constructed as to apply to as large a proportion of the whole work as
possible, and every effort should be made toward the standardization of
materials and apparatus.
In attempting work in blasting, it should be remembered that the use
of new and untried explosives is attended with peculiar dangers. The
men are familiar with the use of the standard grades of powder; and
while they are ignorant of how dangerous it is to take liberties with
dynamite, they are at a great disadvantage when a new explosive is
given to them for trial. If it looks like dynamite and is exploded with
the ordinary detonating cap, its peculiarities do not receive much
attention.
Men in the field are instinctively opposed to new ideas, and it will
invariably be found that new methods meet with stubborn opposition.
A foreman to whom a new method is suggested will not expect it to be
successful, particularly if he has ever heard it condemned; and it
always seems as if the thought were father to the wish, for, when
ordered to try it in the field, if he can make it fail, he will do
so with unerring accuracy. As a general thing, however, when it is
successfully demonstrated, he will become a loyal supporter of it. In
presenting a new method to a foreman or superintendent, it is well
not to encourage the raising of objections. It is better to let the
objections raise themselves in the application of the process; and a
man who has not gone on record as saying that in his opinion a new
scheme is no good, is a much more loyal supporter of the new scheme
than when he has committed himself against it.
One of the difficulties in improving the efficiency of work, is the
extraordinarily ingenious line of excuses that the men will present
for not getting their work done properly. Of these, perhaps the most
hard─worked is that of improper and insufficient material. When a
man is berated for poor work, and presents the argument that he was
unable to do so and so because he ordered material for it several weeks
previously and the material has not yet arrived, the situation is
embarrassing. The best preventive of this is to have small requisition
blanks measuring about 2½ by 4½ inches, made up into pads of
about fifty each, and to give each foreman a pad. Each blank should
have a space for the date, the articles ordered, the time when the
article is needed, the particular part of the work where the article
is needed, the class of work for which the article is needed, and the
foreman's name. The foreman should then be instructed that material
will be purchased through the storekeeper, and that non─delivery of
material will not be accepted as an excuse. The storekeeper should
then go around a job at least once a day, and get from the foremen
their requisition slips; and an intelligent storekeeper will see to it
that useless and unnecessary material or superfluous material is not
ordered. Material that is ordered on requisition, and is not in the
storehouse, should be purchased if necessary on a rush order, because,
contrary to the ordinary apparent belief, it is economical to spend a
dollar for material in order to save two dollars in labor.
=The Field Layout.= In laying out the plan of campaign on starting a
new piece of work, it is important to consider the proposition from
the capitalization end, as well as from that of pure construction.
It is usually not appreciated by the engineer or the owner, that
the contractor is doing a piece of delicate financiering, for the
performance of which his own available money is usually inadequate,
and that he is therefore obliged to borrow money on the work as
it goes along, and to depend upon his monthly estimates. It is
sometimes specified in the contract, that the contractor shall own
all of his plant in fee, but it may be said that this arrangement
is seldom lived up to. He can in addition nearly always borrow the
amount of his pay─roll a month in advance, from his bank. He can
also sometimes borrow money, giving as security his interest in the
money retained on the contract, which is ordinarily something like
10 per cent. Therefore, provided that all goes well, if he gets his
estimates when they are due, if his pay─roll is not more than the
amount of his monthly estimate, and if no very large and disastrous
contingencies interfere with the progress of the work, the contractor
can swing a large piece of work with a comparatively small capital.
If, however, things do not go well; if, through the failure of the
owner's engineer, or through the insolvency of the owner, or through
liens and attachments upon the work brought by dissatisfied creditors,
the contractor does not receive his monthly estimates on time; if, in
order successfully to prosecute the work, it is necessary for him to
buy a large amount of additional machinery at a time when payments on
old machinery are due; or if the portion of the work that he is doing
is bringing him in less than the amount of his pay─roll and immediate
materials and supplies, unless he has a large capital back of him,
which capital is at once available, he is liable to be placed in an
exceedingly embarrassing position. At such a time, if there should
come a period of financial stringency, bankruptcy may stare him in the
face, even though he has at the same time a contract on which he can be
reasonably sure of making a large profit.
