Chapter C: E. Knoeppel (8)

To account properly for the receipts and issues of this stock so as always to have on hand what is wanted, and at the same time to avoid carrying an unnecessarily large stock of any of the articles in store, he uses a _Stock Ledger Card_ of the form shown in Fig. 22. This gives the name of the article listed, and its dimensions, weight, etc. At the right of this are entered the maximum and the minimum quantities to be kept in stock. Whenever the stock on hand is reduced to near the minimum quantity, the Purchasing Agent is requested to order enough more to bring the quantity up to the maximum.

In making requisitions upon the Purchasing Agent, the Storekeeper must take into consideration the length of time necessary to obtain the article wanted. Wire nails, wood screws, and such articles can usually be obtained in 24 hours, while brass tubing may take three weeks. Iron castings can be had in two days, while steel castings will frequently require six weeks.

When articles are _received in stores_, the date and quantity will be entered under the heading _Received_, and other quantities added to these as received. Articles issued will be charged under the heading _Issued_, giving the date and amount. The quantity on hand may be quickly ascertained by adding the quantities received and the quantities issued, and subtracting the sum of the issues from the sum of the receipts.

As most articles are purchased in considerable quantities and issued in small lots, there will be few entries of receipts and a large number of entries of issues; therefore the greater portion of the card is devoted to records of issues. The card is printed with the same form on both sides; and when the spaces on the first side are filled, the account is balanced, and the results carried to the opposite side.

These cards are kept in filing drawers, where they are located in alphabetical order by the names of the articles they represent.

A foreman, on receipt of a regularly numbered and authorized production order or sub─production order, is thereby authorized to make requisition for such stock and material as may be necessary to use in the execution of the order. This he will do by the use of the _Requisition_ shown in Fig. 23, entering the order number and date, and specifying the quantities and descriptions of the articles required. Ordinarily each requisition will contain but one article or class of articles. At the bottom of the requisition, the foreman will enter the name of his department and his own signature.

These requisition blanks are made up in pads (the form shown in Fig. 23), of white paper alternating with tinted paper on which is the _Invoice_ form shown in Fig. 24. This latter form has its ruling and other principal features identical with the form of the requisition, so that by the use of carbon paper the foreman makes a duplicate on the Invoice blank, of the order number and date, the articles required, the name of his department, and his own signature.

When the Storekeeper issues the articles, he first enters upon the requisition blank the date issued, and then passes it to his assistant, who notes the issue on the _Stock Ledger Card_, and then places it on file. The Storekeeper will enter on the invoice the rate and value of the articles issued, and the date of issue, and will sign it under the foreman's signature. He will send it, with the articles issued, to the foreman, who will in turn make it a part of his report of material used.

When the work on an order is completed, such serviceable stock and material as may remain will be returned to the Storekeeper, together with a _Returned Material Card_ of the form shown in Fig. 25. The Storekeeper will enter upon it the value of the material returned, credit it to the department from which it came, and sign the receipt in the lower left─hand corner. The card will then be returned to the foreman as his authority for deducting the amount from the material account in the order in question.

=Follow─Up Methods for Tracing Orders in the Shop.= The Sub─Production orders having been put into the departments, the first one will order the material for starting the work. For instance, the first step may be upon iron castings. Theoretically all stock and material come from the Store─Room. Therefore we might say that upon a strict construction of this general rule the castings should be furnished by the Foundry and sent to the Store─Room, from which they might be drawn upon requisitions the same as any other material. Practically this would be not only a troublesome but an expensive method, requiring a great deal of unnecessary handling and transportation. The problem is much more practically solved by considering the Foundry as one of the manufacturing departments receiving its raw material (namely, pig iron) through storeroom accounts, and thus "constructively" from the storeroom, while physically it is in the foundry yard. This answers the demands of a theoretical as well as a practical view of the case.

Therefore the first sub─production order will go to the iron foundry, which will make the castings and deliver them to such departments as are required to do the first work upon them, as directed upon the order. The sub─production order which this department has received, directs to what department they shall be sent when completed; and so on, until they have gone through the last department and are sent to the Finished Parts Store─Room.

This arrangement is all right as far as it goes. If every man attended strictly to his business and pushed work along as rapidly as possible, and every foreman sent his work along to the next department as soon as his department had completed its work, this plan _might_ work fairly well. Unfortunately, however, these conditions seldom or never exist; and there must be ways and means devised to keep the work moving and to be able to _trace_ and _locate_ the work upon any order at any time when information is desired upon it or its state of progress.

To accomplish this, there is a _Transfer Office_, located as conveniently as may be for all departments, and serving as a sort of "clearing house" for all departments in transacting inter─departmental business so far as it relates to the transfer of the work in progress. By this method, departments send all their work by way of the Transfer Office, where proper records are kept of all such transfers, so that at any moment the Transfer Clerk can locate any piece of work in progress in the plant.

