[Consulting Efficiency Engineer, New York. Published in The Iron Age,
Jan. 6, 1910, and reproduced by special arrangement.]
Managers of industrial enterprises will undoubtedly agree that there
are few qualities which are more to be desired in equipment, methods
and men than that of efficiency. From an extensive study of this
subject in various parts of the country, together with interviews and
correspondence with several hundred concerns, the writer has become
convinced that there is a general lack of definite comprehension of
what efficiency is, whence it springs, how it may be measured and
developed and the results which its cultivation will produce. The
object of this monograph is an endeavor to throw some light upon these
things and to afford a new viewpoint from which to study industrial
operations.
The Evolution of Industrial Management.
In the first place we must realize that the management of industrial
enterprises is in a state of evolution. The tremendous growth of the
past few years has caused certain previously satisfactory methods to
become inadequate to present needs. Many details which in the days of
smaller affairs could be absorbed by personal inspection and mentally
stored for use when needed must now, because of their very volume, be
made matters of record.
The character of these records has much to do with their value.
Because financial records are so ancient they have exerted an undue
influence upon the character of all other records. While under our
present civilization, the ultimate object of industrial operations is
to create financial profits, there are many highly important records
which cannot be adequately expressed in terms of money. The business 371
of manufacturing consists of a repetition of mechanical operations.
Mechanical operations necessarily involve considerations of weight,
distance, time and effort, but not of money.
The reason for the failure of so many cost systems to serve the
desired end is that they are based upon a wrong unit. These systems
become useful only beyond a certain point. Other systems have been the
result of a blind craving for aid, but being without broad underlying
principles and not properly tied together and simply, in many cases,
disjointed attempts to improve isolated details, they too have failed.
The result is that attempts by specialists to improve industrial
conditions have been often looked upon with suspicion and this is not
altogether without reason. These very failures, however, have drawn
the attention of men in certain lines of engineering to the rapidly
developing needs of manufacturers. They have attempted to solve the
problems by the use of engineering instead of by accounting methods,
and the results which have been attained prove conclusively that a
material advance has been made.
What Is Efficiency?
With this understanding of the present conditions, let us consider
what efficiency really is. It has been defined as “the ability to
produce certain results,” and this at the very outset necessitates the
existence or creation of a standard of measurement. Our perception of
efficiency, therefore, is correct only in proportion to the precision
of the standard, which must be accurately developed from data which
are not only exact, but complete. A machinist, believed to be
operating at high efficiency, was observed while turning a shaft. His
cut, feed and speed seemed to be beyond criticism. When the shaft was
finished, however, he had to spend half as much time in hunting up a
chain and pad to remove the shaft from the lathe, as he had taken in 372
turning it. This cut his actual efficiency from 100 per cent down to
87 per cent, yet the man was not at fault. His normal work was to
operate a lathe and not to hunt for things which should have been
provided for him. The points to be observed here are not only the
importance of using the right standard of measurement, but that the
efficiency of the man depended very largely upon his surrounding
conditions over which he had no control. These conditions depend upon
the efficiency of the management in securing proper equipment from the
owners. This in turn depends upon the efficiency of the management’s
records in enabling it to state clearly and accurately what increase
in output and consequently in profits will result from improving the
conditions--thus justifying the expenditure required. We see from this
that the true standard is not the possibility under existing
conditions, but that which can be obtained under other and more
desirable conditions.
Managerial Opposition to Change.
The management, which immediately controls the records and conditions
should be the prime source of efforts towards the increase of
efficiency throughout the plant. The opposition of managers to
progress in this respect is exceedingly great, yet not altogether
surprising for these reasons:
1. There is a widespread fallacy that so-called practical experience
in the manual operations or technical processes of a business is the
chief essential to success in its management. This is due to the fact
that perfection of workmanship, of which he knows much, is more
important in the eyes of the artisan than the actual cost of the
operation, of which he knows little, or than the cause of this cost,
of which he knows less.
2. It is only recently that educational institutions have afforded 373
any opportunity for adequate instruction in the art of management,
pure and simple, a principal feature of which is the intelligent
regulation of cost.
3. There has been, and now is, as a result of these two things, a
failure to appreciate the necessity and value of exact data, in proper
terms, of refined and scientific methods of collecting and using it
and of logical reasoning in the solution of industrial problems.
The highest degree of efficiency, therefore, is only to be realized in
a shop where executive methods have reached a high stage of
efficiency, for in these is unquestionably its source.
Time Measurement Important.
The first step is to recognize the necessity and value of a proper
measurement of time, as a guide not only to the executive but to the
workman. A man was observed during 8 successive repetitions of the
operation of making a machine mold in a foundry. The unit times varied
5.2 to 23.6 minutes, the total time for the eight being 104 minutes.