It is therefore of great importance that the work be prosecuted in
such a manner as to have a continuous running profit, if possible.
A contractor may turn in what is known as an _unbalanced bid_. In
that event it will be very easy for him to start a certain portion of
the work upon which he will lose money before he reaches the portion
on which he expects to make money. Unless, as above indicated, the
contractor is provided with a large fund for contingencies, great care
should be taken to avoid this. The nature of unbalanced bids will be
explained below.
As a case in point, on a certain contract involving over a million
dollars, the company that was organized to conduct the work was
provided with a small working capital, bought its plant on a time
basis, and proceeded with a small working capital, under the impression
that it would not be necessary to borrow any money, that the work
immediately commenced would be sufficient to pay all the expenses and
leave a profit, which profit would gradually accumulate and enable
a running fund to be maintained which would take care of future
contingencies. The idea was admirable. It happened that the work was
in earth and rock excavation also known as _unclassified_, and was
taken at a price which would admit of a large profit in any event. The
rock work, if taken economically, would cost more than the contract
price; the earth work, if taken economically, would cost considerably
less than the contract price. The original plan contemplated starting
the earth excavation at a point to which another contractor was
to excavate, and it was not deemed feasible to commence the earth
excavation until the other contractor had cut up to the line between
the two contracts. Dependence was placed upon the other contractor
doing his work on time, which he did not do; and it was then decided
that it would be impracticable to commence in the earth, and work
was accordingly commenced in rock, which work was conducted at a
considerable loss. The strong financial position of the contracting
company was the only thing that prevented it from going to the wall
with a most excellent contract partly completed and a lot of good money
tied up.
[Illustration: A VIEW IN THE STRUCTURAL SHOP OF THE MINNEAPOLIS STEEL &
MACHINERY CO., MINNEAPOLIS, MINN.]
We shall assume, for purposes of illustration, that a certain
contractor desires to bid on some public work involving the removal of
100,000 cubic yards of earth work and 50,000 cubic yards of rock work.
He estimates that he can do the earth work for 30 cents per cubic yard,
or $30,000, and rock work for 80 cents per cubic yard, or $40,000,
making a total of $70,000 for the entire 150,000 yards, or 46.66 cents
per yard for an average of the earth and rock; and he puts in his bid
at this figure.
If the contract has been obtained as one of the Erie Barge Canal
contracts, the work will be let _unclassified_, as it is called. By
this is meant that no discrimination in monthly estimates will be made
between rock and earth removed; that the earth and rock removed will
be measured in excavation, and the contractor will be paid for these
two materials indiscriminately. Now, we shall assume that he can make
a profit of 4 cents per yard on the earth, and 10 cents per yard on
the rock, so that his total profit on the contract will be $9,000.
According to the terms of his contract, he will be paid on the monthly
estimates 46.66 cents per yard removed, less 10 per cent──or 42 cents,
the 10 per cent being retained until the completion of the contract.
Suppose, now, that he starts in on the rock, and he excavates the
50,000 yards at a cost to him of $35,000.00 for which he will receive
42 cents per yard, or $21,000.00. He will then be out of pocket
$14,000.00; but there will be coming to him as held by the State
$2,333.33.
Before he can begin to "see daylight" on his contract, he must proceed
to excavate earth until he has made up the $14,000.00. He gets 42 cents
in cash, and it costs him 26 cents, so that he must excavate 87,500
yards of earth, for which he will get the $14,000.00, and he will have
held up $4,083.33 additional. There will then be remaining 12,500 yards
to be excavated on which he will get $5,250.00, with $583.33 held back.