The operation of this method is as follows: The sub─production orders are sent to the Transfer Clerk, who fills out two _Transfer Cards_, as shown in Fig. 26, one of which he sends with the order to the first department that is to do work on the order, and the other he retains. This card provides spaces for the various departments, which are designated by numbers. Following these are spaces for entering the dates of transfers, the entries being made with a rubber stamp. After these spaces are columns for the number of pieces of work received and the number of pieces delivered.

When the first department has finished its work, the number of pieces is entered in the column headed _Pieces Delivered_, and the work and the card sent to the Transfer Office. The duplicate transfer card that was retained by the Transfer Clerk was filed in a compartment in a _Transfer Case_ corresponding to the department where the work began. He stamps the date of transfer on both cards, entering the number of pieces on his own, and sends the work on its way to the next department, together with the transfer card. His own card he removes from the compartment representing the first department, and places it in a compartment representing the department to which he has now sent the work.

Subsequent transfers are made in the same manner, small lots of work actually being sent to the Transfer Office, but large lots or heavy and bulky work being sent directly from one department to the next, but under the personal direction of the Transfer Clerk or his assistant.

When the parts are completed and ready for inspection, the Inspector is notified; and upon inspecting the parts previous to their being sent to the Finished Parts Store─Room, he enters the results of his work in the space at the bottom of the card that has accompanied the work in its progress through the departments.

The Transfer Clerk's _card tray_ is shown in Fig. 27, and is made with compartments of sufficient dimensions to hold the number of cards expected to be on file in any one department at the same time. The cards are filed in numerical order. In a large concern the usual card─index method of guide cards is used, so as to render the work of finding the right card when wanted, easy and expeditious.

=Tool─Room Methods.= A large number of small tools such as drills, taps, reamers, and the like, and also numerous jigs and fixtures of various kinds, are drawn daily from the Tool Room and returned there after being used. The problem of keeping track of these valuable tools, of knowing where to locate every tool that has been issued, and getting them back promptly after they have been used, is an important one.

The simplest method of doing this is by the use of small brass checks bearing the individual numbers of the men. For this purpose a _Tool Check Board_, as shown in Fig. 28, is provided. This is lined off in small square or oblong spaces, the number of spaces equaling or somewhat exceeding the number of men employed in the departments served by the Tool Room. At the top of each of these spaces is the name of one of the men; and beneath the name two pins project about an inch from the face of the board. Under each pin is the man's individual number. Two forms of brass checks are used, a circular disc of ⅞ inch diameter, and a rectangular one ½ inch by 1¼ inches. Each check has a hole by which it may be hung on the pins, and each bears the individual number of the man, the checks being used in pairs of one circular and one rectangular check.

All tools are kept upon shelves, divided for individual tools or, in some similar manner; and in front of each tool is a pin similar to those on the board, upon which checks may be hung.

The operation of this method is as follows: the circular checks (there are usually twelve of them) are issued to the men of corresponding numbers. The rectangular checks are held upon the left─hand pins under the men's names. When a man goes to the Tool Room for a tool, or sends a boy for one, he presents one of his circular checks. This the Tool Keeper hangs on the right─hand pin under the man's name. He also removes one of the twelve rectangular checks, and hangs it on the pin in front of the space from which the tool was taken. If the workman sends for another tool, another circular check is added to the first one, and another rectangular check removed from the board.

It will be seen that there must always be twelve checks on the board under each name, counting both rectangular and circular ones. The absence of a tool from a shelf is accounted for by the rectangular check hung on the pin in place of it, and the number of this check shows what man has the tool. The number of circular checks on the board shows how many tools each man has in his possession.

The result of this method is that tools can be issued and taken back very rapidly; and accurate and positive records are very quickly made, without the use of a book, card, slip, or writing of any kind.

At the end of the week, _all_ tools are turned in to the Tool Room, thus enabling the Tool Keeper to check them up and rectify any possible errors that may have been made during the preceding week. On Monday morning, such tools as are needed are re─issued.

COST─ANALYSIS ENGINEERING

=Definition.= Cost─Analysis Engineering is that branch of Engineering which has for its object the analysis of costs of construction or of operation, with a view to effecting a greater economy of production, and with a view to securing accuracy in estimating the probable cost of projected structures or operations.

=The Modern Manager a Cost─Analysis Engineer.= It takes few men to design machines and structures, but it takes many men to superintend their operation. Therefore the great field of activity for the engineer of the future is in the field of operation rather than of design.

Until very recent years, engineers have rested satisfied with being designers of labor─saving appliances. Now, however, they are beginning to assume the broader and more profitable function of operating the plants which their brains have created. To handle the ordinary industrial enterprise successfully, involves:

_First_, the application of engineering ability in selecting and improving the machines used;

_Second_, managerial ability in organizing the workmen, and in stimulating them to produce a large output economically;

_Third_, advertising ability to sell the product.

