Part 7

The elimination or cut─out wheel referred to as being a part of the master clock, is responsible for this wonderful piece of work. The wheel makes one revolution in twenty─four hours and is graduated in fifteen minute divisions for the purpose of setting the contact breakers. The contact breakers are bits of hard rubber which are fastened around the rim of the wheel, and may be moved about at the will of the custodian of the apparatus by simply loosening the set screw. These blocks are set on the starting and stopping time and when they pass the contact breakers the electrical circuit is broken, and the computing device started or stopped as the case may be.

=15. Cumulative Time Records.= In some factories and shops, the work is of such nature that economy results if the work order and the time record follows the job through all of the operations. For example, hosiery and underwear go through the factory in dozen lots; in a shoe factory a lot of shoes is kept together until every operation is finished; in a harness factory, a bridle goes through all operations on one work order; in a machine shop, one or more rough castings may pass through several operations in the process of converting them into finished parts.

[Illustration: Fig. 23. Calculagraph Time Card with Coupons]

When these conditions exist, it is practical to attach a time card to the work, and to accumulate the time of all employes for the entire job. At the same time, individual time records are obtained.

A form to be used with the mechanical time recorder, Fig. 18, is shown in Fig. 23. This form consists of the usual work order to which is attached a series of coupons, perforated for easy removal. Each coupon is of the right size to accommodate the time record, and particulars as to the order number, operation number, man's number, and number of pieces.

[Illustration: Fig. 24. Cumulative Job Time Card]

[Illustration: Fig. 25. Operations Tag Used in an Underwear Mill]

The man who has the first operation enters his number and records his starting time on the first coupon. When the operation is finished, the time employed is recorded, the coupon is detached, and the job goes forward to the next operator. If the operation is not finished at the close of the day, the time record is made and the next coupon used by the same operator.

Each day, all of the detached coupons are sent to the cost department, where they serve several purposes. They are first sorted by employes' numbers, to compare the time reported with the clock record; then sorted by job numbers, to obtain time records for each job. From the coupons, all necessary information is obtained for a record of jobs in process, showing just where each job is at all times.

Another form for a cumulative, as well as an individual time record, is shown in Fig. 24. This card is for use where no time recorders are provided. Each employe records his time, and, when the last operation is finished, the card goes to the cost department. If desired, this card might be made with detachable coupons for the different operations.

PIECE─WORK RECORDS

=16.= Where piece─rate or premium wage systems are in effect, is it necessary to have accurate records of production, since the pay of the worker is governed by the number of units of production. It has already been stated, that to obtain the exact cost per unit of production, time records must be kept on piece work. It is not, however, absolutely necessary that the time be recorded for each separate job or unit of production. The necessary requirement is that the production records shall be so kept that they can be checked as to time──that the time required for a given number of units of production can be obtained, or that the units of production during a stated time can be definitely known.

[Illustration: Fig. 26. Weekly Time Records for Piece Workers]

[Illustration: Fig. 27. Production Record of a Gang of Piece Workers]

Piece rates are applied to many distinct classes of work, each of which necessitates a slightly different system of records. One of the industries in which piece rates are largely used, is the manufacture of garments of different classes. In this industry, each garment or lot of garments passes through several operations, each operation being performed by a different operator. Since practically all operations are on a piece─rate basis, it is necessary to obtain a record of the name or number of each operator.

[Illustration: Fig. 28. Individual Time Record Card Used with the Calculagraph]

[Illustration: Fig. 29. Daily Record of Piece Work]

A form for a record of operations in an underwear mill is shown in Fig. 25. This is in the form of a shipping tag with particulars of the order at the top, followed by a list of the operations. As fast as the goods are cut, they are tied in bundles of one dozen garments. The tag is then attached, the cutters' names or numbers are entered on the lines opposite their operations, and the bundle is delivered to a storeroom located conveniently to the machines.

[Illustration: Fig. 30. Record of Unfinished Piece Work]

[Illustration: Fig. 31. Production Record for Determining Piece Rates]

In the mill where this particular system is in operation, each operator delivers her work to the storeroom and receives more work as needed──always writing her name on the tag. When the work is received in the storeroom, a clerk records the last operation on the operator's time card, Fig. 26. One of these cards is used for each operator and accommodates the record of work for an entire week. Provision is made in the column at the left for a record of the kind of work, while the record of dozens finished each day is shown in the proper daily columns. At the end of the week, when extensions have been made, this card shows the amount of wages due, the different kinds of work done, and the quantities finished. In connection with this, the usual clock record of total time is kept, and a comparison of the piece work and clock records will show whether or not the operator is maintaining standard time on the different classes of work.

