditions seem very natural. But here really exists a situation with very strong tendencies to high inefficiency, which the watchfulness of a general fore- man could not prevent very materially, and PROFITING BY WORKMEN S TENDENCIES 5 which any effort of his toward greater pro- duction per man was liable to make worse. This inefficiency expressed itself in two ways : First, in a small production per day, based on the plea that too rapid work meant careless trimming and high waste; second, since no trimmer desired to have the inspec- tor throw back work upon his hands for a second trimming, he made sure, so far as he could consistently with not making too much waste, that enough was cut off to take it safely past the inspector. These tendencies meant small quantity and poor quality of work ; and they were very strong tendencies, because they were daily present in a some- what monotonous task. High efficiency for constant or increasingly better results demands right tendencies. The ordinary workman will not continuously fight against wrong tendencies without re- ward. It is evident, then, that the problem here was to discover methods that would re- verse the tendencies, viz., make them operate towards more and better work. To accomplish this, it is plain to every practical man that some incentive must be offered to the workman, for the tendencies 6 EXPERIENCES IN EFFICIENCY operate through him and must be counter- acted through him. In the final analysis, from a practical viewpoint, the workman works for money, and appeals through other motives must be subordinated. He has a family to support, or hopes to have, and an increased weekly pay appeals strongly to him. Not that this appeal is in any sense confined to the work- man, and it is somewhat unfair to him to be- lieve that, as a rule, he does not take pride in his work, and attempt definitely to do it in what he thinks a fair and capable manner. There is a tremendous lot of human nature in the ordinary everyday workman, and de- spite the occasional belief of many employers to the contrary, he is not in the class of the donkey with the corn dangling in front of him. He is exactly the man his employer is, only lacking some opportunity, training, or quality which has placed the employer in the more fortunate position. But with his pride in his ability and his work, there is needed, to keep it up to high and constant pressure, a reward which he can express in things he wants. Such a reward is, of course, money although appreciation as an addi- tion is always welcome. PROFITING BY WORKMEN S TENDENCIES 7 The problem in this case, then, narrows down to the devising of a proper money in- centive to turn the tendencies toward inef- ficiency into tendencies toward efficiency. Now the universal form of incentive to labor is to pay it, in some manner, propor- tionately to increase of production in the unit of time. But it is plain that in this case an incentive for quantity would cause a haste in trimming which would only increase the tendency to waste, and thereby much more money might be lost in waste than could be saved by increased production per man. On the other hand, an incentive to save waste alone would have the tendency to slow up production and materially increase the labor cost. Very evidently, then, what was needed was an incentive dealing with both quantity and quality, in such a way as to get the maximum production with the minimum waste. But since the saving of waste was much more im- portant than the obtaining of a large pro- duction, the incentive must be so arranged that the workman should with certainty net the highest wage from just that combination of increase of production and decrease of waste which would also net the company the EXPERIENCES IN EFFICIENCY best returns of value. In such an incentive, however, there existed just as strong a tend- ency to leave on bad leather as formerly existed to cut off good leather. This tend- ency must be controlled by honest inspec- tion. Thus far, then, went the study in hu- man tendencies. Now began that study of surroundings, time of operation, mechanical arrangement, tools and conditions, which every effort for efficiency demands. This involved time studies, experiments, and records, in order to fix upon that maximum number of strips which the competent workman could trim with the minimum waste, under the best ob- tainable conditions. Such studies involve experience and tech- nicalities, and are more interesting gener- ally in the result than in the relation. Neces- sarily there was computed the saving to the company in labor for every hundred strips trimmed over the average number already being produced, and the saving in waste re- sulting from every % per cent reduction under the average percentage being made. These studies accomplished, there were now known the following facts : PROFITING BY WORKMEN S TENDENCIES Average number of strips trimmed per day, with average percentage of waste. Standard number that should be trimmed per day with standard minimum waste. Saving to be made to the company by every unit of advance, both in increase of produc- tion and in decrease of waste, in passing from the average to the standard. An analysis of the tendencies of workman handling the strips, and an incentive devised to make these tendencies right. It thus became a fairly easy matter to ar- range the incentive at a base rate per hun- dred strips trimmed, with the waste at the average percentage and with an additional rate per hundred for every % per cent of waste saved, and a decrease of rate per hun- dred for every % per cent added