The man who combines in himself the maximum sum of these three abilities is the man best adapted to succeed as the executive of an industrial enterprise. Since the introduction of systems of cost analysis and unit─payments for work done, engineers have become best qualified to act as managers of manufacturing plants. We include contracting and railroading among manufacturing industries, for the contractor manufactures structures, and the railroader manufactures transportation.

Before cost analysis had been developed to its present stage of excellence, the successful manager of men was usually one who had relied upon his lynx eyes and his knowledge of the weaknesses of human nature. He was often a man who owed his success largely to the fear he could inspire in his subordinates. He was domineering; he held his men to their tasks; he was, indeed, an industrial captain; and he used army discipline. He regarded every worker as a thief who would not hesitate at petty larceny of time, even in the face of the foreman, and who delighted in grand larceny behind his back. His foremen were his spies; and he set himself to spy upon his foremen. But cost─analysis engineering is evolving a wholly different class of managers and foremen.

To most people, a cost─keeping system means nothing but a sort of bookkeeping; and they are unable to understand how a bookkeeper can develop into a successful manager. But the truth is that modern cost keeping involves cost analysis, and cost analysis involves a study and comparison of methods and machines, and such a study leads to improvements and to commercial success.

Cost keeping, in the sense that we use the term, has for its main object the determination of the efficiency of men. A proper system of cost keeping tells you daily what each workman or each gang of workmen has accomplished. It is better than a foreman, for it cannot "stand in" with the men. It is better than a foreman, for it costs you less and it tells you more. A cost─keeping system tells you who are your good men, and who are your lazy men. It shows you whom to discharge, and whom to promote. It tells you whose wages are too high, and whose are not high enough. And, finally, it leads to that ideal condition of industrial organization known as _profit─sharing_. How often have we read in novels of Utopia, where all men share in the profits of all business; and how often have we smiled with incredulity at the prospect? Yet Utopia is right here in America, in spots; and it is a Utopia far more rational than that of the dreamers. There are many firms that pay their men on a unit─price or bonus system. This is profit─sharing, and it is a profit─sharing begotten by the use of cost─keeping systems; for, when a manager has learned by cost keeping that certain men or groups of men produce more than others, he soon perceives the advantage of stimulating them to further use of brain and muscle by paying them either a bonus for each unit produced in excess of a prescribed minimum, or a unit─price for each piece of work performed. The men invariably respond to this stimulus, and often in a remarkable degree. It is nothing unusual for a man to increase his output 50 per cent upon the introduction of a bonus system of payment; and there are many instances of increase amounting to 200 per cent. Each man then becomes a contractor, and works with the zeal of a contractor, for his earnings increase as his energy and ability increase. This is practical profit─sharing that any workman can understand. It is not something vague and intangible, like 5 per cent per annum. It is something very real and immediate, for a man can feel it in the pay envelope at the end of every week.

Cost keeping, then, leads to better management, although dispensing largely with submanagers. It substitutes the record card for the "big stick," yet the record card itself is the biggest stick ever devised.

=The Science of Management.= The managing of industrial enterprises is still more or less of an art; but the art is fast passing through the period of evolution that produces a science. There are, unquestionably, certain underlying principles of management which can be summarized into rules or laws. These rules or laws constitute the science of management, and it is our purpose to present certain of the more important laws of management.

=Individual Incentive.= When a group of men undertake to do a certain piece of work, such as shoveling earth into a wagon, the tendency is for each man to do as little as his neighbor. The inevitable result is that the shovels move with rhythmic precision, and the slowest man becomes the pacemaker for the rest. If any one of the men is ambitious to do a larger day's work, he is deterred by the knowledge that his employer will never know that it is he to whom the credit is due for a larger output. Then, too, the other men are apt to upbraid an ambitious man, and urge him not to set a "bad example" by working fast. To offset this tendency to fall to the lowest level of efficiency, employers have placed foremen over their employees, the duty of these foremen being to accelerate the motions of the men in any way possible. Each foreman has an _individual incentive_ to get work done economically, for his employer studies the total amount of work done by the gang under the foreman, and rewards or punishes the foreman accordingly, the reward usually consisting of praise and an increase in salary. But the workmen under such a foreman have no _individual incentive_, and they will shirk their tasks as far as possible. Clearly, then, the first law of management is to create an _individual incentive_ for every employee to do his best.

