Maximum production in machine-shop and foundry

Preface

The material on which the present book is based was most of it contained in three series of articles s published originally in The Engineering Magazine at various times from October, 1908, to May, 1911. It was all written in the very atmosphere of the k busy manufacturing plant and under the influence of daily contact with the problems and methods discussed. Everything in it represents some phase or period of the author's personal experience. As here gathered in volume form, however, the material is all resurveyed, rearranged, largely recast, from the viewpoint of a larger experience and a maturer study of the mechanical industries and more advanced principles ^ and methods of management. The result is a logical, well-proportioned and well-balanced development of the subject from beginning to end, by which the relations of all its elements will be much more clearly understood. The discussion will be followed again with new and increased interest and reward, even by those who read the articles as they appeared in sequence in The Engineering Magazine.

The machine-shop and foundry in Mr. KnoeppelV book are considered as twin factors in production, so closely related throughout a vast range of metal manufacturing that their problems can best be studied together. Therefore after laying down the principles of organization and management com- . mon to efficient operation and maximum success in both kinds of establishments, the author follows special applications of the same ideas first in the shop

11 PREFACE

and then in the -foundry. To this latter he gives the larger and closer attention, because it has heretofore been less thoroughly studied by systematic methods, and it yet offers immense possibilities of profitable improvement since it lies at the foundation of so many mechanical industries.

Mr. Knoeppel has the intimate knowledge of shop and foundry conditions and workers that is gained only by being brought up "on the floor/' He has the grasp of principles and methods that characterizes the unusually successful manager. He has the wide viewpoint gained by association (as specialist in betterment work) with many well-known plants, having been formerly associated with Harrington Emerson and later a member of the organization of Suffern & Son. and to this wealth of equipment and experience he brings unusual power of analysis and clear interpretation, completed by close study and practice under one of the greatest of efficiency engineers.

The Editor.

Contents

PAGE

Chapter I. The Two Great Forces in Manufacturing

Cost Accounting Should Present the Right Kind of Information in the Right Way — Inefficient Use of Cost Data — Cost Data Forceful in Two Ways — Analysis and Construction — Cost Data of What has been Done Used to Show What can be Done — Accountancy as a Spur to Efficiency — Organization for Efficient Supervision—Outlines of an Effective Plan 1

Chapter V. Systematic Processing, Assembly, and Erection

Dangers of Ignorance of Actual Costs — Influences Affecting the Margin of Profit — The Factors of Production-Cost — Units of Production — Elements of Handling Work — Material, Cost, and Operation Cards — Principles and Rules of Storeskeeping — Forms for Tools and Jigs and Stock in Hand 76

Chapter VI. Efficiency in the Use of Materials and Time

Common Wastes and Their Amount — The Elimination of Wastes — Organizing the Shop Departments — Systematic Record of Orders — An Efficient Routine of Production — Requisitions for Material — Authority for Processing and Assembly — Move Orders — How the Forms Are Used — Symbols for Work in Process — Time Records — Planning and Dispatching 95

Chapter VII. Better Deliveries — More Satisfied Customers

Commercial Gain from Efficient Production — Prompt Delivery Depends on Co-ordination between Chief Order Clerk, Works Manager, Chief Stores Clerk, Shipping Clerk — A System for Securing this Co-ordination — Routine, Forms, and Records Employed — The Effect on Efficiency of Production 128

Chapter VIII. Scientific Management in the Foundry

A Short Foundry Story Bringing Out the Ordinary Causes of Inefficiency, with a Time Analysis Summarizing the Results 143

Chapter IX. Foundry Organization and Management

Basic Principles — Fundamental Questions Answered — The Necessary Expense — What Can Be Accomplished — Losses Due to Faulty Organization — General Oranization Charts — Charts for Organization of Work under the Foundry Foreman 180

CONTENTS

Chapter X. Foundry Production and Its Details The Vital Purpose of Cost Accounting Is to Increase Production and Reduce Costs — Making the Working Conditions of a Foundry an Open Book — Commercial Production — Working Conditions — Classification and Symbolizing of Work — Detecting Delays — Time Analyses — Measuring Productivity — Averaging Output — Units of Production 196

Chapter XL Efficient Despatching in the Foundry.

