proper condition for performing efficient work, is a question on which
the limits of space prevent a detailed discussion. On such a machine as
a standard─gauge steam locomotive in constant operation to the limit of
its capacity, repairs may run as high as 20 per cent per year; and on a
rock drill the repairs may be 50 per cent or more per year.
10. RENT, STUMPAGE, ETC. The item of _rent_ includes the rental of
ground and the storage buildings, if any, outside of the office
expenses. _Stumpage_ is the cost of standing timber, the purchaser
being privileged to leave the stump after cutting down the tree.
11. MATERIALS OF CONSTRUCTION. These are chargeable F. O. B. the job,
or at the railroad station nearest to the work.
12. HANDLING OF SUPPLIES.
13. FREIGHT, when not included in item No. 11 or No. 7.
14. UNLOADING, HAULING AND STORING MATERIALS AND SUPPLIES.
15. RE─HANDLING MATERIALS AND SUPPLIES.
16. INTEREST ON CASH CAPITAL EXCLUSIVE OF PLANT.
17. TAXES AND INSURANCE ON PROPERTY (including boilers).
18. ACCIDENTAL INSURANCE, to protect workmen and the public.
19. ADVERTISING, MEDICAL EXPENSE, AND CHARITY.
20. DISCOUNTS ON BONDS, WARRANTS, OR NOTES.
21. CONTINGENCY LABOR.
22. CONTINGENCY MATERIALS.
23. CONTINGENCY SUPPLIES.
24. COST OF FINDING AND RECOVERING LOST FREIGHT AND SUPPLIES.
25. PROFIT.
COST REDUCTION
The ultimate aim of cost analysis is economic efficiency; and
any system or method of cost analysis which does not result in
the lessening of the total cost per unit of work performed, must
necessarily be a failure.
After the costs on work have been partially analyzed, it becomes the
province of the engineer to introduce methods and devices whereby
the expense of obtaining the various data may be more than offset in
the general economy of the work. It was long ago realized that shop
practice could be economized by methods of systematization; and we have
an early instance of the appreciation of this fact in the story of the
struggles and methods re─sorted to by James Watt in the construction of
the early steam engines. The troubles arising from incompetent workmen,
drunkenness, and the necessity of doing work in different parts of
the country far removed from headquarters, were as real then as they
are now, with this disadvantage, that in the eighteenth century the
press, the telephone, and the professional schools had not reached a
development admitting of intelligent coöperation in the attack upon
this problem.
Within the last score of years it has been found that cost─analysis
applied to shop work problems gives most amazing results. When
the piece─work system was introduced, it was believed that the
final solution of the problem had been attained. The men were then
placed upon the footing of contractors. A man got so much pay for
accomplishing so much work; and it was most clearly to his interest
to accomplish the maximum of work in order to get the maximum of pay.
It was immediately evident that the good men would soon show such a
contrast to the poor men on the work as to inspire a constant rivalry,
thereby resulting in a very much higher output. In order that the
desire to accomplish more work should not interfere with the quality of
the work, all materials were systematically and rigidly inspected.
For a good many years the piece─work system flourished, and it is
still flourishing as compared with its predecessors. It is vigorously
fought by trades unions and by the less able among the men. It is
tolerated by those of mediocre ability, and it is heartily endorsed by
the most skilful. In order to remove the resistance of labor unions, a
modification of the piece─rate system, known as the _bonus system_, has
been devised. It will be described in a subsequent paragraph.
Remarkable development has been achieved in the shop by the most
brilliant work on the part of the men who have applied cost analysis,
favored by the fact that in the shop one has conditions of work which
are practically invariable from day to day. It is possible, then, to
compare the work done per unit of time in the morning, with the work
done per unit of time in the afternoon, or for each hour in the day,
and thus to determine the effect of fatigue of the operators upon their
efficiency and the effect of such specific influences as the character
of artificial light, the grade of steel in tools, and even the economic
value of providing reading rooms, white─enameled lavatories, and
recreation for the operatives. To cost analysis has been largely due
the development of the special high─speed steels and an amazing number
of improvements in machinery, entirely aside from the stimulus and
education of the workmen.