=Creating Individual Incentive in a Gang.= There are, and always will be, certain kinds of work that must be performed by a group of men working together, or, as we shall call it, a _gang_ of men. When this is the case, the first step to be taken is to devise a method of readily and accurately measuring the work performed _each day_──not each week or each month──by the gang. The next step is to notify the men that, for all work performed daily in excess of a specified number of units of work, a bonus or premium will be paid for each excess unit. Of this bonus, the foreman will get a specified percentage, and the men will divide the rest among themselves. Thus a powerful individual incentive is created. It is true that certain men in the gang will remain less efficient than certain others, but the general average output will be greatly increased. The foreman himself will have enough incentive to see to it that the lazy or inefficient workmen in the gang are discharged, for it will no longer pay him to play the part of indulgence for the sake of being "a good fellow."

=Devising Ways of Dispensing with Gang Work.= Simply because it has always been the custom to do certain classes of work by gangs, should not deter a manager from endeavoring to devise a way of splitting the gang up into individual units. Indeed, it should be self─evident that if the creating of individual incentive is the fundamental law of management, a great amount of study may profitably be devoted to increasing individual incentive by doing away with gang work entirely. To illustrate, let us assume that 12 men are engaged in shoveling earth into wagons, working in two gangs of 6 men, with one foreman supervising the 12. If a sufficient number of teams and wagons are used, there will always be 2 wagons in the pit being loaded, and 6 men shoveling into each wagon. As fast as a wagon is loaded, it pulls out, and an empty one takes its place. If a manager is told that he can do away with this system of gang work, he will usually reply that it is impossible. Nevertheless, it is possible to reduce this gang work to individual work in most instances, as follows:

Instead of having 2 wagons and teams in the pit all the time, have 6 wagons without teams──6 empty wagons. Assign two men to each wagon. Provide a dividing board between the sides of each wagon, running either longitudinally or cross─wise, so that each man has his definite half of the wagon to fill. Then pair the men off according to their respective abilities, putting the two best men on one wagon, the two next best on another wagon, and so on. When a team brings an empty wagon into the pit, let it be unhooked from the empty wagon and hooked to a loaded wagon, thus saving team time, which would otherwise be consumed in waiting for the wagon to be loaded.

It is possible to give many illustrations of this sort, but not desirable, for our object is to indicate the laws that should be applied, rather than to solve specific problems. The student of cost─analysis engineering will derive his greatest stimulus from applying the laws to specific cases that come under his own observations.

=Prompt Reward.= Most men believe in Heaven, and many believe in Hell; but few are greatly affected in their action by the hope of the one or the fear of the other. Any reward or punishment that is remote in the time of its application, has a relatively faint influence in determining the average man's conduct. To be most effective, the reward or punishment must follow swiftly upon the act. Hence a managerial policy that may be otherwise good is likely to fail if there is not a prompt reward for excellence. All profit─sharing systems have failed, principally because of failure to recognize the necessity of prompt reward, as well as because of failure to recognize the necessity of individual incentive. The lower the scale of intelligence, the more prompt should be the reward. A common laborer should receive at least a statement of what he has earned every day. If, in the morning, he receives a card stating that he earned $2.10 the previous day, he will go at his task with a vim, hoping to do better. But if he does not know what he has earned until the end of a week, his imagination is not apt to be vivid enough to spur him to do his best.

One contractor, known to the authors, has a large blackboard on which the hourly record of his brickmasons is chalked up. He has found that this constant record of where they stand in the day's race is a splendid stimulus.

=Sufficient Reward.= When a man produces more than has been his custom, he feels entitled to a very large percentage of his increased output. His sense of justice is keen on this matter, and rightly so. It is true that he is not entitled to all the increase, for his employer may have provided him with machines or tools of a better kind, for which payment must ultimately be made. Moreover, more rapid work with any machine means more rapid wearing─out of its parts, and a consequent expense to the employer. Finally, the employer who has used his brains to devise ways of increasing the output of the employees is entitled to a very substantial reward. No one begrudges Thomas Edison his wealth. He has earned it by virtue of his inventions. In like manner, every man should be richly rewarded for every labor─saving machine or method which he creates or which he applies. However, employers are prone to try to take too large a part of the profit effected by an introduction of a system of unit─payment for work done.

Mr. Fred W. Taylor says that a workman should receive 30 to 100 per cent increase in wages upon the introduction of a piece─rate or bonus system of payment. Mr. Halsey says that the workman should receive one─third of increased value of his product resulting from an application of the bonus or premium system of payment. But the fact is that the employer should share liberally with his men; and, in the long run, the competition of other employers who are bidding for the services of workmen will force wages up to a point where the workman secures all but a very moderate percentage of the value of his daily product.

