M ■ a ^^1 _ SYSTEMATIZING THE FACTORY STEPS BY WHICH A RUN-DOWN FACTORY WAS PUT ON A PAYING BASIS HOW INVENTORY WAS TAKEN STORES LISTED AND CLASSIFIED BUYING SYSTEMATIZED PAYROLL COMPILED HOW WASTE SPACE WAS UTILIZED AND KINKS m ROUTINE STRAIGHTENED By JOHN COAPMAN A. W. SHAW COMPANY CHICAGO NEW YORK LONDON THE MAGAZINE OF BUSINESS SYSTEM "HOW-BOOKS" How TO Increase Your Sales How TO Increase a Bank's Deposits How to Systematize the Day's Work How to Increase the Sales of the Storb How to Sell Real Estate at a Profit How TO Sell More Life Insurance How TO Sell More Fire Insurance How TO Write Letters that Win How TO Talk Business to Win How TO Write Advertisements that Sell How TO Sell Office Appliances and Supplies How TO Collect Money by Mail How TO Finance a Business How TO Run a Store at a Profit Others in Preparation FACTORY "HOW-BOOKS" How TO Get More Out of Your Factory How Scientific Management is Applied How to Get Help How TO Cut Your Coal Bill How TO Handle Workmen How TO Systematize Your Factory Others in Preparation STANDARD VOLUMES AND SETS THE KNACK OF SELLING (In Six Books) BUSINESS CORRESPONDENCE LIBRARY (Three Volumes) BUSINESS MAN'S LIBRARY (Ten Volumes) BUSINESS ADMINISTRATION BUSINESS MAN'S ENCYCLOPEDIA (Two Volumes) THE SYSTEM OF BUSINESS (Ten Units— Thirty Volumes) In Preparation //i\((7l|-Q/''J THE MAGAZINE (/MANACEMEOT Copyright, 1913, by A. W. SHAW COMPANY n CONTENTS Chapter Paob I WHICH STEPS TO TAKE FIRST 6 When the manager overhauls his plant the first step is to list the apparently wrong things. The loose ends found in this factory — lax time keeping, no cost keeping, reckless buying, verbal orders and so on were brought together, then definite means taken to straighten out the tangle. The forms and charts tell just how this was done. II FINDING WHAT THE FAC- TORY IS WORTH ... 16 Inventory records and how to get them are described in this chapter. Forms for assembling totals of raw and finished stock equipment and machinery are shown. Not least valuable a table on depreciation and hourly wage rates for machinery based on actual statistics. ni CHECKING THE PAYROLL WITH COSTS .... 28 Making over the system of handling and paying men brought to light in this factory, principles that are widely applicable. Reductions of lost time, methods of charging time on jobs, tardy lists, pay checks and operation cards are shown and method of using them described in detail. There are seventeen forms in this article. IV MORE WORK IN THE SAME SPACE 48 To get more work through a given department generally means rerouting that work and changing the methods of handling it. How work was ordered, scheduled, accounted for and shipped is detailed with ten forms. By using this system the manager kept in touch with the work of each department and knew how departmental costs were running. V SMOOTHING OUT KINKS IN ROUTINE .... 58 Out of his experience the author points to weak points in routine handling of work. Whether you run a small shop or large, practical experiences may not have been yours. In this final chapter the practical "nubs" of running a system are shown and the ways by which they have been smoothed out are told. LIST OF FORMS AND CHARTS FORM PAGE 1 REQUISITION TO PURCHASE 8 2 QUOTATION CARD 8 3 ORDER BLANK 8 4 RECEIVING REPORT 10 5 INBOUND WAGON RECORD 10 6 LUMBER REPORT 11 7 DAILY REPORT OP LUMBER USED 11 8 DAILY PURCHASE REPORT 13 9 INVOICE LIST 14 10 LIST OF CHARGED INVOICES 14 11 GENERAL STORES LEDGER 18 12 STOCK REQUISITION 19 13 FINISHED STOCK RECORD 20 14 BIN LABEL 21 15 TAG INVENTORY CARD 22 16 EQUIPMENT SHEET 18 16a EQUIPMENT RECORD 24 17 REQUISITION FOR HELP 30 18 APPLICATION BLANK 30 19 NOTICE OF EMPLOYMENT 30 20 PAY CHECK 39 21 OPERATION CARD 38 22 CLOCK-RECORD CARD 40 23 PIECE WORKER'S DAILY REPORT 38 24 PRODUCTION SCHEDULE 41 25 EMPLOYEE'S PIECE WORK RECORD 41 26 DUPLICATE PAY CHECK 39 27 REPORT OF PERSONS TRANSFERRED 40 28 REPORT OF PERSONS ADVANCED 40 29 TARDY LIST 43 30 YEARLY LOST TIME REPORT 43 31 FINAL PAY TICKET 45 32 IMPREST CASH VOUCHER 46 33 PAY ROLL DENOMINATION SHEET 31 34 PRODUCTION ORDER 51 35 DUPLICATE PRODUCTION ORDER . 51 36 FINISHED STOCK SCHEDULE 53 37 INTER DEPARTMENTAL RECEIPT 53 38 TRIPLICATE SHIPPING MEMO 52 39 DAILY LABOR COST SHEET 54 40 DISTRIBUTION OF MATERIAL AND EXPENSE . . 54 41 DAILY MEMORANDUM OF BODY SHIPMENTS . . 54 42 MACHINERY INVENTORY RECORD 55 43 COMPARATIVE COST CARD 55 CHART 1 THE OLD ORGANIZATION 34 2 THE NEW ORGANIZATION 35 3 HOW TO PLAN A FACTORY OFFICE 33 4 EMPLOYMENT CHART 31 FIGURE 1 INVOICE CHECK STAMP 13 TABLE 1 MACHINE WAGE EARNINGS 36 OVERHAULING A FACTORY f^NE concern made a con- tract to deliver its product at cost — plus eight per cent. Be- fore that time the real costs on the product were not known until the end of the year. But the company that bought couldn't wait for the annual in- ventory of the company that sold. Because costs had to be known monthly and accurately the sel- ler s factory was completely overhauled — and its methods put on a modern basis. These methods got results. Whether you carry your costs in a vest pocket note-book or get a detailed weekly cost sheet from your factory you will find ideas in this chapter that will interest and help you. Each idea has worked. — L. I. Thomas I WHICH STEPS TO TAKE FIRST PUTTING a factory on a paying basis requires first the study of all the condi- tions holding in the old plant. This may seem an obvious statement, yet a good many men make the mistake of starting at once to reorganize the time-keeping depart- ment, the material handling department, or oj:her branches without considering each branch's relation to all the others and to the parent trunk. The first thing I did, consequently, in straightening out the tangle in the factory, was to investigate all the conditions. I found a very loose time-keeping system; no cost- keeping system; materials were purchased without securing competitive bids; no record of quotations . After I had spent three weeks investigating the conditions, I put down on paper the gen- eral plan of organization. I first charted the organization and the duties of the various per- sons connected with the heads of the depart- ments, and then with the whole plan in view I re-arranged the organization along the lines shown in Chart 2 (page 35). FIRST STEPS TO TAKE 7 The old organization is shown in Chart 1 (page 34). The purchasing agent seemed to have his hands full. In fact he was unable to give proper attention to any one subject. He had some duties in common with other heads of departments. And as the manager of the factory was present only a compara- tively short time during the day a great many things were allowed to pass unnoticed. Such a subject as the maintenance of the plant and equipment, for example, was overlooked, be- cause no one was directly responsible for it. This organization was boiled down to the form shown in Chart 2. The same men were retained, but the duties and responsibility of each one were diagrammed so that no misun- derstanding could exist. After the whole plan had been thoroughly considered and worked out, blue prints of this chart were made and distributed to each department in the factory. This method of distributing information in the factory was followed by putting any part of the new plan into effect. The head of each department received a bound copy of the methods decided upon so that he could under- stand exactly his relation to all the other de- partments and to the work of which he was in charge. When putting such a plan into effect, the hearty co-operation of each individual, which is essential, can be secured by making it of pecuniary advantage to follow out the plans as laid down. The men in charge of depart- ments naturally consider that the plans upon which they were operating are good and do not take very kindly to new burdens imposed upon them by a reorganization or by the re- arrangement of the work formerly handled in their departments. By paying a bonus on 8 SYSTEMATIZING A FACTORY daily production the department changes in routine, however, may often be accomplished successfully. After it is explained to the man that he can make more by working out the plan proposed he is not long in deciding that the new plan is at least worth trying out. After a general plan of organization has been developed the second step is to arrange the methods used from the buying of the raw material to the shipping of the product. An easy way to do this is to take some one par- ticular product and trace its course from start to finish through the plant, putting all the different steps down on paper so that the actual routine used in the factory can be seen graphically. After this has been done it will be found that the purchasing and stores de- partment is a starting point for reorganiza- tion. THE AUTO MANUFACTURING CO. eNDcnrnoit POnTWC, MIOH. SHIPVtA P.O.B. _MHM» ocseniPTiOH or mateiiiai. wantcd rniei total OATCOrnCQUISITIOH. THE AUTO MFG. CO. rROM TO purchaiifr: RLiAxronDcn the roLLOwiNa 1 DELIVER TO BTOntS THE AUTO MFG. CO. PURCHASINa DIPT. DATE CHARGE TO WHEN NEEDED QUANTITV article 1 LIST okct. NET O.K. PURCHASER 3 O.K. j 1 IN STORES II F.O.O. _ GOODS R i 1! 