The economic side of works management

Front matter

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Preface

This thesis appeared in 1907 in the Business World under the title of The Economic Side of Works Management. The understanding was that reprints would be made. but. unfortunately^ before that could be brought about the magazine changed hands, the manuscript was lost, and the plates destroyed.

The writer would have reprinted the articles as they appeared in the Business World had it not been for the fact that the paper was materially changed for editorial purposes without his knowledge or consent, and some of the parts were omitted which should have appeared. To have reprinted the paper as it appeared in the Business World would not have done justice to the thesis nor have been a creditable piece of work for a Doctorial dissertation.

In the meantime the writer had started a book on the general topic of the Principles of Industrial Management, and had used his thesis notes as a basis for the third part of the book. The publishers of the book did not feel free to let the rewritten thesis appear before the book, and as it was impossible to reprint the original thesis, the authorities of the University of Pennsylvania very generously consented to accept the third part of the book in order to fulfill the technical university requirements. This reprint contains all the original matter in the first thesis, but it is presented in a little better form.

CHAPTER XIII

In Parts I and II the questions which the business executive must consider have been discussed. The creation of an ideal equipment solves about one half of the problem of industrial management. The plant must yet be put under a satisfactory organization before it can be well managed. The works manager must so combine the equipment which has been given him with labor and material that the product of the plant will he the cheapest and best that can be manufactured. The sales department must put the goods on the market efficiently.

The works manager's field in the concern is limited to the iDroduction department of business. His work begins with the receipt of the order and ends with its shipment. He has nothing to do with the soliciting of orders, he is not concerned with the finances of the firm nor with its legal difficulties. His work begins and ends with production. To perform his duties ideally :

1. He must get the work performed rapidly.

2. He must get the work performed accurately.

3. He must get the maximum result from the machinery.

4. He must get the maximum product from the raw material.

5. He must see that improvements in methods are introduced.

In order to get this work performed, there have been evolved three kinds of industrial organization — the military, functional, and departmental types.

The Military System of Organization, — This is the oldest and was almost the only one until very recent years. According to the military scheme, all power and authority for directing the work emanate from one man, who is held responsible for everything that is done in any part of the division under his control. With his plan the leader does not give general directions and then look for results. He keeps control of all details that arise within his sphere of command. The armies of former ages were run according to this plan. The general-in-chief gave directions concerning the health of the men, the way they should march ; he saw to the provisioning of the troops, and in fact Caesar, Napoleon, Frederick, and many other great military leaders, directed the affairs of the state as well. Curiously enough the modern army is no longer run according to the old style military system. The health of the troops is under the care of a distinct body of men, the provisioning and supplying of the troops is attended to by another group of officials. The commander-in-chief now decides upon the general plan of the campaign. He plans where and how battles shall be fought, but modern warfare no longer makes it possible for him to lead his men as did the youthful Alexander, the great Napoleon, or as did Scott, Lee, or Grant in American history. The army now has a staff organization which corresponds very closely to the departmental system used in the progressive firms of to-day.

With the military system of industrial organization every officer in each division or subdivision is held responsible for all that happens within his province. No matter what mistakes are made, he is the one who must stand the consequences. If a foreman has charge of a shop and that shop runs behind in orders, is extravagant in the consumption of supplies or power, or is deficient in the quality of work turned out, the foreman in charge is responsible. He is given a division presumably sufficiently small to make it possible for a reasonably good man to look after details, and ever}i:liing is considered distinctly within the scope of his duties. He is expected to keep his men always supplied with work. He must see that the machines are in working order. He must be able to select good men and keep them. If any question arises concerning how things should be done, he should be able to give explicit directions. He must detect work that is not properly done, know on whom to saddle the blame, and must also remedy the faults. In a word, he must be a thorough, all-round man to fill his place properly.