In field work, however, comparatively little has been accomplished in
the world at large along these lines, not because the opportunity is
lacking, but because certain of the difficulties appeal more glaringly
to the pioneer in the field, and offer some peculiar discouragements.
The conditions are not uniform from day to day. The locus of the work
is changing, the weather is variable, and a very large number of
external agencies will be continually interfering with the scheduled
regularity of the work. The method or process whereby a piece of work
can be done more economically, may be instituted at just the time when
some apparently trivial variation of the weather, or breakdown in a
water system, or interruption in train service, may produce an entirely
opposite effect which will more than nullify the advantages obtained
from the improved process or method, and will sometimes cover a period
of a good many days and possibly weeks, making it appear that the
improved method is not only a failure but a dragon in disguise.
Field work is constantly presenting obstacles and difficulties which
have to be met and fought, calling for emergency judgment on the part
of the men in charge and on the part of all the men on the work to a
greater or less extent; and here alone is one of the chief reasons why
a contractor comes to depend almost exclusively upon the personality of
his superintendent or foreman, to the exclusion of systematic analysis.
It is abundantly demonstrable that when results are properly charted,
and when a careful record is kept of the causes of interruption and
the extent of the accidental obstacles, the problem becomes much
simplified. It is astonishing how intimately a manager may come into
touch in a short time with the obstacles to his work, and with the most
efficient methods for their removal, by means of proper reports and
cost analysis, and especially by the intelligent use of charts.
=Effects of Weather.= The principal obstruction to economical
construction work in the temperate zone, is due to _rain_. If it is
raining at about the time when the men come upon the work, they will
rarely fail to retire to their homes or to some point so far from the
scene of operations as to make it difficult if not impossible to get
them back upon the job if the weather should clear.
If a rain comes on in the noon hour, they generally leave and do not
return to work. If it should start to drizzle in the middle of the
afternoon, and the men are under fairly good discipline, they stand a
very good chance to stay the day out rather than miss getting a full
day's pay.
Next to rain as an obstacle is _freezing weather_. On concrete work, if
the concrete is laid at temperatures below 22 degrees, and particularly
when a slow─setting brand of cement is used, special precautions have
to be taken, and even then the work is liable to be rejected. For
work in which steam engines are employed, as dinkeys, steam shovels,
steam drills, etc., continued cold weather is likely to result in the
freezing of supply pipes, the freezing of valves, and the breaking
of pipe connections, necessitating a good deal of frost protection
and a well─disciplined and well─handled gang of pipe─fitters under
a responsible foreman charged with the express duty of keeping the
water lines clear. In very cold weather──say below zero──the freezing
of water will seriously interfere with the economy of the work on
the water end alone. Where steam drills are used and the weather
is exceedingly cold, the steam from the drills blown upon the men
condenses and freezes upon their clothes, involving great inconvenience
and suffering. Under such conditions the men will not work so many
hours per day as otherwise, and frequently they will not work at all at
critical times in the progress of the work, to the great detriment of
economy.
It has been observed that a combination of stress of weather a few
hours before the coming of the paymaster seems to be more discouraging
than at any other time, and it is seized upon as an excuse to quit work.
In very windy weather, more coal is burned than at other times; and
sometimes a boiler which is capable of running seven or eight drills in
ordinary weather will not be able to furnish steam for more than 70 or
80 per cent of this amount in the high, cold winds.
For the above reasons it is essential to keep a record of the
temperature and weather.
