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Discussion on Mr. Percy Martin's Paper at the Institution of Automobile Engineers.
The practical standard of the papers read before this Institution is enhanced by the latest addition to the transactions—the paper on " Works Organisation " by Mr. Percy Martin. The subject is of real importance in a comparatively young industry like automobile engineering, where changes in design and practice are constantly presenting new problems for solution by those responsible for works management, and it was not therefore surprising that there was an excellent attendance at the meeting over which Colonel R. E. Crompton presided in the hall of the Institution of Mechanical Engineers on March 13th. The discussion on the paper was as full as the circumstances permitted, and the meeting was prolonged until a comparatively late hour in order that the many topics raised in the paper should be discussed. It was evident, however, that not one evening, but many would be required to do justice to so comprehensive a subject as that treated in the paper, and the suggestion isi.ade that Mr. Martin should on a future occasion read a paper before the Institution on one branch only of works organisation, and treat that in detail is one which we hope to see carried out, as the great usefulness to the industry generally of such a paper is at once apparent. The value of the paper itself was borne testimony to by Colonel Crompton, who thought the Institution was to be congratulated on having secured a paper of so useful a character. Our last issue contained the complete paper.
Works Manager should be a Director.
Mr. Alexander Craig in opening the discussion said that the paper dealt with repetition work on a large scale, and the principles it laid down must be applied if any business was to be made a suc-eessful undertaking. One important point was laid down, the necessity for the works management being thoroughly in touch with the business policy, the inability to realise which had undoubtedly been the cause of many failures in the automobile and other engineering businesses. Mr. Craig was emphatic that the man who was responsible for the manufacturing operations should have a seat on the board of directors, the directors of limited liability companies frequently being insufficiently acquainted with the conditions which obtained in ' the works. It was impossible for a works manager to keep a board of directors posted in the works view of affairs at occasional short conferences with the board. Turning to the question of cost it was imperative in arranging a selling programme to have an idea of prime cost, which he would point out was governed largely by the output, and it was necessary to keep a keen eye on the average cost. In a business not run efficiently one had to face the loss arising from failure to obtain the best discounts on purchases and the stocking of unsuitable material which became obsolete. Labour was a very serious item, and some engineers called upon to undertake management not feeling inclined to deal with the labour problem introduced one of the various systems brought before them. Mr. Craig has another and he believes a better way of dealing with the system problem." Where a manager did not feel competent to initiate a cost system he should call in the aid of his accountants. Most accountants were in touch with a variety of businesses and many of them were sufficiently expert at prime costing to be able to lay out a good system. He would emphasise his opinion that it was more important to have a complete system than to have, perhaps, the best or most convenient system. He agreed with Mr. Martin that the designing department should be in close touch with the works, for all those practically engaged in the industry had experienced the inconvenience of having draughtsmen who were not shopmen. Another point in this connection was the importance of arranging that drawings coming from the drawing office should pass through the hands of responsible heads of departments for their criticism before the work was put in hand, so that the works manager who was the ultimate court of appeal might have these criticisms before him in coming to a decision. Mr. Martin suggested that the designing department should confine itself to the development of previous designs. Mr. Craig could not agree with this follow.my-leader policy, which suggested that a business should simply follow in the wake of more enterprising firms in matters of design. Although such a firm might make profits it would not add greatly to its reputation. Any firm which desired to make progress should be constantly preparing for all eventualities in the way of change of design. This particularly applied to the automobile industry, in which design was very far from reaching finality. With regard to what had been said as to the importance of the Material Department, in a small works it was perhaps impossible to establish a laboratory, and in that case recourse must be had to a consulting chemist to make reports. On the vexed question of paying on results under the bonus system there was some danger in the temptation for everyone concerned to strive after maximum profits in a single year, and it was important that care should be taken that the rush after profits thus encouraged did not injure the reputation of the firm or damage its goodwill, and so seriously affect the profits of future years.
System with a Capital "S."
Mr. F. W. Lanchester was, as usual, interesting and epigrammatic. He said there were three departments in businesses of the kind in which they were interested that were of vital importance—design, works organisation and sales. The greatest of these was works organisation. One point, however, which Mr. Martin did not make sufficiently clear in dealing with works organisation was that the system employed must be proportionate to the size of the works. What might be an ordinary, reasonable system in a large works might become what he would term " system with a capital 'S '" in small works. The mistake was sometimes made of trying to systematise in small works in such detail that the amount saved was not proportionate to the amount expended. He fully endorsed Mr. Martin's observations as to the care called for in tool designing, but success in this sphere of work called for a knowledge on the part of the designer of the .details of the machinery for which he is asked to design. He was also in agreement with Mr. Martin as to the treatment of material, his experience being that the steel maker was not always to be relied upon. In the case of nickel steel he had been told by one maker that it ought to be annealed in a muffle and cooled very slowly, and the same maker, twelve months earlier, had given contradictory advice with regard to the same steel by suggesting that it should be heated to a dull heat and allowed to cool on the floor of the smithy. A point worthy of serious consideration was the importance of making the men urge the staff and not the staff urge the men. In the former cast the works organisation flowed like a river, whereas, if the staff had to urge the men, the analogy was to a pumping system, and any want of fuel or efficiency would result in an inefficient flow. Personally he had experienced great difficulties in endeavouring ,Lo arrive at a satisfactory method of arranging for night shifts on either the piece work or the bonus system. He had tried various systems, and was bound to confess that he had been completely defeated.