A trained man of ordinary ability can efficiently direct from fifty to one hundred and fifty people in simple, ordinary tasks which require little mechanical ability. It is only the exceptional man of considerable experience and familiarity with the work who can profitably direct more than one hundred and fifty or two hundred workmen. In continuous industries, of both the synthetical and analytical types, a large nimiber of processes are simply and easily directed. The work is almost entirely routine. The machinery is nearly if not quite automatic. There are no great calls upon the intelligence of the foreman, because there is very little to be done outside of seeing that the workers are at their posts and are turning out an adequate amount of material. In such industries, the military organization is ideal, because the task should be quite within the limits of the foreman's ability, and the responsibility can be constantly fixed upon him. If he fails to prove equal to his position, there is no great difficulty in obtaining another man. Generally speaking, the executives of these types of industries do not find their labor management problems difficult of solution in the production departments. Their energies can be directed toward the distributive department, and to finding a corps of workers who will develop the mechanical efficiency of the machinery, look to the economies of the processes and power-saving possibilities and to other similar questions,

In industries which depend to a greater extent upon the ingenuity and efforts of the laborer who cannot be so greatly aided by machinery, the military organization shows its weakness.

The machine shops in the assembling industries were the first to feel the limitations of the military system. For many years, no one noticed its deficiencies, because the shops were small and one man could attend to all the details and give a fair degree of satisfaction. When, however, the departments grew to more than two hundred workmen, the scheme began to break down. No one could look after all the details of so large a shop. It was useless to discharge the overseers, because no one could be found equal to the task. It is a dictum in management that if punishment by discharge does not eliminate failures and mistakes in an organization the scheme in itself is vitally wrong.

Works managers gradually came to appreciate that the defects were due to the system, so they sought to eliminate the weaknesses of too highly concentrated authority by dividing the leadership among several men, each being equally responsible to the superintendent. This solved the problem of giving the foreman a reasonable number of people to look after, but it increased the unproductive labor expenses and tended to make a conflict in authority and interests. For example, the foreman of the machines in order to make a good showing would be apt at times to have his men rush the work through in a hasty manner, expecting the erecting gang or bench hands to make good his deficiencies. The bench foreman would also slight his work. If heavy castings were to be moved by the cranes, two foremen, equal in authority, would put the riggers and crane men in an exceedingly unpleasant situation because both would insist upon immediate attention. There was but one outcome. The riggers served whomsoever they pleased. The writer is familiar with a shop where the riggers were bribed by an ambitious gang boss to attend to his requests. He needed the services of the crane for a considerable length of time. However, there were intervening periods of a half hour or so in which the crane could be used to fill machines and move other castings. Instead of using this time and making the favored man wait an occasional quarter or half hour, the riggers stood by the job, holding up the machines and erectors the better part of the day. Of course this is an exceptional and most glaring example of the weakness of this scheme, but it is nevertheless a weakness which grows out of too extended a spreading of the military system.

Briefly simimarized, the advantages of the military system of management are :

1. It unifies the work, putting it all in the hands of one individual.

2. It fixes the responsibility for the performance of tasks in a definite manner upon certain individuals.

Its disadvantages are:

1. When a plant becomes too large the foremen are held responsible for too many things, and cannot justly be held accountable for blunders or for smallness of productivity in machines and men.

2. The foremen have so much to do that they cannot see to the introduction of improvements as rapidly as is desirable.

The military system of works organization in a large concern leads to chaos in management, because it fails to prevent bad work and to stop the nursing of jobs. It has no means of rewarding the efiicient man or of punishing the poor worker or loafer. Managers of plants who worked with the military system in their younger days were puzzled as to why the later generation developed so few good foremen and wby it brought forth so many poor workmen. They did not recognize the fact that it was due not to a degeneration in the younger members of the community but to an inherent fault in the system. Thoughtful students felt the need of something, but hardly knew what. Some plants tried varying schemes of running their work. Several concerns hit upon the plan of piece wage payment and careful inspection of material by independent inspectors who were held responsible. This scheme has worked with a reasonable degree of success, but there are so many ways of fooling the inspector and of getting bad work passed, and there are so many possible evasions of the piece wage scheme that it was soon realized that another change was necessary before this method would prove efficient. The piece wage payment and inspection scheme did lead to something better.

Piece workers, on account of the fact that they are working for themselves, are insistent upon allowances being made for all kinds of contingencies. The manufacturer finds it more profitable to lighten their duties, and to limit as little as possible the movement of the workers. He soon begins to study how the work can be divided and men assigned to certain parts. From this development arose the functional system of organization.