The Magnitude of the Loss by Delays — A Simple Test of the Value of Despatching — How to Get the Most Work out of the Foundry — Classification of Articles Used — Classification of Conditions Affecting Work — Personnel Concerned — An Efficient Order Arrangement — Making and Carrying out Plans by Schedule — Working Rules Concisely Stated 219

Chapter XII. Handling Shop Details

Qualities of the Efficient Manager — Foundry Work Analyzed into Its Primary Steps — The Things That Must Be Done Concisely Stated in Order — Planning out the Work— Work Order, Tally Card and Report — The System Clearly Described — What It Accomplishes 245

Chapter XIII. Importance of Correct Burden Apportionment

Essential To Know Where, Why, and How Much We Have Made or Lost — Three Elements in the Cost of Good Castings — Three Typical Cases of Production Examined — Charts of Burden Distribution 268

Chapter XIV. Elements of Foundry Production Costs

Profits not Proportionate to Prices — Getting Results— Material Accounts — Operating Accounts — What Accounts Should Be Kept and What Goes into Each , 294

VI CONTENTS

Chapter XV. Apportionment of Foundry Costs to Production

The Subdivision of Shop and Commercial Costs — Elements Entering into Direct Cost — Elements Entering into Indirect Cost — Elements Entering into Commercial Cost — The Items Discussed — Chart of Apportionment to Product 318

Chapter XVI. Cost Apportionment in Various Classes of Foundries

Classification of the Foundry Industry — Several Ways of Treating Production Costs — Rules for Apportioning Costs in Various Cases — The Methods Codified and Explained 341

MAXIMUM PRODUCTION IN MA- CHINE SHOP AND FOUNDRY

Chapter I THE TWO GEEAT FORCES IN MANUFAC- TURING

TT is extremely doubtful if the accountant A of a hundred years ago would recognize present-day accounting practice. He certainly would be in no position to appreciate immediately the progress that has been made since his day, owing to the fact that he would be lost in the maze of bound books, looseleaf devices, card systems, mechanical aids, controlling accounts, short cuts, special rulings, billing machines, and a hundred and one other things which go to make our Twentieth Century accounting practice. He would admit, after he became familiar with the methods used, that wonderful progress had been made since his time; but he would also be impressed with the fact that many accounting schemes, considered excellent, seriously approach the " worth next to nothing' ' point.

There are a number of reasons for this. In many cases, the accounting is a mere jumble of figures, which have little or no value as a guide to the executive. In others, vital information is compiled only once a year, or if any attempt is made to furnish monthly statements, they are furnished so long after the close of a month that the information contained in them represents so much waste effort— they are furnished too late to enable the executive to point out the reasons for certain inefficiencies. Then again, accounting schemes may furnish information without regard to the requirements of the business in question; or they may be changed materially from time to time, elaborated upon, "boiled down," new features added, others cut out— each new bookkeeper introducing a few " stunts " of his own, until he gets things to run his own way. Between all this and accounting schemes sold in " chunks,' ' and further the willingness of each auditor or accountant that comes along to point out where the accounting fails to furnish the required data —where it violates the rules of standard accounting practice— the scheme in a short time becomes hopelessly confused, rendering intelligent comparison absolutely out of the question. Is it any wonder that a manufacturer, after going through such an experience, is far from being in a receptive attitude when l ' accounting system ' ' is mentioned to him?

To present the right kind of information in the wrong manner is confusing and unsatisfactory. To present the wrong kind of information in the right manner is misleading and dangerous. It would be far better for many simply to keep track of the cash on hand and what is due and owing, than to maintain an elaborate accounting arrangement which does not result in an accounting that can be used in bettering the business. A scratch pad, a pencil, and a good guess would be just as efficient. The right kind of information, rightly presented, is therefore the problem.

As a declaration of principles, let us decide at the outset that an accounting scheme to be efficient must first of all consider the needs of the business in question; that it must be comprehensive, proceeding on the broad assumption that information should be given an opportunity of working for the executive— not a burial which may have no resurrection; that it must be designed to anticipate the needs of the executive in every possible way; that it must be planned not only to make possible a rapid comparison and analysis of the various elements, but to serve as a statistical bureau as well ; that the accounting must be simple to admit of its being easily understood and quickly operated, in order that there may be no delay in getting the pertinent facts to the executive promptly; that it must be arranged so that unnecessary work and entries will be done away with, and in addition should be designed to furnish information during the month— a point of importance to every manager. At any rate, an accounting scheme which measures up to the above standard is entitled to consideration, for one of the possibilities in the right kind of accounting methods is better and more complete information in quicker time and at less cost than is usually found.