[Illustration: Fig. 32. Sheet for a Record of Total Time]

In the manufacture of certain classes of cans, some of the operations are paid for on a piece─rate basis; but payment is made on the basis of the production of a crew. The operation of crimping tin ends on certain cans, requires a crimper and several helpers, the latter preparing the cans for the operation. For this operation, the pay of all members of the crew is based on the number of cans finished; that is, if the number finished by a crew consisting of one crimper and four helpers is 2,000, the crimper will be paid for that number, while the helpers will each be paid for 500. The form used for a record of production on this operation is shown in Fig. 27. This is the assembled record, the individual time records being made mechanically on a card, Fig. 28.

[Illustration: Fig. 33. Combined Piece Work and Time Record for Pay─Roll Purposes]

On the operation above referred to, the speed of the helpers is limited to the speed of the machine, but if three helpers instead of four can do the work, the pay of each will be increased correspondingly. In the operations handled by crews, there is nothing to limit production. The result is that each member of the crew is obliged to maintain the pace set by the most speedy member, which reduces the cost of production and enables all members of the crew to earn a higher average wage.

A form of piece─work record, used in a factory where employes are expected to keep their own time, is shown in Fig. 29. This ticket is filled in by the employe, _O. K.'d_ by the foreman after inspection of the work, and forwarded to the cost department. All unfinished piece work is reported on the form shown in Fig. 30. This report enables the cost department to determine the actual time of all piece─work operations.

Before piece rates can be established for new work, it is necessary to ascertain the average time required for the different operations. This necessitates a very accurate record of production of employes working on day wage rates, and the record must represent the average rate of production of all employes, rather than the rate maintained by a few of the most skillful. A form used in one factory for such a record is shown in Fig. 31. When new work is started, one of these cards is filled in for each employe assigned to the work, and a record kept of each operation. When the records have been kept for a sufficient length of time to obtain an average, the records of all employes for the same operation are combined and, on the average thus obtained, the piece rates are established.

PAYING EMPLOYES

=17.= The time records of all employes, no matter how kept, must be assembled for the purpose of making up the pay─roll. Special forms of time sheets or pay─roll records are designed to meet the requirements of different classes of business. Several such forms are shown in other papers in this series; others are illustrated herein.

A conventional form of time sheet is shown in Fig. 32. The names are grouped on this sheet by departments, and opposite each man's name is his number. The daily time records are kept for a period of one week, then totaled, and the amount of wages extended in the last column.

Fig. 33 shows a form of time sheet intended for a tabulation of both the clock record and job time. The bringing together of the total time records (as shown by the clock) and the production time records (as shown by the job time cards) is of very great importance in connection with any system of cost accounting. One must be checked against the other, for unless all of the time for which the employe is paid is accounted for in the cost records, cost figures will be incorrect.

If the two records do not agree, even though the employe is paid for the time shown by his clock record, the discrepancy should be adjusted. Theoretically, every minute of a man's time should be accounted for by his time cards and, when conditions permit, he should be paid only for the time so accounted for. This rule should not be so rigidly enforced, however, as to encourage a man in padding the time on individual jobs to reconcile the total for the day with his clock record; it is far better to have a few minutes unaccounted for. When a foreman fails to have work ready, he should give the workman an idle or indirect labor card, but the man should be impressed with the fact that accurate records are kept of his time on every job, and that all lost time must be either reported on an indirect labor card or left unreported.

The cost of time shown on indirect labor cards, and of all time unaccounted for, should be charged to the department under some such caption as _Department Waste_, never to the specific jobs on which the man has worked. Time wasted between jobs or on account of a breakdown or other unusual occurrence does not affect the legitimate time in which a particular job should be done. It is rather a legitimate charge against the efficiency of the department, and the aggregate of all such inefficiency charges should be applied as an added burden to all of the jobs in the department during the month.