He will have been obliged to do 91⅔ per cent of his contract before
he stops putting money into it; and the money that he has put into it
he will not be able to draw interest on, because he will not be drawing
interest on the 10 per cent retained. The amount of money that he had
to put up to cover shortage on his contract will have been $14,000.00,
on which he will have to pay interest to his bank. If, on the other
hand, he commences the earthwork first, he does 100,000 yards of
earthwork, costing him 26 cents, on which he gets back immediately 42
cents, and he has $16,000 for working capital, in addition to $4,666.66
held up. He then does the rock work, and the rock work never exhausts
his capital, and he has no interest to pay except on his plant, which
he can easily do out of his $16,000.
This is not only a practical problem in how to handle a contract
without being wiped out financially, but it is an exceedingly important
one as defining where the ultimate success in the operation lies. It
can readily be seen that when a contract is taken on close figures, the
entire success of the financial operation will depend upon the proper
layout, as indicated above.
=Unbalanced Bids.= We shall assume again, for purposes of illustration,
that a certain contractor desires to bid on some public work involving
the removal of 100,000 cubic yards of earthwork and 50,000 cubic yards
of rock work. He estimates that he can do the earthwork at a profit
for 30 cents per cubic yard, or $30,000; and rock work for 80 cents
per cubic yard, or $40,000. If the work in the above example were
_classified_, and the contractor were paid so much money for each
yard of rock and so much money for each yard of earth excavated, and
his bid read 80 cents for rock and 30 cents for earth, it would be
said to be a _balanced bid_. Other contractors, seeing his bid, would
know that he considered that he could do the rock work at a profit at
80 cents, and earthwork at a profit at 30 cents. In order to prevent
them from obtaining this information, the contractor can _unbalance_
his bid, as it is termed; and in this event he would bid perhaps as
follows──namely, 100,000 yards of earth at 40 cents, or $40,000; and
50,000 yards of rock at 60 cents, or $30,000. The total amount of this
contract would be the same, and he would make the same profit; but his
competitors would be deceived as to his basis of doing work.
The disadvantage of this from the contractor's point of view is that,
in the event of an error having been made in an estimate of quantity,
he might find himself doing less than 100,000 yards of earth and more
than 50,000 yards of rock, in which event he would stand to lose money.
=Material Supply.= In concrete work particularly, it is all─important
that material──cement, sand, and stone──be promptly shipped, and at the
same time not too promptly shipped. If the shipments are not promptly
made, there will be a failure of material to arrive, which will throw
the men out of work, with all that this implies in high costs. If
the material is shipped too rapidly, it will be necessary either to
unload it into a stock pile, which will involve the re─handling of the
material; or to pay demurrage charges to the railroad company, if the
shipments are made by rail.
In such work, at a time when there is likely to be any freight
congestion in the country, stock─pile facilities should be provided to
care for a supply of material to carry the work for one to two weeks.
On a piece of work involving, say, two large concrete mixers capable
of mixing 300 yards of material each per day, there will be used 900
yards of stone and sand per day, which, on a ten─day basis, will mean
a very respectable stock pile. This 9,000 yards of material, costing
perhaps one dollar per yard, means an investment of $9,000 in stock
pile, on which interest must be paid at the rate of, say, 6 per cent,
or $2.00 per working day, which means a trivial item compared with
the advantages derived from having a constant supply of material.
The total cost of this stock pile, in addition to interest, is the
cost of one re─handling of material out of the stock pile, which at 5
cents per yard would be $450. This amount is very much less than the
damage that would accrue from not having any stock pile at all. On
most concrete jobs, there is usually provided a large storehouse for
cement; and when the work has to go over from one working season to
another, it is frequently the custom to leave the cement in storage.
This is frequently a cause of loss of money, because the cement, being
hygroscopic, absorbs moisture from the atmosphere, and is liable to
spoil in consequence. This can be avoided by keeping the storehouse dry
and warm through the winter, but this again is an expensive matter.