to the aver- age. Thus the rates might look like this : Percent of Waste Cents per 100 7 46 6% 47 61/2 48 6% 49 6 (Base Rate) 50 53,4 51 51/2 52% 51/4 5 57 10 EXPERIENCES IN EFFICIENCY That these figures are not the actual ones does not make less their ability to illustrate the method of reward offered for betterment, and penalty assessed for doing worse than the average. In fixing the additional rates there had to be taken into account two things the amount saved to the company by better work, and that portion of the saving which would be sufficient to cause the workman to strive to make it; for men will make increased ef- forts only for what they consider a reason- able reward. There yet had to be counteracted the tend- ency of this method to make the workman leave on bad leather to make his percentage of waste low; and this was accomplished by very materially increasing the salary of the inspector, with the warning that his job de- pended on no bad leather getting past him. He now had a much better paid job than he had ever expected. It was too good to lose, and he volunteered the remark that "any guy what got past him with any bad stuff that lost him his job was in danger of his life." He still has the job, with no casualties reported. The new methods were now put into opera- PROFITING BY WORKMEN'S TENDENCIES 11 tion; but before success could be assured there were still conditions to be regulated. Methods alone are inanimate. They must be animated, to be successful. Many good ones fail for lack of this addition of a soul. In the first place, efficiency is the result of con- certed effort, and this does not generally come except through enthusiasm. This is to say, indeed, that efficiency founds itself on a state of mind, and this is a very vital point to consider. To create in the workmen enthusiasm for the new methods, it was first necessary to assure them that the incentives were fair and that the opportunities before them were real. Certain guarantees had to be made against any loss to them. Consid- erable attention had to be paid them in the matter of judgment of good and bad leather, and in the way of training them. And espe- cially was it essential to encourage and assist those who were known to be the most skilful, in order that they might, as an example, make some worth-while pay-envelopes. Once the possibilities were developed by one or two, there quickly grew the desire in others ; a friendly rivalry as to records and pay sprang up, the monotony of the work van- ished, and efficiency had arrived. 12 EXPERIENCES IN EFFICIENCY The company itself learned things it had not properly appreciated before. Urged by disputes between the workmen and the in- spector, it made more careful tests (through a testing machine) as to what, for the par- ticular purpose desired, really did consti- tute good and bad leather. Likewise, as is always the case when men are put on their mettle in a battle, in a game, and in work as well when a measur- able call for ability was made, it soon de- veloped that certain men, by their perform- ances, showed clearly their superior skill in getting out a large production, combined with the judgment of just where to cut to make the least waste and others showed their lack of adaptability for the work. This discovery very soon brought about better training of the men, and also some readjust- ments in the plant which brought to this op- eration the men most capable for it. The day-work method of payment permits many a man to work at a task for which he has neither taste nor ability, when he might make his mark at some other. Proper incen- tive methods pick out the able men and often force out the unable, not infrequently into tasks at which they achieve greater success. PROFITING BY WORKMEN'S TENDENCIES 13 Touched thus by the wand of efficiency, the net result of these changes in this opera- tion was remarkable. The men made very much better wages, and found a real interest in the attempt to make good records and good pay weekly. They had now something defi- nite to work for. But to the company came the magical result. In six months the per- centage of waste had dropped to one-third of the former average, and the production per man had materially increased, effecting, as previously stated, a saving in operation of over $30,000 a year. Thus a study in tendencies led to a great efficiency, through quality piece-work. CHAPTER II A PKOBLEM OF QUALITY OF WORKMAN- SHIP TN manufacturing, the problem of quality * of workmanship, or, perhaps, to put it more practically, the problem of producing articles to a predetermined standard of qual- ity, is ever present, and never completely solved to a thoroughly satisfactory degree, even in the best managed plants. Even in articles of few parts and involving few pro- cesses, there constantly occur difficulties and defects, some natural and some avoidable, causing complaints and losses. Multiply the few parts into a greater num- ber, many of them being small ; the processes into many and delicate ones; and the pro- duction into large volume (as in the case of many complicated machines, like the type- writer, the automobile and so on), and the possibilities of loss and delay may be multi- plied still more rapidly. There are those who 14 SECURING QUALITY OF OUTPUT 15 may desire to make the further observation that if to these multiplications, there be fur- ther added the substitution of piece work or incentive methods in place of day work, the problem of obtaining standard quality is still further complicated; and it is not to be denied that under improper conditions