• The Functional System. — The greatest exponent in America of the functional system of organization is Mr. Frederic W. Taylor, a past president of the American Society of Mechanical Engineers. Mr. Taylor has held a great number of responsible positions in various sections of the country, and has made an enviable reputation in the engineering world. His paper entitled ' ' Shop Management, ' ' delivered before the Society of Mechanical Engineers, is a memorable contribution. In that paper he discussed the management of a shop under the functional system of organization.

"Functional organization consists in so dividing the work of management that each man from the assistant superintendent down shall have as few functions as possible to perform.

1 Cf . Transactions American Society of Mechanical Engineers^ Vol. XXIV, Paper No. 1003, p. 1391,

The scheme is based upon the theory of the division of labor as applied to management. A workman in a machine shop according to this plan is not under one but several foremen. Mr. Taylor advocates four shop bosses : gang boss, speed boss, inspector, and repair boss. The gang boss has charge of preparing the work up to the time that the piece is set in the machine. He must show his men how to set the work on the machine in the quickest possible time and in the best possible way. The speed boss has the function of providing the proper tools for the workman on the machine. He-XQUst see that the cuts are started at the right place and that the machine is speeded up to its proper limit. The inspector is responsible for the quality of the work, and both workmen and speed bosses must finish the work to suit him. The repair boss sees that each machine is kept in working condition, is clean, free from rust and scratches, and is properly oiled.

In addition to these four shop overseers the workmen come into contact with the representatives of the planning department, whose function is to relieve the shop foremen of all thought of how the work should be arranged and distributed to the machines. Four representatives of the planningroom also come in contact with the workmen, the order of work or route clerk, instruction card man, time and cost clerk, and the shop disciplinarian. The route clerk writes a daily list, instructing the workmen and all shop bosses as to the exact order in which the work is to be done by each class of machines or men. The instruction card man states in writing the general and detailed drawing to refer to, the piece number and cost order number to charge the work to, the special jigs to use, the depth of cut to be made, the number of cuts to make, and the time in which the job should be finished. He also sets the piece rate. The time and cost clerk sends to the men through the instruction card all the information they need for recording their time and cost of work, and he secures the proper returns from the men.

"In case of insubordination or impudence, repeated failure to do their duty, lateness or unexcused absence, the shop disciplinarian takes the workman or bosses in hand and applies the proper remedy, and sees that a complete record of each man's virtues and defects is kept. This man should also have much to do with readjusting the wag-es of the workmen. At the very least, he should invariably be consulted before any change is made. One of his important functions should be that of peacemaker," ^

To quote Mr. Taylor again:

"The greatest good resulting from this change is that it becomes possible in a comparatively short time to train bosses who can really and fully perform the functions demanded of them, while under the old system it took years to train men who were after all able to thoroughly perform only a portion of their duties. . . . Another great advantage resulting from divided foremanship is that it becomes entirely practicable to apply the four leading principles of management to the bosses as well as to the workmen." ^

The four leading principles of management to which Mr. Taylor refers in this last statement are :

1. A large daily task should be given to the men.

2. The men should be given standard conditions, making it possible to perform the task.

8. They should be given a high pay for success.

4. They should lose in case they fail to reach the requirements of the daily task. ^

Viewing the subject from a broader point of view, there are other advantages to be gained from the functional organization.

1. The work is divided so that one man need attend to only one thing. It enables complete specialization of labor.

2. It definitely fixes the responsibility for the performance of each function upon one man.

1 Transactions American Society of Mechanical Engineers^ Vol. XXIV, pp. 1393, 1394.

3. It allows the workman opportunity to think out improvements by enabling him to make an intensive study of his work.

Notwithstanding all of these advantages the functional system of organization has not proven popular or successful in a nimiber of plants where it has been tried. It causes men to lose initiative. It has a tendency to shift and divide the responsibility in spite of the contrary intention. This has been fomid to be true in several places where the plan has been tried. The difficulties that have been encountered in cariying the scheme through are :

1. It requires a great amount of clerical work to fill out instruction cards and write out all orders and minute instructions necessary for the complete enforcement of the scheme.