1*. K FORMS 1, 2 and 3: The center form is the order on the factory buyer, the form at the back is the buyer's order on the maker, issued after he has accepted the bid made on Form 2 at the front So in reorganizing this factory the start was made with the requisition blank. As has been said, no regular system of buying had been in FIRST STEPS TO TAKE 9 use in the factory. So both the purchasing and stores departments were replanned. When it was necessary for any raw materials, sup- plies or tools to be purchased, it was arranged so that the department head requiring the ma- terial was to make out a requisition called a "requisition to purchase" (Form 1). This was sent from the department head to the superintendent for approval. If the cost was considerable this requisition had also to have the approval of the factory manager, and in cases where purchases amounted to over one hundred dollars the general manager of the plant O. K.'d the requisition. The requisition thus O. K. 'd was given to the purchasing agent and constituted his authority for making the purchase. If the item was something which the pur- chasing agent had no quotations of on hand a "request for quotation" card (Form 2) was sent to the firm or firms handling the goods required. They had only to fill in the price, sign and return the card. These cards were made standard size (three by five) so that they could be filed conveniently in the indexed drawer and kept as a basis for price on future orders. After the cards were returned a clerk entered the prices upon a quotation record card for general reference. When a purchase was to be made the order was sent out on a sheet like that shown in Form 3. Three copies of this were made, the original going to the supplier. The first copy was kept by the purchasing agent and the third sent to the storekeeper. The latter checks off the receipts on his copy from the receiving report (Form 4). What a system of this sort can save is well illustrated in the buying of lumber in this 10 SYSTEMATIZING A FACTORY RECEIVING REPORT HECD FROM- ADORCSS COnOITION_ . COUNTED By_ -CHECKED BY. DISPOSITION. INBOUND WAOON' WAGOH no plant. The company purchased lumber in car shipments and the railroad allowed them forty-eight hours to unload the cars before charging demurrage. An analysis of the first monthly statement revealed the fact that the company was paying over two hundred dol- lars per month for demurrage charges alone. Some one was immediately asked why. It developed that only one lumber inspector was engaged and it was thought that the business hardly warranted the extra expense of another man whose salary was one hundred dol- lars a month. Judging from the records another inspector was warranted and he was put on as soon as he was found. Then, in order to prevent absolutely any more demurrage charges unknown to the management, an ''inbound car record" (Form 5) was devised. The local freight agent was requested to notify the storekeeper by tele- phone as soon as a car consigned to the com- pany arrived in town. The departments manufacturing body tops were housed in a separate building a few blocks away with its own switching facilities. Formerly the rail- road would switch cars to one plant that be- longed to the other factory building. This meant switching charges which were unneces- FORMS 4 and 5 : The receiving report keeps the storekeeper and the buyer informed of all incoming goods. While demurrage is saved by giving immediate disposition of incoming cars, on the wagon record FIRST STEPS TO TAKE 11 sary. The storekeeper, when acquainted by telephone with the arrival of the car, could consult his records and determine which plant required the goods, and so saved time and switching charges. Keeping Accurate Track Daily of All In- coming Stock The storekeeper noted the date of the arrival of the car on his card and filed this record two days ahead. The morning of the second day his first dutj^ was to inspect these cards. All cars which were not unloaded were taken care of before the close of the day, if this was in any way possible, so that he could notify the railroad. The saving result- ing from this little system alone was surpris- ing. From thirty to forty dollars a week was saved on demurrage charges alone, not by in- vesting any money in machinery but simply by keeping track of the arrivals, and it only required a few minutes' time each day. The lumber inspector reported the grades and quantities received on the ''lumber re- u o E i « s 1 8 3 3 3 A A 4 s e t • 6 i I 1 ' T i ' 0»T« BO. or rccT THtCR ■.mo PtVi^o'oT »OU.T — -i. ,- r- ,1 111 1.4 1,4 1,4 1 _ . ... 1" )•= 1" "" 1 FORMS 6 and 7: The wastage in cutting and handling lumber was reduced by use of these forms port" (Form 6) and the purchases were settled on this basis. Most of the lumber was 12 SYSTEMATIZING A FACTORY put into the kilns shortly after its arrival, the usual time required by the mill departments directly after it had been removed. To check this, however, a ''daily record of lumber used'* (Form 7) was issued and turned in to the storekeeper by the lumber inspector so that each order could be charged with the proper amount of lumber. Hoiv Waste in Lumber Was Reduced Fifteen Per Cent This all had an interesting e:ffect on the re- duction of the waste in lumber. In the ordi- nary wood-working plant the waste runs up to thirty or even fifty per cent. After the amount of material required to actually com- plete the jobs in process was checked against the deliveries of the purchases made, it was discovered that the waste in lumber in this plant was very large. Foremen and stock-cutters were instructed that the amount of waste must be decreased and the work of the men was analyzed so that it was known definitely who was responsible for the largest wastes. After the first month or two had passed, waste in lumber could be estimated with a certainty as not exceeding twenty-five per cent and ordinarily under fifteen per cent. This meant a big and imme- diate saving. When you can save twenty per cent of lum- ber that costs forty-five dollars per thousand, it means nine dollars on the right side of the ledger for every thousand feet cut. As one or two thousand feet of the stuff was cut up each week it soon amounted to something worth while. Some lumber, of course, cost less than this ; some cost more, but the saving was made on all grades and kinds. Another plan which FIRST STEPS TO TAKE 13 was put in operation and wMcli saved expense was inaugurated in the purchasing depart- ment. This was a daily report of purchases (Form 8). Before this plan was adopted the accounting department would often re- ceive bills for purchases amounting to con- siderable sums. It was sometimes inconven- ient to meet pajnuent due on purchases be- cause the disbursement of a large sum at an unusual time was not planned for. Of course, if an extra large pur- chase of any kind was made some- one would keep it in mind, but trou- ble was caused in not remembering that an accumula- tion of many small purchases of medium size often exceeded the so-called big ones. No details were asked for on the purchase re- port, but at the end of the day the DAILY PURCHASE REPORT PUR. TO DATE MATURING TIMBER MISCELLANEOUS 1 DATE INVOICE RECEIV TERMS AND PRICES C >. K DELIVER! EXTENSIONS AND TOTALS 0. K. ACCOUN STOBEKE APPROVE ENTEHEC EPER .. .. I SIGN^n _.,,_, PURCHASING DEPARTMENT FORM 8 and FIGURE 1 : A daily pur- chase report and a rubber stamp that helped systematize buying purchase orders issued during the day and the amounts would all be carefully totaled. This little report alone soon helped to regu- late the purchasing department, for the ac- counting department could easily inform the purchasing department when purchases were being made which might be inconvenient to meet and different terms could be very easily arranged by the purchasing department. The buying of raw materials was further 14 SYSTEMATIZING A FACTORY facilitated by the prompt handling of invoices. When the mail was opened all invoices were stamped on the reverse side with information like that shown in Figure 1. The invoices were then sent to the purchasing agent who had them checked for prices, terms, deliveries, extensions and totals and charged them against the proper accounts. If they were correct the invoices were then listed on Form 9, known as *' invoice list." THE AUTO MANUFACTURING CO. ncPoRT or INVOICES necdvcOANoeHARGCO . MTia* mfttOMU MO. .„. euu (MOUNT e CHARaCDI riN voice O STORKS «• vouchched «"'?»I«« tMA. rnCIOHT ■ CMABRS 1 THE AUTO MANUFACTOHINOCO. _ ovc »... MOKTMUr oiacov^T J - _ —'.)____ — — ' — •- i ■^ J — .