Class TS 15^ Book .^ 3 Copyright^?. COPYRIGHT DEPOSIT: WOKKS MANAGEMENT LIBRARY PROFIT MAKING IN SHOP AND FACTORY MANAGEMENT BY CHARLES U. CARPENTER NEW YORK THE ENGINEERING MAGAZINE 1908 OLttSS/1 Us, Nu.! 1 ?.C / 30 COHY » £j C* Copyright, 1908 By JOHN R. DUNLAP WAVERLY PRESS BALTIMORE V 7~£ I !U / ~2 PREFACE. "Profit Making in Shop and Factory Management" is a concise expression of the methods which Mr. Carpenter has developed and which he constantly uses in his own practice. They have been tried and perfected under the stress of daily operation in the course of his experience as supervisor, manager, head of the labor department, and president, of various large manufacturing plants, notably the National Cash Register Company and the Herring-Hall-Marvin Safe Company, of which latter concern he is now chief executive. The contents of the book appeared first in the form of a series of articles, prepared for and published in The Engineering Magazine during the year 1907. As now presented in this volume, they have been carefully revised, in some points enlarged, to a certain extent rearranged, and a modified division into chapters has been introduced. These alterations however are only in details, adapting more effec- tively to permanent form the sections which were produced serially, and grouping them most advantageously from the closer perspective which is given to the reader of a book. The subject matter is un- changed in substance, and is even more complete than when it was first printed in the Magazine. The study of works-management methods will be found to be marked throughout by the clear sight, the fair mind, the direct deal- ing, and the strong vitality of the author. The whole treatment is vibrant with life, the work indeed having been produced amid the incessant and insistent claims of active work in the management of the great manufacturing company of which he is president and man- ager. It is inspired by his keen interest in the promotion of better ideals in industrial organization. It is largely a labor of love, freely devoted to the advance of the profession of industrial engineering. And it bears throughout the stamp of tried, practical success. The Editor. CONTENTS. Chapter I. The Reorganization op a Run-Do wn Concern The Necessity for Analysis of Existing Conditions — Advantageous Posi- tion of a Well Organized Concern — The Manufacturer with his Eyes Closed — The Manufacturer with his Hands Tied — Organizing the Methods of Inves- tigation and Analysis — The Usual Defects of Organization, System and Methods in Manufacturing Plants — The Superintendent — The Foremen — Job Bosses and Workmen — Systems of Pay and their Effect — The Stock System — The Order and Tracing System — The Cost System — Machining Methods — Defects of the Sales Department — Defects of Executive Con- trol 9 Chapter II. The Practical Working op the Committee System No Ready-Made System is a Panacea — Why New Systems so Often Fail — Co-operation of the Working Force is Essential — The Human Element and the Get-Together Spirit — Formation of the Committee System — The General Factory Committee — Its Personnel — Its Work — Its Meetings — Subsidiary Committees — Job Bosses' Meetings — General Foremen's Meet- ings — The Workmen — Promotions 23 Chapter III. Reports; Their Necessity and Their Uses The Necessity for Reports of Varied Kinds — What they should be and what they should Cover — A General Outline of the Essential Reports — The Monthly Analyzed Profit and Loss Sheet — The Sales Reports — The Factory Reports — The Cost Reports — The Points to be Shown and the Methods of Use 36 Chapter IV. The Designing and Drafting Department Results to be Secured — Close Relations with the Tool Room — Require- ments of an Efficient Drafting Department — Meetings with the Com- mittees — Co-operation with Shop Foremen — Standardization in Design — Designing for Cheap Machining and Assembling — Making and Following of Drawings to be Invariable — Reports from Machining and Assembly Departments — The Use of the Committee System 42 Chapter V. The Tool Room; the Heart of the Shop The Full Functions of the Tool Room — Systems of Tool Supply — Speed of Production in the Tool Room of Vital Import — Methods for Hastening Production — The Choice of the Foreman — Specialization of 5 CONTENTS Labor — Standardization — Duplication of Standard Parts — Subdivision of Labor — The Small Shop — Speeding up Tool Production and Checking the Cost — Tool-Cost Cards — Examples — Method of Use — Tool-Room Commit- tee Membership 50 Chapter VI. Minimizing the Time of Machine-Tool Operations The Determination of Standard Times — The Concentration of the Work- man's Time on Running his Machine — The Adoption of High-Speed Steel — Causes of Lost Time — The Starting Point in Minimizing Operation Costs — Investigation of Existing Machinery — Systematic Report upon Improve- ments in Old Machines and Recommendations for Replacements or New Purchase 64 Chapter VII. Possibilities Attending the Use of High-Speed Steel What Percentage of Increase may be Expected in the Output — The Abundant Provision of Cutting Tools — Standard Shapes for Tools — How Determined — Forging — Hardening— Form for Records — Cooling — Grind- ing — Use of Automatic Grinders 73 Chapter VIII. The Determination of Standard Times for Machining Operations The Shop Conditions upon which Standard Times Depend — Tests of Times which should be Attained — How to Begin — Classification of Parts — The Expert Tester — His Qualifications — Practical Speeds in Lathe Work — In Planer Work — In Drilling — Tables—How to Use the Tables — The Com- mittee at Work — Requirements for Maximum Production by the Work- man 83 Chapter IX. Standard Times for Handling the Work The Elements which must be Considered — Causes of Lost Time in Hand- ling — Injuries to Stock or Parts in Handling — The Use of Standard Boxes — Standard Places for Stock and Parts — Records of Handling Times — Forms — Setting-up Time — Times for Work on the Machines — Time for Removing Work from the Machines — The Use of Committee Action 94 Chapter X. Standard Times for Assembling Special Difficulties to be Found in this Subject — Methods of Procedure which Succeed — Examples of Results Secured — An Instructive Case Described — Foremen's Co-operation Essential — How it can be Enlisted. . . . 101 Chapter XL Stimulating Production by the Wage System The Attitude of the Workman — Mischief Caused by Cutting of Rates — The True Theory of Costs — The Wage Problem in Introducing Standard Times — How to Get the Workman to Stand for Them — Systems of Pay — Day Work — Piece Work — Premium Plan — The Differential Plan — The Bonus Plan — Special Modifications of the Bonus Plan Recommended 109 CONTENTS 7 Chapter XII. Stock and Cost Systems as a Factor in Profit Making The Prime Requisites of a Cost System — What it should Accomplish — The Three Fundamental Problems at a Stock System — A Simple and Suc- cessful System Described — The Forms and Cards and their Mode of Use — Storage Platforms and what they Accomplish — Stock-Tracing and Cost Sheets — Forms — How the Data are Used. 116 Chapter XIII. The Upbuilding of a Selling Organization The Various Methods of Selling Manufactured Goods Defined — What is to be Considered in Developing a Selling Force — Training of Salesmen — Its Possibilities Proved — Development of a Selling System — Salesmen's Demon- stration Meetings — A Typical Programme — Modes of Stimulating Interest — Salesmen' Training Department — Selection of an Instructor — Prepara- tion of a Manual — Reports and their Importance — Forms — Lists — Adver- tising 124 Chapter XIV. Effective Organization in the Executive Department Difficulties Peculiar to the Executive Division — The Personal Element — The Use of the Report System — Reports from the Selling Division — Forms — Factory Reports — Forms — Executive Reports — Forms — The Methods Illustrated by an Example and a Typical Programme — The Results Secured 138 PROFIT MAKING IN SHOP AND FACTORY MANAGEMENT Chapter I. THE REORGANIZATION OF A RUN-DOWN CONCERN. N the day of prosperity, when manufacturers are behind their orders, running full forces night and day, straining every nerve to increase production and are further embarrassed by a constant influx of new business, the consideration of the problems confront- ing a " run-down'' concern and the ways and means of correcting its serious defects in organization, methods, and systems might not, upon first thought, appear "timely." I contend, however, that the present is the time to attack and solve these problems. Experience and investigation have disclosed an amazing number of concerns which, even under prosperous con- ditions, have been having none too easy a time in making headway. Many manufacturers today have an uncomfortable sensation of uncertainty concerning the progress and profits of the establish- ments under their management. Any manufacturer feeling the existence of unsatisfactory and unprofitable conditions must make up his mind that the real reasons for them must be discovered and the causes removed at any cost; for should the management, in its conduct of the business, not discover its weaknesses, this same management may be sure that some thoroughly organized competitor will drive the condition to their startled attention when more severe seasons of trade come upon us. 9 10 PROFIT-MAKING MANAGEMENT Necessity for Analysis. To solve the problems confronting him, a man must bring to them an absolutely unbiased mind and a determination to analyze the situation thoroughly and mercilessly, and so to form an accurate judgment as to the underlying reasons. You, the manufacturer, may be sure that unless your factory, selling, and executive organi- zations can stand this test of your coldest and most searching exami- nation — your analytical test — with any change from expanding conditions of trade, you will rind the foundation of your business slipping from under it, slowly perhaps, but surely. Advantageous Position of a Well Organized Concern. We hear much today of the advantages that one competitor secures over another through the "secret rebate," special "shipping privileges," unfair "rate classifications," "secret agreements," etc. In a manufacturing business these advantages count for little against a company with an effective organization of the working force, stimulated by a desire to work not only for self but also for the good of the concern, aided by up-to-date mechanical methods and modern tools especially adapted to the quick, accurate, and economical manufacture of the parts to be produced; supported by compre- hensive, though simple, systems that enable the management to keep an accurate check upon the cost of production, and also enable them to determine the proper course to pursue in order to secure still greater economies — a system of manufacture that enables the management to feel certain that the most economical methods of production are being planned and pursued. Add to this an efficient selling force, properly trained by modern methods, and an economical plan of putting the manufactured goods upon the market, and the firm possessing such advantages is in an impregnable position. first requisites in reorganization 11 The Manufacturer "With His Eyes Closed." In this day, a firm which would hold its own, must adopt the most modern methods in organization, method, and system. Repu- tation gained in the earlier days of a firm's existence is a valuable asset when backed up by modern methods, but amounts to little when it is coupled with obsolete ways of doing business. A business must progress or slide backward. It cannot stand still. The manu- facturer can always feel certain that if he is not progressing some one of his competitors surely is. This he may learn to his sorrow. The old maxim "a stern chase is a long one" applies with peculiar force to business conditions. Once your competitor has built his tools for economical production, improved his product, organized his forces, and secured the proper start on the market, his sales and profits multiply and yours decrease. And the longer you delay adopting similar methods, the more the difficulties increase. There are still many manufacturers who are not satisfied to give their unqualified approval to modern methods in shop and selling organization. The number is growing less every day, but there are thousands to whom these remarks yet apply. To these the very word " organization" implies something mysterious — something big, and certainly something expensive. The idea of " organization" is not compatible with their idea of economical management. To these the idea of "system" is indissolubly linked with "red tape." "System" to them means additions to their clerical force, and addi- tions to their clerical force means additional dollars spent upon "non-producers." They will refuse to admit the advisability of systems sufficient to care for their heavy factory interests, and yet they have sufficient intelligence to keep up their general accounting system. In brief, they do not note the tremendous leaks in their factories because they have not sufficient experience or data to enable them to know, with any degree of exactness, whether or not they are getting proper and economical results from either foremen, men, or machinery. A moment's thought must make such as these 12 PROFIT-MAKING MANAGEMENT realize the possibilities of the existence of such leaks, and they may- be absolutely certain that where such possibilities exist, unchecked and unsystematized, there also exist the losses. The Manufacturer "With His Hands Tied." There are, however, many manufacturers on the other hand who realize that something is wrong, seriously wrong, and who would be glad to adopt modern methods if they but knew what they were and how to apply them. But to many a man who is intent on improving conditions, but who necessarily faces ignorance, prejudice, false pride, and stubbornness on the part of those in his organization who should help him, the job is appalling. To such, however, as recog- nize the conditions and are willing to attack the problem, methods can be suggested, the value of which has been proven over and over in actual experience under the most distressing conditions. Careful investigations, coupled with a thorough campaign of action along organized lines, will bring the reward. The Reward. The reward for such investigation, coupled with vigorous, intelli- gent, and tactful action, is so great as to justify the expenditure of any amount of labor and time. That it will take time, and in most cases a long time, is very true; but that is all the more reason for beginning and continuing courageously along steady lines of pro- gress, and in such a manner that any backward step would not be be possible. The most difficult and discouraging problem to con- tend with, next to the difficulty of wheeling the old men into line, is that of progressing along new lines, devising and putting into effect new methods and new processes and tools, and at the same time not interfering with the regular required output. However, if the manager is sufficiently impressed by stern necessity to lay out plans for improvement, every one upon whom he must depend must be impressed with the idea that every day must show some progress, however slight, on the part of every one connected with the plans. FIRST REQUISITES IN REORGANIZATION 13 Organizing the Method of Investigation and Analysis. As stated before, nothing can be done in any case until the manufacturer, and such advisers as are qualified and trustworthy, approach the problem in an absolutely unbiased frame of mind. They must make up their minds to analyze coldly each and every man and situation. The problem may be attacked as outlined here- inafter. Let us consider first the usual defects in organization, system, and methods, in their order, and attempt to discover the "sticking points" in each division. They may be classified as follows: — 1. — Defects of factory organization, dealing with the superintend- ent, the foremen, the job bosses, and the workmen, and the usual methods of management. 2. — Defects of systems and methods of manufacturing. 3. — Defects of sales organization and executive control. The separations made here are important ones and should be considered as thoroughly in the case of the concern with fifty men as in the case of the one with five thousand. If you are interested, take these divisions item by item and make a faithful memorandum of the defects under each heading that you alone know of. If you have such a knowledge of the busi- ness as you should have you will be surprised at the number of your notations. Then when you come to the headings of those processes with which you are not familiar, secure the advice of com- petent persons in each line and observe the extent and character of your notes. I. Defects of Factory Organization. The Superintendent. Singularly enough, the method of management usually adopted is that of placing all the responsibility on the shoulders of one super- intendent and failing to surround and strengthen him with a small 14 PROFIT-MAKING MANAGEMENT body of the most efficient foremen, who might prove to be advisers of great value to him. In adopting such a method, the manage- ment fails to recognize the great benefit to be derived from securing the best advice of a small group of the best qualified men upon most important subjects, and from giving its foremen an opportunity to increase their knowledge of the business and so to grow to be of greater worth to the concern. The stimulus to the ambition of the foremen because of the opportunity so to show their worth is thus lost. Instead of these men being moved by the hearty desire to co-operate with the firm and with each other " for the good of the company," they are usually impelled by feelings of jealousy and impair the efficiency of themselves and the entire organization by their backbiting and faultfinding. And yet with any method of organization there must be a head and a strong one. A " cheap" superintendent is dear at any price. A strong and capable man in this position is usually worth any reasonable amount necessary to secure or retain him. A large manufacturer once said: "My $20,000 superintendent is the cheapest man I have." In reply to the expected "Why?" he said: "He's my ' dividend maker.' I tried 'em at $3,000, $5,000, $10,000, only to keep on losing. Finally, I made up my mind I wouldn't pay less than $20,000 — got my man, and he's bringing my dividends. Cheap at $20,000." The Foremen. The most important men in the shop. You may have the best qualified superintendent, but if you have inefficient foremen, you have poor management; you may have the best machinery — but with inefficient foremen, poor results; the best systems — complica- tion; the best desires toward your workmen — your poor foremen bring upon you labor troubles galore. When one stops to consider that these are the men who come into daily touch with your workmen — that they practically control the shop life and shop destinies of your men on machines and bench — FIRST REQUISITES IN REORGANIZATION 15 that to them falls the responsibility of getting the best results from the workmen, and upon their knowledge you must depend when it comes to the question of getting the proper and best results from the machinery you have bought — is it not absolutely true that they are the most important men in the shop, and that their methods, their intelligence, their experience, are questions most vital to you and your business? Usual Methods of Appointment and