Under the method of timekeeping in use at that shop it was only
ascertained that the eight operations took 1¾ hours or an “average” of
13 minutes each, and the labor cost and distribution of burden were
made on that basis. Because of the absence of any standard time
whatsoever it was not realized that had the man done each of the eight
in 5.2 minutes, they would have been completed in 41.6 minutes,
resulting in a saving of over 60 per cent of the total time. Had the
man received a proper work ticket bearing this standard time, before
he began the work, there is no doubt that he could have easily
performed the work in the shorter time and a marked difference in
proportionate burden and cost would have resulted. Under the existing
methods the management could not know of the waste, and so was
helpless to prevent or cure it.
Every item of time, therefore, is capable of division into two parts: 374
A standard or necessary time and a (more or less) preventable waste,
which latter is the easier thing of the two to determine.
An Example of Increased Efficiency in Riveting.
A gang of four were engaged in riveting some steel plates. By the use
of a stop-watch it was found that a large proportion of the total time
of the riveter and bucker-up was not utilized; yet some one was always
at work. The reason was that the men proceeded along the work in such
a way that the bucker-up covered with his body the holes as yet
unfilled by rivets, he moving from left to right. When, therefore, a
rivet was driven, these two men had to stand aside until another rivet
was placed by the rivet passer. Upon the instruction of the engineer,
they reversed the direction of their movements so as to cover only the
filled holes, thus enabling the passer always to have a rivet ready
for them and making their speed in driving the real gauge of the speed
of the operation. Furthermore, when they encountered a hole that
needed reaming (as was sometimes the case, until the fault was located
with the fitters and remedied), the riveter would lay down the gun,
pick up the reamer, ream the hole, lay down the reamer, pick up the
gun and drive the rivet. When persuaded to test consecutively ten or
more holes after driving the first rivet in a seam to anchor the
plates and then to drive the ten consecutively, they progressed faster
with less effort. These men, receiving not only a standard from the
engineer, but kindly instruction as to how to attain it, and being
stimulated, not by abuse, but by a scientifically determined
bonus--increased their output over 150 per cent beyond the original
amount.
In this plant, by the use of these methods, and in about seven months,
the general increase in efficiency of the men was such that the force
was reduced 67 per cent without reduction in volume of output, but 375
with a great reduction in net total unit cost, even after paying the
bonus alluded to and the cost of the expert services which alone
produced this result.
The Use of Bonuses.
It is proper to say a word here on the subject of bonus as a means of
increasing efficiency. The principal merit of this motive lies in the
fact that immediate personal gain is the strongest incentive to
immediate personal effort. It operates just as strongly on the employe
as on the employer. Hope of promotion is too vague and the actual
chances too limited to exert much pressure, but an extra sum in the
pay envelope--or better still, in a separate one--for the disposal of
the “old man himself,” will do wonders. To be most effectual a bonus
must not begin at the point of standard efficiency, but at the point
when average efficiency ceases and extra effort begins; and it should
increase on a curve faster and faster as the point of standard
efficiency is neared, because the accompanying effort will be
correspondingly greater.
Efficiency Methods and Department Heads.
So much for the individual operator. And now for the executives. From
foreman up to and including the highest official the same methods can
and should be applied. Under ordinary circumstances, the workman in
need of material, tools or instruction keeps his skirts clear by a
more or less indefinite and unintelligible request to the foreman. He
thinks it the foreman’s duty to look after him, but that if he does
not do so it’s no business of his. Put that man on standard time and
bonus and if there is anything he thinks the foreman should do or get
for him he speaks loudly and directly. This the foreman does not
resent--as would ordinarily be the case--for his efficiency is
determined by the combined efficiency of his men and upon this his 376
bonus depends. Anything, therefore, that interferes with the progress
of the men touches him closely, and he will move heaven and earth to
eliminate it. All kinds of defects which were previously hidden from
the superintendent are now brought to his attention, and he welcomes
them for exactly the same reason that actuated the foreman. Thus the
change that comes over a shop when efficiency is accurately measured
and adequately rewarded is often astounding.
But this is not all. The possession of exact data as to standard and
actual times makes possible a certain great improvement in, and
addition to, the executive staff and a material increase in the
efficiency of the foreman and department heads. By this is meant the
installation of a planning department, by which the apportionment of
the time of men and machines is controlled. The advantage, indeed, the
positive necessity, of the services of engineers and draughtsmen in
apportioning the different parts of the product is well understood.
The requirements of each part, the strains to which it will be
subjected, the kind, quality and quantity of material required to
resist these strains, the shapes of the pieces, their relations to
each other and many other things are all given most careful attention.