—J 1— ^ ■*-^ *— *— ' ' - ' FORMS 9 and 10: The accounting department kept the purchasing agent within his limits by using these forms The duplicate of this was retained in the purchasing department while the original, to- gether with the invoices, was sent to the storekeeper. The latter noted on the back of the invoice the date the goods were received, and^'O. K.'d"it. These invoices were then listed on Form 10, charged. The original of this report and the invoices were sent to the accounting depart- ment from which the checks in settlement were sent out. THE FACTORY GOVERNOR (^N every steam engine there is a regulating" device — a governor that balances the sup- ply of steam with the demand for power. When more power is needed more steam is admitted; when the load decreases the gov- ernor automatically lessens the amount of steam fed to cylinder. In every factory one man per- forms a similar function — he balances the work of the factory with the sales and administra- tion policies of the business. Without him the business is out of balance in one direction or another. A factory manager must keep the balance between cost to pro- duce , quality of product and service to the customer. — F. M. Feiker II FINDING WHAT THE FACTORY IS WORTH WHEN a new business is launched or an old one taken over, the first duty is to ascertain the assets. Inventory is taken. Everything about the plant or the premises is counted and weighed. After everything is inventoried the next step, which many consider the most difficult, is the process of placing valuation upon the goods. Many methods are in vogue for this and a different one is necessary for practically every firm. As was explained in a preceding chapter, after the goods are ordered, shipped, received and paid for they represent just so much money and should be treated as such. One thing more, many buyers will often make a purchase because the price, free on board at the factory of the maker, is less than what they might be able to get in their own town. The cost of freight or express charges and the cartage does not appear to them as expense that should be included in the cost of the arti- cle. One gentleman informed me apon one occasion that the company hired a team by the day to do the hauling from the freight house and as for the freight or express, *'0h, TAKING AN INVENTORY 17 a very small matter of little or no conse- quence !" -He changed Ms mind later on when he was obliged to move to another city and had the freight to pay on his furniture. A general stores ledger card (Form 11), upon which was entered the purchase order and the receipts as shown by the receiving re- ports, was planned. As the freight or express bills were received with the goods, in most cases it was a simple matter to enter these upon the card with the receiving report. The matter of cartage was more or less hazy. Oftentimes the driver would bring back from the freight house several various articles weighing different amounts. Where possible these were apportioned, but when this was out of the question we charged them to ''mis- cellaneous freight and cartage." All with- drawals from stock were entered on this ledger and taken from the requisition blanks. One thing I found very much in evidence was the ease with which supplies, such as nails, screws, sandpaper, and so on, could be obtained. The stockkeeper admitted that he had been told not to allow any goods to leave without a requisition. ''But the boys would sometimes forget to get one from the foreman and I didn't like to make them go back," or else "Henry was building a little chicken-coop and wanted a few nails, not very many, you know — oh, a couple of handfuls or so — and I kind of wanted to be obliging, so let him have them. Don 't cost very much, I don 't suppose. ' ' Instructions were immediately issued to all department heads that in no case would ma- terial be issued from stock without an order (Form 12) signed by them. The stockkeeper was informed that if any more instances were found of material leaving his department 18 SYSTEMATIZING A FACTORY ■ ■- , MM ■■" r— r— "" ^ "~ - Ml « ' ' P ' a *■ a ; z a Q o S 3 < < a X 1— kl 1 Z O P < a & _ ^ a 5 u u *■ z a o s a r-i s Zi < z 2 < > 1- s ? t- c o z < u X 9 f- i; 3 » z s. o h Z S N o i III s 0. 8 _-. ■■ — ■ ■ »- 3 o P (9 o k j M U s H »- » z a o o o s M C i o 8 s u ■t- li. s S z hi 3 ^ 1 z D « < !i n tc I z d ml u 1- t b < i; if o 1 K i^ o m U (A ^ i.^ b. ** o ». }5 c P 5 M O o z < • w M f h o z 1 i ■ s k O 3 Z S X U S ?s 5 » C 8 ■ « "sf 2 1 5 L— ,, L^ 111 -.1-J..I 1 II II ^1 TAKING AN INVENTORY 19 without the necessary papers he could con- sider himself discharged and with no recom- mendation. This had a salutary effect upon the whole plant immediately. A few remarks were made that the company was getting mighty close all of a sudden. The stockkeeper in each of the stock de- partments recorded his stock receipts and dis- bursements upon the stock card shown by Form 13. The various bins and aisles were numbered and upon each bin was attached a card holder so that bin stock cards (Form 14) might be kept there. As articles were re- moved or placed therein it was noted upon the card, thus enabling one to tell the quantity contained without being obliged to consult the records at the desk. It was soon found necessary to inventory the plant. This had been done about six months previously but no one cared to take the responsibility of the figures shown, and upon GELNCRAL STORE OCPT. flftTC PLEASE SUPPLY THE FOLLQWINa MATERIAL AMO OtWt TO QOANTITT SYM. NUMBER ARTICLE •MOUNT - ;■ ; i| \ i i i : ! i ; } - I \ ORDER FILLED BV cnDrMaK) FORM 12: This standard requisition for material stopped petty losses of stock investigation it was found that they didn't check up ' ' within a mile. ' ' Preparations were 20 SYSTEMATIZING A FACTORY made for this some two weeks previous to the time set. The manager and department heads calculated that at least three days were neces- NAME FINISHED STOCK RECORD PART IMrt NO. REQUIRED SECTION ^ lo. Rira iMrt. r DATE QUAN. RECD. TOTAL OUT ON ORDER TOTAL BAL. ON HAND BE- IvrSBKS i| i t i i i! ! \ \ ; i: 1 1 1 i i 1 . ^ ^ . i il , ,- 1 FORM 13 : A balance sheet for stock on hand in the stores sary. I suggested that we shut down Thurs- day night and take Friday and Saturday morning, but their previous experience had taught them that three days were none too much. It wasn't, with their method of but two men in the department — one to call off and the other to record. First of all, tags similar to that shown in Figure 15 were ordered from the printer. These were numbered consecutively and a rec- ord was kept as to the department receiving them. At a meeting of the foremen the rea- sons for this inventory and the imy»ortance of its correctness were explained. On some floors TAKING AN INVENTORY 21 were located portions of one or more depart- ments and. it therefore became necessary to divide the jurisdiction of each foreman so that the best results would be obtained. All machinery and equipment were turned over to the foreman of the mill department and he was given the millwright as first as- sistant. In the other departments, where it was found that interference might result be- cause of too many cooks, one foreman was made responsible for his floor and given the other foreman as his first assistant. As the plant was to be closed for three days orders PART NO. RECTH 3N NO._ BIN NO. NflMF ^ IN OUT 1 DATE QUAN- TITY DATE QUANTITY BAL. DATE QUANTITY BAU i ^ ' FORM 14: A label used to keep track of the stock in each bin. All disbursements are noted on it were issued to the various department heads to retain as many of their men as they con- sidered necessary. The storekeeper was placed in full charge of all inventory work 22 SYSTEMATIZING A FACTORY and was assisted by the head of the cost de- partment. The plant closed on Wednesday night, and Thursday morning the work of distributing the tags was begun. Instructions had been issued to the effect that everything in the plant was to be tagged. If a lot of parts were found in one portion of the de- partment and an- other lot in an- other portion, each individual lot was to be tagged. This re- quired the best part of Thursday morning. The foreman then delegated to each workman the task of count- ' ing or weighing the various lots. One man would be instructed to take a certain number of lots and was told to simply weigh or count the ar- ticles and mark the number on the tag. No other information was desired from him. The foreman would then follow and fill out the bal- ance of the tag, tearing off the lower portion which was later sent to the office. By Thursday night practically everything had been inventoried. The foreman then made the rounds of his territory and removed the stubs which were left from the day pre- / S'CAsoN or © '" \ 191 CARD NO DEPT. CARD NO. t> EPT. MATEqiAt FINISHED STORES 1 AND WORK IN PROCESS I OESCRIP- 1 LAST OP- TION 1 ERATION QUANTITY UNIT 1 1 1 1 1 1 i 1 1 ( 1 TOOLS. EQUIPMENT, MACHINERY 1 AND SUPPLIES 1 DESCRIP- TION QUAN- TITY UNIT SERIAL NO. OUR NCI. LOCATION r FORM 15: These tags were used to mark all the facts while taking inventory TAKING AN INVENTORY 23 vious. This constituted a check on his work. Because it became necessary for him to visit each lot he could see whether or not it had been inventoried. These stubs were also turned in to the office where they were checked up with the remainder of the tags to make cer- tain that all tags were in. The tags were sorted according to depart- ments and then to materials. After this was done it was a comparatively easy task to price them when they were listed as : Tag No. Article Quality Price Value By totaling this list for each department the value of that department financially was shown by the inventory. To get the total val- uation it then was necessary to total the values of the individual departments. After