Development. — And yet what are the facts in many cases? The foreman is often a former machine hand promoted to this position because of superior intelli- gence, diligence, and desire to please. This man, who should have a wide and thorough experience in modern machine practice, is often simply a graduate of your own shop, with experience limited to your routine practice. The Proper Type. — The foreman should have a thorough knowl- edge of the best mechanical processes and the types of machines best suited for the work he handles. He should have also a wide knowl- edge of the tools, such as jigs, milling fixtures, dies, etc., best adapted to his work, and of methods of using them so as to procure the greatest economy in production; and, last but not least, the ability to handle men and get the best from them. Am I setting too high a standard for the foreman? I say No ! positively No ! These are the men who can "make or break" the concern. As is the foreman, so is the department. In nine cases out of ten, he is your "Sticking Point," or is responsible for it, be it poor workmanship, high costs, tardy pro- duction, or trouble with your workmen. This is as true of the small shop as of the large one. Therefore, select him with care, watch him and help him, edu- cate him, and, above all, give him the stimulus of "his chance" and watch him grow, if he is the right kind. True it is that in the most modern shops the tendency now is to depend less and less upon the foremen on the important questions of speed of machines, types of tools, setting of standard time, and 16 PROFIT-MAKING MANAGEMENT proper prices on jobs. The best practice in the up-to-date shop is to institute speed bosses, rate-making departments, and tool and tool-designing departments, entirely independent of the foremen. In fact, as will be brought out later, such plans, properly instituted and carried out, will accomplish wonders; but this course is rendered necessary because of the weakness of the ordinary foremen. But in most shops it is hardly possible to consider such elaborate, though extremely valuable plans amongst the first steps. Depend upon your foremen you must. Even though the greater plan of organiza- tion with speed bosses, rate-making departments, etc., may be determined upon, this consideration of the foremen's efficiency is equally necessary. In fact, the broader plan will utterly fail unless it is supported by the intelligent efforts of the heads of depart- ments. The Management's Representatives. — Never forget that the fore- men are the management's direct representatives to the workmen. The men form their opinion of the company from their opinion of their foremen. Their daily life and career are subject to his control, his whims and vagaries ; their promotions and increases in pay depend upon his characteristics and knowledge. They more often have reason to depend upon his practice of favoritism than upon his sense of fairness. The character and ability of the foremen affect the workmen more directly than any other three factors in the shop organization and management, and as a consequence have a direct effect upon their output and disposition toward the company. Job Bosses and Woekmen. In any shop organization, however small, the question of the proper division of the working force, so that the proper amount of supervision can be given to each man or group of men, must receive careful attention. A foreman cannot properly oversee his entire department without assistance and still give his attention to the larger and more important details of his work. The usual method FIRST REQUISITES IN REORGANIZATION 17 of securing this result is to appoint the more efficient members of the working force " job bosses" with some limited degree of authority over a small group of men. These men perform their share of the work, receiving a slight increase in their pay. The importance of carefully selecting these men is at once appar- ent. They are usually the next in line for advancement to assistant foremanship. From these men come your heads of departments. And yet how many managers or shop superintendents possess accu- rate information concerning the character and ability of their job bosses? They usually promptly pass over to the foremen the responsibility for making these selections, and very often they in turn just as promptly pass the coveted position to some favored friend without much regard to the matter of his ability compared to that of the rest of the group affected — or, to drive the thought harder home — without regard to the ability and intelligence of the rest of the candidates for promotion. Advancement in wage and authority is as important to the $1.50 per day workman as it is to the superintendent. It is the neglect of just such points as these that cause workmen to feel that merit and hard work count for little, and that extra effort brings no reward in the face of an unfair foreman's selection of his friends and favorites for the only progress that is possible to them. System of Pay and its Effect Upon Workmen. Of equal importance in its direct effect upon men is the question of the " system of pay" and the method of handling it. Little will be said at this point regarding these matters. However, in consider- ing the defects directly affecting the workmen and seriously affecting the cost of production in many forms of business, the first prize (for total inefficiency) may usually be given blindly to the pay system without much danger of going amiss. The average system, usually piece work, started by men little versed in modern methods and based upon data usually secured by 18 PROFIT-MAKING MANAGEMENT the foreman by methods "strictly their own" — and as often totally incorrect — supplies a first-class millstone to burden any concern. Little faith can usually be placed in the average foreman's esti- mate of a "fair price" for a job. Lacking proper knowledge him- self, he will, however, unhesitatingly and with a great display of confidence, place a price upon any piece of work. Then follows the old story of, first, excessive earnings by workmen; second, dissatis- faction on the part of the employer, and consequent reductions in price; and, third, the invariable result of discontented workmen, who find that their only protection from reductions in price lies in the strict adherence to a certain limited rate of earnings and hence of production. The foremen continue blithely to set the prices, the employer suffers unconsciously through excessive costs and limited output, and the workman works away discontented and determined to even up matters for unfair treatment. These con- ditions are still very prevalent. It is astonishing to note the manner in which otherwise sensible men will put into effect and enforce methods and policies vitally affecting the workman's daily life, without regard to the "human element" that enters into his makeup and that the manager should know must of necessity be reckoned with. Much has been said about the tendency of the modern workman to limit his output and not put forth his best efforts to improve either himself or the company's product. This complaint, however, generally comes from the manufacturer who does not consider it worth while to give close attention to such details as are mentioned briefly here. Seldom is it heard from the manager who wisely "puts himself in the other fellow's place," and then builds up his plans along lines that he realizes would mean encouragement and inspiration to him were he in that other fellow's place. Any man who has sufficiently clear vision to recognize such faults existing in his business must make up his mind to start right in at the bottom and build up. No points can be neglected. The faults in organization and methods mentioned in this brief outline, if FIRST REQUISITES IN REORGANIZATION 19 existing, must be eradicated before any permanent or really effective improvement can result. II. Defects of Systems and Methods of Manu- facturing. It is not my intention to do more at this point than to point out the most serious defects of the ordinary systems, as the succeeding chapters will deal with the defects and suggested methods of better- ment quite fully. The need of system is, of course, becoming more widely recognized each year. But in many cases the manufacturer stops just short of full success. Many times he also fails to realize the full purport of his system and to reap the full, and, in fact, the greatest benefit possible from it. The Stock System. To the manufacturer who is not thoroughly awakened to modern possibilities, the stock system is simply a means of keeping track of his stock. It may never occur to him that it is possible to develop it easily so that he can cut down his necessary working capital to a minimum and reduce his interest account to the lowest point possi- ble, or that, by a little development and attention on the part of several intelligent men, monthly inventories correct within 1\ and 2 per cent can be easily secured and made the basis for an exceedingly valuable factory profit-and-loss sheet, so that factory conditions can be accurately noted monthly. The Order and Tracing System. The order and tracing system are often considered "necessary evils," and yet the great success of many a concern depends upon the promptness in filling orders and keeping delivery promises, and the tracing system is responsible for this. The tracing system as an aid in keeping down stock investment 20 PROFIT-MAKING MANAGEMENT through keeping the regular stock constantly moving is also often a new idea. The Cost System. The possibility of ascertaining the cost of the article is often the only thought in the manufacturer's mind when the "cost system" is mentioned, and is accordingly its only function that is developed. In fact, however, the valuable analyses of costs, operation by opera- tion, to be secured from an efficient cost system, supply the manager with invaluable data from which to work in reducing costs. Nor does their effectiveness stop here. If it is decided to start a campaign to increase the efficiency of the factory force and to eliminate the inef- ficient men, then the individual records of the man will be secured from the cost records. In large bodies of workmen, a steady and intelligent campaign along these lines will work wonders. While to some this last point may appear to be an unnecessary refinement, it must be admitted by all that a cost system must pro- vide a method of cost analysis which will unerringly reveal the points of high and excessive costs throughout every stage of manufacture. The failure to accomplish this means the failure of the chief function of any cost system, namely, making possible the greatest economy in manufacture. Linked up closely with the cost system is the "system of pay" or the wage system already touched upon. This will be handled fully later, but must be mentioned now because of its great importance. It, and the "method of organization," form the two pillars upon which rest the whole framework of a successful concern. Any weak- ness here is felt throughout the entire structure. Machining Methods. Closely linked up with the cost system and wage system are the shop processes of production, such as machining, assembling, etc. The lack of system in the first two almost invariably means a FIRST REQUISITES IN REORGANIZATION 21 deplorable lack of proper results in the shop processes of production. The lack of accurate information relative to the amount of work that can and should be turned out from a first-class tool is astounding. In many shops it is only another case where those methods which vitally affect the cost of production are "up to the foremen," and the foremen, lacking knowledge and experience, cheerfully run their departments year in and year out, satisfied if they turn out sufficient volume to keep the "super" off their trail. In my own shops before they were reorganized I have seen cases where one department was operating the machinery at such cutting speeds and with such depths of cut as to show a loss of 21 per cent when compared with another department directly beside it but under another foreman. And, at that, both departments were far below the standard of efficiency they have now attained, and the end has not yet been reached. In this matter understand me clearly. The average foreman wants to do well and to make a good showing. But he cannot but lack the desired (and indeed necessary) training and experience to secure proper results. The only proper method of handling these men is to train them. It can be done. It has been done with fine results. Necessarily, then, this vital information as to what should be pro- duced from any one machine is usually lacking "in the front office." I recently installed in certain factories several large boring mills and heavy planers built by two of the highest grades of manufac- turers. In order to test the amount of knowledge possessed by the manufacturers of these machines, they were called upon for advice as to the best results that could be secured from them when working under differing conditions. Simple questions were asked as to the speed and depth of cut possible in order to secure the best results. These builders of the tools could not give a definite answer that would be of any material assistance to any one needing light. They knew that their machine tools ran as fast and " would turn out as much work, etc.," as any in the market, but when it came to the 22 PROFIT-MAKING MANAGEMENT question of shapes of tools, depth of cuts, results upon differing grades of metal, results from the use of water and composition on the tool, etc., they floundered hopelessly. The lack of knowledge of the best results obtainable is not by any means confined to the older type of shops. There is many a factory today which to the eye presents a modern appearance, with its new buildings, well venti- lated and cleanly, its fine equipment in machinery and tools, and its show of bustle and hustle, which yet needs the " doctor's care" badly. The shop, whether new or old in appearance, operating under the older methods of obsolete of obsolescent wage and shop systems, hampered by lack of accurate knowledge of best obtainable results in up-to-date processes of production, by lack of progressiveness and lack of " pulling for the good of the company" spirit in the work- ing organization, is far behind in the race for commercial supremacy. III. Defects of Sales Department and Executive. The Sales Department. Thorough and careful consideration of sales-department methods is considered essential in this discussion. A full study of any business is incomplete if the sales-department methods are neglected. For the " production of orders" is a most essential link to the chain. The possibilities of scientific development in this branch of the ordinary business are so great that they must be carefully studied. To this statement I often hear the manager say: "Scientific develop- ment of the selling end of the business ! Why ! a salesman is a sales- man. The selling of the goods is an art in itself. A matter of individualism. Salesmen are born, not made. Training of sales- men! Bosh!" The managers who make such statements are usually of the type that will employ a new salesman, let him " dig around the shop a bit," give him a catalogue and start him out. A mere " taking of orders on price alone," not a finished salesman. For the gulf of difference FIRST REQUISITES IN REORGANIZATION 23 between a man who takes orders because he quotes lower prices than his competitor, and the salesman who sells the goods at a higher price than his competitor because of his skill and knowledge of his business, is a very wide and deep one. That there is a " psychology of salesmanshp" I would be the last one to deny. But innate selling ability, unless backed up by proper knowledge, will not win. Add to natural selling ability a thorough training in the "talking points" of the product, the defects (and good points) of the competitors, the best methods of meeting arguments and objections, gained from the experience of all the best men in the selling organization, the most successful means of demonstrating the merits of the goods to the prospective customer — and you have a strong salesman. Train your men collectively, thoroughly organize them along scientific lines, and then back up your training by simple yet ade- quate systems whereby you may know that the territories are being completely covered, your prospective customers are being handled properly, profitable prices being secured and competition being met, and you will have an invincible selling organization. Instead of this condition, one often sees a group of salesmen, jealous and distrustful of each other, lacking in the desire to work together for the good of the company, without a thorough knowledge of the company's goods or their competitors' product, and very chary about sharing what knowledge they do possess either with each other or with the poor newcomer. Usually the firm itself is almost entirely responsible for such conditions. The possibilities that lie in the development of proper methods are astounding. Actual experience to be described in later chapters has proven it beyond the peradventure of a doubt. The Executive. The weaknesses outlined in the preceding pages will surely be felt in the executive division whether that consists of one man or twenty. With the possibility of securing only such insufficient 24 PROFIT-MAKING MANAGEMENT data as can be obtained with lack of organization, methods, and systems, such as has been outlined, what can the executive do but struggle along in the dark and in doubt, trusting that his untrained salesmen can sell his product for such a price that a reasonable profit will be shown after his factory, without proper organization, sys- tem, and training, has produced? In passing, let me state again that there is many an executive today who, not realizing the ineffi- cient condition of both branches of the organization, wonders what there is wrong with a business that apparently is in good condition as far as surface conditions are concerned. To such I say analyze the business to the uttermost. Compare it with a modern concern with an organization built upon lines that inspire the workers in it to give their best knowledge and ability to further its progress, with methods that ensure the best results in cost and volume, and systems that will not only tell the story of progress but also indicate the " Sticking Points" — and then begin to build along proper lines. And when the work is once begun, never let up; fight it out to a finish. It will pay. Chapter II. THE PRACTICAL WORKING OF THE COMMITTEE SYSTEM. /CONSIDERATION of methods for " curing industrial ineffi- ^-^ ciency," or for increasing such efficiency as we may already have in the factory, will be much simplified if we keep in mind the classification of defects given in the preceding chapter. If we get the causes of loss clearly recognized and logically grouped for study, we can easily see what must be done (and what must not be done) to change these harmful conditions and to secure the much desired improvement. This classification of the sources of loss and waste in a manufac- turing business was : — 1. — Defects of factory organization — of the superintendent, the fore- men, the job bosses, and the usual methods of management. 2. — Defects of manufacturing systems and shop methods. 