a tendency toward deterioration naturally lurks in any incentive method that tends to hurry the mind or body of the workman. Nevertheless, considerable experience has shown that quality of workmanship is not a matter of day work or piece work, of slow work, or rapid work. Quality is a matter of systematic insistence. That plant which demands a standard quality from its work- men and aids them by proper appliances, training and discipline, obtains it equally well under either plan of payment. And there are very many plants operating today under incentive methods, yet producing higher quality goods than similar plants op- erating by the day-work plan. The necessity of the constant struggle for standard quality of workmanship is the very natural outcome of three main weaknesses of human nature as applied to modern in- dustrial production (1) wide variations in 16 EXPERIENCES 'IN EFFICIENCY the natural skill and in the past training of operatives, due somewhat to the lapse of the apprenticeship system; (2) the constant ex- pression of a lack of interest and concentra- tion on the part of a certain percentage of the operatives, not sufficiently counteracted by discipline; and (3) a failure on the part of the management to make proper prepara- tions, to give proper instructions and train- ing, and to maintain necessary discipline. It is not practically conceivable that these weaknesses will find any radical and uni- versal remedy within the very near future, even if it may be said that modern methods are creating a tendency constantly to reduce them. Nevertheless the practical man finds himself impelled to seek definite remedies to suit his particular needs, and perhaps the methods employed in the case of one large plant may be of interest as illustrating a successful method of betterment, not merely of quality of workmanship but of other at- tendant results. Consider, then, the elements of the situa- tion: A large plant with some twenty de- partments, consisting in storerooms for rough and finished parts, machine shops, tin shop, forge, paint shop and assembling SECURING QUALITY OF OUTPUT 17 rooms ; with about six-hundred operatives, the number fluctuating somewhat according to the season of the year; producing in pre- determined yearly quantities a machine of numerous parts, many of which are small, and undergoing in their preparation from five to twenty operations each, these opera- tions frequently performed by as many dif- ferent operatives the parts being ordered in the rough from foundry or forge or cut from raw material, being worked upon in the preparatory departments in lots, till, passing through the finished stores to as- sembling rooms, they are first assembled into sections and the sections then assembled into the finished machine. Such a situation is a rather usual one for many factories, and theoretically it would seem (after the questions of design are set- tled) rather a simple one to plan and to push. But the practical man will recognize at once the many probabilities of difficulties, delays, and losses, even granted that the large prob- lem of getting all the parts into the plant and started to the first operation has been satisfactorily accomplished. In practice the parts were started through the plant in lots of 10 to 200 pieces, accord- 18 EXPERIENCES IN EFFICIENCY ing to size and length of operations, the in- tent being that no lot should be so large in bulk or number as to halt more than a rea- sonable time at any one operation, so that it might be unnecessary to split it. And, of course, there were very many lots constantly on the march towards the finished stores and assembling departments. All this sounds very simple and orderly in recital. The imagination can readily pic- ture these parts, grouped in lots, in boxes where possible, properly ticketed with in- formation, progressing from department to department through needed operations of finishing, and all arriving finally to their in- tended use and function in the complete ma- chine for of course this is exactly what the plant, its organization and methods, existed for. But the actual practice might readily have been compared to numerous bodies of soldiers starting in good order to a battle rendezvous, going through the struggle, and assembling, though victorious, in much de- pleted array. For, under the conditions ex- isting, while some lots came through quickly and intact, others came through much dim- inished in numbers and the missing parts could never be found. Still others came SECURING QUALITY OF OUTPUT 19 through entirely or in part unfit for use. Some halted in their progress until insistent cries from the assembling room started trac- ers after them to give them a push along their way. And some lots disappeared en- tirely, or were discovered only after dupli- cates had been ordered to take their place. Despite the fact, then, that completed man- ufacture went on and many successful ma- chines were shipped out, the net result of this situation was that the floors of the de- partments, especially in the busier season, were clogged with parts; foremen and trac- ers were kept busy searching and "hustling" needed parts, and delays in the assembling room caused much loss of time and money; and the disappearance and loss of parts through poor workmanship mounted up to a considerable sum. A peaceful canal running past some of the machine shops had the even tenor of its way frequently and rudely interrupted by the impact of spoiled parts passing swiftly and mysteriously out of the windows, and it was said to have a steel-lined bottom; a well-known