=Accidental Conditions.= Besides the weather, there are a host of
accidental conditions that may arise to influence the economy of the
work and complicate a precise study of the performance. Some of these,
named at random, are:
1. The blowing─out of the gasket in a main water supply pump.
2. A shipment of poor coal.
3. The wrecking of a trestle.
4. A derailment of cars.
5. The breaking of machinery on a shovel.
6. The burning─out of a boiler, due to carelessness on the part of a
watchman over night.
7. The non─arrival of necessary and important material.
8. Irregular blasting, due to irregular spacing of drill holes, or to
bad loading, or to poor detonators or a poor exploding machine, or to
irregularity in the character of the rock itself.
9. Erratic action on the part of one or more of the men, due to
drunkenness, ill─temper, or general contrariness.
10. Errors on the part of foremen in coöperation, some of which are
not detected in time to be eliminated.
In working out any special problem, care should be taken that such
accidental causes affecting performance──whether they decrease the
performance or, as may happen, increase it──should be carefully noted
and be a part of the regular report on the work. These features of a
report ordinarily are ignored as being unimportant, but they are of the
utmost value to the success of the work.
STIMULATING THE MEN
The art of persuading a man who is turning out 500,000 foot─pounds of
work in ten hours, to turn out 800,000 foot─pounds of work in ten hours
with a trivial increase in pay, is on its face difficult; but is by no
means impossible, and a list of some of the ordinary means of doing
this should not be out of place here.
1. =Watching the Work.= If, on the average work under the observation
of a foreman whom they know, the men are made to realize that their
individual performance is being watched and recorded by someone who
is above and beyond their own foreman, there will usually result
an increase in performance of from 10 to 20 per cent per man; and
particularly if a tab is kept upon the performance of the gang as a
whole, the foreman will add his own stimulus to that applied by the men
themselves, resulting in highly increased efficiency.
On such work as teaming, where teams are hauling earth along a road for
a considerable distance, a punch─card is very valuable. The driver
knows that the time of his trip is being recorded and compared with the
time for the same work done by other drivers; and it has the effect of
concentrating his mind upon his performance, which in itself causes
him to use more care in cutting down delays and keeping his team up to
their work.
In the operation of drilling, most valuable results have been achieved
by giving each drill runner a card on which, at the completion of each
hole, the time of the finishing of the hole is punched; and also the
time of starting the new hole, in the same way. This card will then
show the length of time that it took to drill the hole, and the length
of time required to move his drill. He will be stimulated to move
quickly, which in soft rock is an exceedingly important element of the
drilling work, and he will be stimulated in the effort to get his holes
down rapidly.
Where earth or rock is being loaded by steam shovels and hauled by
dinkey trains, great economy can be arrived at by providing each dinkey
runner with a punch─card or a report card on which he indicates the
time when his train left the shovel and when it returned again to
the shovel. This card then indicates the time for a round trip, and
his mind is constantly being stimulated to look out for causes of
delay; and, if he is at all conscientious, as most men are, he will
instinctively attempt to make the best time. Some remarkable results
have been achieved by this means alone in recent work.
When concrete is being mixed by hand, if a record is made of the time
when each batch is finished, there will inevitably be an increase of
activity of all the men in the mixing gang.
2. =Discharges.= The principle of natural selection of the men can be
very advantageously applied. Where the supply of labor is adequate,
it is advisable to make a rule of discharging a few of the poorest
men every few days, taking on new men to fill their places. This
necessarily results in an increase of the ability of the average
men on the work, and it gives a healthy spur to the men who are not
discharged. In carrying this method out, it should be done judiciously
and with care to avoid discharging good men, lest the discipline of the
work be interfered with. Any man who is not willing to do his best,
or who is caught loafing deliberately, is an economic disadvantage to
the work, and should be allowed to go. Likewise, any man who with good
intentions is so dull as to hinder the progress of the work, should
not be retained because of his good intentions alone.