3. — Defects of the sales organization and sales methods, and of executive control over the entire business. Let us understand fully at the outset that there is no infallible panacea — no ready-made "system" which will fit all cases alike. Methods must be suited to the circumstances of the particular shop or department. The first thought in regard to any plan, indeed, must relate to its adaptability to existing conditions and processes, and to the character and ability of the existing men in the organiza- tion. Their sympathetic support must be secured, whether the new plans affect methods of organization, systems, or shop processes. The most thorough and effective system in existence will not bring the degree of success that should be attained unless it is supported by superintendent, foremen, and job bosses — and workmen. I hap- 25 26 PROFIT-MAKING MANAGEMENT pen to know of five cases, of importance because of the size of the concern and the thousands of dollars that were wasted, where this mistake was made and failure resulted. The new systems all "cut and dried," were figured out carefully "on paper," new printed forms were prepared, the old forms de- stroyed, and the start made. The men introducing them, desiring to retain the full credit and glory for the innovation, made the mis- take of refusing to call in the different members of the organization and trying to secure their support, but instead attempted to force their pet plans through. They met with instant though covert opposition. Unexpected obstacles suddenly blocked the way — ob- stacles not apparent to the investigator, but which lay hidden away amongst existing shop processes and methods that could not be changed, waiting to spring up and prevent the longed for pro- gress — all of this to the delight of the men in the departments, who chuckled to themselves (and to each other) because of trouble arising from some difficulty with which they were thoroughly acquainted, but concerning which they said nothing "because they weren't asked." In one case in particular where the system required an especially large expenditure, its introduction was apparently successful though accomplished after many a hard wrench and pull. However, this apparent success lasted only so long as the devisers of the plan were on the ground to see that its vital points were not neglected, its essential features not abandoned. But when they left the shop and their pet system to the tender care of the old organization, there began a process of disintegration, imperceptible but effectual. The tendency of the workers to abandon gradually methods with which they possibly were not altogether familiar, and certainly not in sympathy, was practically irresistible. Little by little they slipped back, giving up one idea after another, until the result was a hetero- geneous mass of methods, part belonging to the new system, part to the old, the final condition being worse than the first. THE COMMITTEE SYSTEM 27 Oftentimes lack of knowledge of details leads a manufacturer to entrust the important work of reorganization to those who can talk the loudest and make the greatest show of a little knowledge. So important is this work, however, that it may well claim the closest attention on the part of the manager himself. The "show me" attitude is nowhere so important. If you don't know or under- stand, stay with the problem until you do. Don't let anyone else decide these important things for you. The support, the co-operation, of the men forming your organiza- tion is, then, essential. To enlist it, they must have some part in forming the plans, some share in devising the systems. They must be made to feel that the methods are their own. They must be con- sulted frequently and thoroughly concerning the difficulties and encouraged to suggest ways of overcoming them. If some com- prehensive plan that will ensure this result — such, for example, as the committee system — can be worked out and put into effect, the difficulties will quickly disappear and ways and means for over- coming the "unexpected obstacles" will soon be found. With these fundamental principles clearly in view — (1) that re- organization plans must be adaptable to the conditions of the business, and (2) that they must enlist the co-operation of the personnel — we may lay down three ruling ideas which must govern the manufacturer in introducing new profit-making methods into his factory: — 1. — All plans must be based primarily upon recognition of the human element of the men who are affected. Always keep in mind this: "How would I act were I in the other fellow's place, with his limitations of knowledge and experience, and what plans would be most likely to elicit my support, develop my latent ability, and bring out the best that is in me for the support of the company?" 2. — The plans must be developed along the lines of the modern "get-together spirit." The facts must be recognized that, nine times out of ten, the joint advice of five men conversant with a sub- 28 PROFIT-MAKING MANAGEMENT ject is immeasurably superior to any plan developed from one man's brain; that the only possible method of developing a proper shop spirit is through getting the men together; that you can elimi- nate their distrust and jealousy of each other only by bringing them into close contact one with another, handling them tactfully and showing them they are "not such bad fellows after all," that the spirit of "helping one another for the good of the company" can only be brought forth through the spirit that develops from coming together; that the feeling of concerted action on subjects vital to the company's welfare can be cultivated — gradually, perhaps, but easily — if the proper attention is paid to it. 3. — Thoroughly developed methods of overseeing and checking up production conditions, both as to volume and costs, are vital. System provides these for the management. The heads of a con- cern cannot see everything, but they must come "mighty near knowing everything," or at least be in a position to scent danger, locate it, and eradicate its cause promptly. Hence the systems for the factory, sales, and executive divisions must be developed with the idea of providing the heads of a con- cern with accurate methods of overseeing the entire company; systems which will provide an executive, possibly totally ignorant of factory or sales processes, with data sufficient to enable him to lay his finger on the " Sticking Point," whether it be excessive costs, overproduction, delayed shipments, or unprofitable sales. FOEMATION OF THE COMMITTEE SYSTEM. And now we come to the initial step — concrete, definite, and sim- ple — by which the human factor is recognized, the spirit of co-opera- tion is fostered, and the idea of order and system is implanted. It is evident that there is but one way to secure the advice on vex- ing problems of those best qualified to counsel, and also to stimu- late these men to give the company the best that is in them. That is by forming "Standing Committees," to handle matters pertaining THE COMMITTEE SYSTEM 29 to routine production and to solve other important problems such as those relating to progress, invention, and economies in production, and promotions. In each factory the problems relating to the foremen who would naturally form the committees, and to the work, vary so as to make any hard and fast rules out of the question. But in ninety-nine cases out of a hundred the factory superintendent, naturally the final authority in all cases, should be the chairman of the most important committees. In the case of large concerns, where the superintendent would naturally have several assistants, these may be the heads of the less important committees, though in many cases the work of the committees renders the assistant unnecessary. The superintendent himself in all cases, however, should be the head of the Main Factory Committee. I find that six men form the ideal committee as to size. Any larger number than this is liable to prove unwieldy. These committees are in all cases of an advisory character. The General Factory Committee. There should be first a General Factory Committee, with the superintendent as chairman, formed to care for the most important questions arising in a shop. The members of this committee should be selected with great care, and with a view to having the brighest, most progressive men in the shop upon it. While of course it is advisable to consider the character of departmental work in charge of the different men when making the selection, so as to have experi- enced men on the committee, at the same time a serious mistake will be made if this is the only point observed when choosing them. Ordinarily, the personnel may well consist of the chief designer of product, the chief designer of tools or the head of the tool room (preferably the latter), the head of the cost department, and two or possibly three foremen. In the case of assistants, these should form part of the committee. They, however, should not take the 30 PROFIT-MAKING MANAGEMENT place of the foremen, even if it be necessary to increase the number on the committee. Accurate notes of actions taken are of course necessary. A capable stenographer to act as secretary is always a valuable adjunct. Further, an efficient secretary can straighten out many a difficulty between meetings, and the knowledge of shop conditions he absorbs is of great value. Work of this Committee. — As stated before, no hard and fast rules can be laid down relative to the work of this committee; but, generally speaking, it can well consist of the following : — 1.— Plans to standardize product, and consideration of new methods of design. 2. — Consideration of actual progress made upon new ideas already introduced into the factory. (A most important subject; for the way in which valuable ideas, bravely begun, can be totally buried and lost sight of in the press for the necessary everyday output, is often discouraging.) 3. — Consideration of possible economies and the systematic plan- ning of reduction in cost. The mere starting of a general discus- sion often opens up a surprisingly large field for this highly import- ant work. Reports by foremen upon economies, decided upon at previous meetings, and assigned to them to put into effect, should invariably be required. 4. — Consideration of routine work, both stock and contract, and of progress upon it. Thorough weekly reports fully covering this subject are of the greatest importance. 5. — Promotions. While naturally the superintendent should be the final authority to act upon promotions, the plan of having this committee pass upon them in an advisory manner proves most salutary. Not only is the management thus assured of the best possible selection of men for important positions, but also the worker far down in the ranks will feel the effect of appointments based upon merit, and free from any taint of unfair influences of relationship or personal friendship. THE COMMITTEE SYSTEM 31 Meetings. — The number of meetings to be held will depend upon the character of the business — usually two a week will suffice. But one point should be insisted upon: There should be stated times for these meetings and nothing should be allowed to interfere with them. The tendency to slight the meetings after the plan has been in effect for a time and has straightened out the kinks is very strong. Subsidiaky Committees. Most companies manufacture several different lines of product, or a number of important variations upon this product. Each line should have its own committee. The men forming the Factory Committee should act as chairmen of these different Subsidiary Committees, their selection being deter- mined by the character of their work and their experience. Each committee should be made up of the foremen handling that particu- lar line of product. Very often other members of the Factory Com- mittee, and especially the tool designer or tool-room foreman and cost man, should be called into these meetings, where possibly the same stenographer should act as secretary as in the case of the Factory Committee. At first glance, this may seem an unimportant point; but it is not so, by any means, when you consider how much information of great value to a first-class superintendent a bright man in this position will absorb. Work of these Committees. — While the work of each of these committees is naturally restricted to the details connected with one branch of production, still the work done by the Factory Committee as applied to that particular line will naturally be handled by it. Important matters for consideration would be : — 1. — Standardization and new designs. 2. — Progress on new ideas already introduced, with reports from the foremen responsible for pushing them. 3. — Consideration of possible economies and reduction in costs. Full reports from foremen upon assignments relating to this work. 32 PROFIT-MAKING MANAGEMENT 4 — Routine work, its condition and progress, with reports from foremen responsible, showing whether or not each job, be it stock or special contract, is making proper progress so as to meet delivery- dates. Job Bosses' Meeting. Naturally, the next step is that the foremen shall hold meetings with the job bosses/ Some may think this an unnecessary refine- ment of the committee system. I regard it as an important link in the chain. Naturally, these men cannot be taken away from their work very often without crippling the output; but short and sharp meetings with them every two weeks are strongly advisable, for necessarily upon these men ultimately falls the responsibility for pulling many a project through successfully. Many a cherished plan of great importance evolved by the head of the company will succeed only through their help; many a one will fail because of their opposition. Never forget, either, that these men are the back- bone of the shop in labor troubles. They are the future foremen, and the development of the best ones amongst them is of prime importance. General Foremen's Meeting. A general "Foremen's Meeting" should be held once a month. In addition to the attendance of the foreman and assistant foremen, the presence of the members of the Factory Committee and of the superintendent should be required. Indeed, the presence of at least one of the higher officials of the company is advisable. At these meetings the heads of the several committees should touch upon the important problems before their particular committee requiring solution. Many points relating to progress of important work can be profitably discussed. Each man should invariably be required to make a statement as to the condition of his own depart- ment, a statement whether or not he or his department is responsible for any delays or trouble in any other departments, and a further THE COMMITTEE SYSTEM 33 statement as to whether or not any other department is causing him or his department difficulty of any character. With the knowledge that they cannot deceive the well-informed committeemen before them, such a method of procedure soon develops many an interest- ing situation, and leads to the discovery of many a " Sticking Point." The discussion that naturally ensues soon leads to definite plans for the overcoming of these difficulties. A most profitable part of this meeting is a discussion of depart- mental records for the past month. These records can include such subjects as "Economies Effected," " Costs Reduced," "Suggestions for Improvement," "Production Records," "Departmental Ex- penses," and many others of an intensely practical and bene- ficial character. You may be sure that each and every foreman will strive to his uttermost to present a clean slate, a good record, if he knows that such departmental records will be openly discussed before his fellow foremen, the committeemen, the superintendent, and other officers of the company. I recall very forcibly my own animated and de- termined efforts to present a good record before such an audience, when I was the head of important divisions of work in several large manufacturing concerns. The existence of this spirit amongst the other heads of departments was also very evident. The average foreman can present to any one man his side of any story very skilfully. It is an entirely different matter, however, to tell the same story before a body such as I have described. It must be absolutely correct, or it will be instantly contradicted. In presenting matters before these bodies, very effective use can be made of folding blackboards. I continually use a type containing ten leaves, each leaf 36 by 28 inches. These fold together like a book. The entire set can be closed, and a lock placed on the cover. Their value is apparent. As our men often say, " nothing gets away from that blamed blackboard." An order from the executive to consider and bring through to success any certain plan is placed upon 34 PROFIT-MAKING MANAGEMENT the board and certain portions of the work are assigned to different men, these assignments being noted upon the board. There each stays until it is accomplished. It has always been of much interest to me to note the effect upon the foremen. The thought that " that blackboard" contains these data, and that in four weeks it will appear staring them in the face, always worries them, and arouses their determination to accomplish the task so as to have it "rubbed off the slate." I receive reports right "from the blackboard" show- ing progress made or lack of it. The average manager needs no assur- ance as to the effectiveness of such a plan. It is a wonder worker. The Workmen. That this committee system has a good effect upon the workmen cannot be denied. They are undoubtedly affected by it. The posi- tion of job boss becomes a more attractive prize to strive for. They soon see, too, that under such a system unfair selections to such a position by the foremen become very rare, inasmuch as a foreman will seldom risk recommending a man to the Factory Committee for promotion on any basis other than that of merit. The danger of being caught is too great; and then again, the rivalry between departments becomes such that the foreman very soon learns that he cannot afford to take such action, because he thereby immediately affects the efficiency of his department. He soon learns that under such methods inefficiency becomes apparent at an astonishingly early date. I do not intend to deal at this point with a comprehensive plan for increasing the efficiency of the working force, for a thorough consideration of many other practical points, such as wage system, rate of pay, sanitary conditions, etc., is first necessary; but it is necessary to emphasize the fact that some such plan as that outlined is absolutely necessary as a foundation to work upon ; for you must give the worker "his chance" to advance in fair competition with others in order to develop his latent efficiency. THE COMMITTEE SYSTEM 35 Again, such a system assures the company that any policy affect- ing its workmen, which it desires carried out, will be carried out. I have often seen the humanitarian, fair-minded policy of the man- ager of a business so mangled, twisted, and torn out of shape by superintendent, foremen, assistant foremen, and job bosses, that its original owner would never recognize it by the time it reached the men and began to affect their daily life. Such a system cannot be equalled as, first, a discoverer, and sec- ond, a developer, of the strong men in the organization. After all, success in any project is only a question "of the right man," first, last and all the time. Consider how enormous is the practical benefit! What a method for pushing improvements, for controlling production so as to