=Educational Supervision.= As previously stated, the old type of foreman mingles the functions of a spy with the functions of a mule─driver. The higher we go in the scale of human intelligence, however, the more noticeable is the fact that _the supervisors are teachers of the men they supervise_. These supervisors, foremen, managers──call them what you may──have learned that it pays better to spend time in training their men than to spend time in tongue─thrashing. Only of late years has it been discovered that systematic training of the least intelligent of workmen pays equally as well as the training of the most intelligent. The manager who recognizes the necessity of educational supervision, undertakes, first, a careful time study of each class of work. Then he analyzes the results, and deduces methods of securing greater economy. Having evolved a method of procedure, he reduces it to writing, and furnishes his foremen with detailed written or printed instructions to be followed, or, where the workmen are intelligent enough, the instructions are given to them directly; otherwise it is the function of the foreman to instruct the workmen.

=Divorce of Planning from Performance.= We have just spoken of the education of the workmen by the manager; but, before such education is possible, the manager must educate himself. In brief, he must study the problem and plan its most economic solution. According to the old─style method of management, each foreman was left largely to his own resources in planning methods, and, added to this duty, he had several other duties to perform, such as "pounding the men on the back" when lazy, seeing that materials were promptly supplied, employing and discharging men, looking after the condition of machines, etc. This multiplicity of duties can be properly performed, only by a foreman possessed of a multiplicity of talents. Since few foremen can comply with such a specification for brains, it follows that good foremen of the old style are rare indeed. The modern system of management consists in taking away from the foreman the function of planning the work, and in providing a department that does all the planning. This planning department should be under the supervision of the Cost─Analysis Engineer, for it is he and his assistants who, by unit─timing of work and by cost keeping, are best able to ascertain what methods should be applied to get the most economic results. Having planned a method, the Cost─Analysis Engineer delegates its pursuance to one or more foremen.

=Subdivision of Duties.= The previous rule of action comes under another, still more general in character──namely, the law of the _subdivision of duties_. Men are gifted with faculties and muscles that are extremely variable. One man will excel at running a rock drill, another at keeping time, another at surveying, and so on. It is clear, therefore, that the fewer the duties that any one man has to perform, the easier it is to find men who can perform the task well. But give a man many duties to perform, and he is almost certain to do poorly in at least one respect, if not in several. One foreman may have a great knack at "keeping an eye on" machinery, and in having few break─downs and delays. Then it is the part of wisdom to burden him with no other duties, unless the magnitude of the work does not warrant dividing the duties among two or more men. Let him be the _machinery and tool foreman_, reporting directly to the Cost─Analysis Engineer, and subordinate to no other foreman.

Another foreman may have a special knack at teaching workmen how to use tools and machines. Let him have no other duty but to see that the men have the proper tools, get them promptly, and use them properly. Let him be the _gang foreman_.

According to the magnitude of the work, there may be different kinds of foremen, all coming in contact with the same men, perhaps, but each performing different functions.

=Limitations of Military Organization.= Most industrial organizations to─day resemble military organizations, with their generals and intermediate officers, down to sergeants, each man reporting to but one man higher in rank. There is little doubt that the present tendency in industrial organizations is to abandon the military system to a very large extent, and for the following reasons:

A soldier has certain duties to perform, few in number, and simple in kind. Hence the man directly in command can control the actions of his subordinates easily and effectively. Control, moreover, should come invariably from the same officer, to avoid any possibility of disastrous confusion, and _to insure the instant action of a body of men as one single mass_.

On the other hand, industrial operations do not possess the same simplicity, particularly where men are using machines; nor is there the necessity of action in mass. The military organization, therefore, should be modified to suit the conditions; and one of these modifications is the introduction of two or more foremen in charge of certain functions or duties of the same men or groups of men, as explained in the paragraph on _Subdivision of Duties_.

=Opposition to Change.= All men have a certain mental inertia which makes them resist any change of their methods and habits. Foremen are particularly resistant to change, because of their custom of giving orders more frequently than receiving orders. Hence the Cost─Analysis Engineer who is trying to introduce modern methods is sure to meet with violent opposition from foremen; and the older the foreman, the more violent the opposition. When the Cost─Analysis Engineer introduces a new method, he must personally attend to every detail, or it will surely "go wrong." The old foreman will see to it that it does "go wrong," just to show that the "new─fangled ideas" are worthless.

Opposition may also develop among labor unions, particularly if it is proposed to pay on the piece─rate plan──that is, to pay so and so much for each unit of work performed. The bonus plan and the premium plan (to be described later) are schemes to overcome this opposition to the piece─rate plan, but in essence they are all the same.

No manager of men can attain great success unless he has grit enough and tact enough to overcome the opposition to change which he will encounter from all quarters. If he realizes in advance that such opposition is as certain to manifest itself as it is certain that it takes power to change the direction or speed of motion of a heavy body, he will have possessed himself of one of the laws of successful management.

A man cannot impart motion to a very heavy rock by violent impact of his own body against it; but he can separate it into fragments, and move each fragment by itself. In like manner, no attempt should be made to change all the methods of an industrial organization at one stroke. Separate it into elements, and take one element at a time, beginning with the simplest. Apply your cost─keeping system to that element──it may be only the hauling of materials with teams──and effect the change desired. Then take another element of the organization, and apply the system to it. Continue thus, fragment by fragment, and you will overcome the opposition that would otherwise resist your greatest effort.

