Works Organisation.
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Discussion on Mr. Percy Martin's Paper at the Institution of Automobile Engineers.
Mr. L. A. Legros wished that Mr. Martin had given fuller reasons for the faith which in him lay. He found himself in general agreement with the author, but pointed out that the system adopted should be ahead of the present requirements of any works to meet the needs of an expanding business. He would raise a question as to what was meant by the actual cost of an article. Did it mean labour plus materials plus establishment charges, and, if so, did Mr. Martin calculate his establishment charges partly on labour and partly on material, say, 70 per cent. on labour, and 10 per cent, on material? He would also point out that it was necessary to have detailed costs. It was not sufficient to have the whole labour charges. He would instance the case of a cylinder where the separate cost of boring and drilling should be known. The premium bonus system, with its half-and.half principle, he was in favour of, but the Rowan system, with which many were doubtless acquainted, was another good system to adopt. It really amounted to the half-and-half system. With regard to the specification of materials, it was not sufficient to know the tensile strength and elastic limit. Further information was required, as the railway works people had found out long since. Railway engineers had introduced shock and drop tests, and some of the materials used for motorcar construction should be tested in a similar way. Steel often behaved in an apparently inexplicable manner, and in investigating failures in boiler plates some years ago, Mr. Strohmeyer showed bow steel can be made perfectly brittle by the treatment it received, and railway and bridge engineers had found it necessary to specify the method by which the steel should be prepared. In dealing with workmen, it was very important to keep faith with them in the matter of time allowed for particular jobs, and, although there were bound to be fat and lean jobs, the thing averaged itself out very well. He could testify from personal experience in this respect in railway fitting shops, Mr, C. R. Garrard, speaking from ten years' experience of the bonus system, did not agree that prices should never be altered, and, in case of a new piece of material, he had been accustomed to rearrange the time limit. The same applied to a new process, and he agreed that, while that process and material remained, it was necessary, in order to retain the confidence of a workman, that no change should be made. It was as easy to keep accountancy in hours as in money. A machine was bought for what it would do in units of time, and a man worked for a certain sum per hour, which, again, was a unit of time. He was quite in sympathy with what had been said about boards of directors, and would like to suggest that every director of an engineering works should be able to repeat Mr. Martin's paper, and stand a cross-examination upon it before qualifying for a seat on any board.
Sales Manager a Genius.
Mr. Thomas Clarkson fully appreciated the very practical paper which had been read. A works might be regarded as a machine, and a manager should use it to the best advantage. He agreed that it was not possible in a small works to organise a testing department on a comprehensive basis, but he, person. ally, had found that the training he had received in metallurgy was of the greatest possible use. With regard to the heads under which Mr. Martin's paper was classified, it had been said that any man could design a machine, but it took a clever man to make it, and a genius to sell it. He believed there was much truth in that observation.
Mr. Rose said that he preferred not to speak of productive and non-productive charges, but to classify them as direct and indirect.
The Scrapping of Directors.
Colonel Crompton said that it was clear that no definite statement could be made as to the proper proportion of indirect charges, as that largely depended on the nature of the business. Therefore, references to 40 per cent, in one case and 120 per cent, in another conveyed no real meaning. It had been his task to teach many boards of directors these and other elemen tary facts, and one of the most important things they had to deal with was the scrapping of directors, who were often the more ineffective part of the whole system, but who were neces sary under the limited liability laws for the performance of certain duties. He hoped the day would come when the view would no longer be held that the business-like end of engineering must be attended to by business men who really knew nothing about business. He had been a business man all his life, and realised the importance of works organisation. He could assure them that in the electrical engineering industry, owing to the intense rivalry which prevailed, only those who had organised their works on the lines laid down in the paper had been able to survive. Ile was one of the survivors.
Mr. Martin, in replying on the discussion, said that he did not want to throttle the efforts of the designer, as the paper might appear to suggest, but it was fatal to allow hfin to have too full sway, and it was necessary to take the design and reduce it to something that could be "made." With regard to a testing department in a small concern, that work should be done by the head of the business himself. With regard to the dispute between the bonus system and piece work, that was a very big subject, some points concerning which had been elucidated in the course of the discussion. With regard to the piece work system, he would say, if you made a price let that price stand. Comparing that with the bonus system, where you divide the saving in half, in that way you would get a basis for comparison. The management should have the courage to stand by its price and let a man make more than time and a quarter, if it came out at that. The premium system, when properly organised, should give prices upon which you could rely. If a man, in framing the system, made many mistakes, he was inefficient ; but a few mistakes had a great moral effect on the workman in showing that you intended to treat him fairly, and he himself had sometimes made intentional mistakes to illustrate the advantages of the system. With regard to overtime, that was a difficult problem, and was to be avoided as much as possible, unless the business fully warranted the expenditure. If that were the case, a works manager could afford to disregard the charge against establishment. He looked upon overtime in the ordinary way as a necessary evil ; but a night shift might be dealt with on different lines. The standing charges were more directly proportional to the number of hours than any other easily-obtained factor, and such a method of investigation was superior to piece work in arriving at direct costs. It was infinitely better to use a unit of time than a unit of money. The proportion of establishment charges varied in different departments, according TO the class of work done, from 30 to 120 per cent. He had come to the conclusion, after much experience, that the best labour and the best material was the cheapest in the end, but there were outputs for which it was not possible to utilise the best labour and the best material, and special cases of that sort had to be considered. With regard to the question raised by Mr. Legros as to the percentage on labour and percentage on material for establishment charges, the Daimler Company had taken great trouble to allocate these charges in the proper proportions, and had obtained some useful informaticn. They had not been content to assume the usual 10 per cent, on materials. He would probably reply more fully in writing for publication with the transactions on some of the points raised.