meet dates, for reducing costs, and, last but by no means least, for inspiring the foremen, job bosses, and workmen to do their best, through their natural ambition, under a system that provides them with a chance to show their worth ! How they will grow and expand under such conditions ! The words esprit de corps, and "working for the good of the company," are no longer empty phrases, but are illustrative of a spirit of enthusiasm, of good fellow- ship, and of determination to do their level best, which constitutes the best asset the company has, and the greatest and strongest force that tends toward success. Chapter III. REPORTS; THEIR NECESSITY— AND THEIR USES. ££ / ~T" v HE secrets of cheap production!" The secrets that every ■*■ manufacturer ardently desires to discover; that every wide-awake maker of manufactured articles wants to adapt to his own business! The place of first importance in all the methods and processes that will be considered in this series must be given to the comprehen- sive Committee System which has been fully treated in the two pre- ceding chapters. While the consideration of ways and means of increasing output, lowering cost, and improving quality leads us through a discussion of the several lines of department activities of a well organized business, the underlying principles of the " Committee System of Management" will be constantly referred to, and the great effectiveness of this system will be constantly employed to help us in solving many an intricate problem of management, method, or processes. Knowing so well its tremendous benefits in the develop- ment and management of large industrial enterprises, I consider it the best, and, in fact, the only, foundation upon which to build a thorough plan for reviving a run-down concern, or for developing even a well organized business to its fullest power and possibilities of profit. The work of the committees as outlined will however be immensely expedited if material for their deliberations is ready in written form — if there is " something before the court" at once upon its assembly. The result of their consultation also should often be permanently recorded. And the data of progress throughout the factory must come in concise expression to the manager's desk. The necessity 36 FACTORY AND SALES REPORTS 37 for comprehensive reports of varied character is, therefore, obvious. The exact character of these reports and the ground that should be covered therein is not always so obvious. In fact, seldom is there found a system of reports that is really comprehensive and logical. Any attempt to define a system of this character must be at first general in character because of the differing conditions in each business. I have, however, applied the fundamental ideas explained below to a number of lines, and have never yet failed to make a practical application of their meritorious features, although their form was greatly changed. In developing such a line of reports, let us begin by considering what we need in the way of methods to increase the working effi- ciency of the concern, and what will enable us to oversee and check up thoroughly both production and sales conditions. First, then, we want methods for determining what must be accomplished in the production division — in the character, regularity, and volume of output, in the cost of production, in the development of new ideas or inventions to conquer competition, in the steady development of greater efficiency and reduction of costs. Second, we want methods for determining what volume of business must be secured, and what profit must be obtained, on each and every class of goods manufactured, in each selling territory ; what expense can be allowed to pile up while the goods are being placed upon the market. Next, we need methods by which the selling organization can be forced to meet these requirements and bring the necessary results. In short, we must have plans and methods by which the manu- facturer can first get a clear conception of what should be accom- plished in each division of his business; and next, means by which he can get a firm grasp upon the details of his business so as to force the accomplishing of these longed-for results. In general outline the reports must be: — the "Monthly Analyzed Profit and Loss Sheet," the "Sales Reports," the "Factory Reports" 38 PROFIT-MAKING MANAGEMENT and the "Cost Reports." All will be more fully outlined as the discussion develops, but the scope may be outlined as follows: — The Monthly Analyzed Profit and Loss Sheet. This report should show: — a. Delivered sales, with proper divisions for each class of goods produced, and receipts of other character. b. The factory cost of the goods in each division. c. The cost of delivery, including freight and cartages properly classified. d. The receipts and disbursements on all work of a character auxiliary to the main lines of production, such as repair departments, moving departments, etc. e. The selling expense, divided into proper classifications for analysis. f. The office and general expenses that can properly be charged against each selling branch or territory. g. The, division of general or executive expense of such nature that it cannot be charged directly against a branch. The importance of this report will be immediately recognized. It provides an analysis that enables any manager to locate immedi- ately the points of profit and the points of loss, provided the distribu- tion of credits and debits is correctly made. It is the primary report upon which the balance of the reports are founded. While it may appear complicated, the business man knows that it is necessary; and the one who fears its complication can be assured that it can be developed very easily by ordinary methods of accounting and the inauguration of comparatively simple systems in the factory. The Sales Reports. Coupled with the preceding report should be first, a comprehen- sive memorandum outlining in a simple manner the necessary work of the selling department, no matter how the goods are distributed FACTORY AND SALES REPORTS 39 upon the market. This report should show what goods must be sold, at what profit they must be sold, and under what expense they must be sold, in order to secure the desired profit on the balance sheet at the end of the year. It is not a difficult matter for an intelligent man to take such a report as the outlined " Analyzed Profit and Loss" report, consider what profit his business should show, and calculate from this the profit he should expect from each branch of it in order to secure this profit, and under what expense it is possible to run in order that his gross profit from his sales may not be eaten up by selling and general expenses. A simple enough method of procedure, but one seldom taken. And often where this sensible calculation is made, little real scientific effort is made to "hew to the line," to insist upon reasonable profits, to hold down expenses and to conduct the busi- ness along the lines which such an analysis shows are absolutely necessary. The next report on sales needed is naturally the one showing the actual results, territory by territory; showing volume and profit secured and expense of getting the business. It is immediately apparent that a weekly (or in some concerns a daily) comparison of the actual sales results with the data showing the results that must be secured or — as I term it the "must data" — will prove invaluable. There are naturally a number of sales reports of a different char- acter from these two just outlined that should be secured from the selling end of the business, but they are amplifications of the main reports and will be touched upon later under the sales division. The Factory Reports. The discussion of factory reports will naturally follow the descrip- tion of the factory system and so cannot well be elaborated upon here. They should, however, naturally give the first importance to exhibiting progress upon contract, special and stock work, weekly; showing clearly the location of this work in the shop and the steps taken to get it out on time. The manufacturer who is constantly 40 PROFIT-MAKING MANAGEMENT harassed by tardy deliveries and hampered by the lack of such data, can hardly realize the effective use that can be made of such weekly reports. The knowledge of exact conditions, coupled with the devis- ing of ways and means to overcome threatened delays, and constant pressure upon the factory, bring excellent results. The Cost Reports. Their extent will be determined by the character of the business. But, in general, fully analyzed cost figures sent to the chief execu- tives for their scrutiny, comparison, and criticism, bring admirable returns. Let one of the higher officers bring into a committee meet- ing, or a general foremen's meeting, a set of fully analyzed cost returns upon some particular line of the product, and begin to inquire of the different foremen present why their share of the expense amounts to "so large an amount," and there will usually follow a red-hot discussion that will throw many a valuable side light upon costs of production. Again, with accurate cost and stock data it is not difficult to secure monthly stock inventories at least approximately correct. Of course, a perpetual book inventory which enters into the general accounting of the company can be devised. I find, however, that not one manufacturer in ten is willing to spend the necessary money for this. However, he would rejoice over a monthly inventory, secured without shutting the shop down, which, coupled with his profit and loss statement and the data contained in his general books, would enable him practically to secure a balance sheet of the company's operation monthly. The other important reports upon output, departmental expenses and results, production methods, tool-room results, etc., will be treated later — likewise the strictly executive reports. Keep in mind, however, that these reports are so effective because of the committee system . They should wherever possible be made up by the committee handling the different branches of the product. And you may be FACTORY AND SALES REPORTS. 41 sure that your committee, composed of enthusiastic men whose reputations are at stake, are going to see that progress reports, cost reports, output and production reports, represent the very best that they and the shop can accomplish, when they know that these will be closely scrutinized by the heads of the company. Chapter IV. THE DESIGNING AND DRAFTING DEPARTMENT. A FTER the establishment of the committee system and the -**- foundation of a fundamental scheme of reports, the next logical step in reorganization is the consideration of the designing and manufacturing system, methods, and processes — the considera- tion of the usual defects, and the determination of plans for remedy- ing them and introducing in their stead the most modern means for efficient, cheap, and accurate production. The Designing and Drafting Department. The secrets of cheap production lie first in the organization of the designing and drafting department, whether it be two men or one hundred, by methods that: — a. Will develop the possibilities in its working force in both gen- eral efficiency and accuracy in details ; b. Will ensure invariably a design on a new or a re-design on an old product that will bring out the best possibilities of manu- facture, both as to ease and cheapness of manufacturing, and the use of standard and stock parts ; c. Will bring about intelligent and sympathetic co-operation of this department and the shop, upon both design and methods ; d. Will result, through the mutual co-operation of designer, drafts- men, foremen and sales department, in a constant striving for new and better designs, a more thoroughly standardized prod- uct, and lines of manufacture better suited to the needs of the market and better fitted to outstrip the competitor. 42 THE DRAFTING ROOM 43 In inseparable association with the designing and drafting depart- ment is the tool room, including the tool-designing department. Here indeed is the " heart of the shop." An ill managed, inefficient tool room invariably means a run-down shop. A well managed, up- to-date tool room, headed by a first-class, tactful mechanic, thor- oughly versed in the possibilities of modern methods, modern tools, modern steels and speeds, should always head the shop in the right direction and be the great factor in keeping it there if its power is recognized and properly guided and used. The general designing and drafting department and the tool room may be properly con- sidered the main levers by which to pry up slovenly and bad manu- facturing conditions, and the strongest factors in gaining the desired end of cheap and accurate production. The work of these two departments forms the initiative to modern shop success. The drafting department, however, does (or certainly should) originate the fundamental designs and plans and the accompanying details; yet its work is too often responsible for the "shop deviltry" that shortens the days of many a conscientious factory superin- tendent; it is the department which is seldom properly conducted, even in well developed concerns, and, in most average or run-down concerns, it is a "fright." The head of this department, one of critical importance, is often a man of limited shop experience, with little knowledge of methods of adapting design to economical methods of manufacture, no appre- ciation of the value of standardization or concern for the use of stock parts in designs, but plentifully supplied with the baneful "bump of importance" — the spirit of "know it all." His deter- mination to hold fast to his own ideas is equalled only by his ingeni- ous methods of covering up his mistakes, and an intense jealousy of anyone (especially a shop man) who can or does suggest any improve- ment in design or method. Requirements for an Efficient Department. — The first and the absolute requirement for an efficient designing and drafting depart- 44 PROFIT-MAKING MANAGEMENT ment is an efficient man to manage and run it. No half-baked off- spring of a school nor " graduate" of your existing department will fill the bill. Both this department and the tool room call for men of a high type. The more capable, the better. Men in these positions, if properly handled, should prove to be worth any reasonable sum. This particular man, in addition to being a capable designer and draftsman, should possess a thorough knowledge of the best types of machine tools and the most modern machine methods. He should also have a good knowledge of foundry practice and pattern making. To this necessary knowledge, add tact and a willingness to listen to the shop foreman and to follow stock records in designing new or re- designing old work, and you would have an ideal combination ; one so rare, however, that I do not advise anyone waiting to secure a man with this desirable combination of qualities. You might have to wait too long. These pages will outline methods by which this necessary con- sideration of shop processes and shop knowledge of the foremen (invaluable as it is) will be fully developed and the valuable points incorporated in this man's work. Whatever his qualifications along the lines mentioned, however, he should invariably be progressive to the last degree — ambitious to a fault. His mind must be open enough to consider the needs of the market from the standpoint of the sales department and the progress of the competitor. He should be in much closer contact with the sales department than is generally considered necessary or even advisable. Indeed, the spirit between designer and sales manager is more often one of hostility than of co-operation. And yet " common horse sense" should teach us that this connection should be a close one. The day of hostility between the factory and selling organizations is passing. I have discussed at some length the requirements necessary for the head of this department because his importance is vital; and also because in most cases the man usually in this position falls far short of these requirements, and the firm thus fails to realize the possibili- ties of cheap production. THE DRAFTING ROOM 45 In many cases I venture to predict that the special conditions of the case are such as to make it impossible to introduce a new man without danger of serious disruption of existing conditions. If such be the case, then introduce methods of organization and man- agement that will check errors, force co-operation between the draft- ing room and shop, lead to standardization of product, and provide the inspiration for new and better designs through other sources than an inefficient head. Often it is wise to introduce a new head into the department as a "new draftsman," to work "on 'the table" until he is thoroughly acquainted with conditions and can take hold of the department without danger of disturbance. The qualifications of the balance of the draftsmen will depend altogether upon special conditions in each case. I cannot pass consideration of them, however, without suggesting methods of training and advancement that will spur them on to do their best. Bi-weekly meetings will do much good, and when a draftsman is working upon a special design, meetings with the proper committee will benefit him and improve his work greatly. Encourage your draftsmen to absorb all the shop and foundry practice possible, and to mingle with the shop foremen constantly. Impress upon them the necessity of studying existing machinery and stock conditions. The general requirements for efficient work in this important department, in addition to those relating to the organization itself, just detailed, can be classified as follows: — 1. — Comprehensive and businesslike co-operation should be estab- lished between the designing and drafting departments and the shop foremen. The objects are manifold. Great benefit will be derived from a free exchange of ideas and a free criticism of design by men qualified by shop experience and a knowledge of former mistakes. Assurance will be obtained that every design represents, in its last analysis, the combined knowledge, skill and experience of your best men, and the consequent assurance that when it is produced it will be properly proportioned for strength, will operate 46 PROFIT-MAKING MANAGEMENT properly, and will be so designed as to be produced in the cheapest manner possible. Such conferences will also facilitate the proper routing of new work through the shop with reference to the existing conditions of stock output and machinery. This co-operation, further, will ensure a most thorough considera- tion of re-design of regular product— a question which is of paramount importance in considering the steps necessary in revivng a run-down concern. The general conditions surrounding the old line of produc- tion and the problem facing one in considering the general re-design- ing of this old line are often well-nigh appalling. But here you must start and here you must stay until a general line of procedure is mapped out and progress begun. And, watch that progress. See that it is made. Singularly enough (in view of its importance), there is usually a slackening of endeavor, a lessening of effort in the proper direction, after a full plan of this nature is mapped out and work begun. Every excuse of " overload of routine work," " unex- pected demands upon time due to unusual conditions," etc., is offered to explain why the necessary progress upon work of a critical nature is not diligently pursued. Progress every day, if only one new line upon the desired drawing, should be insisted upon, and no excuse for failure to accomplish this little should be accepted. One of the most irritating experiences of the conscientious factory manager is that lack of progress upon improvements that he knows are vital to the business. "Some progress every day" should be unflinchingly called for from those delegated to handle these questions. 