quotation, representing a certain spirit in the shop, which frequently followed 20 EXPERIENCES IN EFFICIENCY them, was "what the eye don't see, the heart don't grieve for." Now, of course, there can be no pretense that any such situation could be character- ized as efficient, yet it is not different, if the imagination is not forced in this conception, from that which exists in many plants. And this plant made a fair profit. The first necessity in any attempt at a remedy was an analysis to discover the underlying reasons why delays and losses seemed to occur constantly, as if there were some evil principle at work. It was not diffi- cult, of course, to find the reasons in many given cases, and though they varied consid- erably in detail, it soon became clear that loss and spoiling of parts were definitely due, at the bottom, to the fact that very many op- eratives did not have (and could hardly be expected to have) any idea of the use and function of most of the parts they worked on. They were therefore performing their me- chanical operations doubly mechanically and monotonously, and did not have either that supervision or that sense of constant ac- countability which is necessary to counteract such a condition. The loyalty and pride of work which might have been of material as- SECURING QUALITY OF OUTPUT 21 sistance here did not sufficiently exist, be- cause the somewhat seasonable nature of the work made many of the operatives transients, and generally of the less skilled class. Of course there were many loyal, skilful men and there were good reasons generally for losses for which they were responsible. The delays were readily traceable to the fact that the parts were inanimate, and moved forward only at the volition of an ani- mated system, while the management, in their order system, foremen and tracers, had supplied this so that it was a spasmodic rather than a continuous operating plan. The problem, therefore, in the search for quality and satisfactory movement was to discover and put into effect those methods which would give each operative the desire to perform every operation he undertook in his best style, and to supply animation to the lots as desired. Now it is a fortunate quality of efficiency, not sufficiently used as a basis of operation, that very frequently the simple method is the best, and sometimes it is the only suc- cessful one. This is recognized often un- consciously when it is said of some plan or mechanical arrangement which is successful ; 22 EXPERIENCES IN EFFICIENCY "How simple! Why wasn't that thought of before?" Efficiency in its conception is not at all a complicated proposition requiring wonderfully ingenious devices. But a fre- quent trouble with the obvious method is that it involves expense, and requires pa- tience and persistence to get into operation, so that faith and imagination are required in the inception and through the develop- ment. The philosophy of Hamlet that it may be "better to bear those ills we have than fly to others that we know not of " has undoubt- edly found many followers in the ranks of manufacturers in their consideration of the methods of efficiency. In this case any method effective in mak- ing each man intent on the quality of his work, must make it very clear to him that at the completion of each job the manage- ment would know just how well or poorly he had done it, and that he should expect to be held definitely responsible for lost or spoiled parts. This is merely operating along the lines demanded by the ordinary human nature of the situation, a necessity lying at the root of all methods of labor effi- ciency. SECURING QUALITY OP OUTPUT 23 The obvious necessity, then, was that each lot of parts should be inspected and reported upon after each operation. Such a plan would bring about a simple but vast differ- ence ; for, instead of a general knowledge that parts were spoiled or missing when the lot reached the finished stores or assembly rooms (creating possibly an investigation in- volving a dozen or so men, some of whom might have left in the meanwhile, and cover- ing frequently a considerable lapse of time, all of which investigations usually end in befogging disputes), there was substituted a definite responsibility, readily placeable on one man at the moment. Such a method, as indeed proved to be the case, immediately tended to relieve the work of monotony, since it introduced to each operative a definite and constant accountability, and brought inqui- ries as to methods, uses, and needs, which much elevated the tone and interest in the shop. Now this plan necessarily involved a corps of inspectors and a definite expense, always a point of much consideration to the execu- tive, and properly so. On the other hand, it carried with it measurable possibilities of the saving of lost and spoiled parts, and 24 EXPERIENCES IN EFFICIENCY in addition promised a fine means of bring- ing parts through the shop in desirable or- der for the saving of delays in assembling. It proved not too difficult a proposition to balance the estimated cost of inspection against probable savings of losses and delays and the plan was accepted. It is not to be maintained that in all such circumstances a similar decision might have been adopted. It is not true of methods of efficiency that if successful in one plant they are necessarily similarly applicable in an- other. The principles of efficiency are always operatable, but it frequently happens that a particular principle, effective and profitable when carried out by a given method under certain conditions, human or mechanical, under