=Respect Your Own Ability.= One of the most common mistakes made by managers lies in assuming that a skilled workman necessarily knows better how to perform work than does the manager himself. A manager should first aim to familiarize himself with the methods used by the best workmen, and then, by an itemized time study, he should set his own wits to work to improve the methods. Workmen, for the most part, do their work just as robins build their nests──by the pattern of precedent. They put little or no brains into improving the process, because it usually means no money in their pockets to effect an improvement, and because they reason that an improvement that effects a saving in time may actually result in the discharge of some of their fellow workmen. It should be a cardinal law of management to give very little weight to the claims that workmen make as to their own skill or knowledge; and the same holds true as to foremen. Because a man has blasted rock for twenty years, should not make his opinion of such force as to prevent a manager from undertaking to show that man how to do rock─blasting more economically. We have frequently effected great economies in rock─blasting after a time study occupying fewer weeks than the blaster had occupied of years in the same sort of work. The trained mind of the Cost─Analysis Engineer enables him to analyze costs and methods, and to develop improvements which no amount of so─called "practical experience" can effect.

Weigh carefully every _reason_ against any proposed change in method, and act accordingly; but pay no attention whatsoever to predictions of failure that are bare of reasons. Do not be influenced even by many positive statements that your proposed method has been tried and has failed; for its failure may have been purposely brought about, or some small condition essential to its success may have been absent.

Therefore, respect your own ability. The manager who cannot improve upon methods used by his men is not fit to manage.

=Profit Does Not Mean Excellence.= Many a manager points to the profits of his business as the profit of his ability. He forgets that to a plainsman a small hill looks like a mountain. The general level of mediocrity makes such managers fancy that they are quite extraordinary if their business shows a large profit.

The Cost─Analysis Engineer can frequently take a profitable business and convert it into a wealth─producer beyond all dreams of the ordinary self─satisfied manager. Nor should the Cost─Analysis Engineer himself grow satisfied. _There is positively no limit to the economies in production which may be effected by the human brain._

=The Human Engine.= The human body is an engine, or rather a boiler and engine combined. Its fuel is about 3 pounds of solid food daily, containing about as much energy as one pound of carbon or coal. One pound of coal will develop energy enough to perform about 10,000,000 foot─pounds of work; that is, it will raise 10,000,000 pounds one foot high, if there is no loss of power. But in all boilers and engines there is a loss of power, due to heat lost by radiation, heat carried away in the escaping gases and solids, etc., and heat developed by friction. A steam boiler and engine suffers so much loss of heat energy from these sources, that it rarely develops an efficiency of more than 10 per cent of the theoretical energy of the coal consumed. Curiously enough, the human body is not much more efficient than a steam boiler and engine; so that, while the one pound of carbon fed into the human body has a theoretical energy of about 10,000,000 foot─pounds, the actual useful work performed by a man is seldom more than 1,500,000 foot─pounds a day, or about 15 per cent of the theoretical energy of the food consumed.

When a man is walking, his whole body rises and falls each step, the rise being about one─seventh of a foot. Hence, in walking 25 miles in a day, about 2,000 steps per mile, a man weighing 140 pounds does 1,000,000 foot─pounds of work in raising the weight of his own body, to say nothing of the energy consumed in swinging his legs. A man may walk the 25 miles in 10 hours, or he may walk it in 8 hours. In either case, he does substantially the same amount of work, and burns up substantially the same amount of food.

It should be clear, therefore, that when workmen are doing intermittent work, with periods of comparative rest, they are capable of working correspondingly harder during the periods of exertion. Thus, in running a rock drill, the physical labor is light, except when shifting the drill or when changing drill bits. At such times, the men should be required to work with great vigor in order to reduce the lost time.

It should also be clear that workmen should be taught to make no unnecessary movements of the body in doing work. Yet it is a fact that few workmen economize their energy by avoiding unnecessary motions.

It should also be clear that it pays to house workmen at no great distance from their work, so as to reduce the labor of going to and from the work; for every foot─pound of energy spent in going or coming reduces by that much the available energy of the man.

If it were practicable to measure the amount of resistance involved in doing each class of physical work, we could readily reduce to a science the setting of reasonable daily tasks. The authors are of the opinion that a careful study of _resistances_ will eventually enable managers to fix certain tasks with great accuracy. To illustrate, let us assume that it is desired to know how much sand a workman should be able to shovel into a wagon box 5 feet from the ground in a day. It is not impracticable to measure the force required to push the shovel into the sand, and the distance pushed. The average weight of the earth on a shovel, and the weight of the shovel can be ascertained. The vertical height that this load is lifted, is easily measured. If the workman bends his body to fill the shovel, the weight of his body above the waist, multiplied by the height that the center of gravity of that weight travels will give the foot─pounds of work done in bending the body. And thus, by a calculation of each element of work done, an accurate forecast of the total possible work could be made.