this was done the storekeeper could obtain the quantities of material throughout the plant and after deducting from outstanding orders was able to show the net amount on hand. This took care of all the stock in a very sat- isfactory manner, but gave no record of ma- chinery and equipment. For valuing this class of assets it became necessary to call in the service of a machinery dealer as some of the equipment was of an unknown age. Equipment sheets were then devised (Forms 16 and 16a) to record all information required regarding the equipment. One of these sheets was issued for each piece of equipment. Where the name of the manu- facturer and dealer were known, this was re- corded and if no invoice could be found a let- ter was sent requesting a duplicate invoice. The date of purchase was also essential, as was the date of manufacture, providing it was pur- chased second hand. The freight bills were also located wherever possible and the cartage u SYSTEMATIZING A FACTORY r o r - ^ « ffl i X o E »• 4 S ; U o 6 z > ', : H z w 3 z 3 O s Z o u u 1 1 S z —\ f- J a, ^ / ■ 1 ~ - s 3 O -1 u £ u « 3 (A ' 5 a > £ kl a 0) OC — — — — — ~i ~ ■^ ifi 3 o '- tf s z E H o u III ° "6 »Hi 1 2 a e u _J z 1- 1 bi o s -1 < > I > II "l. U ^0 !;; Z 1 " U u o o 7 u s kl OC I \ ' t- ! u u z kJ s ! _ 1 , „ _ (fl (3 HI 3 j « U ■< > 1 t- !S 1- 3 i O 1 1 , 10 1 a. ■ 4 1, J u J N 1* _ _ _ „l 1- [ u o z 3 O 3 - - i I \ 1 « ^ ■— > 4 1 (> % a / T z 3 o s K Z 3 E < i ] O 1 U i IX b. u a E« •-' i It £ B i- Z z 3 ^ s- n M Ul £ u u 1 o => a. a S 0. « s * Q. 3 u o 1 O U 13 'Sli b. « O W U 1- 1- il ^ a K _ _ TAKING AN INVENTORY 25 bills. These two items, however, were rather hard to get. The cost of pulleys and belting was easy to obtain from the catalogues and price lists. When a new machine was purchased the head of the cost department issued an equip- ment sheet from the purchase order. An equipment number was also assigned at the time. A note was made on the purchase order giving this number and requesting that it be painted on the machine. Upon arrival it was possible to obtain the freight bills, also the cartage charges. All requisitions for belting, pulleys, and so on, and also labor and supplies in erecting them, were charged to this number. It will be seen that once started the complete cost of the machine installed ready to run was put on record. The probable life of the machine was de- cided upon and this was noted at the top of the sheet. If the machine cost $1,000 and it was decided its life was finished at the end of ten years, that machine should pay for itself and also pay interest within that time. Six per cent was taken as a fair rate of interest and Table 1 (Page 36) was compiled to facili- tate calculations. To get a little ahead of the story, it was now an easy matter to keep track of all time that the machine was operated by having the work- man note the number of his machine on his time card. Observation showed that the aver- age machine was operated about one hundred and sixty-six hours per month, or two thou- sand hours per year. At this rate if it were desired to retire this machine at the end of ten years it must be credited with $133 per year, this amount to be distributed over the various jobs produced on this machine. Ac- SYSTEMATIZING A FACTORY cording to Table 1 it is seen that it is neces- sary to charge each job with $0.0665 for every hour that the machine is used. The amount each machine must earn per year is arrived at by multiplying the amount to be earned per hour as shown in Table I by 2,000, the number of hours in a working year. By means of this chart the value of each machine was known, since a record of how many hours it was operated, and how much to charge each hour, was available. When the time came to scrap the machine there was a complete history of it. As the inventory cards came into the office they were filed for the time according to de- partments. After they had all been received they were then divided as to machinery or equipment, finished work and that in progress. After being priced it was an easy matter to list them by their class under the departments. The main building was of brick, containing the office, paint shop, shipping and assembling departments. The mill work was done in an abutting building of frame construction. One or two changes were made in the location of departments from one building to the other and thereby saved a trifle on the insurance. Building Amount Carried Old Rate Pre- mium New- Rate Pre- mium Saving Brick $10,000 5,000 3,500 2,000 1,000 18,000 $2.80 3.85 $280.00 192.50 $2,00 3.05 3.30 3.30 3.30 1.58 $200.00 152.50 115.50 66.00 33.00 284.40 $80.00 Frame Addition to Brick Dry Kiln 40.00 Bending Room . . . . Drying Room Lumber No fre\- ious Rate 1.871 336.60 52.20 Above is a copy of the old and new rates, together with the saving in premiums. To obtain this saving required an outlay of less than twenty dollars. LAWS FOR MANAGERS ^ MODERN shop must be more or less of a school- house, and in it the manager must be one of the pupils. Equipment is not the best be- cause we own it Obsolete machinery is the foe of profits, the brother of high cost and the friend of bad methods, A thing is not right because we do it. None of us can afford to be deceived by our own affairs. It is better by self-criticism to find and correct our own faults than to have our customers do it for us, — William C. Redfield Ill CHECKING THE PAY ROLL WITH COSTS IT had been the custom in this plant since its first inception to call the factory man- ager, superintendent or foreman when- ever an applicant for employment presented himself. The request for an interview was usually made to the telephone operator, whose desk was near the office entrance. Since she was well acquainted with most of the inhabit- ants of the town and desirous of pleasing everybody and aiding her friends, the operator would immediately create confusion in the whole plant, if necessary, in her somewhat overzealous endeavor to locate the department heads. She was no respecter of persons and it mattered not that the person she desired was in conference. Usually he would come to her desk, ascertain her desires and would then talk with the applicant. This plan of hiring men was abandoned. The accounting department was housed in a room adjoining the entrance as is shown by the office arrangement (Chart 3, page 33) . The location of the timekeeper was changed and a window was cut in the partition at his back. How the office was rearranged is also made PAY ROLL AND COSTS 29 clear. Just above the window was mounted a blueprint (Chart 4, page 31). This chart was called the ''Employment Chart" and the timekeeper could tell at a glance just what class of employees were in demand through- out the various departments. The employ- ment department was turned over to the time- keeper. Each department head would issue a ''Requisition for Help" (Form 17) when in need of help of any kind. One of these re- quisitions was issued for each person desired. Upon receipt of these the timekeeper would place a peg or glass-headed push-pin in one of the squares opposite both the department and the class of employees. When an applicant presented himself it was a very simple matter to tell whether or not he was needed. If not, he was requested to fill out an application as shown by Form 18, pro- viding the timekeeper thought that the com- pany would ever care to engage him. These applications were retained on file and when a requisition for this grade of help was received the applicant was sent this form letter: "You will recall having left with us an application for a position. We now have a vacancy and would be glad to have you call on the writer for an interview at your earliest convenience. In case you are imable to call, or do not care to consider a position with us at this time, kindly advise us by return mail, or telephone Mr. , who will endeavour to place you to oiu- mutual advantage. "Yours very truly, "Auto Mfg. Co." If the applicant failed to appear possibly others might be tried unless the supply was abundant and the demand urgent, and in that case the first promising-looking candidate would be ushered to the foreman. If upon the so SYSTEMATIZING A FACTORY close of the interview he decided that the appli- cant was suitable for the position he would fill out a copy of ^'Notice of Employment" (Form 19) and instruct the applicant to turn it in to the timekeeper on his way out. REQUISITION FOR HELP POH BePAHTMtftr _»^™.«.-____ — DATE ..m^,.,- „■■■,. ■.„.n.,.„,.m^ KINO OF HELP WAN.teft >—— , . ' AGE REQUIRED -^.^l^f t PREFeftfteSi- SINGLE J REMARKS — APPLICATION FOR EMPLOYMENT §if UAtidrl A3 NAME— AOORESd MARRfEO Vk&ti eXMCttft ^T8. M« H». .SERtfEO ^ ^»B5» A^MENtlCESHIP WITH ~^ Was EM^L8ve6 6V -<;T9. PER MR. LA^rEMPLOflTB B nCMARKS': ~ — NOTICE OF EMPLOYMENT I HAVE tmS DAY ENGA^GEO -^ -WHOSE DUTIES WILL BE - WILL START. DATE — — — OePARTMENT HEAD FORMS 17, 18 and 19: These self-explanatory blanks are used in hiring men The timekeeper then assigns a number to the new workman and calls his attention to a copy of the shop rules which are posted in a conspicuous place. A payroll card and also an operation card (Forms 20 and 21 respect- ively) are then made out and placed in the clock-rack in the department. At the same time a clock-record card is filled out (Form 22) and placed in the file for future use. Upon his arrival for work the employee de- taches his ''pay check" from the payroll card and registers his arrival on it. He then re- ports to the foreman for work. When as- PAY ROLL AND COSTS 31 " 1 a »5 B^ 0) -1 i « < ^.