different conditions, may need to be applied by some other method to be profit- able. Herein, indeed, lies the necessity and value of ingenuity in efficiency application. In the given case, the plan being decided upon, it was proceeded upon. And the method of it was this: An independent inspection department with a chief, a clerk and a corps of inspec- tors chosen from the best men in the plant, was established. This corps comprised about SECURING QUALITY OF OUTPUT 25 ten men eventually ; but since it absorbed the tasks formerly occupying the time of three or four tracers of lost and delayed parts, there was a net addition of only six or seven, at an approximate cost of $6,000 or $7,000. The department was equipped with blue-print drawers and ample inspection tools. All parts were issued from the rough stores (where they were received at the fac- tory) in lots, the number in which depended upon the size and intricacy of operation. These lots were sent to the operating depart- ments through the inspection department, after passing inspection. With each lot went a lot card stating the lot number, part number, blue-print number, operation numbers, number of pieces in the lot, and any other necessary information. This card, guarded against loss by the in- spection after each operation, followed the lot through to the finished stores, and pre- sented to the observer a history of any loss or delay. With each lot was also issued a time note with necessary details thereon, on which was the rate, if an incentive method was used. Of course it eventually contained such neces- sary data as the name and number of op- 26 EXPERIENCES IN EFFICIENCY erative and time of starting and finishing, and the inspector marked on it the number of good parts finished, and the number spoiled, with cause, before it was turned in to the inspection department clerk. Each lot was thus constantly equipped with com- plete information. As the lots were finished in each opera- tion, they were inspected and the cards were properly marked, each inspector reporting daily as to what he inspected, with full in- formation as to the result, and the lots were passed along physically to the point of the next operation. This inspection took place as often as was possible in the inspection room when the parts could be easily brought there after the operation or where the inspection was important as to exactness. In those cases where the parts were large and expensive to move, or where the principal item of inspec- tion was a verification of the count, as in a roughing operation, the parts were inspected in the department where they were operated upon. Common sense decided each case. The clerk in the inspection department had in his charge large cards, one for every ma- chine part, of different colors for different SECURING QUALITY OF OUTPUT 27 sections of the machine. These cards, filled from the time notes daily, showed the entry of each lot of parts into the factory and its progress by dates through the various op- erations, with all casualties reported. Now this is all very simple and straight- forward in method and dull in recital, even without further details added in the develop- ment of the plan. For interesting as ef- ficiency methods are in their development and operation, it would take more than a Jack London to emotionalize these details in script to make their description fall among the best sellers. The general reading imagi- nation, readily as it pictures and enjoys the unreal, emotional, and adventurous, refuses to deal after working hours with the affairs of everyday business life and the educa- tional, for perhaps after all, to the majority, these are dull and dry. Of course, simple as this plan was, it had to undergo development, for development is essentially the means by which an efficiency method passes from the theoretical, where it is believed in by a few, to the practical where it is operated by all. In every plant of any size, it will readily be understood, there are many varying opinions, habits, rights or sup- 28 EXPERIENCES IN EFFICIENCY posed rights, customs, and individual meth- ods, not to speak of physical obstructions, all of which must swing into average accord with any plan before it becomes effective. This development consisted first of a slow spread of the inspection to cover all parts and all departments, taking weakest spots first, and thereafter of a refining process. First the newness of the plan had to wear off. The inspectors had to be trained to work rapidly and systematically, to know what to inspect carefully and what roughly, and not to wait around to be sent here and there, so that the cost of inspection might be kept at a minimum. In short, the inspec- tors had to be trained to inspect accurately and rapidly and to do a day's work. It took, of course, some time to decide in each case where the parts should be inspected, i.e., at point of operation or in the inspection de- partment. Some time must pass also before the operatives got accustomed to having their work inspected without agitation and comment, and without some embarrassment on the part of the inspector if in their pres- ence. In fact, the whole proposition had to work itself into a routine affair where the inspectors, chosen men, did a full and un- SECURING QUALITY OF OUTPUT 29 biased day's work and reported facts. It took some time, of course, to bring order and sequence of the flow of the lots to the finished stores, instead of the former spas- modic and erratic movement. But the plan adopted in a few months be- came very effective, for, once the operatives