2. It is exceedingly hard at times to define clearly to whom certain functions belong and on whom the responsibility rests when things go wrong. For instance, no less than eight bosses outside of the shop disciplinarian come into direct contact with the w^orkmen. Four of these men make out instructions, and four others say how they should be carried out. It not infrequently happens that the man who makes out the instructions is somewhat vague in his directions, in the hope that the speed boss or gang boss will make up deficiencies. If a mistake occurs under these conditions, it becomes a difficult matter to determine who is to blame, because the instructions man will plead that they were not interpreted correctly and the other bosses will assert that such interpretations could be made. Sometimes the instruction card man will give instructions and the gang bosses may see a better method. If they do, the chances are that they will want to put their scheme into operation. Hence there will be a conflict of authority. If a boss adheres to the system and doesn't follow the best method possible under the circumstances, the firm is paying for a system of management which is failing in its purpose of getting the goods out in the cheapest possible manner.

3. It is cumbersome and expensive to operate. In every shop the jobs must be assigned to men at all kinds of odd times during the day. If a workman desires to start on his job he must come into contact with at least three of those bosses before he can do anything. There are usually several men desiring jobs at one time. Under a system where the workman is supposed to know how to set up a job and interpret instructions, he merely needs to find out what he is supposed to do, and do it, calling on the boss only when there are complications. With this functional scheme he is not supposed to act on his own initiative. As a matter of fact, so many bosses really hinder the work. They irritate the men and are expensive to keep up, because in a large shop they must have a number of sets of bosses to carry out the scheme as laid down.

The Departmental System, — In advocating the functional system of works organization, Mr. Taylor made a valuable contribution in that he brought out the idea of dividing the work in such a way that it could be looked after by functions rather than by complete units. No plan of organization can be successful unless it is workable. The military type fails to be workable in large organizations, because it is impossible to get men who are capable of filling the leading positions. With the functional plan it is possible to train a sufficient number of men to carry out the functional duties, but it is only under the most exceptional conditions that these various functions can be clearly defined and the scheme worked without conflict and irritation. If there is a remarkable man at the head who can smooth all points and be everywhere present whenever a difficulty arises with conflicting ideas and authorities, the system has a chance of working; but in this every-day world a highly sensitive or- "ganization of that character, no matter how perfect on paper, is bound to be disrupted by the bumps and collisions of daily strife. A finely adjusted, compensated astronomical chronometer will keep perfect time, provided it is wound up at certain stated intervals, and is kept from jars and vibrations and extremes of temperature, but for ordinary day use to carry around in the pocket, a dollar watch may prove more satisfactor}-. Works managers need the dollar-watch combination, and the}^ have found it in combining the good features of both the military and functional systems of organization. Hundreds of plants at the present time use the departmental system without being fully aware of what they are doing. The departmental system does the following things :

It divides the plant up into a number of clearly defined departments, and puts each under the control of a gang boss, who is given general directions to work to and is held responsible for results and not for servile attention to detailed instructions. Thus in a machine shop there is a man to look after the large machine tools, such as lathes, planers, and milling machines. Another foreman will be appointed to look after the erection of the large parts of the engine, another will be given a valve-setting gang, and still another may be given charge of the tool-room, and another will look after the stores. The riggers or crane men will be under a sub- foreman, who will have to kee]3 all the machines supplied with work. In addition to these, the repair department will ]je in the hands of one man, a tool-making and grinding department in the hands of another, and the stores department in the hands of another. All of these men will be under a head foreman or superintendent. Each man is held responsible for the outx^ut of his machines. When a set of drawings of an order comes into the shop, the head foreman will examine the drawings and call in the various gang bosses. He will tell them the things they are to look after. Each man clearly understands, from either written or oral instructions, his particular province. It is then his duty to keep his machines going and his men employed on their particular tasks. The work, when performed and inspected, is passed on to the other departmental boss. If the succeeding gang boss finds any defects in the work, he must at once report the mistakes, or he will be held responsible for all defects uncovered by his immediate successor.