=Old versus New Machinery.= In planning construction work, the question
always comes up as to whether to use old or new machinery. No hard
and fast rule can be prescribed. A case occurred upon an important
contract where there were needed some new boiler tubes for the boiler
that ran the main supply pump. The purchasing agent of the contracting
company, who happened also to be the President and Chief Engineer of
the company, bought some second─hand boiler tubes, which were forthwith
put into this boiler. The saving on the boiler tubes was probably $8 or
$10. The loss caused by a breakdown of the same boiler was nearly $50.
In purchasing second─hand material, if the material can be thoroughly
and rigidly inspected, it is perhaps wise to purchase it, and sometimes
money can be saved; but as a general proposition, no second─hand
material should be purchased for a contract, unless it is done with the
determination of putting this material in first─class condition before
it is used. The best inspection, as a general thing, will not disclose
the exact condition of old material. By this it is not meant to
intimate that new material should be purchased for every new contract.
=Use of Maps.= A precaution on construction work that is very seldom
taken by contractors generally, and one that is a most certain saver of
money, is to have a complete map of the work to a large scale carefully
prepared, on which should be indicated day by day the progress of
the work. This map, if kept up to date, will enable the manager of a
company, or the president and directors, to know in detail the progress
of the work, without necessarily going out on the work; and from it can
be found the quantities of needed materials, such as rail, pipe, etc.
=Standard Instructions.= Every organization doing field work would do
well to follow the custom admirably illustrated by Frank B. Gilbreth,
of issuing regular standard instructions to foremen and to employees
generally. These instructions have been published in book form by the
Myron C. Clark Publishing Company, and are an admirable example of the
type. The idea follows that of the old Railroad Company's "Book of
Rules" that will tend toward evading similar accidents in the future.
In this manner eventually a contractor can obtain a control of his
organization, and a freedom from accidents, that will be extremely
valuable.
=Chronological Charts.= These are intended to show the proposed time of
completion in certain parts of the work. A valuable aid to a manager on
work requiring a large amount of material, and where there is a small
amount of available space, is a chart showing the time and quantity
of expected materials and supplies. This will enable him to see at a
glance where he may expect to be in the matter of his materials, and
will tend to relieve his mind of one of its most annoying problems.
These same charts can also show him the estimated times of completion
of certain parts of the work.
REVIEW QUESTIONS.
PRACTICAL TEST QUESTIONS.
In the foregoing sections of this Cyclopedia numerous illustrative
examples are worked out in detail in order to show the application of
the various methods and principles. Accompanying these are examples for
practice which will aid the reader in fixing the principles in mind.
In the following pages are given a large number of test questions
and problems which afford a valuable means of testing the reader's
knowledge of the subjects treated. They will be found excellent
practice for those preparing for Civil Service Examinations. In some
cases numerical answers are given as a further aid in this work.
REVIEW QUESTIONS
ON THE SUBJECT OF
PURCHASING AND STORES DEPARTMENT
1. What information is required by the purchasing agent?
2. Outline a system of catalogue filing suitable for a business of your
own selection. What styles of files would you recommend?
3. Describe and illustrate with suitable forms, a system of catalogue
indexing.
4. Explain how special quotations can be recorded, and illustrate with
a suitable form.
5. What method would you suggest for keeping a record of orders placed?
6. Explain the routine of the purchasing department. Illustrate forms
for requisition and low stock reports.
7. Describe a system to be used in ordering goods, explaining the
purpose of each copy of the order.
8. How does the purchasing agent know when goods are received?
9. What papers in connection with an order are filed permanently in the
purchasing department? How are these papers indexed?
10. What are the functions of the stores department? Who should
supervise the stores department?
11. Describe a labor─saving system for taking an inventory.
12. Into what classes is the inventory in a manufacturing enterprise
divided? Illustrate a suitable inventory record form for one of these
classes.
13. Name three reasons why a stores record system is of value.
14. What general plan should be followed in locating storage places for
material and supplies in a manufacturing plant? How should the material
be arranged in the storeroom?