learned that the result of each job they did was a matter of record, and that they were subject to criticism and in many cases to actual loss of pay or position, the quality of their workmanship vastly improved, and the disappearance of parts and the number spoiled very shortly fell to a minimum. The poor and careless workmen very soon be- trayed themselves. Questions as to uses of parts, possibilities of machinery, demands for jigs and all helpful appliances, became more frequent; the saving amply justified the expense, and the canal again flowed peacefully on undisturbed by the surrepti- tious Jeer-plunk. It had to conceal no more industrial crimes. But this was not by any means the whole gain. The cards of the inspectors' clerk, giving the history and position in operations and departments of every part, soon became the basis of knowledge and operation of a 30 EXPERIENCES IN EFFICIENCY proper routing system. The finished stores, issuing in advance the assembling orders, could demand (with great certainty of ob- taining them) any desired parts, thus elimi- nating delays in assembling; and the saving did not end even here, for the method of con- trol of the movements of the parts soon brought about better physical order in the departments and kept in front of each op- erative ample work for himself and machine, thus cutting out delays on his part and es- sentially increasing the production per man of total parts worked on, even in addition to the increase of good parts produced by the reduction of the number of the spoiled parts. The relief to the foremen was of course also very great. Their time, formerly largely spent in hunting and pushing needed parts, could now be spent in looking after their departments in the way logically planned for them, and the knowledge of the result of each operative's work gave them some command of the situation. In fact, as is always the case when a par- ticular efficiency method is introduced to remedy some particular fault, especially when order is brought about, many other SECURING QUALITY OF OUTPUT 31 faults were likewise remedied and economies unsuspected were made. Thus by the obvious method and the cour- age of expenditure based on a right princi- ple, loss of material and labor was much re- duced and production increased by the re- moval of delays, and the ideal function of the plant to receive, finish and assemble parts into workable machines was more closely attained. CHAPTER III WASTE SAVING THKOUGH PIECE WORK TN these days of increasing agitation for A economical methods of manufacture, per- haps the element that receives the most uni- versal attention is that of labor. This is not to say that there are not other elements of very large importance from the stand- point of possibilities of economy in every business, and indeed, in some plants, of greater economical significance than labor. But in the first place many of these other elements have received, and are receiving, in a progressive systematic manner, such attention as to bring not only constant im- provement, but (which is really very much more to be desired in the plan of things) to open up still larger fields of returns for human effort. And in the second place the quick returns on intelligent action, the hu- man interest involved, the increasing profit that lies in volume of production, the un- 32 QUALITY PIECE WORK 33 limited possibilities of increase of product per hour that every man seems capable of developing, and, perhaps not a little, the fact that in any plant more energies and brains become immediately interested and active when the element of labor is dealt with, make it of supreme interest. And so we are developing the possibili- ties of this element through motion studies and scientific analysis, and coaxing it on through its human side by the incentives of piece work, premium plans, bonus methods, efficiency standards, etc., with economical re- sults as to cost, and with a hope that in the long run, all this will lead to decreasing sell- ing prices. But there are those who think that this latter could be radically effected much more quickly by a decrease in the tariff, the discovery of a plan of distribu- tion more direct, or a law-compelled or heaven-sent abnegation on the part of capi- tal of all unreasonable profits. However, to return to labor, it must be acknowledged that very good economical re- sults are being obtained by the various studies and methods employed, and that a new era of labor values is being developed. It cannot be denied that too often the incen- 34 EXPERIENCES IN EFFICIENCY tive back of the introduction of these mod- ern methods in labor handling is solely the narrow one of plant profit, and not the broader one of mutual benefit to labor and capital alike. Yet it is a fact of observation that when these methods of incentive have been introduced with a sense of fairness and appreciation of the full and continuous rights of labor, the net results to capital have been even greater than when the work was done in a narrow way, since such operation has aroused the most liberal spirit of friend- ly co-operation, which is most absolutely and essentially the true basis of all of these meth- ods. And it is not to be doubted that through such a spirit of co-operation lies a develop- ment of this great problem that will lead to Utopian results. But in all this effort to increase the product per man-hour, quality must not be forgotten. In the matter of moving materi- als, of much rough work, and even of a good deal of work with precision and automatic tools, haste does not make waste nor affect