The departmental system divides the work up into small departments, each under the absolute control of a man, and the departments are so related to each other that no individual workman will have to obey two bosses. The riggers, for instance, in the military system served any man upon request. In the functional system, the riggers obey a rigging boss who is at the beck and call of a half dozen functional foremen. In the departmental system, the rigging boss learns from the head foreman the conditions of the large castings, and about when they are to be moved, and adjusts his gangs in such a way that there will be a minimum of waiting throughout the entire shop. If the head foreman finds any men idle due to the fact that they cannot work because castings are not moved, he can at once ascertain whether the boss rigger has arranged the movements correctly, or whether there is insufficient crane service. Whatever the reason, there is one man from whom an explanation can be demanded and readjustments promptly made. If the machines are not turning out sufficient work or are giving poor service, the departmental boss cannot blame the speed boss or an instruction-card boss. He has the machines to look after. If his men are not efficient, he is to blame, because he should report and discharge the delinquents. If the machines are in bad condition, he is at fault, because it is his duty to report defects and breaks at once, and insist that they be repaired. A machine boss should never let a machine get into general bad repair. The erecting boss is to blame if the erecting is progressing slowly or is poorly done. The great advanrage of this departmental system is tliat the responsibility can be fixed; it is possible to trainmen to fill the jobs, and it is impossible to have any shifting of responsibility, because the men nuist show results in output, and not -proYe that they have given or followed instructions.

CHAPTER XIV

Befoee the employer can decide how he is going to run his labor force he must determine what kind of labor he is going to use, because his treatment of employees will be influenced to a very great extent by the labor personnel. The labor force may be men, women, or children. Adult male labor is for the greater majority of the important industries the most profitable kind of labor. There are, however, a great number of industries wherein women and children may be employed with profit, because they work for less wages and have their natural aptitudes for the work. The industries that can employ women and children are the textiles, shoe factories, and other concerns which produce either light materials or goods which require deftness in handling. We may compare male and female labor in the following way :

1. Comparison of Male and Female Labor. — Male labor is stronger and has greater physical endurance. Men alone are able to stand long-continued heavy work, such as is required in a shipyard, steel plant, or locomotive shop.

2. Men are more apt to be permanent employees. The home is woman's ultimate sphere. A woman's maximum working period in industrial occupation is usually limited to the time she leaves the grammar or high schools until she reaches the age of thirty. In that time, she may serve an apprenticeship to a trade, and become a capable, conscientious employee. She is, however,, apt at any time to marry and leave work. Marriage increases a man's value to the firm, because he now has new responsibilities to shoulder, and is more desirous of giving satisfaction to his employer.

8. In general, men have more initiative than women.

Man's initiative is not due to superior brains, but is the result of greater opportunity. In the city, night schools, Yoimg Men's Christian Associations, correspondence schools, and public schools offer inducements in the way of courses of study which men can pursue during their evening hours. These courses of study are designed primarily for men's needs in industry. A great number of the evening schools inform the employers of the progress their hands are making in the courses, and the employer is consequently apt to give such persons greater opportunities. Women in the same lines of occupation do not have the same encouragement, they are less able physically to work all day in the mill, and then to carry on technical studies after working hours. There is a lack of incentive to attend these courses, because they do not in most cases regard their work as a life's career. Moreover, thousands of women and girls, after they leave their factory at the close of the day, have household duties to perform for parents or for the male members of the household, who are also engaged, perhaps in the same mill or factory. Even if they do not engage in those duties, a girl invariably has a great deal more to do than a man ; she usually makes much ' »f her clothing, often trims her hats, repairs her garments, and looks after a thousand and one things which a man turns over to some one else and pays for having done. All these things combine to make man possess more initiative. He has more opportunity to learn how to do harder things, has a Ijetter physique, a greater incentive to make an effort to learn, and less of other things to do.

4. Woman's clothing is a hindrance to her, and she can be employed only in places where the machinery is of such a nature that her clothing will make employment safe. In places where she could otherwise be more serviceable than a man, firms take the trouble to design the work-room and machinery in such a manner that she can be employed with safety.

5. Women's hours of labor are more closely restricted by law. Our labor laws justly seek to throw more protection around women and children than around men. The manager of a plant, however, cannot afford to overlook the fact that these are disadvantages when he considers women as prospective employees, although it is only a question of time when the law will place greater restrictions upon male labor. Legislation and common justice require conveniences for women in wash-rooms, and a supply of chairs for resting during the working period. Their hours of daily and weekly labor are shortened, and they may not be permitted to work overtime except in rare and carefully guarded instances.