^ _____ o- 3e o X o > o o K* ki. » |l s 3 5 'O IE X. a X < X — X (0 i « a o C H « « J _____ < M H z Z u o """"" o o « ~~~ ? U) 1 i a rj 2 > ** Z 4 » Q ^ < m •. u u. g o s 3 "^ • -J -i o „ o 10 ^ 1- 1 ^ X a * X f i * o " o o ~"~ ^ ^ o h 5 •" * 0. 1 3 q: §si 11. E < < X e I z o o O S u c «S h z 111 s o -1 0. o Z z o z (A C o Q a £ O li- o o u m ■ s • o q hi u 6 o o E S d S i N i i X- = i s s "» 1 i """' w S * X I s > « a 2 i z 5 g W o li. £ Z 2 ow E HZ £ ' K E 5 X 1 u 5 ZO ° 2h z o5 < ■ p s m m M > o 3 1- KZ < z « O OU o 5 ^ o a »* o !. S SSn M Z OZ t- ^ ^^^ o o h K 13 tL u o 111 z a. u Q O > a li z 3 u O > ii z 1- I o £ m 111 c ^s z . i . •St a 111 o a. Q o Z 5 z . uu a 3 i o («■' OUI z z D 1 So SO 3 Z -1 < i o < o z u a 2 lA < i Iff 1- lA o o 3 o m ►- 3 O lA < a 0. o 1- c3 fi-S -C in in o 'a S W < u S2 SYSTEMATIZING A FACTORY signed to a job, lie registers "in" upon Ms operation-card at the time-clock. An attempt was made to control the produc- tion so that a foreman could keep his men em- ployed on but possibly one or two jobs a day or week. At the end of the day or job the employee would punch his operation-card out. As the pay period was a half month the card was printed for this period. A workman might use but one operation- card for the whole pay-period and then again he might have one for every day or oftener. If a great many cards were used, the superin- tendent was asked to investigate. This was necessary because at first the foremen of some departments did not plan their work right and would often assign a man a small job of little or no consequence simply because he did not know what to do next. The operation-cards were turned in to the timekeeper upon the completion of the job or in any case at the end of the pay-period. When the job was finished the elapsed time was known and from this the labor costs could be computed. The payroll-card in this case merely served as a check because the opera- tion-cards should check up with the payroll- card. It is needless to say that at first they didn't. In some instances there would be a difference of over one hour on some days. This was ex- plained in many cases by the workman in that he was waiting for a new job. Not always would he loaf one hour between any two jobs, but in some cases where it was necessary to have him work upon three or four in the course of the day he would be forced to lose twenty to twenty-five minutes, waiting. A record was kept of this and at the end of the PAY ROLL AND COSTS 33 1 riue ^ COST TYPF- ACCOUNT ANT 300K KEEP ER ^ _^ WRITER PHONE *SST- PURCH KEEPER \ FILE \ SHEL VES ♦■ -POST V t^ \ SHIP- 1 1 - ^ PING 1 CLERK MANAGER .,-. _..„ FACTORY MGR.- SAFE ^ CHART 3 (Page 28) : The before and after arrange- ments of the factory office are shown here. The new office arrangement below facilitated the discharging of employees ' w^a ^ COST II WINDOW ACCOUNT- ANT TIME KEEPER BOOK KEEP iwower nsjir ER '^""^"■AGENT AGENT u V iZ I TYPE- WRITER J \ FILE i \ SHEL VES -POST V '^ ^ II SHIP- 1! PING !l CLERK MANAGER • STORE FACIORY KEEPER MGR. 1 " i 34 SYSTEMATIZING A FACTORY MANUFAC- TURING SHIP- MENTS FACTORY MANAGER SUPT. BODY PLANT - WATCH • MAN DEPART- MENTS MANUFAC- TURING TIME — SUPT. TOP PLANT STOCK SHIP- MENTS '■" - POSTAGE PURCHAS- ING PHONE RECEIVING MANAGER PURCHAS- ING AGENT — — INQUIRIES - STORES MESSEN- GER SUPERVISE SHIP- MENTS — BOOK KEEPER GENERAL : ACCT'G i TIME COST AC- COUNTANT COST MAINTE- NANCE INSUR« ANCE CHART 1, (Page 7): This is a plan of the factory before it was or- ganized. Notice the details handled by the purchasing agent PAY ROLL AND COSTS 35 MANAGER FACTORY MANAGER MANUFAC- TURING SUPT. BODY PLANT MAINTE- NANCE DEPART- MENT PURCHAS- ING AGENT PURCHAS' ma RECEIV- ING NIANUFAC- TURiNG SUPT. TOP PLANT MAINTE- NANCE DEPART- MENT DEPART' MENT OFFICE AND ACCOUNTING - SHIPPING. EXPERI- MENTAL TIME FACTORY r ACCOUNT- - ING COST GEN'L - ACCOUNT- ING p POSTAGE - OFFICE - . PHONE CHART 2, (Page 6): The plan of the re-organized factory, show- ing a proper distribution of responsibility 36 SYSTEMATIZING A FACTORY w t- z 3 s < -1 < ^ z z < c b. U a < !; EC 3 O X < u >• flC u 0. m a 3 o (0 c < u > s rO ^ fs rS! C ~ nr -e8 t D ^ c C s ^ g § ^ g ^ q p c^q 0> fC ^ V3 q c r- ^^c- s? ^ oc un n1 c c q a p q s c q n ^ '(3 s 2 O S^ q 00 s 5 S << 21 ^ 5^ a- ^ d s c p ^ 5 g C ^ 5 s S s p s^s N p3 < fr 1^ oc c- ^ ?; IT 5; :^ 5« OO r" o a p o o p C q >0 q s ^ ^ q 2^ q (0 a to *-1 OS % S f= ^ rJ 00 ^ OO vr> c <3 o q o a C? s ^ g c £ t ^ q 10 g % 5 o 15 ^ »* S3 S <^ ^ § q c a 5 q q ^ q 9 ^ S p is ^ {^ S 5J? ^ S^ ^ S lO ^ OO S^ ^ ^"^ s - ^ o p ^ ^ K3 q P S ^ q q ^^ « ►: s S ed — i K s 9 ? S U5 o u: j g c q c P g rC q s < C ^ *r. o s^ OO p CM f: to v£ lO fO S u: p 13 S i^ Ok da ffi q C, q S g c ^ 1 S q ^0 q r- OO s :S to 00 l<3 g c ■rn <* 90 P 5 5 o p Q p s c 2 q c W3 p Q ^ c^ S I „ o o q w" u S o .£ lO •A < |0 ^? S iT 0*^ ^s c- a O g p q .-J o • Q ^ s ^ p o o ^ s 8 p^ s 0) 00 !3 c- 3 >0 ^ s S 5^ J3 dg s a <= § ^ ^ ^ § o o § o s s S ^2 q CO <0 SC c- in ^ •— ir i^ 00 < O z «t H (0 c3 c •0 a o q J 1 g c s p ^ s s •00 o s o ^ = N ^ * a( :^ ^ .-J V7 — o ©0 ?2 3 V. to 5 % o s 1 ^ ■* a o s s ^ s o ^ ^ !2 (D o o o «^3 C J<5 q t 2 s s s o s 1 CO G C OlJ q a -; c is (0 IT U) 5 IT oc J? ■ IT' •0 o 3 3 OS s^ r- F o c O o s ° s ^ O s § s o si ^ U1 ^ £ ^ K an 1 c p ,oc q 5^ • 00 p p 5 rO 5 t- «5 c: IT jr - m E < u > m o3 ■4 oe x/1 s «o in o 5 \r. ?S ds 00 C iC ^ a ^ lO '2 J OC JS ^^ K M SO c c- p •d- c 5 c o J3 j2 ^ «£ "■ a d ^ V. re c- n r- - ^ K) s p 10 c v/3 O s 00 ^ If. In 00 \0 K "? Ul • (0 s < c3 o o C3 a o o o q o o o o q q a o o g a f 1 c C e o c c ^ ^ m. PAY ROLL AND COSTS 37 pay-period the factory manager and each of the superintendents were supplied with a re- port of the time lost by the various workmen from this cause. A short meeting of the fore- men was held each morning and it was a sim- ple matter for them to bring the subject up. After the plan was understood, the losses de- creased. A number of the employees worked upon a piece-work basis and for these a somewhat different system was tried. Piece-workers registered their arrival upon the payroll-card the same as the other employees, but instead of the operation-cards they turned in a daily report of their work to the foreman to be ap- proved by him and then forwarded to the time department. These piece-work reports, shown in Form 23, were entered upon the "Em- ployees' Piece- Work Record" (Form 24) by the timekeeper. In case it became necessary to change a piece-worker over to day-work he punched the operation-card the same as a day-worker with this exception: At the beginning of his day- work he was obliged to obtain an operation- card properly filled out by the foreman. At the close of the day this card must be dropped in the box for "Jobs Completed," located at the clock. The foreman was instructed to mark "piece-worker" across the top of the card as these cases were the exception and not the rule, and therefore there was likely to be some delay to the workman in receiving his full wages. These operation-cards were also entered upon the "piece-work record" and the payroll for the piece-workers was made up from this. Probably the employee would rarely, if ever, work upon more than two dif- 38 SYSTEMATIZING A FACTORY OPERATTON CARD §H5P OiRSi. PART NO.^ .LOT &ROi NO. OF PARTS. OPERATION WORKMAN'S NO.. NAME ^..^^ MACHINE^ DATE IN 1-iS -— - — ,,.^,,,_,,..._ _ — DATE . OUT I IN I OUT SN OUT TOTAL . . 1 2-17 DATE. EMP. NAME. QUANT.®^^", PIECE WORKER'S SHOP DAILY REPORT ORDER_ ^EMP. NO. ARTICLE SERIAL NUMBERS RATiE, AMT. DEPT. NO. J\PPROVED. FOREMAN 31 TOTAL TJWre. .HRS. RATE TOTAL WAG E^ $ FORMS 21 and 23: These operation cards are put in racks at the clocks. Piece workers use a daily report instead of an operation card PAY ROLL AND COSTS 39 PAYCHECK NO.. PAY ENDING .191 TEAR OFF THIS CHECK AND PRESERVE CARE FULLY UNTIL HANDED IN FOR PAY. OVER PAY ENDING. NO. NAME 19 MORNING AFTERNOON OVERTIME DATE TOTAL IN OUT IN OUT IN OUT 1 .16 2 -17 DUPLICATE PAY CHECK NO. PAY ENDING RECEIVED PAYMENT (SIGN HERe) 14-30 15-31 TOTAL TIME. RATE. .HRS. TOTAL WAGES. FORMS 20 and 26: A stub tag pay roll card is used with Form 21 for day workers. A red card, Form 26, identifies the man who has lost his regular pay check 40 SYSTEMATIZING A FACTORY ferent orders during a pay-period; but a dif- ferent '* record" to each order number was assigned. After the completion of the order the cards were filed under that number, with other data relating to it. All operations in assembling or building bodies or tops were given a serial number and the employee was instructed to note this number upon his piece-work report, or, if a day-worker, upon the back of his operation- card. In the factory manager's office was kept a *' production schedule" (Form 25) upon which was noted the employee's number, op- dEPARTMEN?