The value of fully constructing the design on paper, as a means of
discovering possible errors or difficulties, and of correcting or
overcoming them before large expense for material and workmanship has
been incurred, are too well realized to need more than a simple
statement for their acceptance. No sane executive would expect his
department heads to take a copy of his customer’s order and
individually work out the details with which they are particularly
concerned and expect the parts to fit. Yet this is just exactly what
is being done as regards the apportionment of productive time; and a
tumult of broken promises of delivery, excessive cost of production,
enormous wastes of time in changing jobs, etc., is the immediate 377
and unavoidable result.
What Can Be Done.
It is perfectly possible, but only to one trained in the particular
art, to schedule the different operations on all of the different
parts of the product; to plot the productive times required, so that
each may begin at such a time in relation to the others that all will
arrive at the point of assembly at the proper time and in the proper
sequence; to combine these studies of the different productive orders
on a chart which will show the disposition to be made of all the men
and machinery; to prepare advance programs for each man and machine
engaged in productive labor; and thus to give to the superintendent
and foremen the advantage of the same predisposition of time that they
now have of material.
As it is now, the time of these persons is entirely too much occupied
with this problem of the disposition of time for which they are only
partly equipped, having, it is true, much of the necessary
information, but no training in the scientific handling of it. They
are, therefore, unable to devote the time they should to the immediate
study of the operations and the provision of tools, material and
instruction to the men. They try to be all over the shop at once and
they depend on getting their information at first hand, and
consequently fail more or less clearly to cover the ground. Having
such schedules and programs as are above described, and with the
proper work tickets distributed on a dispatching board, each one in
the division representing the work upon which a man or machine is
engaged, having the time of commencement and the standard time
thereon, the foreman can see at a glance without leaving his office
what men will shortly finish their work and what steps must be taken
to see that the drawings, tools and materials for their next work are
ready for them in time. Having seen to this he has some leisure to 378
give his attention to matters immediately requiring it, knowing, if
anything is obstructing the other men, that their anxiety to earn
their bonus will cause them promptly to bring such matters to his
attention. Having this schedule, moreover, the foremen are enabled to
order material, etc., ahead and to do so intelligently, thus making
the work of the shop transportation department much simpler. In one
case by this means 25 men were able to handle the intra-shop
transportation in a more satisfactory manner than 75 men had
previously been able to do.
The planning department also greatly aids and is in turn aided by the
purchasing department, for the times when material must or can be got
can intelligently be determined to their mutual advantage. The sales
department, too, when it once gets the idea that the shop is not
working miracles, but has its limitations, can make delivery promises
which really mean something and can be kept, and this is a trump card
of no small importance when the fact becomes realized among the
customers of the concern.
Responsibility of the Management.
In the opinion of those whose opportunities have enabled them to get
at the facts, the inefficiency in manufacturing, which undoubtedly
generally exists today, in spite of the prevailing impression to the
contrary, is only about one-fourth due to the things over which the
employes have control and three-fourths to conditions imposed upon
them by the management. The methods outlined above have achieved
results whenever they have been faithfully and honestly tried, with
proper co-operation by the management and under the direction of
skilled specialists, and the results have continued and will continue
as long as the methods are followed. The effect upon the men is that
from being often listless, indifferent and antagonistic, they become 379
energetic, ambitious and loyal friends.
One thing more: Much has been done and overdone in the line of
so-called welfare work. It is a highly creditable and necessary line
of effort, when confined to attempts to remove from the path of the
employe any obstacle which prevents him from developing his skill and
efficiency to the highest degree. An uncomfortable, unhappy person
cannot be efficient. But as steam is necessary to the engine, so is
incentive necessary to the worker to get him to make the best use of
the facilities provided for him. Under our present civilization, the
same incentive which pushes on the master will push on the man, and
that is direct personal gain in dollars and cents, not for itself, but
for and what that gain will bring. It must come to him quickly after
the exertion which its expectation calls forth, for if long delayed,
the effect is lost. It must also come to him separately from his
regular wage that its amount may be the more readily realized.
Moreover, the results of efficiency methods, within the writer’s
knowledge, are sufficient to convince him that their general adoption
would so increase the purchasing power of the employe, by increasing
his wages and decreasing the cost production, as to have a markedly
beneficial and steadying effect upon the business of the country.
Efficiency methods, however, cannot be successfully designed or
installed by those trained in other lines and prejudiced by other
associations. After these methods have been scientifically developed
to suit the existing conditions and actually put into operation by
those skilled in the art, they may gradually be relinquished into the
control of those who have been educated in the process of
installation, with some hope of success for their future operation.