Part 24

=Design of New Methods.= When there is crying need for improved methods in the field on account of special necessity, it behooves the man in charge to invent improved methods and design improved apparatus. The cardinal elements of such design include the following:

1. Simplicity.

2. Low first cost, so that if the experiment is not successful, nothing will be lost.

3. The use of standard sizes of material.

4. Generality of application.

Whenever possible, a new method or a new machine should be so 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?