- ADORESS ADORE ADDRCS ADORES ADOREE PHONE NOt- ADDRE5 ADORES ADORE? TRANSFERRED TO NO; — REPOI^T OP PERSONS TRANSFERRED TO THE manager: date »9»- I HAVE TaANSrCRREO name — NO. IN THE TO TO TAKE EFFECTr DEPT. AS A bEPt. is A — REPORT OF PERSONS ADVANCED TO THE manager: DATE '- - I REC'OWTVftrND ADVANCE crPTi Ks n- OLD rate *r- «JEVlLflATE «r To take effec.1^ remarks signed: OEPT. WEAO OiK.- FORMS 22, 27 and 28: When a man is hired, advanced, or trans- ferred the facts are accounted for on these blanks posjte the body and operation numbers, as shown on his card. This was used as a means of reference, and also as a check to prevent an employee from turning in a claim for work PAY ROLL AND COSTS 41 42 SYSTEMATIZING A FACTORY performed by some one else. This alone showed up some money that had been going out of the firm's hand which should have re- mained. If employees would report work done which they had not performed, when this sys- tem was started, it was reasonable to assume that they had been doing it for some time past. At first it was found that piece-workers would invariably quit about thirty minutes before the whistle on pay-day, and would come down to the office for their money. These, together with the men who had either left the company or were not working, would require an hour or more of the paymaster's time. He had all he could attend to. The employees' attention was called to that clause in the rules to the effect that they would not receive their wages until after quitting-time. Of course, this was objected to, but like all such matters soon died of itself. These same piece-workers would also quit fifteen minutes or more before quitting-time at noon and in the evening each day. They argued that their time was their own and so did the foremen, but after it was pointed out to the latter that the overhead expense went on whether half the men worked or they all worked, and that the production was mate- rially lowered by the loss of that half hour or more, they began to discourage this practice. The men had been in the habit of coming to a window in the office for their wages on pay-day and by this method they were some- times forced to wait over a half-hour before the last man had received his money. Need- less to say, this method did not tend to create any very pleasant feeling on the part of the men. Cages were erected, one on each floor, which PAY ROLL AND COSTS 43 ! ■ "~" •(' ^ > o oc 1- hi 0. *^ -_--_ Id U o o z I 1 X u S w u V) m < f \ h 0) ft i CI 1 4 u j *• 1- Jl 1 o N < ! 1 O in ~1 1 •> '• N N -' 2 *" d s 0) a T- id M u z o «9 t3 I «> < -> I Q - « Z «l N 1 UI i S O UD. ^ j O 2 « >e ^ (C < >• < N u z O -- -- . Z o in a> N o >> O 0) Zj >• Q N t* u. 1- . flcd -- / ' 1 - -- ID N K <0 Q. N f Ill K a> ! D hi --- A 10 u 4 ' 1 \ - 35 u "t ^ s ( (0 i 1 « 2 _ t U C l» o I H < u 3 m t- K / --- SHOW MIN -low HOUR! OTO REGIS 1 « N / 1 Q UI Z O •• t f u S ^ i CO IGURES URES SI •. FAILE ES ee: iii isi is < X H Z tfo L<0 LflOL " O 111 D 1 U. o ••■ < * c « 323 U J m mS o c o E S H < ^*v^^ CE z z 0. o bi p o . 1 < z < -1 a. — '~~" s K U rt 2 a o. 05 o 44 SYSTEMATIZING A FACTORY would fold against the wall when not in use, from which the men were paid off. This method required less than ten minutes instead of thirty. Occasionally a workman would report the loss of his pay-check and would desire his money without it. It was found that in some instances an employee was unable to call for his money and a fellow employee would obtain it on this plea and later the absent employee would call for it. There was no means of identifying the party who had obtained the pay, so we decided to issue a ''duplicate pay- check" (Form 26). The employee who required one of these was obliged to wait until the day following pay-day and then present himself at the time- office with his foreman to identify him. The latter was obliged to endorse this pay-check. Like all firms, it was often found necessary to advance the wages of some of the em- ployees. For this purpose the blank shown (Form 27) was filled out by the foreman, O. K. 'd by the superintendent and in some in- stances approved by the manager. Whenever it was necessary to transfer an employee from one department to another a report (Form 28) was issued, and when it was approved by the proper authority the report was sent to the timekeeper. The changes in the clock-numbers took effect the first day of the pay-period. All of these em- ployees' records were filed in an envelope under his number and it was possible to refer to his whole history at any time. To reduce the number of docked cards a "tardy list" (Form 29) was prepared at the close of each pay-period and a copy for- warded to each department-head concerned. PAY ROLL AND COSTS 45 n^fp 111 PA55 S^Anff) ^LdtlK NO III A.M'^ rjMm eiGNCO ' ^•»!^> .;_..•.-.._>. ^J u.*... 9^9 » » ^ a z s z < Q.' 6 z o hi >• Q z m H . 111 1 < ^i > o o 0) o "^ 0. a. h < o o >• < K c < o *; bi < z Q. . O K z OC 111 S -J 0. z o o < " I z O U 3 u c Z - W J 355 o o z < lA o H 22t ■ so I :£ o u z . c o o 3 .J w O o z z o K u o (1 J h 3 Z z z 1 M w < < s ^ a z > « O 2 « 2 3 o h III I:! « ^ ■ X j -J < o y S H u ' > M j < 0. 0) 3 i z z < < ( y z O 4) a l-l a o "*-■ «.& in (J ^ 1-1 S3 '^ ??3 2 o O -(J 46 SYSTEMATIZING A FACTORY A summary of these was also furnished the superintendents. Its effect was in every way very beneficial. In the time department was also kept a *' lost-time report" (Form 30) for each employee. Tliis sheet was good for a year's report and reference might be had to it when decreasing the working force or weeding out the irregular ones. When an employee left the company's service the department head issued a "final pay-ticket" giving the cause and other in- formation. This is shown in Form 31. The tool and supply stockkeeper would then re- ceipt on this card for all tools loaned and re- turned. Such articles as belonged to em- ployees were passed out by the watchman upon presentation of the stub. The paymas- ter was notified immediately by telephone so that he could make up the employee's time. IMPREST CASH VOUCHER no* necEivEo rtnw the AUTO MFG. CO., 9~ -DOLUVRS FOR CHARGE ACCOUNT ENTERED ON SUMMARY NO. ; CERTIFIED CORRECT DATE ENTERED ON SUMMARY APPROVED BT FORM 32: When the pay-master's petty cash runs low he uses this voucher for reimbursement His wages were taken from the imprest cash kept in the time-office for this purpose. When his cash became low a cash voucher (Form 32) was issued to reimburse his petty cash. This latter must be accounted for at all times. A "denomination sheet" (Form 33) was used in making up the pay-roll for the bank. 9 e P ssiiaunHu"^ ' YlBiiiiiinamuuitHuunuK 5 »"QeoSiSC J HUB mm J. ^ V|A \\\x\\«Sl>X\*,'*^X^VV ' OJ^ S S ^ Hnnisiiiiii ■■ III! iiiii nil III MBii III RULES FOR SYSTEM !^EE that a broad view of the subject is taken^ and provi- sion made for properly dovetail- ing" the various departmental systems. Make the connection clear to all employees by the use of a chart. Such a table is self in- terpreting and saves much ex- planation. Do not treat the system as a fetich. It is a good servant, but a bad master. So much of it as is justifiable is merely organized common sense. Prune and pare your system without stint, until it gives the utmost economy and dispatch. There are many daily items of shop practice being perpetuated in expensive card systems today, of which no use whatever is being made, or is ever likely to be made. — John Caldek IV MORE WORK IN THE SAME SPACE WHAT has been told in the preceding chapters has referred more particu- larly to the accounting end of the business. After the routine of handling ma- terials and pay-roll had been straightened out, production methods were considered. Our production was thought to be very good, for the size of the plant, when compared with plants of similar proportions. However, the demand for greater production became so urgent that something had to be done and that quickly. To make a small addition would be false economy as the property was situated so that it was possible to build in only one direction. Plans had been drawn in which it was proposed to tear down the major portion of the present plant and build a much larger factory on a piece of property in the imme- diate neighborhood. In view of this, it was advisable to see if production could not be boosted up without increasing the floor space. This meant to get definite data on the production of each depart- ment and the space assigned to each. In the past the factory manager had been content to SAVmG WORKING SPACE 49 take tlie daily shipments for his production data. Of course, with these only, he had no means of checking up the various departments as they might all be held up because of the delay of one department in getting out the work. Specification sheets were prepared. Every item that entered into the makeup of a body or top was entered upon a sheet. As far as possible each of these items was assigned a serial number by which it was known. Of course, such items as glue, thread, and so on, were not given numbers. After these sheets were completed it was possible to work intelli- gently. Inventory had been taken so we knew what was in stock and through our newly installed stock record systems we could tell the quantity on hand above