The Special Order Difficulty.
Mr. Charles Sangster was mildly critical. He referred to the merits of piece work and bonus system, and in this connection ,Taised the question of obtaining accurate costs, maintaining that all that could be obtained was a limit cost. In his opinion it was not possible by the premium plan to obtain such accurate costs as by piece work.. The bonus plan did not do away with the trouble of various times for the same job. Referring to Mr. Martin's statement that no stampings or forgings should be used in machine construction in the condition in which they were delivered, he was not quite clear what was intended by this paragraph when it was read by the light of the context. Did Mr. Martin intend that mechanical tests should be made, or what process of testing did he propose? Another axiom laid down by Mr. Martin was that a time allowance once fixed for a particular job should never be reduced, but, in his opinion, that was carrying the principle too far, and led irresistibly through ordinary human error to the creating of a number of fat jobs and a corresponding number of lean jobs. In his opinion it was not wise to lay down the dictum that you should never reduce the price unless the design was altered. Mr. Martin, indeed, went so far as to suggest that a firm should not take advantage of the use of improved tools, which was going an extreme point in the direction of leaving the price unaltered. With regard to the increase in output per unit of time, which, of course, was very far-reaching in its effects, Mr. Martin supplemented his printed statement by saying he attributed success in many directions to the premium plan, and claimed that bonus work gave all the advantages which were claimed for piece work, and was a more simple method. At the end of his paper, in his list of " Don'ts," there were one or two things which automobile engineers might take to heart. Mr. Martin thought that an output once settled should never be changed, and some of them would wish that that policy had been invariably carried out. Mr. Sangster finally dealt with the question of accepting special orders at a high price, on which he has quite pronounced views, and a neat plan of dealing with the fads of customers. It was suggested that foreign firms were always willing to meet the convenience of customers, but his experience was that foreign firms would not take these special orders. No doubt it was difficult to explain to customers why deviation from standard work could not be undertaken. In such a case the plan adopted by his own works was to send to such a customer a list of the very great number of sizes which they had standardised. This was calculated to have the effect of showing a possible customer how wide was the choice actually offered him, and in that way the special order difficulty was overcome.
The Vexed Question of Factory Charges.
Mr. H. Austin liked Mr. Martin's prescription, but would prefer it made up in smaller doses. The paper embodied all the points they had to deal with as automobile engineers, but the subject was so large a one that it would be well if Mr. Martin at some future date would take one of the departments mentioned in the paper and treat that in detail. There was one point of considerable importance to which he would like to refer, as it would assume even greater importance in the future. Mr. Martin was inclined to suggest very elaborate works organisation at very considerable cost, but such an organisation could not he carried by a small works, the management of which had to look at matters in a different light. He had personally had to deal very closely with cost of labour, material and factory charges, and he maintained that in automobile engineering, which called for accurate and careful work and very good material, both of which cost a good deal of money, it was not always possible to be lavish in works organisation expenclituru. There were occasions when it would he unreasonable to spend large sums on non.procluctive items, and he was convinced that it was possible to make very considerable reductions in factory cost, a nd yet, at the Same time, keep the organisation thoroughly up-to-date. He had been going carefully into the question of costs recently, with interesting results. He had been accustomed to calculate factory charges on workmen's wages, which, in spite of its being a rough-and-ready plan, was very generally adopted. He knew of one firm making automobiles where the factory charges came to 120 per cent, of the workmen's wages, while in another firm, equally well organised, the factory charges did not come to more than 40 per cent., and while the latter company was working at a profit, the former was not. If it was possible for such variations to exist in respect to factory charges, clearly the whole subject was worthy of careful consideration. It was obvious, too, that a small works could not establish a testing department, nor, in his opinion, was the establishment of testing departments in automobile works altogether desirable, as those steel makers who made a speciality of steels for motor construction had themselves installed departments for the thorough testing and rexamination of their own materials, and could probably do it more effectively than the user of the steels.
A bonus or piece work system was absolutely necessary, but the difficulty was, at the outset, in fixing prices upon a reasonable basis, He, personally, had started a bonus system by guaranteeing a workman his minimum rates and adding a bonus which he never divulged, and in that way he gradually got together a considerable amount of useful data, and got his prices very near the proper mark. He suggested that to others interested as one way out of the difficulty.
Mr. Lawrence came forward as a critic, and was not at all inclined to agree with Mr. Martin's statement that it was not necessary to assume a particular form of product, or location, or set conditions in considering the subject of works organisation. Such a point of view was absurd. He also entirely disagreed with Mr. Martin in regard to the bonus system. In working tht, bonus system there came a point where it was no advantage to the workman to further increase his effort, which was against the business principle of getting the greatest output out of machines. With regard to the materials department, it was suggested that it should be made responsible for the class of material used, but he thought that that was rather the province of the designer. On the labour question he was inclined to agree with Mr. Martin that, if you were tied for room, it paid better to pay very high wages to get a good output, provided it did not increase the cost of the article. It had been proved to be more profitable to pay one workman high wages where room was of importance than to employ two workmen at a lower price. The point, however, turned on the question of location and the supply of labour available.