2. — Standardization is the second great line of advance to be pursued in the designing department. The entire designing and drafting force, from the head of the department down, should always keep in mind the great benefits to be derived from it. While this applies particularly to lines of product manufactured under special contracts and specifications, at the same time much of its advantage can be applied even to the production of a so-called standard article. THE DRAFTING ROOM 47 In many cases standardization of a product is possible if the sales department can be forced into line and a conscientious attempt made to introduce a standard article on a market apparently requiring goods of special sizes and quality. The great advantage of this from every standpoint is of course apparent. It means cheapening production through duplication of parts and ease of handling; increase of output per square foot of floor area through quicker production, and the consequent reduction in indirect expense, per piece ; the possibility of building for stock in slack times and so keeping up the factory output; quicker deliveries and more orders, better satisfied customers, and a more rapid turn- ing over of working capital — this latter being something that the financial managers of the business will thoroughly appreciate and hail with joy. The use of stock parts is a profitable step toward standardization even where product in its entirety may not be reduced to standard. The entire drafting force should be provided with books containing full data upon the shop's standard small tools, such as reamers, dies, taps, etc. They should also be continually forced to consider methods of designing so as to use standard and stock parts already manufactured. 3. — Designing so as to ensure cheap machining and assembling is a third prime requirement of drafting-room economy. The men should be continually impressed with the necessity of designing the parts so as to be easily and cheaply machined and assembled, and that, too, upon the types of machine tools already in the shop. The needs of the pattern maker and the possibilities of the foundry should never be forgotten. Nor should the tool room and its possi- bilities in the way of making inexpensive tools be overlooked. 4. — The making and following of drawings should be insisted upon. The designing and drafting department should make all drawings of every character. Under no circumstances should any drawings be made by the shop foremen. The up-to-date shop man- 48 PROFIT-MAKING MANAGEMENT ager will smile at the idea of this being done in this generation; yet I know of several large shops, and many small ones, where this rule is not being enforced, and the shop foremen (in some cases even the job bosses) make many of the detail drawings. In all cases, how- ever, the drawings should be 0. K.'d by the shop foremen, either in committee or individually, before they are placed in the shop. The great importance of this is at once apparent. Then, after the draw- ings are 0. K.'d and sent into the shop, they should be followed. No deviations should be permitted. If any change is found necessary, then this change should be approved by responsible parties, and made on the drawing. Reports from the Machine and Assembling Rooms. — Much good can be secured from a simple yet thorough system of reports by the foremen, based upon their actual experience in carrying through their departments a newly designed product, these reports to con- tain criticisms and suggestions upon design, and ease and cheapness of machining of parts. In my opinion, all these very desirable results mentioned in detail here can be secured only through the consultation and co-operation of a group of those men best qualified by experience to control and solve the important and intricate problems arising in the considera- tion of new design or re-design of an old product. I therefore strongly advise the submission of all these ideas to a committee formed of the head designer or draftsman, the head of the tool room, and the general factory committee made up of the factory manager, the important machine-room foremen, and the head cost man. This committee should be supplemented from time to time by the pres- ence of the foundryman, the pattern maker, and the stock man. With such a committee handling the questions outlined, the success of the plan is assured. In cases where the company is fortunate in having an efficient head designer, such a committee will prove a great spur, and of tremendous assistance to him and to the company. Where no THE DRAFTING ROOM 49 efficient head exists, this committee will assume the important role of " originator of new ideas." Let the head of the company place in the hands of such a committee the general problem of the market requirements regarding a new product, or the necessity of re-design- ing an old product, from the standpoint of trade requirements as affecting either design or costs of production. The interest shown by such a group is immediate and intense. The result of their thought and work is invariably so far superior to the work of any one man as to admit of no comparison. Supported by such a system, the work coming from the department will be scientifically designed, correct, with every part mechanically strong, and capable of being produced in the cheapest manner possible. The entire design will represent the best ideas of your best men, and every man through his participation in the particular product will be so interested as to do his level best to make a success of it. The experienced shop manager has only to consider the usual maddening program of errors in data, mistakes of design, faulty judgment regarding economy of manufacture, lack of standardiza- tion of parts, and last, but by no means least, the covert hostility of the shop man to the new productions of "that blamed drafting department," to realize the possibilities which lie in developing methods which will ensure accuracy, economy, standardization, and the interest of the machine foremen in the successful and economical production of any particular design. Chapter V. THE TOOL ROOM— THE HEART OF THE SHOP. TN the preceding chapter I advanced the proposition that the essential preliminary step in the reviving of a run-down con- cern is the thorough reorganization of the designing, drafting, and tool rooms, along rather new lines. The necessary conditions to be secured in the first two departments were fully dealt with and the functions which the tool room should exercise toward the manu- facturing processes at large were outlined. In order, however, that the tool room, by its organization and equipment, may be enabled to lead the shop toward the goal of manufacturing success, it must itself be instituted for the highest efficiency and economy in the production of tools. I feel that too much emphasis can not be put upon the conception that this is the place to begin the work of reform, by close examination of the exist- ing conditions and rectification of existing defects. It remains, then, to show how the maximum possibilities of the tool room may be realized. My suggestions are the result of experience in a number of very trying cases of factory inefficiency, and the remarkable results coming from the adoption of the plans described fully justifies strenuous insistence upon the statement that this is the real starting point for the campaign of physical improvement. The Tool Room. The tool room, as already mentioned, has been aptly called " the heart of the shop." It is the most important department in any shop, if its full functions are developed aright. If the designing and drafting department is weak, the wide-awake shop manager can 50 THE TOOL ROOM 51 supply the defects through other sources, if necessary; but if the tool room is in an inefficient condition, the whole shop will invariably be in correspondingly bad shape. A well organized and well equipped tool room, even though it be a very small one, in charge of a pro- gressive, wide-awake, thoroughly experienced man who is willing to co-operate with the balance of the shop, is essential in the reviving of a run-down concern or the improvement of one not "up to the proper mark of efficiency." It is always interesting, when inspect- ing a shop that is in bad shape, to visit the tool room and note how closely the entire shop conditions conform to the tool-room condi- tions. At times a good machine-room foreman will build up an efficient department despite a badly managed tool room ; but this is rarely the case, owing to the severe handicap of poor maintenance of machine tools, defective design of cutting tools, and the impossi- bility of securing any accurate, first-class milling fixtures, drill jigs, form cutters, etc., designed to produce the machine work more economically. It is not my intention to treat here the questions of tool-room equipment and methods of operating a tool-supply room ; for these questions have been fully discussed frequently, especially in a series of articles that have appeared in The Engineering Magazine.* The needs of different shops differ, although the equipment of lathes, milling machines, universal milling machines, grinding machines and one or more planers is common to all tool rooms. A number of systems for tool supply-rooms have been described, so that little need be said on this subject, except to insist upon having some accurate method of caring for small tools, keeping them in good condition, and checking up the workmen relative to those tools in their possession. Some simple system of checking up the men when returning old or broken tools should assuredly be kept. The item of broken tools can become a very large one if the workmen * See especially the articles by John Ashford, July and August, 1904, and by R. Emerson, Dec, 1904 and Feb., 1905. Ed. 52 PROFIT-MAKING MANAGEMENT learn that little or no attention is paid to their record in this matter. A simple report showing breakages and the parties responsible for them will enable the shop manager to locate his careless workmen. My main object at this time, however, is to bring out clearly the tool room and its functions as factors in the development of a shop toward a high standard of efficiency, particularly when its initial state of efficiency is low ; to show how this department can prove its value in making possible the determination of proper standards of production rates, the devising of vital data for a proper wage sys- tem, the introduction of economies which the cost system shows are possible, and the lowering of production costs through efficient main- tenance of machine tools and the building of new tools especially designed for the particular product manufactured. The determination of proper standards of production rates is a subject which will be treated fully in a later chapter. Its great importance is obvious. The possible output of the shop, the lowest possible cost of production, the determination of wage-system stand- ards (in itself a subject of great importance), all depend upon the accurate determination of the lowest possible time in which each piece of work can be completed. The method of keeping the indi- vidual workman and the shop keyed up to that rate is an entirely different subject, to be discussed later. But the initial determina- tion of this possible speed of production is vital. The necessary tests are by no means simple matters. They involve accurate knowl- edge of the best results possible from the high-speed cutting tool steel, the proper shape and size of cutting tool, a knowledge of the character of the steel worked upon, and of the greatest capacity of the machine tool used, without too great an expense for mainte- nance and depreciation. Tool-Room Methods. The conditions surrounding tool-room work often make it diffi- cult to apply the same methods towards the hastening and cheapen- THE TOOL ROOM 53 ing of production therein which might be applied to the production departments. Day pay is the usual rule. Owing to the character of the work, any other wage system is generally impracticable, and even if practicable would be inadvisable because of the necessity for accuracy. Nevertheless, even granting the difficulties that beset one in try- ing to apply the principles of cheap production to this chief agent of progress and economy, the tool room itself — still, so high is the expense per man when compared with that prevailing in the balance of the shop, so costly may the tool-room product run, of so great im- portance is rapid production, and last, but by no means least, so many are the opportunities for "laying down on the job" without the possi- bility of detection of any such costly tendencies — that some compre- hensive plans must be adopted, first, to ensure the cheapest possible methods of production, and, second, to check up foremen and work- men properly as regards costs and accuracy. If these points are properly covered, the rate of production will care for itself. Such a policy is especially necessary in the care of the run-down concern with an inefficient or " slow-gaited" tool-room force, whether the tool-room force is a large or small one. For, to state an important point which I shall want to emphasize, we must always keep in mind not only the possibility of wasted money through excessive tool costs, but also, and indeed especially, the waste of valuable time in securing tools by the use of which large sums can be saved in the shop. We must, of course, assume that the tool room is supplied with a full equipment of high-grade machine tools. First get a first-class, high-grade tool-room foreman. This can- not be emphasized too strongly. Do not plan a campaign of im- provement with any expectation of a satisfactory outcome unless this first step is taken. Well paid, high-grade mechanics are, in the end, the cheapest labor for the tool room. The mistakes of the low- wage workman are too costly. Owing to the high hourly rate of the 54 PROFIT-MAKING MANAGEMENT tool maker, thorough organization in the tool room is necessary in the interest of low costs and rapid production of the tools them- selves ; but beyond this, is the great importance of getting the new tools into service. Delays are doubly costly, as already pointed out; and yet unless the tool room is well organized and systematized, it is often more productive of "unaccountable delays and disappointed hopes" than of the new and much needed tools. The dilatory movement of the ordinary tool room constitutes one of the most try- ing experiences of the factory manager. In the older types of shop, even where large forces of tool makers are employed, the practice of allowing the expert high-priced work- man to machine up and fit all the component parts of a single tool and then assemble it into the finished product still prevails. Under such conditions, this high-priced tool maker will be found machining up jig bushings, legs, special screws, and other parts of special tools that can be easily standardized, and in many cases will be turning out in small quantities work that should be handled on stock orders and turned out in large quantities by much cheaper labor at a frac- tion of the cost. The similarity between this method of building tools and the old- time methods of building the finished machine for the market is striking. But just as the old-time method of construction in the case of the finished article was found too slow and costly for modern conditions of trade and competition, and has been rapidly supplanted by comprehensive plans for standardization, duplication, produc- tion in quantities and careful supervision of labor, just so the old- time tool-room methods are being changed so as to take advantage of these obviously economical steps in the building of costly tools. Standardization. — A tool-room force working under the old-time methods just described will produce in the course of a year sets of tools that are distinguished chiefly by a great lack of uniformity and absence of any attempt at standardization. Yet a close study of the ordinary shop tool conditions and requirements will prove that the THE TOOL ROOM 55 standardization of many parts is possible if only a thorough-going attempt is made to effect it. This applies particularly to those shops where the tools are of the smaller sizes. For example, in the case of drill jigs, such parts as bushings, legs, stops, screws, pins — and even the bar stock — can be standardized to a comparatively few sizes. Duplication. — Once this is done the duplication of these parts in quantities and the keeping of them in the stock bins for immediate use becomes possible. The savings are at once apparent. First, a large reduction in the initial cost results because of. this production in quan- tities, and that too by a much lower priced workman than the tool maker. Again, the possibility of always having these parts on hand when wanted by this tool maker will invariably result in a large saving in both first cost and time. Subdivision of Labor. — The modern practice tends therefore toward the same rigid subdivision of labor in the tool room that exists in the production department. The high-priced tool maker does no work that can be performed by cheaper men. Not only are those parts that can be standardized and machined in quantities produced by a less expensive class of labor, but also much of the closer work in milling, turning, grinding, etc., is often handled by special men who do no other classes of work. Thus the tool maker, instead of labori- ously producing each and every part of any tool at great cost and loss of valuable time, becomes an expert adjuster and assembler, receiv- ing promptly from various sources many portions of the tool he is to finish, these parts requiring simply the finishing operations at his skilled hands to bring them "to size." In one large shop under my management, where conditions were unfavorable, we applied these rules of subdivision of labor and standardization to great advantage, especially in the building of large numbers of small drill jigs. The screws were standardized. All stops, legs and other small parts were turned out in large quanti- ties on the automatics. The bushings, also manufactured in large quantities, were turned into stock in such condition as to require 56 PEOFIT-MAKING MANAGEMENT simply the finishing operations by the experienced tool maker. Even the bar steel forming the top, bottom, and sides of the jigs, was finished to standard dimensions, cut off to standard lengths, and placed in stock for immediate use. The tool-designing depart- ment followed closely this scheme of standardization, the result being a large saving in tool costs, even though at times slightly more metal was used in the jig than was required by either the part to be manufactured or the character of the operation. This extra cost was saved many times over in the lower wage cost, due to the fact that the high-priced man had only a few finishing operations upon the component parts of the tool, and thus became an assembler and adjuster to a large extent. In addition to this pleasing reduction in cost, there ensued a still more satisfactory increase in the output