orders. When a new lot of bodies or tops were to be made (which was about once each week, each lot being two hundred and fifty) the pro- duction order was issued by the factory man- ager. The original (Form 34) was retained by the factory manager, duplicate (Form 35) sent to the cost department. On the reverse side of this was space ruled for the cost rec- ords which will be taken up in detail further on. Each department was furnished vdth a copy of Form 35. All operations were listed and numbered and copies supplied to the various depart- ments interested. A *' finished stock sched- ule" (Form 36) was issued for each part re- quired and the necessary daily production noted on same. As the parts were sent from one department to the next it was accompanied by an ''interdepartmental receipt" (Form 37). The foreman receiving goods checked the quantity received with the receipt and re- 50 SYSTEMATIZING A FACTORY ceipted for same. The duplicate was returned to the department issuing same while the orig- inal was collected by the office boy at short intervals and turned over to the factory man- ager. It was then a small matter to enter these upon the finished stock schedules. If produc- tion was behind schedule set, or increasing to the detriment of other parts, steps to remedy the conditions could be taken immediately. By means of this the cause of the delay in shipments was soon ascertained, something which was obviously entirely out of the ques- • tion before. Of course reasons would be ad- vanced by all questioned, but as these varied with the parties they did not count for very much. If a foreman found that his supply of stock was running low he immediately sent a copy of the ** daily shortage report" to the superintendent. He followed up the reason. Each day's production was shipped the fol- lowing day with but very few exceptions and the *' shipping memorandum" (Form 38) was used. The original went with the goods or the Bill of Lading when shipped by rail, duplicate retained by shipping clerk, triplicate sent to the accounting department from which the invoices were made, while the last copy was sent to the superintendent. The factory manager was supplied with a ** memorandum of daily shipments" (Form 39) by the shipping clerk. From these it was possible to tell at a glance the totals for the day, for each model, and also the total to date. In the top plant shipments were made mostly by rail and were usually made but two or three times per week instead of daily. Memoranda of shipments as made were supplied to the manager the same as that for the bodies. What fits in one business very well may not SAVING WORKING SPACE 51 I'L^T-::-: Q \ „ „,.. .™ .=_-^^ - B ii t a o 1 i { - 8 J U 1- < <~- ^g < GCJ ~ in z o 1 <• - ■ — _& ^m s "ij z J . n. o D z D 1- z u Q d J lOi C 1- IS i D W I moo 03 ji U (0 s u ifl o 1 "* a: c >. o < J _, u en tn r < 1- 3 1- w •2. IS u (0 o o ,(A < (A 2 / "^ E »- O 0) « u h < < , 1- 2 h w I -1 5 QC z Ud d QCz 0) 1 <- ^ 1 ^■ O ai o QC S O i5 _ Q LL _ « 1 QC o o s III z < s o o ^ z z \ D tS d o 3 -O „ ^•2 1 o 4) U rd 3 o o b o z o z b ^2 Q z u Q S c 3 O o 1 D O 5 o -J .2 QC Q. u 1 z i o < o u IT U 1- < O QC tt. i 1 hi z z o < E u c u H < O g < 1- if .2 d i ! £ - . "O Ill , 3 § 1 -• ;-■ 1 1 ; * -^ / i> ^ H 10 1 Q 1 '(0 1 1 d o J 1 o u « 1 (0 u 3 o u (C o ^ o ? H \ K (0 j \ W ^^ • • 1 a — o u ' -1 CO z u tf) z o (0 o b < >o o t^ -1 > u So .J o u t- o u < S: 2 -1 < CO < o z ? < z£ ° < o 2 »■ f r ■H- ■T^V-rH-' J u g 52 SYSTEMATIZING A FACTORY do at all in another, and it therefore behooves each manager to investigate the merits of any system and endeavor to determine for him- self as to the adaptness of it for his own use. THE AUTO MFG. CO. duplicate PONTIAC, MICH. SHIPPING MEMO. 6HIPPCO TO_ EERIAl NO SKIPPING MEMO. SHIPPED TO_ seniAt no. JIRTICH ---: -^=»AS INSPECTED ^ SHIPPER. FORM 38: Is made out in triplicate. From the third copy, invoices are made out In the cost system outlined below it was not desired to ascertain the individual cost of the various parts used, though to do this would have meant merely the extension of their de- tail. The first step was to set up the *' manu- facturing accounts" separate from the ** gen- eral accounts." These are shown below and included everything pertaining to the cost of manufacturing. After this had been accomplished each de- partment was assigned standing shop orders to cover all supplies of various natures. Whenever any such supplies were required they were requisitioned out from stores on these numbers. It was then possible to fix the overhead expense for supplies on each depart- ment and these costs could be used to check the following month's report. SAVING WORKING SPACE 53 s i5 / • o M 6 I z p I 5° d d d o ^ m Ql J J h z z i -1 D Q bJ o bJ d z , U cc Q o ) I -« o z 1 o f^ i / / Z < ^ u • oc > o t- (0 h < o 10 o Ul > I o Q. u \ bJ bl o 1 z (j2 > < ■ u S 1 o CC co H Z u a. z V) > Q O m >- -J < Q bL s 3 O z < s Ul 3 m Id c u > u o M Q O h m 1. < E h d z - > o o w u a d z < 1- 3 z o H • < 6 o z z z K 3 3 1 ! 12 1 < X X z D m < p a. O z - z D o I z (L a (J « 2 Q E 3 si* >: i z < 1- 2 3 Z < s 1 SAVING WORKING SPACE 55 ■1 r- T T 1 ' 1 1 l.l 1 1 1 1 r 1 1 in O o u ! 3 - U 1- U (fll 03 U o • ri ? z: — '" , 1 Z '. — bJ — u _, t~i 0) ■- oo2 Off H ■^' or 0. -- - 0. '! -- ■4-> ^ (U t- 1 2 O § o z o s < f J z 1 u h ~ a, S < '3 .. -a U Q " tn C 0. Uf O ss t' Q EC < O O tt 2 ° ,^ S (fl a (T Q „ ,1 >. EC 1 1 < 1 — i ti) 3 o O 1- ! u ^ ^2 — C ■ 1— H d E i w z (0 o u u IS 1 ... Z "ri -a X § z l!f > n Id K S H « r""! o Z Q < 1 < u EC Z 0. , < a. -1 4 — ' r t >i s E >.o 3 U w u ._. fc aj O u o 5 S — C i-i 'H >. — -- — ■ ! z •t be S 3 (3 3 O r' ^ E IH H U O o a t.t-1 -1 E T3 cc o 53 s§ o 4J o J 2 O u S u »- 1 § H < ■< i en a. 2 ° "" o -i4 (J w ^ u <: o o u Q CO H V) z Tt< K EC < I o 13 u U. Z ii. O L. C3 c la. »- D 1- o z U) CO i c o hi z I o 0. u z o u z 3 o u >• bJ -I m < O < fiC < EC 3 u pi; z ea o h. I U (L CD o ^^ . ■ ■MM ■ , __ __ _ _ Ph 56 SYSTEMATIZING A FACTORY At the end of each month a manufacturing report was made out showing the cost of jobs in progress, jobs completed and an analysis of the departmental expense. For this pur- pose Form 40 was used. As each shop or- der was issued the duplicate copy came to the cost department and was placed on file. Each morning the timekeeper sorted out the time- cards and piece-workers' slips turned in ac- cording to the order numbers. They were then posted on the back of this order copy. If this copy became filled an additional sheet (Form 41) was used. Upon completion of the or- der the various requisitions were sorted and extended and then totaled according to the material after which they were posted on the order sheet. The labor could then be totaled and the overhead expense ascertained from the monthly report. The total of these three would be the cost of manufacture. We cofuld then post these costs on the '* com- parative cost record" (Form 42) from which it is possible to watch the costs. In case any increase over a previous order was found the manager could quickly locate the reason as the shop orders were issued for amounts covering as a rule but one week's production and anything unusual would be fresh in the minds of all department heads. An inventory of all machinery and other equipment was made and each piece assigned an equipment number. Equipment sheets (Form 43) were made out for these and all charges for repairs, replacements, and so on, were noted on same. From these sheets we could tell the valuation of the plant equip- ment. EACH UNIT A MACHINE T^ACH unit in a factory, whether it is a department or a building, may be considered a machine with certain functions. To keep that machine operating" at its highest speed and with the greatest efficiency means that the ''use- factor" of that section or of that building approaches the hundred per cent mark. It may take only a general study of a department to show where time is wasted, where out- put might be doubled if little changes in equipment for han- dling material, better light, dif- ferent arrangement or methods ofhandling machines were made. Or it may take a stop-watch study of detail operations to point to the weak spots and losses. — p. L. Battey V SMOOTHING OUT KINKS IN ROUTINE ^NE large motor car company kept quite a considerable force in their engineer- ing department employed continuously. Efforts had been made at different times to cut down the size of the force, but eventually it became necessary to increase it to its for- mer size and occasionally to exceed that. The majority of the engineering force was engaged upon routine work. The size of the experi- mental engineering department was kept within close bounds. To add to the difficulties the personnel of the force was changing un- expectedly at all times. The employees seemed to feel that their positions were some- what insecure and at the first opportimity would leave. How the Engineering Department Was Re- duced and Its Efficiency Increased Under the old regime it had been customary to keep several high grade men on who were supposed to be capable of handling any kind of engineering work which might come up. One man would be working upon motor de- signs and later be switched off on to chassis