Costs obtained, after adding this inefficiency burden, may be considered the actual costs for the month, but cannot be safely used as standard. Standard costs are the costs obtained under perfect conditions──when the department, shop, or plant is running full time at full capacity; when all of the time of every employe is accounted for by his job time cards; when there is no wasted time or unusual expense. While standard costs may not be attained──probably never will be──this should be the goal, to reach which, managers, engineers, superintendents, foremen, and workmen should strive constantly. As a matter of record, therefore, to show what obstacles must be overcome before the ideal is reached, the inefficiency burden should be added as a separate item after all other items of cost have been computed.

As an example of the effect of the application of this principle of considering efficiency in figuring costs, we will consider an imaginary case. We will suppose that, in a certain month, the pay─roll for direct or productive labor in our shop is $4,000; that 40 completed machines──identical in every respect──are produced; that every minute of the time of every productive employe is accounted for by his productive job cards. This gives a labor cost of $100 per machine. During the next month the same men are employed at the same cost──$4,000──but owing to an unusual breakdown, 2½% of the time of these men is wasted; they are idle while the breakdown is repaired, and but 39 machines are produced.

If the $4,000 wages paid is charged as direct or productive labor it gives a cost of $102.56 each──an increase in cost with nothing in the figures that shows the cause. If, however, an inefficiency charge of $100 (2½% of $4,000) or $2.56 per machine is added as a separate item, it is seen at once that here is an unusual item of expense. The amount ($2.56 per machine) is included in the final costs, but in the right place; there is no cause for confusion on account of an apparent, but not real, increase in the productive labor cost. If the cost of $100 per machine obtained during the preceding month is standard for productive labor, it still is the attainable standard; the fact of an unusual expense has in no way affected the legitimate cost of productive labor.

Another great advantage in presenting the labor cost statistics in this manner is that inefficiencies are shown in an understandable form. The fact that indirect labor is increased, say 2%, might occasion no comment; but if an inefficiency charge of even 1% is shown, it calls for immediate investigation.

The establishment of standard or efficiency labor costs means predetermined costs. This is a radical departure from established custom; on its face, contrary to recognized accounting practice; in results, wonderfully efficient. To determine standards in men, material, and machines is a function of the engineer; the recording of facts──the actual cost──is the function of the comptroller or accountant. The two must work together. Properly prepared accounts, showing actual costs with the items that make them segregated, show the engineer how far short of possible standards the plant is running──the extent of the inefficiency.

[Illustration: Fig. 34. Record Card for Applicants for Employment]

RECORDS OF EMPLOYES

=18.= In connection with the different time records designed to record hours of service and units of production, there should be a personal record of employes; and the more intimately personal it can be made, the more valuable will the record become.

[Illustration: A BIRD'S─EYE VIEW OF THE PLANT OF STUDEBAKER BROS. MANUFACTURING CO., SOUTH BEND, IND.]

Napoleon, it has been claimed, could call by name every man in his armies, but, however great value may have been placed on such a memory feat, the manager of the present─day great business organization, who can call by name each of his employes, is an exception.

[Illustration: Fig. 35. Card for Record of Applicants]

[Illustration: Fig. 36. Card for Record of Employes]

It is not necessary that he should do so, for, as business is now specialized and departmentized, he needs to know only the results of the labor of those employes. By this is not meant that he should not take an interest in the personality of his organization; on the contrary, he should be very much interested, but he can be relieved from burdening his mind with details by means of simple records.

Somewhere in the office there should be as complete a personal record of each employe as is possible to obtain. This record should include applicants, employes, and past employes, and it should be the duty of some person or department to maintain the record. In the smaller establishments, employes' records should be in charge of the chief accountant, office manager, or superintendent; in larger establishments, the employment department will keep these records.

[Illustration: Fig. 37. Card Showing Complete Record of an Employe]

=19. Application Card.= Fig. 34 shows a simple form of application card to be filled out for every applicant who is not hired immediately, but whose application receives favorable consideration. This card is headed with the name of the position applied for, or the trade of the applicant. Following this is the name and address, and such information about the applicant as may be considered of special value.

These cards are filed in a regulation card index drawer and indexed under the trade or position applied for. The index cards are headed with the names of the trades employed, the departments, or such other designations as may be best suited to the business. For instance, one index might be headed _Machinists_. Back of this index the cards of all applicants for positions as machinists will be filed in alphabetical order.