of greatly needed tools from a department handicapped by lack of room and of high-grade tool makers. The Small Shop. In the case of the small tool room of very few men such subdivision of work is often impracticable. But even in a department composed of four or five men, common horse-sense methods applied strictly to their work will result in a saving in both money and time that is of great importance and fully proportionate to the savings in the large departments. In shops where the tool-room force is a small one there usually exists a tendency to ignore this part of the organi- zation and let it get along as best it can. This is a vital mistake. In the first place, the tool-room force is seldom half large enough con- sidering the great value of its work. Again, the relative importance of this department in the case of the small plant is fully as great as in the case of the large company. Its work bears the same rela- tion to cost, accuracy, and quickness of production in one case as in the other. Whether the department be small or large, the same methods of organization, division of labor, and checking up of tool costs can be used to great advantage. THE TOOL ROOM 57 Speeding up Tool Production and Checking the Cost. Lost time in the tool room, as already pointed out and emphasized is a more serious matter than in any other department in the shop, since delay in the production of a tool means not only a high rate of increase in actual cost of that tool, but may often involve a con- tinuation of a shop loss which could be avoided were the tool in use — a loss often many times the cost of the tool itself. The importance of adopting up-to-date methods for increasing tool-room production and for checking up and lowering costs then seems obvious. And yet the lack of effort to accomplish these results in most well run modern shops (to say nothing of the poorly managed) is as singular as it is prevalent. The belief seems to pre- vail that the cost of a tool is too difficult a matter either to estimate or investigate. And yet the admission of the fact that it is a diffi- cult question to solve makes the possibilities of loss in many direc- tions the more apparent, the need for some method of removing them the more pressing. The peculiar conditions make the problem a hard one. The work is usually altogether special and must be done upon the day-work basis of pay. The difficulty of securing proper economical results from this day-work system often leads to lax methods in administra- tion and management. The amount of time wasted by workmen under the day-rate system, unless they are rigidly supervised, is astonishing. Only an approximation to a " few days work" is often secured with difficulty. Even rigid supervision avails but little unless it is supplemented by some system that will prove a spur to the men — some system through the use of which the good men may feel that there is an opportunity for recognition and reward, and laggards may know equally well that if they do fail to produce work in a reasonable length of time they will surely be noted for punish- ment. 58 profit-making management Tool Cost Card. The tool-room system advocated here depends upon the deter- mination (by estimate) of the proper tool-room costs, item by item, operation by operation, before work begins upon the tool; and then, after the tool is completed, the comparison of the actual with the esti- mated costs, and especially the noting of the records of the rapid and the slow workmen as shown upon the cards. The card on the following page is self-explanatory. Form of Card. — The form given is merely suggestive. In some cases, the division of "operations" is unnecessary. In other cases, they are important. In most cases, the total time in which the work is actually done can be placed upon the card after the operation is completed ; inasmuch as the man has before his eyes a statement of what should be done, he will know what he is accomplishing in the way of speed of production and he is certain that his record, be it good or bad, will "go up to the front office." Immediate and insistent inquiries as to causes and reasons for delay, when these occur, should invariably be made. Substantial benefits may be derived by offering to the men fair bonuses in case they secure a clean record of work done within the estimated time in the course of the week. This offering of bonuses removes the idea of "driving" which is so distasteful to many work- men. Such a system, simple to the last degree, still is remarkably effective. Indeed, it is so effective because it contains, in simple form, the fundamental principles underlying all progressive methods of increasing shop efficiency, namely: — 1. — Determination of time in which work shoidd be done. 2. — Placing it before the workmen themselves in definite form. 3. — Holding before them the chance for rewards in bonuses and promotion for record work, and the fear of reprimand or discharge in case of failure through carelessness, negligence, or laziness. THE TOOL ROOM 59 Tool No. Tool Record Card Drawing Nos. Name of Part. Name of Part of Tool Operations Estimated Costs Actual Costs Name of Workman Remarks Total Costs Labor " Material Complete Cost This Tool must be completed by Date of Completion If any delay, Why? Special Instructions Design and Estimated Cost Approved by Tool passed by Committee Sig. of Sec'y SUGGESTED FORM FOR TOOL COST AND RECORD CARD. 60 PROFIT-MAKING MANAGEMENT The Tool-Room Committee. The question that immediately arises will be "Who sets the esti- mated time for the work and who checks up the actual time re- quired?" I answer "The committee, as described in the preceding chapters of this book." While the work of this committee will be varied, its functions many, still they will always relate to the one main object so ardently sought for — cheaper production costs. Its members are vitally interested in the original cost of the tools and the rapidity with which they can be gotten through the tool room. These members are usually better qualified to estimate the length of time that should be required to build a tool of any descrip- tion than any one man or group of men. After a short experience in estimating and checking up costs, they will soon become sufficiently expert to answer the purpose. Method of Procedure. — After due consideration has been given to the tool model and the design of the tool itself, the estimate of cost of the tool should be determined and the record placed upon cards as noted. These cards should always be issued from and by this com- mittee, so as to have the proper effect upon the workman. The card should travel with the work so that the workman may have a constant reminder beside him as to the time in which this body of men expect the work to be completed — a constant reminder that any failure to live up to the estimate will be surely noted upon this card and an explana- tion required — that his failure makes an indelible record against him which will infallibly be seen by those in charge of the shop and com- mented upon to his disadvantage — that a poor excuse for his failure will only blacken his record still further — that, on the other hand, any betterment of the estimated record will be noted with satisfac- tion by these same men and will surely redound to his credit. A first-class honest workman will be pleased at the opportunity afforded him of placing an evidence of his superior ability upon records which are lasting and which are noted by those high in authority with a THE TOOL ROOM 61 view to future promotions. The loafer and sluggard will soon be detected and can be sought out for improvement or discharge. Owing to the fundamental importance of the work of this com- mittee and the fact that upon it hangs most of the burden of bring- ing the shop to a condition of high efficiency, a short resume of its functions, mentioned briefly in Chapter IV, may well be brought out at this point. An outline of its province would be somewhat as follows: — 1. — Planning new designs of product to meet new market con- ditions in such a manner as to ensure: — a. Proper construction and accuracy of operation. b. A course of manufacture that will result in the lowest possible cost of production. 2. — Planning the re-design of an old product in the interest of economy of production. 3. — Devising and considering plans whereby the shop production efficiency may be raised to a high point. This involves: — a. A close consideration of cost data so that the problem can be attacked at its most critical point. b. The devising of full sets of special tools so as to make possible the attainment of the desired end of lower manufacturing cost. c. The thorough consideration of these tools from the standpoint of design and low production cost. cl. Investigation of existing manufacturing conditions in the shop, and the careful planning of methods through which a high state of manufacturing efficiency may be reached. This itself involves a thorough knowledge of the types of machine tools best adapted to the work, and the best results that can be obtained from them through the use of modern high-speed steel for the cutting tools — a big subject in itself concerning which there is still a lack of definite data. 62 PROFIT-MAKING MANAGEMENT e. The determination of "standard time" (or the time in which each job of work should be done) on each job in the shop by calculation and test. This work is of an importance that can aptly be termed critical. It is perhaps the most important work of the committee. As I will explain in detail later, I do not consider that the committee itself should attend to the tests and the determination of the standard times, but the head of the tool room should actively direct the work under the strict supervision of this committee. The work, espe- cially at its inception, should be constantly considered by this body in order to ensure proper results. Tool-Room Committee Membership. — In ninety-nine cases out of a hundred, the head of the tool room, supplemented by one or two of the best machine-room foremen and the head cost man, form the best group for undertaking this highly important work. Full reports of comprehensive tests made to determine the best production possible from each machine must be made the basis for one line of shop rejuvenation. The investigation of machine- shop processes and methods can best be made by such a group. The result of such action will invariably be as surprising as it is profitable. The designing of new tools holds great possibilities for economy or waste. Of course, the simple designing and building of new tools in a haphazard manner can be left to the head of the tool depart- ment and his tool designer; but only "haphazard results" can be expected. The results attained from this general method will often prove futile, for the head of the department is seldom in a position to determine by himself the most important problems to attack. I have seen the results of many weeks' work in the tool room thrown away almost immediately after the completion of a new set of tools, because of some change in method and design that upon examina- tion proved profitable. THE TOOL ROOM 63 The work of laying out a thorough, consistent, and profitable line of work for the tool room requires judgment of the highest quality. If the original designing or re-designing of the product deserve the attention of the best qualified men in the organization, formed into a committee, then certainly this even more important and vital work should receive like consideration. In fact, considera- tion of the design of a new or old product, and consideration of the tools necessary to build the component parts of this same product, go hand in hand. I therefore urge the serious consideration of the tool problems by the committee formed of the head of the tool room, the head designer, the members of the factory committee, the head of the cost department, and any other of the machine-room foremen in whose departments the work is to be performed. Keep in mind that the most important — the really vital — " secrets of cheap production," can be solved only by the work of these two departments, and particularly of the tool room. If your shop is not producing as much as it should, or the costs of production are too high, then start a campaign of rejuvenation. But start it through the designing department and the tool room, whether these departments number hundreds of men or but five. Map out a logical and systematic plan of improvement, working through these departments, calling to your aid also the active heads of those depart- ments who meet and conquer the difficulties of manufacture daily, and whose suggestions and aid will prove of peculiar value. You can thus be assured of a product designed along lines that are practical, accurate, and that meet the requirements for eco- nomical manufacture. Coupled with this, you will secure from the work of the tool room and its committee data relative to possibili- ties of speed of production that are vital, plans for new systems of manufacture that are often radical, and as profitable as they are radical, and plans for new systems of tools that will often revolu- tionize individual processes and bring about great reductions in cost. Chapter VI. MINIMIZING THE TIME OF MACHINE-TOOL OPERATIONS. TWO fundamental principles of cheap production lie hidden away amongst inefficient shop processes, bewildering dis- order of shop conditions, and lax, inaccurate, and utterly mis- leading shop methods. They are of the greatest importance, and yet nine times out of ten a searching investigation will prove that little consideration has been given them in ordinary shop practice. They are so closely related that their simultaneous discussion is advisable. They are both essentially " time savers." These two principles are: 1. — The determination of " standard time" for each job and its tabulation, introduction, and enforcement. 2. — The absolute elimination from the workman's routine of every duty but that of running his machine continuously and efficiently; the bringing to him of tools and stock for his next job before he is ready for it. The first and possibly the more vital of the two is the determina- tion of standard time upon each job — that is, the shortest space of time in which each job should be completed (including setting up), under normal conditions and with due regard to the fullest possibili- ties and capacity of the machine tool, the cutting tool, and the stock. An appalling undertaking, this, in most shops, under existing conditions; appalling and seemingly impossible because of lack of knowledge of the best shapes for cutting tools, of the best methods of hardening and grinding, of the results to be secured from the use of high-speed steel cutting tools, of the best methods that can and should be adopted by a skilled workman, of the capacity of the 64 MINIMIZING OPERATION COSTS 65 machine tools in the shop, and, worst of all, because of the lack of men skilled in the best methods for handling these cutting tools — men capable of doing the work and of seeing that the workmen do it. It scarcely seems necessary to argue in favor of this determination of standard time; and yet many manufacturers seem to prefer to leave the question of the rapidity of production to the foreman's judgment and skill alone. Their confidence, while perhaps amiable, is usually misplaced. No man with real shop experience will assert that the average foreman does, or in fact can, know the best results that can be secured in machining today, unless he has been afforded and has accepted exceptional opportunities for making thorough tests of a really scientific character — something that rarely happens. Even should a foreman possess this desirable knowledge, it is beyond the power of any one man to supervise properly any group of men, even though small, so that the high point of efficiency may be assuredly reached, and at the same time do the other work that usually falls to the foreman's lot. Again, the use of high-speed steel for cutting tools is a develop- ment of recent years. Notwithstanding all that has been published on this subject, comparatively few shop foremen really know what the fullest possibilities of its use are, and fewer still ever force their depart- ments to use it to its fullest efficiency even after its value has been recognized. In fact, there have been comparatively few tables ever published that show in a practical manner just what can be done with it. The machine-tool builders themselves, singularly enough, seem to be unable to give any positive, accurate advice as to the actual con- ditions of cutting speeds, feeds, and depth of cut under which their own tools can best operate, and even the makers of the tool steels do not provide tables of much practical use. Nevertheless the work of such a man as F. W. Taylor, in his remarkably thorough and extremely valuable publication, "The Art of Cutting Metals," clearly shows the possibilities that lie in the use of these modern cutting tools — Messrs. Taylor and White being the 66 PROFIT-MAKING MANAGEMENT discoverers of these possibilities and Mr. Taylor himself leading the van in the application to practical use of these principles. This one work makes clear not only the great possibilities but also the great difficulties that originally lay in the path of the investigator. With all of these points in mind, it is simply "rot" to give heed for a moment to any claim of any shop man that his knowledge of this sub- ject is at all exhaustive. Standard times should be determined by some one, some how. Certainly no one can dispute the fact. Experiments and experience show that the good old plan, "depending on the foreman" for this determination, as mentioned above, gives results 40 to 60 per cent short of maximum efficiency. Inasmuch as your entire business is built upon and depends upon the cost of production — or, in its last analysis, simply "the time it takes each man to do his job of work," it is of fundamental importance that that standard time be first deter- mined by methods that will ensure accuracy. The second cardinal principle of cheap production stated at the outset was " the absolute elimination from the workman's routine of every duty but that of running his machine continuously and effi- ciently; the bringing to him of tools and stock for his next job before he is ready for it.' 7 The machine hand, assembler, or other worker must be forced to concentrate his skill and attention upon his own work and that work alone, making it impossible for him to waste his time (and thus the employer's money) upon work he should not do. Consider for a moment the many things that a machine hand, for example, will ordinarily do other than operate his particular tool, and then give a moment's thought to analyzing the result. The worst "time wasters" can be classified somewhat as follows: a. Running to the supply room for stock for a new job. Result, the machine tool is shut down. b. Getting tools, clamps, etc., from the tool room for a new job. Result, the machine tool is shut down. MINIMIZING OPERATION COSTS 67 c. Grinding his own tools (and very badly at that). Result, the machine is shut down. d. Excessive time in "setting up" a job, due to lack of proper instruction, or to a tendency to "soldier" because of lack of supervision. Result, the machine is shut down. e. To these add the further tremendous loss of output because the workman fails to use the proper — the very best — cutting speeds, feeds, and depth of cuts, through either lack of knowl- edge or