or SYSTEMATIZING A FACTORY 59 running gear designing. As a result no one man was thoroughly conversant with any one group. As regards the detailers, they were grouped into those capable of handling intri- cate details and those whose ability was limited to the minor details. Then came a large number of tracers whose sole duty it was to trace on cloth the details made by the de- tailers. In all, about forty-five men were re- quired to handle the work. The salaries paid were as follows : design- ers, $115 per month; Al detailers, $95 per month; second class detailers, $80 per month; tracers, $40 to $65 per month. The new sys- tem was arranged on the following plan : de- signers instead of being assigned to all classes of work were grouped into squads. One man was placed in charge of all motor and trans- mission work. Everything pertaining to power plant came under his jurisdiction. For this he was paid $150 per month. This salary was greatly in excess of the former salary, but the object in paying it was to insure a really good man on the job (which was quite impos- sible before) and keeping him there. To another was assigned everything per- taining to bodies, tops, fenders, and so on. One had everything connected with steering gear, axles, springs, and so on, a fourth had the chassis and all control mechanism, and the fifth had experimental work. These men constituted the engineering department and were held responsible for everything under their direction. The drafting room now con- sists of tracers and the second grade of de- tailers only. The best among the detailers have been distributed as assistants in the engineer- ing department. All designs are worked up by the engineers in charge and the princi- 60 SMOOTHING OUT KINKS pal details made by their assistants. As each engineer has but one assistant it will be seen that the force is not exceptionally large. After the designs and major details progress sufficiently far, a part list giving the name of each and every part is made up by the engi- neer for reference. Then a requisition is made by him upon the chief draftsman for additional assistance. The chief draftsman assigns other men to assist the engineer in get- ting out the details. Usually not more than one man is required, at the most, two. The details are made upon a tracing paper and after receiving a general check from the en- gineer they are turned over to the checker in the drafting room. How Blueprints Are Made and Issued to the Experimental Department After the experimental work has been com- pleted and the necessary minor changes incor- porated on the drawings these same drawings are traced upon cloth. Inasmuch as the detail drawings have been checked, it is possible for a tracer to perform twice as nmch work as formerly because he is not obliged to confer with the detailers in regard to the drawings. If the experimental department finds that certain details in design require changing they report to the engineer in charge of that work and not to the chief engineer. After the work has reached the manufacturing department, it sometimes becomes necessary to make minor changes. These are always referred to the engineer in charge. In this way a vast amount of purely routine labor has been removed from the chief engineer and assigned to men who are more conversant with the small details. The chief draftsman was not obliged to keep SYSTEMATIZING A FACTORY 61 a large force of designers on hand, each familiar in a general way with motor car de- sign and apt to leave at any time. The size of the entire force was reduced from forty-five men to twenty men made up as follows : five engineers, five assistant engineers, five detail- ers and tracers and five tracers. Every week the engineers were called into conference with the chief engineer, general manager and the factory superintendent. These conferences would usually take up about two hours and all questions pertaining to de- sign and manufacture were thoroughly dis- cussed. The former chief engineer was made the consulting engineer and was consulted by the general manager in regard to all engineer- ing problems. The former assistant engineer was made chief engineer in charge of the en- gineering department, the experimental de- partment, laboratory and drafting depart- ment. It was found that by the adoption of this plan the expense of operating the engi- neering department was decreased, new work was greatly expedited, because the engineer in charge knew that he must report progress to the general manager. However, no difficulty was experienced as numerous applications were received from first class men who had reached the limit (about $125) paid in draft- ing rooms, and from these the new engineer- ing department was recruited. B^otv a New Scheme for Specifying Tools to Use Was Inaugurated All special taps and dies, reamers and other small tools were listed upon data sheets in the drafting department. All sheet metal parts, those requiring steel tubing, and so on, were compiled. It was found that in several cases 62 SMOOTHING OUT KINKS parts were raade from different gauges which could have been made from the same gauge as well as not. The material specifications were changed so as to call for the same gauge where possible. Certain gauges were then compiled on a data sheet and future drawings called for gauges contained thereon instead of leaving this question to the draftsman. All broaches were listed and when new details were drawn dp the detailers and checker were instructed to use standard tools where possible. In this way many small tools were saved as previously the drafting room was not informed on this subject. The many variegated stocks of ma- terial were decreased and it became possible for the purchasing department to order a larger supply which, of course, enabled it to get better prices. One man in the laboratory was placed in charge of all material specifications. It was his duty to specify the analysis and treatment of the different metals used. In the labora- tory was a complete chemical and physical equipment which was used far more than un- der the old plan. In several instances it was possible to reduce the size of certain screws and studs by substituting a little better grade of steel at practically no extra cost. Repairs due to defective material or poor design were gradually eliminated because certain men were held responsible for these items. A small library was also started by the en- gineering department in which were filed all technical papers, catalogs, and so on, of inter- est to that department. This was placed in charge of a clerk and copies were furnished upon requisition. This eliminated no small amount of delay due to the inability to obtain certain information contained in catalogs or SYSTEMATIZING A FACTORY 63 trade papers. It was the duty of the clerk to keep on file everything obtainable regarding automobiles and tools. In the factory several accidents resulted to employees due to finger rings catching in mov- ing machines or tools. While the company was not legally responsible for these accidents, still the fact that an employee 's finger was in- jured decreased his working efficiency. A no- tice was then posted to the effect that all em- ployees must remove finger rings during work- ing hours or else wear working gloves, the reasons for this order being given. As a result the number of minor accidents was greatly decreased. The factory engineer was requested to fur- nish figures showing the safe loads which could be carried upon the different floors. Signs were then posted in each department giving this information. Foremen were in- structed to see that these figures were not ex- ceeded. In several instances it was found that heavy castings, and so on, were stored in such small quarters that the safe load was greatly exceeded. Steps were immediately taken to correct this. Each building is separated from the adjoin- ing one by a brick wall, and brick fire parti- tions separate most of the departments. Fire doors are provided and an elaborate sprinkler system. However, a fire broke out one night and the firemen lost considerable time in loca- ting the source of fire. The fire was confined to one department, but the firemen entered a window on the wrong side of the brick wall. The next day a large white strip was painted on the outside walls showing the fire walls. In addition to this a bulletin was posted up at the main entrance giving the location and sizes 64 SMOOTHING OUT KINKS of the various hydrants distributed throughout the plant. Considerable trouble had been experienced in one plant due to the wrong material being dispensed by the stockroom. This applied to the analysis of different steels. For some rea- son steel of one analysis was placed with that of another. Inasmuch as it was impossible to discern one from the other by appearance, re- course was had to assigning a number to each analysis, and each bar was painted on the end with this number as soon as received. It is now an easy matter to keep the stock straight. A^ . °o ^ %/ <^ <./*^?r^^c '^^^^^ /^Si^^*- '^o^:^' ^'t^v^^^lia'- '"^..^^ 4> -.^ • " V^ .*J — '- ^ '*bv^ «^^ ^^-^t. • •« ECKMAN NDERY INC. ^ DEC 90 N. MANCHESTER, K^"^' .. %« '•-• - » ^ <«'»..