32 



HARDWOOD RECORD 



than we can. For instance, it makes some difference whether you 

 have to cut logs that measure on an average twenty inches in diam- 

 eter, or if you have logs twenty feet in diameter, which I imagine 

 some of our gum neighbors must have, judging from the prices some 

 of them sell their product at. It seems to me that the manufactur- 

 ing cost of veneer depends entirely on the location of the plant and 

 kind of woods used. 



The labor and material cost having been obtained are now added 

 together to give the total "manufacturing cost." 



The factory expense and overhead burden are next to be consid- 

 ered. If figures are obtainable for previous periods, the estimate of 

 these costs may be based thereon, but the result obtainable should 

 be carefully compared with actual expenditures to obtain accurate 



estimates, such as repairs and depreciation of plant, involving capital 

 expenditures, and superintendence. 



In our plant it would be practically impossible to arrive at the 

 actual costs, as we are cutting all kinds of woods, and thick and thin 

 stock from the same logs, and the only figures I am in position to 

 give are these: for the labor, factory expense, and overhead burden, 

 it costs us $G0.O0 per day to operate the plant, and up to the last 

 three months the plant had never paid. However, we have since, with 

 a little hard work and much good fortune, been able to make $1,000.00 

 profit from the business. 



To those who are interested, I have a form of the monthly state- 

 ment which I mentioned, which we are using at our plant at the 

 present time. 



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Business Efficiency 



Editor's Note 



The following paper, reciting speciflc incidents where money has been saved in the veneer and panel manu- 

 facturing business by increased factory efficiency, and in the reduction of material waste, was delivered by L. 

 Reeves Goodwm at the meeting of the National Veneer & Panel Manufacturers' Association, held at Chicago, on 

 December 12 and 13. The address is one of marked ability, and reveals a close study of the details of veneer and 

 panel operating practice of many plants. It is worthy of careful reading and close "analysis by those engaged in 

 this important commercial pursuit, with a view of not only adopting many of the suggestions incorporated therein, 

 but for straightening up other inefficient details of the business 



The subject of business efificieney is one of vital interest to all 

 progressive manufacturers, and one which is obtaining more attention 

 each day. 



There has been a wonderful development along the line of efficiency 

 and conservation of material and energy, particularly in the last 

 three years. I can well remember the reception given me by many 

 manufacturers not long ago. It was necessary to begin at the founda- 

 tion and explain the value of efficiency as applied to their own plants. 

 Now nearly everyone I approach only wants to be shown or have 

 proven to him the value of certain methods over others. It is not a 

 question of ultimate results, for these are certain. 



In bringing out specific instances where savings may be made, I 

 am drawing not only from my own experience but from that of 

 others of the organization of which I am a part. It will be impossi- 

 ble to give names, as we attempt to hold all our business with clients 

 as confidential. There are two distinct ways in which savings may 

 be made in almost every manufacturing plant today — that is, on labor 

 and material. The amount in each is dependent upon the ability of 

 the particular plant manager. Some have given their time and atten- 

 tion to one item, either forgetting or not seeing the value of the 

 other. 



I will take up, first, instances where the study of efficiency of 

 labor has greatly decreased the cost of output, and by decreasing this 

 cost has enabled the management to increase the quality for a given 

 price. 



Many manufacturers do not appreciate the value of physical sur- 

 roundings upon the workmen. Three distinct instances have proven 

 the necessity of keeping buildings and machinery in good working 

 condition, not only from the operation standpoint, but the moral 

 eflfect upon the men. The buildings had been allowed to go without 

 proper repairs, and machines were not kept even in moderate work- 

 ing order, the manager thinking that he would quit the business in 

 that location and move with the timber belt. The general effect of 

 letting things go was unconsciously communicated to the men. It 

 proved a bad policy, as when the plant was moved the machinery 

 had to be completely overhauled, and it was done at a greater 

 expense than if kept up as repairs were needed. 



The ultimate results in the new place were nearly double that in 

 the former location, from an efficiency point of view alone. 



The value of definite labor records are little appreciated by some 

 men. They say, ' ' Oh, I have a superintendent who knows men and 

 who is getting all there is to be gotten." That man is deceiving 

 himself, as has been proven many times over. In one plant, a saving 

 of three per cent on gross sales was made on non-productive labor 



alone, simply by requiring definite labor reports from each man 

 each day. We will admit that it took a little of each man's time 

 each day, but it was nothing as compared to the savings made by 

 finding out how much time was wasted when the man should have 

 been on productive work. It brought out the lack of supervision on 

 the part of the foremen, in that the men had to wait between jobs, 

 lack of foresight in planning of work necessitating many resettings 

 of knives and saws, when one set-up should have done. It brought 

 out the fact of short runs in machine rooms, where there were sev- 

 eral men affected — this applied to the rotary machines and dryers. 



Operating labor records bring out savings not only in non-product- 

 ive labor, but productive as well. 



By keeping an operation cost record taken from the labor time 

 cards, a superintendent is able to compare actual results of different 

 men on the same kind of work. You will say, ' ' What is a foreman 

 or superintendent for? Why shouldn't he know the relative value of 

 different men?" He may, but in no definite way, as can be testified 

 to by at least four that could be named. Comparative costs on the 

 same work bring out amazing results. Instances of one hundred per 

 cent greater output on the same operation by different men are 

 not rare, and fifty per cent differences are common. Such knowl- 

 edge allows the superintendent to weed out the undesirable men. 



Taking up the question of profit-sharing methods, you will find 

 men who claim it is not advisable, but experience has shown us differ- 

 ently. To be true, many plans have not given results, but almost 

 always it is because of the way it was handled, and not the plan 

 itself. 



The installation of piece payment methods in one cutting room 

 increased the output over twenty per cent. There was, of course, a 

 closer inspection of the veneer necessary, but it was possible to do 

 this by having a well-paid inspector. 



One point to be remembered in the installation of piece paynii-nt 

 methods is that the rates once set must be guaranteed for a period. 

 Otherwise the men will not work up to capacity. Many mistakes have 

 been made in this way. Savings of from five to twenty-five per cent 

 are usually made by the use of some piece or bonus payment methods. 



In connection with this, there is an opportunity for the study of 

 actual motions performed. While I have not any specific instance at 

 hand in a veneer or panel plant, I can speak from experience in two 

 wood-working plants. The operators of two machines were shown 

 how to save one-third of their time by proper placing of trucks of 

 material, and handling same into the machine. Many of you would 

 be surprised at how many hours a day can be saved by a study of 

 nothing more or loss than the proper placing of trucks and benches. 