lack of supervision, and you have a combination that cuts the output of the ordinary shop far below what it should be. If your shop is running under ordinary foremanship supervision, with no thorough method for bringing to the workman his stock ; for providing him with tools for the next job before he is ready for it; with no method of instructing him what to do and how to do it, and no thorough way of comparing his output with what it should be according to the best standards of today, (mark me! not your fore- man's standards) — then you can make up your mind that your output is far too low according to the best standards of production. You may imagine that "carefully calculated" piece-work rates will protect you ; but if your piece-work rates have to allow for the conditions stated just above, you are deceiving yourself grossly as to the possibilities of your output. The important consideration is time! time! Time of the work- man running his tool — that is the vital point. Every minute counts for profit if this tool is operating continuously and efficiently; for loss if it operates under the nullifying influences detailed above. Consider for a moment! Your entire factory investment — build- ing, power plant, transmission plant, all probably built and selected with great care and expenditure of money — is simply to care for and operate the separate units of machine tools, or to house properly your assembling spaces. Your investment in machine tools repre- sents large sums. This vast expenditure is made with but one object 68 PROFIT-MAKING MANAGEMENT in view — that of producing work and producing it as cheaply as pos- sible. Calculate accurately your indirect charges of every character; proportion the total against each machine tool according to the "machine-rate" method of apportionment, and note carefully how large must be the rate per hour for each machine. This will be found to be an astonishingly large proportion of the labor rate per hour and will prove a good index of the great cost of lost time in the shop. Is it not clear, then, that each machine tool should be, nay must be, brought to as high a factor of operating efficiency as possible? Is not your entire investment made with that one end in view? Does it pay to have the efficiency of any collection of these units reduced 15 per cent to 25 per cent by the existence of such shop methods as those detailed, by which the men operating the machines are actually com- pelled to shut them down to hunt up their next job, to collect their tools, to grind their tools, and to do many things that should be clone for them? Can you afford to suffer an even heavier reduction in effi- ciency due to lack of knowledge of the " best time for each job?" The importance of these points can be further emphasized by con- sidering that all such delays, which in their total represent a large amount, directly affect cost and profits, output, indirect expense of every description, quick movement of stock, and hence ultimately the amount of working capital needed in the business, and the possi- bilities of quicker deliveries, with a resultant direct effect upon the sales department and customers. Indeed, aside from the question of costs and profits, nothing is more important to the separate mem- bers of a company — from the executives with their financial problems, through the sales department with their selling problems, to the harassed factory manager — than the quick movement of stock. The reason for the continual absorption of working capital into machinery or stock that worries many a financial officer, or for deliveries so delayed as to affect seriously the efficiency of the selling organization, or for excessive and unreasonable and possibly unex- pected costs that seem and, in fact, are out of reason — the reason for MINIMIZING OPERATION COSTS 69 all lies hidden away back in the shop processes and methods. It crops out at the individual lathe, planer, shaper or assembling bench, and then only to the keen experienced eye. The workmen busy? Surely. Look at them hustling ! But — see that group around the tool-supply window waiting for tools? How many are waiting at the tool grind- ers to grind their own tools each in his own "individual" manner? There is a mechanic who has taken twenty minutes to " set up" his job instead of ten. Then pause and wonder how in the world any one or two or more foremen can be sure that the men now operating the machines are using proper speeds and feeds and getting the most out of the machine and the tool. In fact, the causes for all these serious troubles are located so far back toward the fundamentals of production — the individual units affording the causes are so seemingly unimportant, and such is the difficulty of recognizing these conditions, buried as they are in a busy shop — that they are overlooked or ignored. As a general proposition, the greater the difficulty of solving such problems the more important and necessary becomes that solution, simply for the reason that in this you are dealing with humane ele- ments to whom is given the opportunity of slowing up in production solely because of that very difficulty that lies within the problem itself and its solution. And yet so fundamental and vital is their importance that they cannot be ignored. The Starting Point for Minimizing Operation Costs. Investigation of Existing Machinery. — Any plan for the intro- duction of proper methods for the determination of standard time and the elimination of wasted time must begin by an investigation of the existing shop machinery — an individual report upon each machine tool, especially touching upon the defects, and a recommendation as to what types should be purchased in the future to meet modern pro- duction requirements. This is a matter of great importance, but machinery, designed to stand up under the latest high-production 70 PROFIT-MAKING MANAGEMENT requirements, are recognized and listed up at the beginning of the introduction of any new plans, this important matter is liable to be lost sight of later, with the consequence that when the time for pur- chases of new machinery does come, the older inefficient types are clung to and the shop is further encumbered with old-style tools. Nor is the question of securing a more rigid and efficient tool such a simple question as at first appears. Few machine-tool manufac- turers are making an earnest attempt to place upon the market tools strong enough to meet the more severe requirements of today. Why? First, because comparatively few have made tests of sufficient scien- tific worth to determine where the points of greatest weakness really are and how to strengthen them properly. Second — there is the money tied up in old patterns, old stock in the factory bins, in ma- chines going through the process of manufacturing, and finally in finished machine tools carried in the sales rooms. Changes of a radi- cal character would prove a serious matter under such conditions. And, again, the demand of the manufacturer for better and heavier tools has not been urgent enough to force the machine-tool builder into the tremendous trouble that a thorough redesigning of the older types would surely cause. Therefore the latest product of a machine- tool manufacturer is not necessarily adapted to the methods of pro- duction that I am advocating. Greater driving power is usually the first requirement. Accurate tests have shown that modern lathes, for instance, should have fully double the driving power usually contemplated in their design. This is a point that must be considered carefully. Of course a proper increase in driving power of a lathe, for example, means wider cones, heavier bearings, and stronger heads. Immediately there follows the question of the rigidity of the bed. It is at once apparent that this is a very important point, and yet too little attention has been paid to the design of bed best suited for withstanding the strains and stresses due to the use of new high-speed cutting tools. Solidity is very nec- essary. The consideration of the need of strength and rigidity should MINIMIZING OPERATION COSTS 71 certainly be applied to the tail stock. Slide rests and tool holders should be simple and strong. The tool must be held rigidly under all conditions. The tool posts should be set down lower than is custom- ary in everyday practice. Under modern conditions much greater feeding power is needed. But however certain we may be that defects in machine tools have a direct effect upon the rate of production and the cost of the product, existing conditions may prevent purchase of new tools. Inasmuch as I have been through the mill several times with run-down concerns, I appreciate fully the fact that most manufacturers are obliged, through sheer financial stress, to ignore any scheme, no matter how promising, that involves at the outset a thorough replacement of the existing machinery with the most modern types, even though it can be demonstrated that the latter are 50 per cent more efficient. The practical question that confronts many a manager is : " What on earth can I accomplish with my present old c rattle traps' of machine tools? I couldn't buy gold dollars for 98 cents if I had to pay cash, much less spend thousands for replacing my present machinery. I must first make good with what I have. After we are on firm ground we'll talk about stronger and better machine tools." True! Very true! A viewpoint very often overlooked by the manager, or by the man who has this work in charge but doesn't have to produce the dollars to "keep the old ship afloat." This latter situation, which is a stern actuality with many a man who is eager to improve conditions, is all compelling and must give shape to the preliminary methods of procedure. This I shall try to keep in mind. Granting, however, the hard fact that many concerns are obliged first to dig out the problem, using their existing facilities, it is of all the greater importance that two reports relative to machine tools be made out: — First, a report showing what heavier, stiffer, and more efficient types of machines should be substituted for existing types when the proper time comes. 72 PROFIT-MAKING MANAGEMENT Second, a full report upon each and every machine tool in the shop, showing its points of weakness and its limitations in cutting speeds, feeds, and depth of cuts ; how it can be strengthened ; a descrip- tion of the kind of work that should be done on it ; a record of best times on jobs; a full statement of the best machine tool to substitute for it, and a clear-cut comparison of possible production by the use of the latter machines. I warn you again that unless this be done systematically at the start, it probably never will be done ; then as time goes on you will find yourself burdened with many a newly purchased machine tool just as weak and inefficient as the older one it replaces. In considering the problems of increasing production in any par- ticular shop, we find therefore that they become problems of devising methods and making tests upon the supposition that existing machines and facilities must be used in regular production — that, however advantageous the latter types of tools, the important question of low- ering costs must be considered on the basis of developing to the uttermost the efficiency of the present machinery. We must there- fore keep in mind these points in the building up of our system. The great importance of gathering all our data systematically and of using them scientifically cannot be too strongly insisted upon. Chapter VII. POSSIBILITIES ATTENDING THE USE OF HIGH-SPEED STEEL. /"^LOSELY linked with the study of the design, character, and ^^ remodelling of the existing machine tools, is the second great step in the betterment of machine processes — the use of high-speed steel cutting tools. The possibilities underlying their introduction and full employ- ment have been thoroughly discussed by other writers and proven again and again in everyday shop practice where thorough methods have been adopted. It is sufficient to say that the increase in produc- tion over that secured through the use of the older carbon steels may be expected to reach from 40 per cent to 85 per cent (depending upon the character of the metal being cut) if the machine tools are in proper condition to withstand the strains of the increased cutting speeds, feeds, and cuts. If the shop under consideration is in a run- down condition, and there has been lack of system in shop processes as well as lack of efficiency in production methods, a much greater increase than 90 per cent may reasonably be expected. I have noted myself records of over 200 per cent increase in efficiency and out- put, and have been shown records in a number of cases that exceed 300 per cent. Of course to anticipate such large increases in all cases would be foolish, but there are many cases today where such results are well within the range of possibility. Such a prize is well worth fighting for. Before passing to the important questions that follow I cannot for- bear pressing upon the interesting fact that in a great number of shops the recognition of, and the tremendous enthusiasm for, possibili- 73 74 PROFIT-MAKING MANAGEMENT ties of high-speed steel for cutting tools and for better production processes, seem to be confined to the primary installation and the first fever of enthusiasm over its introduction; after this, the shop often settles down to a dead level of production far below its proper point, and the ultimate increase in efficiency, instead of being fully 60 per cent or more, is nearer 12 per cent. How often have I seen a shop, in its first spasm of delight over the discovery of high-speed steel and its possibilities of increase in production as applied to their peculiar circumstances, eagerly scan- ning new records, planning great things for the future, Often the officials are brought into the shop to see the first results. Mayhap the president will take into his office some of the pieces for paper weights, look them over gleefully, compare the new and the old records with the fine showing of increased efficiency, and take pleasure in the thought of what he will do to the trade when all his work is produced at such a low cost. And then this matter of getting the best results from the new methods is placed in the hands of a few ignorant foremen — each with different ideas as to the forging , dress- ing, hardening, and grinding of these tools, with no definite idea as to proper shapes, angles, and clearances, and no real knowledge of the possibilities of production that rest in the proper treatment of the problem. Soon the entire important question is swallowed up in the pressing problems of everyday production, and the only real knowl- edge that the manager possesses on the subject is that " We are buy- ing and using regularly brands of such-and-such a make of high- speed steel." Later on the official will pick up his "paper weight" and wonder what has become of the expected reduction in labor cost that at first appeared so simple to make. Somehow or other his cost records do not show those material reductions that he assumed were assured. The cause? Lack of method. This is no fairy story nor dream. If the manager of the average concern wants to ascertain the fact that these comments in all proba- HIGH-SPEED STEEL 75 bility apply to his own shops, let him, after ascertaining what should be accomplished upon, say, certain classes of lathe work, then go down into the shop and ascertain for himself just what is being done. And while on the way to the shop itself, don't stop at the factory office and ask any foolish questions, for if you do, "information galore" will be your lot, but as for actual facts right from the machine tool — little of it for your portion! But let us turn to measures by which the use of high-speed steel may be made to yield the maximum results in regular work: — The Provision of Abundant Cutting Tools. The determination of proper and standard shapes for cutting tools, and the supply of a sufficient quantity to avoid lost time is the first point of attack. Before another step is taken these standard tool shapes must be determined and must be rigidly adhered to. The old tool dresser, who is in all probability totally ignorant of the proper shapes of tools as determined by scientific experiments, and probably stub- bornly sticking to his "home-made" knowledge of hardening the modern tool steels, must be eliminated. The practice of allowing a hundred workmen to grind their tools in a hundred different ways must positively be stopped. In place of these haphazard, inefficient methods must be substi- tuted those that will lead to the adoption of standards proven by ex- periments and experience to be efficient, and these must be adhered to without deviation. In view of the differing opinions of factory men upon the subject of proper shape of tools, it is fortunate that we can refer to the results of and deductions from the experiments of Dr. Nicholson, and later, and indeed especially, to those of Mr. F. W. Taylor of Philadelphia, as guides which can safely be followed. The latter tests of Mr. Taylor are especially exhaustive and convincing. The results of the tests performed in a modest way under my direction are confirmed by Mr. Taylor's data. The limits of this article prevent any lengthy dis- 76 PEOFIT-MAKING MANAGEMENT cussion of the many important points to be observed; they must be skeletonized only. 1. — In determining the most effective shape for any tool, such as for instance a lathe tool, careful consideration must be given to the fact that limitations may have to be placed upon the shape which would provide the greatest cutting efficiency, by the necessity of con- sidering the difficulty and cost of forging and grinding. These costs may prove such as to require a modification of the type which per se would be the most efficient. 