15. What steps are necessary to provide a record of the receipt of
material and supplies, and to prevent the acceptance of goods which
should not be received?
16. How are unauthorized deliveries guarded against? Illustrate a
suitable requisition form for a business of your own selection.
17. Into what two classes are stores records divided? Which class is
the more usual in the storeroom?
18. How should stores record forms be filed? How can the accuracy of
the stores records be verified?
19. Illustrate and explain a suitable form for a stores record of
materials and supplies, showing quantities only.
20. Illustrate a stores record form for supplies showing the
distribution to departments.
21. When a foreman draws from the storeroom more material than is used
on a job, and returns it to stock, what form of record should he make?
22. When material drawn for one job is transferred to another, what
form of report should be made?
23. Why should a complete record of machinery and equipment be
maintained?
24. Describe a suitable system for the tool─room.
25. Illustrate the necessary forms for a record of tools.
REVIEW QUESTIONS
ON THE SUBJECT OF
RECORDS OF LABOR
1. Into what general classifications are wage systems divided?
2. Describe the characteristics of the _day wage_ plan. In what
respects does the day wage plan prove inequitable?
3. Describe the _piece rate_ plan. Name its advantages and
disadvantages.
4. What is a premium system? What conditions are intended to be brought
about by a premium system?
5. What special points of merit does the Halsey plan possess?
6. What are the essential features of the Taylor differential wage
system?
7. Name the special features of the _Gannt bonus system_. What are its
apparent disadvantages?
8. What are the principles of the _Emmerson efficiency system_? Name
some of the conditions necessary to a successful operation of this
system.
9. What wage system or systems are used in the business with which
you are connected, or another selected for your illustration? Do you
consider the plan used the best suited to existing conditions; if not,
what changes would you suggest?
10. Into what two classes is time keeping divided? Which system is used
in a trading business? in a manufacturing enterprise?
11. Explain why time records are necessary when the pay of an employe
is based on the unit of production.
12. Explain the operation of the check system of time keeping. What are
its disadvantages?
13. Explain the operation of the time clock as used for recording total
time worked.
14. What is meant by _production time records_?
15. Illustrate a form of work order providing for a time record. Under
what conditions is the use of such a form justified?
16. Illustrate a form of time card which provides for an entire day's
production record. Why is this a dangerous form to use?
17. Illustrate a form of time card for a record of one job, suitable
for a business with which you are familiar. How is it used?
18. Describe the principal features of the different classes of
mechanical time recorders, designed to record the time worked on
specific jobs.
19. Name a business in which cumulative time records can be used to
advantage.
20. Illustrate and explain a form for a piece work record, suitable for
a business of your selection.
21. Illustrate a suitable form of pay─roll sheet to include records of
both total and job times.
22. If the total time shown by the job cards does not agree with the
clock record, how should the discrepancy be adjusted?
23. To what account should time shown by idle cards, and time
unaccounted for, be charged, and how should it be distributed?
24. How can standard costs be determined? Why should the inefficiency
burden be added as a separate charge?
25. Why should a detailed record of every employe be kept?
26. Illustrate suitable forms for applicants' and employes' record
cards. How should these be indexed?
27. What is a _production order_? a _shop order_?
28. Name and give examples of four classes of production orders.
29. Illustrate a form of production order, suitable for a business of
your selection.
30. How are the instructions of the superintendent given to the
foreman? Illustrate a suitable form.
31. Explain, and give an example of the use of, _standing orders_.
32. Name three good reasons why a record of manufacturing orders should
be maintained.
REVIEW QUESTIONS
ON THE SUBJECT OF
GENERAL EXPENSE AND COST SUMMARIES
1. Explain the relationship between expense and cost of production and
why the former should be absorbed by the latter.
2. Why is manufacturing expense related to cost rather than selling
price?
3. Why is the labor cost of production considered the most reliable
basis for calculating expense?
4. What is a safe rule to follow in the segregation of pay─roll into
productive and non─productive labor?
5. Why is expense not added to operating costs?