There can be no question, however, if one stops to review the past, that there has been and is now, on the part of a great many, altogether too ranch dependence placed in mere cost records and fignres ; for while they are necessary and of the ntmost importance, they must not be considered as being the only means to a desired end. A great many are satisfied when their cost fignres inform them regarding the disposition of their money, and in addition may be nsed as a check on their selling prices. Others go a step further and nse their information as a basis for comparison between operation and operation, or of completed nnit with completed nnit, in order to detect fluctuations in an endeavor to keep costs down. Others use their figures for carefully checking up the departments, foremen, machines, operations, men, etc., in order to reach some conclusion, even if not altogether accurate, as to the efficiency of their plant. Still others have definite estimates or standards against which the actual performances are checked. How many are there, however, who use their facts and figures for all the purposes mentioned? If all were using all of them, they would be bringing into play what I would term an " analytical force' 7 — a process enabling them to apply remedies when their information developed the fact that certain places needed prompt attention.

An equally important force can be employed with as great if not greater results— one which can be fittingly termed a "constructive force," a building up process— which acting in harmony with the force just mentioned, finds ways and means to anticipate as far as is possible the leaks and faulty conditions. One force is as vital and necessary as the other, although it is true, and unfortunately so, that very few get all the good possible out of both of them. Whether employed separately or together, they are made up of the following steps: —

1.— Securing data. 2.— Eecording the data secured. 3.— Compiling the data in convenient shape for reference and study.

4.— Seasoning applied to the compilations. 5.— Conclusions based on the reasoning. 6.— Action in some definite direction. 7.— Results.

The principal difference is that the analytical force is concerned with figures and statistics showing what has been accomplished, as a guide to future action and resuits, while the constructive force is concerned with facts and information as to equipment, conditions, operations, men, etc., showing what should be accomplished in order to secure results. One force will of course do a great deal of good without the other, perhaps because of the fact that there remains, in modern manufacturing practice, a great deal to be done, but it should be seen that the two forces mentioned, working harmoniously along widely different lines with the same goal in view, will accomplish more in the way of results than either of the forces working independently.

Mention was just made of the fact that a great deal remains to be done. How true this is no one knows better than those whose profession it is to assist in getting all that is possible out of men, equipment, and materials, and who are in a position to see, through close observation, where the faults lie and what will eliminate them. There is a task ahead of this great nation — a task of such magnitude as to warrant wise executives giving it earnest and careful consideration, as well as to attract the attention of those who are in a position through training and natural ability to assist in solving its many problems — that of increasing the efficiency of all human endeavor.

We have graft and investigations of one kind or another nntil it would seem that there remained no such thing as civic pride; we hear on all sides constant reference to "high cost of living" with innumerable reasons therefor; we hear that railroads must raise their rates in order to protect themselves, to which the shipper strenuously objects as any such increase affects cost of production which would mean still higher prices; we see sufficient evidence of a far from diminishing dissatisfaction among the laboring classes resulting in constant strife between capital and labor. These and many other conditions which could be mentioned furnish sufficient evidence that something is decidedly wrong— that we are face to face with conditions which cannot exist continuously without disastrous results.

This condition of affairs has been most excellently described by H. L. Gantt:*

With increase of prices comes higher cost of living ; with higher cost of living comes demand for higher wages; with higher wages comes higher cost of pro-

*See "Work, Wages and Profits," by H. L. Gantt, The Engineering Magazine, New York.

duction. Then to maintain the same profit under the new conditions, we must again increase our selling prices and the cycle repeats itself.

This vicious cycle is illustrated graphically by the chart below.

Increase in Prices

Higher Producing (

Costa V j f \ Higher Cost of V J Living

Demand for Increased Wages

FIG. 1, THE VICIOUS CYCLE OF INCREASING PRICES AND COSTS.

What is the trouble? To me, two great faults seem to be responsible: first, extravagance and, second, impatience. The widespreading movement for the conservation of our natural resources is sufficient evidence that as a people we are extravagant, and no one, after due consideration, will deny the fact that in our lmrry to get things done — to see results— to turn time and material into cash — impatience is largely responsible, both faults being the result of our present system of organization and management, as will be evident to anyone who will take the time to read carefully Harrington Emerson's "The Twelve Principles of Efficiency."*

As a people we have come to the realization of the importance of conserving our natural resources, and as a result we now have this matter as one of our lively issues, forcing the attention of our able men. What we need, however, and at once, is a movement for the conservation of our resources other than water power, minerals, timber, etc., which would mean decided benefits. This would involve:

1.— Increased production. 2.— Lower production costs. 3.— Decrease in prices. 4.— Lower cost of living.

as an offset to the condition pictured in the chart.

We need most of all to hear more about inefficiency and less about efficiency. We like the latter word so well that we use it without much thought as to its real mean-

♦Published by The Engineering Magazine, New York.

ing. If we talk about the inefficiencies more, our efforts towards eliminating them will be increased, and efficiency, as a natural result, takes care of itself. Inefficiency is an unhealthy state of affairs— a disease in other words — just as susceptible to diagnosis and treatment as any unhealthy condition. If diagnosis and treatment are withheld, however, decay and death is the result — a law which is no different in its relation to the industrial body than to the physical body.