3. =Bonus Systems.= An immense advantage can be counted upon by the
employment of a bonus system, of which there are a good many; and it
should be said at the start, that a bonus system may, although it
probably will not, be opposed by labor unions. The general idea of a
bonus system is to place the men upon a contract footing whereby they
will be guaranteed a minimum wage, and more money than the minimum
if they perform unusually good work. A refinement of this system may
be applied where the men receive less than the guaranteed minimum if
their work is noticeably poor. Where this latter arrangement should
be applied, will depend largely upon the local conditions; and this
feature is the one that is peculiarly obnoxious to the labor unions.
Where the supply of labor is adequate, it is usually better to
discharge the inefficient men than to attempt to work them under a
depressed rate.
On a recent piece of work, the steam drills, of which there were 14,
were averaging 4 feet of hole drilled per drill hour, the drillers
were getting 30 cents per drill hour, and helpers 18¾ cents.
For a period of ten days the drills were kept under the personal
supervision and instruction of the expert in charge; and at the end
of that time a bonus of 2 cents per foot for everything above 70 feet
in 8 hours was offered to the men. On this basis no one could get a
bonus unless he did 100 per cent better than the average previously
attained. Exceedingly cold weather intervened, preventing a good deal
of drilling; but within two weeks of the return to normal weather
conditions, the average drill output rose to over 6 feet per drill
hour, and one man obtained the remarkable record of 142 feet in 9
hours, or over 15.7 feet per drill hour. On this work a careful record
was kept day by day, of the performance of each man; and the men who
had a consistently low average were gradually discharged, thereby
helping out the bonus system. The men were also under more or less
constant instruction, and therefore the improvement was not entirely
due to the bonus system.
A further modification of the bonus system is advisable in some cases,
where an extra bonus is given for exceedingly high performance, such,
for example, as paying the men an extra cent bonus, making 3 cents
above, say, 90 or 100 feet per 8 hours. It is well, however, to apply
this modified arrangement only after there has been an elimination of
the poorest men. When possible, the payment of bonuses should be made
at very short intervals, and not left to a monthly settlement.
[Illustration: A CORNER IN THE LAUNCH BUILDING SHOP OF THE GAS ENGINE &
POWER CO. AND CHARLES L. SEABURY & CO., CONSOLIDATED]
4. =Bulletin Board Posting.= Posting upon a bulletin board in the
storehouse or office, of the records of performance accomplished in
different parts of the work day by day or week by week, is a very
valuable adjunct to the other methods of stimulation. The methods above
indicated will keep the men on the _qui vive_ during the day. A very
valuable improvement can be instituted if the more intelligent among
them can be led to think about their work after working hours. This
must necessarily be done in rather a subtle way. Posting records at
the end of the day's work so that the men see them on their way home,
will do a great deal toward keeping the subject alive until the next
morning. When the men have been led to a state where they discuss with
each other the methods of improved efficiency, for the following day
amazing results can be counted upon.
5. =Gang and Team Work.= If a certain number of men have been working
together under one foreman on one particular piece of work, they come
to know each other's methods and their foreman's methods intimately;
and they necessarily will become very much more efficient than when
they are shifted from gang to gang or when they have to work under
different foremen. If the record of the performance of each individual
gang can be obtained, and the men, as well as the foreman, are
acquainted with the record, a spirit of rivalry between the gangs
can be developed which will add greatly to efficiency. In making
such a record, inasmuch as the gangs are likely to vary in size, it
is necessary to have a unit of performance that will be independent
of the number of men in the gang. It will be found that, shortly
after the application of this principle, the men are themselves
making suggestions as to improvements in method; and frequently their
suggestions are immensely valuable.
6. =High Pay.= Some contractors have found it economical to pay a
little more than the prevailing rate of wages, thereby attracting to
their organization the best of the labor available. As a general thing,
a man is perfectly willing to do 10 per cent more work for 5 per cent
more pay per hour; and the difference in men is so great as to make
it more than well worth while to secure the very best of the labor
obtainable.