Such a study as this will often disclose an unsuspected lack of economy in using certain tools. From such a study, for example, it is perfectly clear that the long─handled shovel, universally used in the far West for shoveling sand, gravel, etc., is a more economical tool than the short─handled shovel used in the East. Men have argued about this matter for years without coming to a definite conclusion, the reason being that workmen accustomed to the short─handled shovel prefer it, while workmen accustomed to the long─handled shovel show an equal preference for that type of tool.

COST GETTING

In taking of time and in the application of the cost of labor to the cost of work, there are probably as many systems as there are organizations doing work; and even within any one organization using a well─defined system throughout its entire operations, there will be no two men making the same interpretation of the rules laid down, or──more especially──whose methods of attack will be the same. But in spite of these many variations of method, there are several primary systems which are standard, and which can be found in one form or another on all properly conducted work.

The starting point of all cost getting is the taking of the time in the field, and it is here that the greatest variation in individual method is found. The most common way of taking this time record from which the pay─roll and the cost distribution is made, is for the time─keeper to go over the work with a notebook and put down therein with a pencil the number of each man and the particular part of the work that he is engaged on.

Two systems of record keeping, of which small cards form the basis, are also in vogue. One of these systems uses what is known as _punch─cards_──that is, cards in which the records of time, distribution, and performance are made by means of an ordinary conductor's punch; and the other has the record made in a way somewhat similar to the entries in a notebook──a written record being made on the cards with a pencil. Another system bases its records upon reports turned in by foremen.

=Time─Keeper with Notebook.= While the manner of taking time with a notebook varies according to the training and experience of the time─keeper, it may be said that there are in general two ways in which such notes are kept. In the first, the time─keeper has a list of the numbers of all men on the work, and, as he goes over the work, simply checks off the numbers, showing that each particular man is at work and indicating upon what branch of the work he is engaged.

A more common way, however, is for the time─keeper to make headings corresponding to the distribution used in making up the office records, and to write under each of these headings the numbers of the men working upon the part of the work so named. This method is often simplified by the time─keeper becoming so familiar with the foreman, and the numbers of the men under the particular foreman, that he is able to dispense with the headings entirely, and simply use the foreman's name or number in place of it. This, of course, makes the time─keeper's notes more or less unintelligible to anyone but himself, and makes it necessary for him to do office work as well as his field work. Moreover, not being a permanent or intelligible record, it is impossible for even the man who made the notes to return to them in case any dispute arises or a mistake is found to have been made, and get information after the notes have "grown cold." The time─keeper becomes so familiar with the appearance of the men who are on the work, that he learns to know their numbers, and often attempts to put them down without seeing their numbered checks. This is often a source of error, as the uneducated foreign laborer is very liable to make a mistake in stating his number; and if he does, there will exist no record of his having worked that day, and he will get no pay for it. The apportioning of the cost of his labor to any work that he may have been on, will also be the cause of trouble.

Of course, the time─keeper's memory serves him if any men are absent from the gang for any reason, and he is able to ask the foreman whether or not that particular man is working. A man may be away from the gang and be missed by the time─keeper altogether. In this case, no chance is given for correction of the record, unless the time─keeper goes over the work again soon after; and the consequence is that costs will be in error, and the men will be short of pay at the end of the month. This is especially liable to be true when night work is being done.

Men may be changed from gang to gang, or a whole gang may be changed from one job to another, and the time─keeper knows nothing of it unless he happens to be on the spot at just the right time. Such a change would not show in his time record; and while the men would get credit for their full time, the distribution of costs would be much in error. The difficulty in recording such changes can be seen from the following extract from a report of a Consulting Engineer after inspecting work upon a road─making contract:

"In one case, at 10:30, there were eight men carrying stone to the crusher, and three men on the crusher platform. Two others were in the cut, loosening earth and loading; and half an hour later, two of the four men who had been blasting were also loosening and loading."

This, of course, indicates an unusually loose organization, but is an example of what a time─keeper with a notebook has to contend against.

In case of emergency──say in steam shovel work──a train of dump cars goes over the side of a dump, and a track gang is called upon to help the regular dump gang so that the difficulty may be overcome as soon as possible. The time─keeper might fail to make record of an hour or an hour and a─half which the track gang put on this work, because he did not see them at work at that particular time. This, of course, affects the distribution of cost. One advantage from the notebook is that much of the distribution is made in the field, with a corresponding reduction of office work.

=Punch─Cards.= The keeping of time by means of punch─cards has been tried with considerable success on many jobs, but only recently has it been reduced to a practical basis for use on large construction work.