Efficiency in the best acceptance of the term means more than simply doing things well — I might say, thinking or guessing that they have been done well; it is the positive relation or ratio between a possible accomplishment — an ideal, a standard — and the actual attainment. We have had altogether too much imagined efficiency and not enough of the cold, mathematical, relative determination. The great trouble has been that standards have not been properly set, or if set no consistent effort is made to assist those responsible for results in attaining them. Consequently we have accomplishments that are not what they should be, which if reduced to. a relative basis would show that inefficiencies are still "on the job." For this the management of the enterprise is largely to blame. Instead of beginning at the bottom and setting standards for each and every part of the work— whether it be operation or condition— entering into making a business successful, they begin at the top and fix in their own minds a final standard as regards what they want accomplished, after which they promptly proceed to unload all responsibility onto the shoulders of others— everyone all along the line, down to the workers themselves, having a hazy idea as regards what is really expected of them; and as "anybody's task is nobody's work" it stands to reason that the final attainment cannot measure up to the expectation. This however does not seem to relieve those who have failed to accomplish what was wanted from their share in the session "behind closed doors."

In recent years, a great deal of attention has been devoted to "waste products" — a number of establishments having their own corps of experts, who do nothing but analyze and study the wastes previously considered as possessing little or no value, with the result that the markets today are filled with "by-products" of every kind and description producing a revenue which pays excellent dividends on the cost of their marketing.

In all industrial pursuits, there are many wastes which can be made to yield satisfactory returns. Careful investigation in the majority of institutions will soon disclose the fact that the chief wastes are due to time losses, wasted materials, too much equipment, lack of intelligent planning, poor and insufficient facilities, equipment improperly maintained, etc. A costly bridge is erected, not because it was impossible to cross before, but because crossing is facilitated and made easier with the bridge than without it, and as a result all share in the benefits. If, then, we place a force at work which will turn the wastes into products, we erect a structure which enables the consumer as well as the maker of the products to share in the benefits that always accrue through turning out more in less time.

A successful organization is one which considers the fact that the "constructive force" is a building force, and as it takes time to erect any structure, results must not be expected in a minute; that it should be composed of men who can give their time and attention to the careful study of the wastes, or be assisted by men who are expert in analyzing and bringing np for attention the weaknesses of the industrial body; that the hearty cooperation of the ones who own and operate the business is vital and necessary, in carrying to a successful issue the proposed ways to greater results. It should first see that the working conditions are what they should be; that the equipment is placed in the best possible shape for maximum production ; that the men are furnished with the best facilities in order to enable them to take every advantage of the improved conditions and equipment; that the work, in its various details, is planned ahead and scheduled s.o that delays and annoyances can be eliminated; that careful observation is made as to time and materials consumed in order that suitable standards may be arrived at, against which accomplishment may be measured; that advice and instructions are given in order to assist the various persons interested in attaining the standards set; that suitable records are maintained in order that the management may know exactly what is being accomplished; that those who measure up to the expectations are rewarded in proportion as they assist in converting " waste products" into "by-products. ' '

As will be easily seen, the above is not the usual procedure in the majority of enterprises. The usual course is to engage a manager; to allow him a limited time in which to get acquainted with the conditions and the product, and after that to tell him to go ahead and get results. His time is devoted to securing business; pushing the work through the shops— many times regardless of the cost; running a "diplomacy bureau" for the benefit of the customers; worrying about finances and getting customers to pay their bills; listening to complaints from his men; settling disputes and quarrels, and a thousand and one other things that an executive is. called upon to do in the course of seven or eight hours daily. While so busily engaged, in spite of the fact that he may have facts and figures in abundance regarding what has been and is being done (which he uses as best he can when he has a little time), it is easy to appreciate how it is possible, in the absence of a well-organized attempt to convert wastes into cash, for time to be lost, money thrown away, materials scrapped, etc., all because industrial endeavor seems to be conducted on the assumption that the more detail a man can look after in the course of a day, the greater he is as an executive and the more he should be able to accomplish. As a matter of fact there is a limit to the amount of detail a man can handle, but practically no limit to the supervision that he can exercise.