7. =Prompt Pay.= Men will work very much more contentedly when they
can count upon their pay with promptness and regularity. There is
nothing that demoralizes a piece of construction work more than the
postponement of a pay─day. Special care should be taken that each man's
pay is accurate. A man will seldom be over─paid unless there is "graft"
on the job, but it sometimes happens that through errors on the part of
the time─keeper or bookkeeper a man's pay is short, much to the agony
of the man himself.
8. =Early Hours.= A good deal of money is lost by the men not starting
to work promptly at the commencing hour, and by quitting before the
final hour. On a recent piece of work that had to be drastically
reorganized, an entire blasting gang rested on their shovels for over
one hour, because their foreman had decided to quit without notice,
and the man who was supposed to be in charge of the work arrived
late himself, and was detained at the other end of the job. On this
particular piece of work, it was not the habit to blow a whistle at
the commencing or the quitting hour, and the men started work in the
morning and quit work in the evening according to their own timepieces.
It was noted that nobody on the whole job quit a minute after he should
have quit, or started a moment earlier than he was paid to start.
In factory work it is feasible to have all the men go through a gate
which is closed one minute after the hour and not opened again for
perhaps 25 minutes, so that, if a man is two minutes late, he loses a
half─hour's pay. This has the merit of not working injustice to anyone,
and, after being instituted, seems to be accepted by the men with a
reasonable degree of contentment. It is not easy to start a strike
because some men lose their jobs from being late.
Such a system as this, however, is practically impossible on outside
contract work; and while it may be feasible to institute a modification
of the time clock method, it is not known that this has yet been
successfully done. Probably the most satisfactory way of insuring
prompt arrival of the men, is to measure the output of each gang and
make each foreman responsible for it, thus giving him a personal
incentive to get his men on the job promptly.
9. =Enough Foremen.= It is necessary, in any organization, to have the
chain of responsibility lead through a sufficient number of foremen;
otherwise a superintendent or supervisor will find himself "spreading
out too thin," and will be attempting to perform a lot of work that
should be done by a foreman. One superintendent can supervise the work
of 20 or 30 foremen with a favorable layout, and each foreman can
supervise the work of from 10 to 25 men. If, however, there be more
gangs than there are foremen, the superintendent will find himself
trying to play the part of foreman in instructing the men, and not able
to do his own work, which is to instruct and supervise the foremen. In
the matter of drilling, a number of able managers are not in favor of
having a foreman over the drills. It is calculated that by substituting
a boy to keep the records of the drilling, and putting bonuses on the
drills, the difference between the pay of a foreman and the pay of a
boy is saved, with no appreciable loss in performance.
There are strong grounds for the opinion that there should be no
process, such as drilling, without a foreman, where the work is on a
large scale. When 10 drills are working, they will employ altogether 20
men on the drills, a number of muckers clearing the ground, and a pipe
man. The work of these men cannot fail to be improved by their being at
all times under the watchful eye of a man to whom they are responsible
for the quantity and quality of their work. Aside from this, if the
foreman is an expert driller, the instruction that he can give to the
less able of the drill runners will be worth ten times its cost.
The same argument applies to all processes in the field.
10. =Education on the Work.= As a general thing, men who take money for
their labor are more than willing to deliver a square deal to their
employer; and it will almost invariably be found that the more familiar
a man is with the difficulties and possibilities of his fellow─workmen,
the more efficient he will be himself. For this reason it has been
found highly satisfactory, in some lines of work, to change the men
around on the job. In a certain concrete building 12 stories high, the
upper stories were built in a small fraction of the time required for
the corresponding lower stories. The greater part of the extraordinary
increase in efficiency was attributed to the fact that the men were
so educated that a man at the top of the building knew how the men at
the mixer and in other parts of the job were doing their work, and
knew that the superintendent in charge was measuring the speed of the
deliveries from the hoist. The disadvantage of this method is that
it takes a long time to work up the efficiency. It is, however, an
admirable method for disciplining an organization.