A form of application card which provides for more detailed information along certain lines is shown in Fig. 35. While this card is headed with the name of the employe, it is filed under the trade, as described for Fig. 34.

The value of these application records is apparent. When a man is needed, reference to this file will show who has applied and assist in getting a man quickly.

=20. Employe's Card.= One form of employe's card is illustrated by Fig. 36. This card is filed as soon as a man is engaged. At the head of the card is the name of the employe, the department to which he is assigned, and his clock number. Following this is the address and other essential information. Space is also provided for a record of changes in wages, including both dates and rates. At the bottom of the card, space is left for notes on the record of the employe, which can be continued on the back of the card. The final record on this card is the date the employe quits, or is discharged, with reasons.

[Illustration: Fig. 38. Card Record of a Past Employe]

Another form of employe's card is shown in Fig. 37. The special feature of this card is that, for each increase in wages, the reason and name of the person granting the increase is noted.

The cards of present employes are filed alphabetically by name. However, in very large establishments, it is advisable to subdivide them by departments and arrange the cards of all employes in the department in alphabetical order. It is seldom necessary to arrange the cards by trades for the reason that the names are, as a rule, so classified on the pay─roll records.

The employe's record proves valuable in many ways. If, for any reason, an employe is away from his work, and it is desired to communicate with him, the address is quickly found; in case of an accident, resulting in injury to the employe, the address is very convenient. Again, when a man is wanted for a position a little above that occupied by the average employe, it is best, if possible, to select a man from the present employes. Whether the position be that of a gang boss, a foreman, or the head of a department, a condensed record of past performance, supplementing the personal observations of his superiors, will be found of considerable assistance in selecting the right man. Many other advantages might be named, but those given should be sufficient to demonstrate the advisability of maintaining these records.

=21. Past Employe's Card.= In some respects, a record of past employes is as important as the record of applicants and present employes. When more men are needed, it is natural to suppose that past employes, whose services were satisfactory, will be specially desirable. On the contrary, a past employe who has been discharged, or whose work was unsatisfactory, is unlikely to be desirable.

Any record that will show who the past employes are, why they left, and their past record, will therefore be of value. Such a record is provided by the card illustrated in Fig. 38. When an employe leaves, for any reason, one of these cards is filled in and filed alphabetically. At the same time, the employe's card is transferred to another section of the file, and indexed under the name of the department, or the trade or class of employment.

These cards furnish a very complete record of employes, past, present, and future. If the number is small, all can be filed in one drawer, with separate indexes to segregate them into classes. Or a large cabinet, with one or more drawers for each class of records, may be required, but, in any event, the records are complete.

MANUFACTURING ORDERS

=22.= One of the principles that must be kept in mind when installing a system of any description is that provision must be made for recording every detail of the work intended to be cared for by the system. While this holds true in respect to the systems in every other department of a business, it is of special importance in the manufacturing branch. Accurate costs are out of the question unless every detail of the operations of the plant is properly recorded.

Experience has shown but one method that will insure accurate records, and that method is to manufacture all goods on definite orders and to charge all work not applied to a specific manufacturing order, to expense or operating accounts. The receipt of an order to manufacture before starting the work, is of the same importance to the superintendent as that the commercial department shall receive an order from the customer before shipping goods.

Few managers will accept verbal orders for the manufacture of expensive goods, without asking for a confirmation in writing. When those orders are transmitted to the manufacturing department, it is just as important that they shall be in writing.

Manufacturing orders are of two classes: general orders to the superintendent to manufacture a certain quantity of goods, and specific orders to shop foremen to do some part of the work. For convenience, these orders will be referred to in this discussion as _Production_ orders and _Shop_ orders.

=23. Production Orders.= The production order is the written instructions to the superintendent to manufacture certain goods. It is his authority to secure the necessary material, to employ the required number of men, and to convert that material and labor into the finished product. The production order may call for the manufacture of the quantity of goods of a certain type required to fill one or more customers' orders; the manufacture of a certain quantity of goods to be placed in stock, from which to fill future orders; the conversion of a definite quantity of raw material into finished products; or even the manufacture of an indefinite quantity of raw material into an equally indefinite quantity of the finished product, but within a definite period of time.