Supply the executive with proper records and a staff of men who can assist him in locating and eliminating wastes and inefficiencies; make him a supervising agent, not a drudge; furnish him two good strong arms with which to work— one the "analytical force" with which he can study the past and present as a guide to the future— the other the "constructive force" with which he can improve and build new structures, and the "By-Products Department" will pay dividends far in excess of the cost involved. Unless this is generally conceded to be the proper scheme of management— and not only conceded but generally adopted — we are going to have with us, as a destructive factor, the condition of affairs so clearly pictured in the chart.

Chapter II IMPORTANCE OF EFFICIENT ORGANIZA- TION

TF consideration is given to the analogy ■*- between the business machine (the manufacturing enterprise) and the fighting machine (the company of soldiers) the importance of "Organization" is at once apparent. A company of soldiers will accomplish results in the surest and swiftest way simply because they are well organized and properly supervised. From the captain to the privates, through the lieutenants, the sergeants, and the corporals, the orders are given and executed methodically without confusion, delay, and misinterpretation; and in the manufacturing enterprise, the orders can be given and executed methodically without confusion, delay and misinterpretation— if, in the growth of the business, in its evolution from the old order of things to the new, proper consideration has been given to the importance of a well trained and efficient organization. I do not maintain that it is possible for the manufacturing enterprise to attain that high degree of efficiency enjoyed by the army company, but I do most emphatically maintain that it would be possible for more manufacturers to be more successful than they are if they would inject some sort of organization and supervision into their business, instead of conducting it in the hap-hazard, disjointed, hit or miss, aimat-the-ground-hope-to-hit-the-stars way of which so many are guilty. To this class the mere mention of the word " organization" elicits the cry "red tape," although if one of them would once consent to have some of this kind of tape wound around his business, the results would be so startling as to win him to the side of those who had attained success through a well systematized organization and from whom he could learn how to conduct his own business properly if he would but once get away from his habit of jumping over dollars in an endeavor to save pennies.

If space permitted, we might go into the details regarding the evolution of business in general, from the primitive stage of barter to its present immense propositions. In its early stages business was most simple.

If a man had something his neighbor needed and he needed something his neighbor had, a trade was effected ; or if a man had several things of like nature, he sold them to others for whatever suited his requirements. As the demand for various articles increased, however, it was found necessary to specialize in a small way, but in a way which enabled a man to devote his entire time and attention to the manufacture of one thing. During this stage of business development, it was an easy matter for the proprietor of the little establishment to give his attention to the various details; in fact, we can safely say that he carried his office " under his hat." As we approach the next stage, we find that conditions, becoming a trifle more complex, necessitated a radical departure, and that instead of one man looking after every detail, the work has been rearranged so that at least two men divide the responsibility. Tracing still further, we will find that as the volume of business expanded, the amount of detail work necessary to accomplish results assumed such proportions as to make it utterly impossible for a few men to manage a business properly. At this stage segregation was an absolute necessity, and today manufacturing enterprises, while still a unit, are divided into two distinct branches— the commercial and engineering— these branches being again divided into departments and sub-departments.

While business as it is now conducted is not as simple as it was in the barter days, it must not be inferred that this segregation of authority is synonymous with complexity, for its very purpose has been to simplify and this is what it has accomplished. It is only where this segregation has been the result of lack of thought and proper attention that we find a complex and unsatisfactory condition of affairs. In fact, there is all about us sufficient evidence that many commercial enterprises are being conducted along lines that, as far as evolutionary development is concerned, are several stages behind the times.

Let us suppose a case, which will apply in a greater or less degree to the majority. In the earlier development, we will say that the founder of the business was able, on account of its small size, to make what sketches he needed, solicit orders, see that they were filled, perhaps take a hand at the making if occasion required, see to the shipments, and attend to the collections and the keeping of his few accounts. He finds that business grows, and eventually places a man in charge of certain branches while he looks after others. The accounts eventually require more attention than he can give them so he engages a bookkeeper in order that he may be relieved of this work. He finds that the quantity of materials received and shipped amount to enough to warrant a receiving clerk as well as a shipping clerk, and to handle this material from its inception to shipment he conceives the idea of placing a man in charge as stock clerk. He then adds a purchasing agent, in order that he may be relieved of the detail and that the purchases may be made most economically; a man is placed in charge of the orders— foremen are placed in charge of certain men in the shops —the details connected with making plans, drawings, estimates, etc., are taken over by a practical man— his manager is given a person to look after the shops or engineering branch, while the commercial branch with its many details is placed in the hands of another. As the evolution continues, the selling function is assumed by one man — cost details are looked after by another— a chief inspector is added in order that all work may be shipped according to specifications— the engineer, who before had been a sort of jack of all trades, is placed in charge of certain work while an electrician is engaged to look after this particular work— and so this segregation continues with the development of the business.