The Construction Service Company of New York City has developed a system of time and cost keeping, using the duplicate punch─card almost entirely. Several of these cards are reproduced in connection with this text.

As a general thing, the punching of the cards is done by foremen of the gang, or by someone who has the performance of the gang under direct observation. The cards show not only the time worked by each man upon any one day, but just as exactly the time worked upon any job by all the men. A duplicate of the record is made automatically, to be kept in the time─keeper's office, the other going to headquarters for permanent record.

The record thus obtained is absolutely exact, especially as to distribution; but the system has some of the same objections that the notebook has. For instance, unless the cards are kept by the foreman himself, whoever punches them may inadvertently miss a man. This, however, is not so liable to happen as when a notebook is used. Whenever a single punch appears opposite a man's number, it is apparent that all his time must be accounted for in some way or other; while, with a notebook, it may be that, having been missed once, no record of any time will appear.

There is absolutely no opportunity for a time─keeper or for a foreman to "fudge" his account in any way, for a punch mark once made in the card cannot be erased or destroyed in any way. The record stands.

=Time─Keeper's Cards.= Instead of the time─keeper keeping his records in a notebook, as has been described, he may be provided with slips of tough paper of such size and shape as will readily go into his pocket, or will fit in a filing cabinet.

The _modus operandi_ of these cards or slips is as follows:

Each card or slip is devoted to but one gang and one ledger account──such, for example, as placing ties in railroad work, gang No. 6. It will show the foreman's name; the name or number, or both, of each man; and the amount of time that he spent on this particular class of work. The sum of the amounts for the gang on this classification, will be the cost for this gang and this account for the day in question.

If a man has been working at more than one piece of work on that day, the time─keeper makes the apportionment of time on the spot; and the portion of his time that he has spent placing ties is put on the "Placing Ties" card or slip. The remainder of his time is placed on another slip corresponding to the other ledger account. If the time─keeper is uncertain as to which ledger account the work belongs to, he writes a description of the work at the top of the card or slip. A convenient form for a slip is illustrated in Fig. 1; and a convenient form for a file card, in Fig. 2.

It is frequently of advantage to have time─cards show, in addition to their pay and work performed, a log of the conditions, such as temperature and weather; the causes and duration of each delay; the general conditions on the work; the kind, condition, and the make of tools, machinery, etc.; and any further details that may be important. How this can be done on the various cards illustrated in this volume, can be seen from a study of the illustrations.

=Written Time─Cards= have the advantage of the minimum of departure from existing methods; the disadvantages that arise are slight; and it is difficult to so arrange the cards as to obtain duplicates. A foreman with a dirty thumb will make a paper sheet on which he writes in the field look as if it had been dragged through the mud; while, with a punch, he can bring his card in with comparatively small damage. In general, it may be said that for the time─keeper's use the written card has a slight advantage over the punch─card; while the reverse is the case for records to be obtained by the foreman, or whenever the men, such as drillers or teamsters, hold their own cards.

=Foreman's Report.= When the making─up of the pay─roll and the distribution of cost depend upon the reports of foremen, many serious difficulties are introduced into the work. Most foremen are intelligent enough to make a satisfactory report, and even more of them are honest enough to make a correct report. It is a curious fact, however, that among men of this class, while they would use every care in accounting for money entrusted to them, there is no tendency to consider time in the same light; and in consequence the reports of time given are liable to be very lax.

Moreover, if a foreman felt so inclined, if there were no one checking him or his reports, it would be a very simple matter for him to "fudge" his accounts so as to be able to acquire considerable graft.

If the foreman is intelligent and conscientious, a report and a distribution can be obtained from him which would be very easy to work into an excellent office record. Unfortunately, the desired combination seldom obtains, and there are very few large works carried on with such a system of time─keeping.

=Cost Distribution.= The time having been taken in the field, it now becomes necessary to make a distribution of costs in the office. The cost is that which is paid for producing work, being the material and labor cost of production, added to the proper proportions of expense cost, the expense being incurred in carrying on the operation and so making the actual work a possibility. The distribution of the cost is necessary in order that the contractor may see whether or not any particular operation is profitable; and a detailed analysis of the distribution, such as will be given later, will indicate in what respect the work may be made cheaper and more profitable.

In all cost distribution, there are certain items which cause trouble; and their proper disposition has led to much discussion among authorities on them, and has been the source of many different arrangements for their proper apportioning to the various operations on the work. For instance, there is the time of such men as are engaged upon water─supply service, drainage systems, the blacksmith, machinists, electricians, water boy, the time of watchmen, police, etc., which may come under the heading of "general labor;" and there are such items as the transportation and distribution of coal to various parts of the work, the transportation and handling of stores, and numerous other items which, while seemingly affecting the whole work, are directly chargeable to some particular operation.