2. — The dynamometer tests by Dr. Nicholson demonstrated the fact that a tool with lip angle of 54 degrees (cutting angle 60 degrees, clearance 6 degrees) would remove soft steel at a low degree of pres- sure. Such an acute angle, however, can hardly be considered for commercial use, because of the danger of crumbling. He established the fact, however, that we should generally adopt the sharpest angle of cutting tool that would not crumble under the strain of working conditions. His tests showed that on medium cast iron cutting angles should be 76 to 80 degrees (with, clearance of 6 degrees) and con- sequently their lip angle should be about 70 to 74 degrees. His tests upon soft steel were not conclusive because of work conditions, but the tests he made indicate that a cutting angle of about 70 degrees (lip angle 64 to 65 degrees) lasted the longest time in rapid cutting. Mr. F. W. Taylor's tests show that tools for cutting softer steels should have a clearance angle of 6 degrees, back slope of 8 degrees, side slope of 22 degrees, or a lip angle of 61 degrees. For cutting cast iron and harder steel the tool should have clearance angle of 6 degrees, back slope of 8 degrees, side slope 14 degrees, or a lip angle of 68 degrees. On harder steel a clearance angle of 6 degrees, back slope of 5 degrees, side slope 9 degrees, or a lip angle of 74 degrees is recommended. On chilled iron a lip angle of 86 to 90 degrees is recommended. Great care must be exercised to see that the point of the tool is HIGH-SPEED STEEL 77 blunt to such a degree that crumbling cannot occur. The round- nose tool with a large radius of curvature has been adopted by me as the best of its type, although straight broad-nosed tools can at times be used to good effect. As regards the question of side slope vs. back slope I favor steep side slope, though guarding to the utmost possible against gouging into, the work. A combination of these two can be secured that will produce good results. This question of shapes of tools must be thoroughly thrashed out and settled by the expert and the committee before another step is taken. Decide upon your standard types. But whatever types are decided upon, by all means adopt a few set rules in regard to tools, and stick to them. First. Reduce your sizes of tools and the types of tool steel to a minimum. Second. Adopt standard shapes and then don't change them. Third. Stock up your tool-supply room with plenty of small tools. Keep the workmen supplied. Forging. — The final standard shapes of tools having been decided upon, then take up the important question of the proper forging of the tools. Here is where vigilance should begin. In the first place, limit gauges will pay. Your tools must be forged to the correct shape and in such a manner as to reduce the preliminary grinding to a minimum. The shapes must be considered with care so as to provide for cheap and effective tool grinding after the tool begins its life of usefulness. Naturally the conclusions reached in the con- sideration of standard shapes will influence very largely the methods of forging. Do not run the risk of starting cracks in your tool steel by nicking it and breaking the pieces off cold. In heating the tool do it slowly so that the heat will have ample time to penetrate the entire bar. Unless this is done cracks may develop. Bring it up to a light yellow. Hardening. — Considering the large volume of good information now available as to the best methods of hardening high-speed tool 78 PROFIT-MAKING MANAGEMENT steel, it is strange how often we find the toolsmiths adhering to plans of their own. It is of great importance that your toolsmiths should be given to understand that any adherence to the old " color" ideas in the pro- cesses of hardening must be absolutely abandoned, and that the newer methods of hardening recommended by the makers of tool steel must be absolutely followed. At one time the methods described by the makers were unnecessarily complicated, in order to throw a certain degree of mystery around the processes, but of late the tendency has been toward a decided simplification. It is highly desirable that the number of grades of high-speed steel used in a shop be reduced to as low a number as possible — certainly not over two, and, if possible, one — and that a thorough standard method of hardening be adopted, and adhered to. Owing to the tendency of the ordinary toolsmith to slip back into his old slipshod ways, it is important that some accurate record of his hard- ening processes and some check be kept upon him, especially during the period when practical methods of hardening are being introduced and thoroughly standardized. The record need be only a simple one, but must be sufficient to enable you to trace unerringly any defects appearing in the tools due to bad process of hardening, and to center the responsibility for these mistakes upon the toolsmith responsible for them. I therefore suggest the form on the opposite page for keeping hard- ening and tempering records. The methods of hardening lathe, planer and boring tools are fully described by the makers. Generally the forged nose of the tool is placed in a well-burned-through coke or coal fire, and brought slowly to a white welding heat. This heat should be raised to a point where the nose begins to soften. Care should be taken to see that this heat extends over fully three-quarters of an inch of the nose. At this fusing heat, the white-hot part should be put immediately under the strongest and coldest air blast which is available, compressed air being HIGH-SPEED STEEL 79 Hardening Records. Date Tools Size Quality of Steel Lot No. Remarks Hardening Heat Temperature. Cooling Agents. Tempering Heat Temperature. Toolsmith . If defective, Why?. FORM FOR HARDENING RECORDS. the best to use. Under no circumstances must the tool be brought in contact with water while it is hot. It is probably preferable to harden the white-hot nose of the tool in fish or lard oil until it grows mode- rately cool, and then to continue the cooling-off under a cold blast. Mr. Taylor, in his description of the heat treatments, brings out the important feature that the nose of the tool should be heated slowly to a bright cherry red, so that the heat may penetrate to the center of the tool. From the bright cherry red up to the melting point, the tool should be heated as rapidly as possible in an intensely hot fire until the nose of the tool begins to soften. He urges very strongly the importance of using an intensely hot fire for the second period of heating. The cooling of the tool should be done rapidly until it is below 1,550 degrees F. From this point it makes little difference whether 80 PROFIT-MAKING MANAGEMENT it is cooled rapidly or slowly. Mr. Taylor advises the use of a bath of red-hot molten lead in bringing the tool down below a temperature of 1,550 degrees. In his article on the "Art of Cutting Metals" he brings out the advantage of the second or low-heat treatment, which is obtained by re-heating the tool which has had the high-heat treatment to a tem- perature between 700 and 1 ,240 degrees F. Great care, however, must be used to see that the higher temperature is not exceeded, for should this happen the quality of the tool will be seriously affected. For the heating of special form tools, milling cutters, etc., special methods are of course necessary, the use of the ordinary coke or coal fire being out of the question. Where a number of these parts are heated at a time, great care must be taken to see that they do not touch one another. Special furnaces should be used. These can now be purchased for a reasonable figure. In these furnaces the work can be properly suspended so that separate pieces will not come in contact with one another, and accurate control of the heating can be secured with the aid of a pyrometer. Grinding. — As was pointed out under the heading of shapes of tools and forging, it is necessary to determine these shapes with care so that the cost of grinding the tools will not be excessive. It seems hardly necessary to assert the importance of having all tools ground in one place and according to standard shapes. There are, however, a surprising number of shops still left in which the workmen are allowed to^ grind their own tools in their own way. Inasmuch as tests show that the shape to which a tool is ground will affect its efficiency to a very high degree, it is perfectly obvious that such a plan as allowing the workmen to grind their own tools is simply ruinous, to say nothing of the question of wasted time on the part of the workmen. We must, of course, assume that under the heading of shape of tools the manufacturer has determined just what grinding angles should be adopted throughout. It is of much importance that these HIGH-SPEED STEEL 81 angles be rigidly adhered to, not only because they will prove the most efficient, but also because all the tabulations which any one may make up for any particular shop will be based upon these standard shapes and consequently any variation from these shapes will tend to vitiate the records and so annul the good points of the determina- tion of standard time. In my opinion, all grinding of tools should be done by automatic machines, so that all angles can be ground uniformly. If, however, this grinding is still to be done by hand, it is very important that you get a thoroughly skilled man and watch him with extreme care, espe- cially at first, to see that he will adhere to your specifications for grinding angles. If you do not watch him, he is almost certain to slip back to methods of his own or to adopt those of other men in the shop. If this grinding is done by hand, then provide the tool grinder with proper templates and tables so that the possibility of mistakes will be eliminated as far as possible. Such is the importance of grinding these tools accurately, however, that an automatic machine grinder will be found almost necessary. Overheating of the cutting tool during grinding is one of the greatest causes of deterioration of quality. Caution is generally impressed upon the people handling these tools, and it can not be urged upon them too strongly. Many a tool apparently in good condition has been ruined by overheating in the grinding operation. The tool should be moved continually. A cooling agent directly on the nose of the tool should always be used. Many makers of high- speed steel state that while grinding on a dry wheel may be done, at the same time great care must be taken to see that the tool is not discolored, i. e., overheated. I concur in the statement of Mr. Taylor that on the average a lathe tool should be so operated that grinding would be required at the end of an hour and a half, going, of course, upon the presumption that the tool is of standard, high-grade quality. In many of the tests on which records have been presented and in the data which are 82 PROFIT-MAKING MANAGEMENT always submitted by the high-speed steel maufacturers, we find a continual reference to the length of time a tool runs without regrind- ing. This, however, is of very little interest to the average manufac- turer, as the question is not how long a tool may run without regrind- ing, but how much should a tool be forced so as to produce the most work with a minimum expense for grinding, keeping in mind at all times that the crowding of the machine tool is the important con- sideration. The question of how long a tool may run without regrind- ing sinks into the background, especially if the grinding of a tool may be done in a scientific manner by automatic grinders. The use of cooling agents, such as soda water, is highly desirable. An increase in production of 35 per cent on medium and soft steel can be secured through the use of a properly directed heavy stream of water. Finally, let me urge the necessity of keeping a large supply of tools already ground up in the tool-supply room, so that, under no circumstances, will the workman be compelled to wait for his cutting tools. This is an important point and is often overlooked. Chapter VIII. THE DETERMINATION OF STANDARD TIMES FOR MACHINING OPERATIONS. A SSUMING that we have determined upon standard shapes and •£*• have the proper facilities and men for the forging, hardening and grinding of tools properly, we now come to the consideration of the question of making such experiments as will make it possible to determine with a high degree of accuracy just what the shop ought to be able to accomplish in the way of production with the existing equipment. To sum up anew the elements of the problem before us, the "stand- ard times" for any shop depend upon the following: 1. — The character and limitations of the existing machine tools, 2. — The introduction and use of high-speed steel for cutting tools. This will include : — a. The determination of the proper shapes for tools. b. The provision for proper treatment of steel of this char- acter in forging, hardening and grinding. c. The determination of the best working conditions possi- ble, such as the cooling agent, etc. 3. — The securing of the maximum possibilities in cutting speeds. This includes: — a. The careful consideration of tests already made and sub- mitted by different investigators, giving of course due thought to the conditions existing at the time of the test. b. The adaptation of these records to existing shop condi- tions and the making of thorough tests in the local shop under the limitations imposed by types of machine tools existing in the shop. 83 84 PROFIT-MAKING MANAGEMENT 4. — The collation of all production data upon a systematic plan and their arrangement so that they can be used. a. The instruction of the foreman and the workman as to the results to be expected and how to secure them. b. The insurance that the every-day production follows closely this standard of efficiency. The first and second sections were discussed in the preceding chap- ter. The third and fourth — that is, the fixing and the practical intro- duction of standard times — remain to be considered. The first problem that confronts the factory manager is how to start to make tests on the bewildering number of pieces used in the manufacture of his particular product. The warning should be issued that unless the work of testing is done systematically much of it will be done without avail and great loss of time will follow. Classification of Parts. I have usually found it possible, and strongly advisable, to divide into groups or classifications the parts which are to be manufactured according to these new methods. The first separation which would occur to any one would be that according to the quality of metal used. The second grouping will depend altogether upon the article that is being manufactured. Generally it will be found perfectly practicable to make a second series of classifications depending upon the similarity of design, shape, and mechanical operations necessary. Of course where parts are of the same genus but of different sizes, this is a com- paratively simple proposition; but it will generally be found upon analysis that even a further classification can be made under which these groups can be still reduced by considering, as stated above, design and similarity of operation. I have in mind one shop which required in the course of building, assembling, and making the machines the production of some 9,000 parts. However, by a thorough system of analysis and classification, it was found possible to group these 9,000 parts into less than 250 STANDARD TIMES FOR MACHINING 85 classifications. It was thus possible to get a clear idea of what should be accomplished on these 9,000 pieces through the results of the 250 tests made in a thorough manner. While it was probably true that the deductions made from these tests were not in all cases as thor- ough as would have resulted from individual tests, at the same time this plan simplified a tremendous problem and enabled the concern to get a much quicker start on the right road than if a haphazard method of testing these 9,000 pieces had prevailed. In studying the question of production in regard to any tool, we must consider not only the efficiency of the machine tool and the cut- ting tool, but also the time that it takes to set up the job on the machine tool in the first place. It is quite probable that a critical examination of the way of setting up the work usually practised will prove that the method used is capable of alterations which will result in a surprising saving of time. A thoroughly scientific method of setting up the job usually results in a saving of 30 to 50 per cent in the time required by the average workman. It is therefore necessary to study this question at the start, as the test is being made, and pre- pare a list of instructions giving the different operations required in detail and the length of time that should be taken under ordinary conditions to accomplish this job of setting up. This determination of setting-up time should not be left for future tests, but should be done right at the beginning, for if it is not done then, the chances are it never will be done. It is easier to do it at the time of the test than at any other time. Again, we must consider the time required to handle the parts, especially if they be small so that they can be clamped in and taken out of the machine tool in the shortest possible space of time. A thorough study of this one problem should be made at this particular period. The importance of this is much greater than is usually apparent, especially on parts of small dimensions. A short time ago, I noted with particular care a workman oper- ating a lathe on a large number of small pieces in a shop where the PROFIT-MAKING MANAGEMENT rH £ o ~ 0} W H H m p < X ; - K § o O os c > w a Q H £ «! P hJ o « ft H rr « n w w w OJ Ph iv o H rt v. t/J h u H o P H _jO00»0(NN • l> -H CD • OS CO OS t- if • 00 (M 00 CD • • t~ 00 t^ U5 Tf CO Orfr| 00CNOS NOION 00I>1> • o>o SlNOlONMiCCOtDOOOcOOHNNOONrfNtOOlMIM ■OC0HK3 ONONDOOcOO'OHaiNOOOCODNO'OCOIMOSNcO -lOHOOtD 3QNHH (N rH rH rHrH rHrH rHrH ........ 'SOtDOONHHCCCCMMffiOOMnONNHiOiONNHOOOOSNHXtDINHCOKIO ^OHNHN(M0)tDifC0i Ift IC O © 00 CO l> CM CD OS CO rH rH tH P rjanM^mtONiMKJOOOONHOOHNNOlN'^NOCIM o jHoooiciitcooooiOHifMosNioifcocoajo^wco rH S NHtDHMOOOtDHNHNN MNiO-^nCllMOiOKICONN tMtONONNiOiOOOON^OOH(MTtiu3rt^NNLOM(MHNOONO)rltiO(Nr)* M CO N CO if CM CD CM CD ! rO CO CO rH CO 00 tH JO CO rH CO 00 rH CO CO H CO 00 H CD CO H CO 00 rH CD CO rH CO 00 rH <£> CO rH CO 00 rH ^ 0' HCOHMHHHCOHMHHHCOHCOHHHfOHMHHHCO' o "JO STANDARD TIMES FOR MACHINING 87 manufacture of small parts prevailed. The machine tool itself was well speeded up and the production was quite rapid. It was an actual fact, however, that the time consumed by the workman in taking out his finished piece and fastening in the machine tool the piece to be worked upon, exceeded by quite an appreciable percentage the actual length of time required for the machine operation of cutting. While this may to the inexperienced man seem to be insignificant, at the same time the determination of these points is of the greatest value, especially under such conditions as outlined above, because of the fact, as stated before, that "time is what we pay for." Every- thing possible should be done to cut down that element of time all through the shop processes. Before starting any tests, care should be taken to see that there is provided a cut meter for measuring the cutting speeds, that the belts are all in good condition, and that the proportion of pulley speeds is carefully checked up. The depth of cut should be very carefully measured, and, as stated before, care should be taken to see that you have tools of uniform character and plenty of them. Even at risk of reiteration, I want to emphasize the importance of this provision being made in advance. Whatever the condition of your shop and whatever the system of management, it is altogether probable that an expert tester will be absolutely necessary. This man should be one who is totally removed from the influence of the foremen or any of the workmen. He should when possible be placed in some part of the factory where he can work practically unobserved and certainly undisturbed. Wherever his tests are made — specially or in the shop — his reports should be carefully checked up and should be invariably sent to the head office, he being given to understand that he is responsible to the officers alone. The importance of having an expert of this character lies not only in the necessity of securing accurate tests upon which you can depend, but also upon the absolute necessity of training up some man who can properly analyze the possibilities of production, fill out the 88 PROFIT-MAKING MANAGEMENT »MN 00 CI CO • • CO ^ • • • • O JHMOO i— I f- co • ■ i— I i— I • • • • iO ^ O CO *tf CO OS iO CO • ■ 00U5 • ■ • • fri H 0 (M (M O ** iO CO l> • • 1> 00 t- • • r^ o IjOMOO) STS 00 ^^ i-i^CO00 ■ • NOON • • ■* CO C5 CO •* CO (M 00 iO CO (N • • t^ ^t 1 CO • • CO *# ShhqOiO ^-*toooo •hIMMNN O 00 CO ■* CO(N i-l Si r-4 t> CO CO .2 "5 OS t> rt< i-rj ^44 CO i— I OS fl>- CO 00 COINHH • MNH • (N r-4 N CO lO CO CO i-4 00 CO 00 CO CCOHIOCD 00-^LOO t> CO CO t-- £- CO t-(M OS CO^p CO CO ^00(MCOH O OS CO CO 00 b- CO no iO 03 00 t> i-H 00 GO iO lO ■* t^ CO i-H 05 CO