the desired quality. But there are many operations and articles where judgment and care play a material part in the items of QUALITY PIECE WORK 35 quality and waste, and the unquestionable tendency of haste is to deteriorate. This latter is the statement that is met when methods of labor payment according to product are suggested to the manufac- turer who is proud of the high grade of his product, and who guards, as the secret of his profits, against any tendency towards de- terioration. And certainly no advance is made, either from a profit point of view when one element of cost is decreased at the later expense of the selling price, or from a broader materialistic point of view when a poorer article is made from good material which care, would make into a better article. One hears much complaint, whether with a true basis or not, that workmen are not so skilled, so careful, as they used to be; that articles are not put together so solidly and well as formerly. If this is true, as indeed it may be in cases, it is only fair to labor to say that it is probably more the fault of the design, the plan, the attempt to imi- tate cheaply some popular or high-priced article, or perhaps even more than these the different divisions and training of labor, brought about by modern methods, than the fault of labor itself. Nevertheless, some 36 EXPERIENCES IN EFFICIENCY years of experience in many varied indus- tries have left the conviction that quality is a matter of insistence, rather than of meth- ods of either day or piece work. That is to say, that in that plant where a given stand- ard of quality is insisted upon, the workmen will work to it whether they be paid on a day-work or piece-work basis. To obviate any danger of retrogression in quality and loss through waste by possible carelessness on the part of workmen hasten- ing toward daily increase of production on account of the rewards offered by the piece- work or other plan, the writer, working as a business economist, devised and put suc- cessfully into operation in several plants a plan of piece work in which the rate varies with the quality and per cent of waste, so that the daily pay of the operator depends not merely upon the quantity done per day, but very largely on the quality of the work. There is nothing new under the sun, it is said, and it would not be wonderful if one or more of the minds that have for years been working on these problems should have evolved some similar methods. Neverthe- less, neither at the time of introduction of these methods, five or six years ago, nor QUALITY PIECE WORK 37 since, has any similar method come to his attention. There are many articles the manufacture of which, both as to quality and the waste of raw materials, can be gauged very accu- rately ; in which no great scope of judgment is allowed; in which accurate measurement and prearranged jigs and tools play a guid- ing and correcting part. There is little chance for judgment or waste, except through punishable carelessness, in the work of machining to blue-print size a casting, perhaps with jigs and fixtures. Here, and in many like cases, piece work finds a safe economy. But there are many operations in very many staple businesses where haste and carelessness may spoil much material, or where care and interest may save more in material than the total wages of the worker. In these cases the executive naturally hesi- tates to reward speed and volume of pro- duction, because of a fear that his loss in waste will be greater than his gain in labor cost. In such cases the executive will find "Qual- ity Piece Work" a valuable method. A practical case will illustrate this method. 38 EXPERIENCES IN EFFICIENCY In a large mill an important operation in- volved the pasting together of sheets of ma- terial. This operation developed a large ten- dency toward imperfections of various kinds, not only those arising from the spoiling of the material in pasting, but others due to further enlargement of defects during the drying and finishing operations defects which careful pasting might avoid. The value of the material was such that its waste was a very considerable matter. Quality was the most important element to be considered. Even on the day-work plan, it was the cus- tom to sort over the material, so that the im- perfect sheets were eliminated to be pasted separately. The pasting gang, therefore, started with presumably perfect stock, of- fering a fair basis for waste-gauging. Starting with perfect material, there were two losses to guard against. The first was the turning of perfect sheets, through poor workmanship, into sheets not imperfect enough for waste, but so defective as to bring a lower selling price. The second waste was that absolute one where only a scrap value remained. The scheme put into effect must take care of reward for speed, but a reward so proportioned that the most careful and QUALITY PIECE WORK 39 skilled gang obtained a large return for good work, while poor work carried penalties in reduced rewards which forced out poor work- manship. The detail of the method on this case was as follows. A standard ratio of imperfect pasted sheets to perfect pasted, sheets was fixed, as well as a standard percentage of total waste. These standards were, of course, the result of records and experience. The rate was based primarily on the per- centage of imperfection. While the figures given below are not ex- act, the following table shows in a general way how the rates look: $1.12 per 100 pastings at 2% per cent imperfect -i -i r\ (( (( (( fy (( (C (( L08 " " " 31/2 " " " -j r\n (( ec