Febiuaiy 2o. 1916 



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The Prohlem of Waste 



Editor's Note 



'ibe following address was delivered Ijy James E. Dewey Qf the Stearns Salt and Lumber Company, Ludington, 

 Mich., before the Manufacturers' Cost Association in session at Chicago, January 20 and 21. 



I have been requested to address you today on the problem of 

 waste in the manufacture of your products, but do not intend to 

 confine my remarks strictly to this subject, as it seems to me this 

 offers an opportunity to cover a much Tvider field of operations 

 concerning your various problems, and I trust you will regard my 

 comments and suggestions to you from an impartial standpoint. 



Perhaps there arc some members who are curious to know the 

 reason for m}- presence here today, and .iust why I am competent 

 to talk, on this subject. For their benefit, I will preface my re- 

 marks with a brief explanation. Last year the Stearns Salt & 

 Lumber Company, whom 1 represent, inaugurated a service depart- 

 ment to be devoted to the interests of lumber consuming manu- 

 facturers and the problems in connection with their lumber require- 

 ments. Through this department we have come in closer contact 

 with several members of your association, and evidently the results 

 of our investigation of their various institutions made sufficient 

 impression upon them so that they felt justified in extending this 

 invitation. I desire to state at this time, however, that the mem- 

 bers we have already come in contact with have accomplislied great 

 results and show a remarkable understanding of their problems. 



The problem of waste, without doubt, is the most vital question 

 that confronts every manufacturing institution in existence today, 

 not only in the consumption of lumber alone, but it applies to 

 any raw material that enters into the process of manufacturing 

 your products. When you consider that statistics show all of the 

 principal materials have increased in value from 25 to 150 per cent, 

 which, I presume, is a conservative maximum, then you appreciate, 

 to some extent at least, the great necessity for conserving the 

 waste in these materials. Modern machinery and improved methods 

 absorb a reasonable percentage of this increase in cost of materials 

 by reducing the handling and manufacturing costs and otherwise 

 creating a saving in production. We must then give our attention 

 to other means of waste reduction, and I now refer particularly to 

 your lumber requirements. 



The first and, I believe, the most important feature in this rela- 

 tion is in the purchase of your material. One might say, "This 

 covers a multitude of sins. ' ' In my limited experience I have come 

 to the conclusion that there is no department of the average busi- 

 ness institution so grossly neglected as the purchasing department. 

 This is a problem in which every department of manufacture is 

 implicated to some degree, and the proper results cannot be obtained 

 without the hearty co-operation of each operating department. 

 The purchasing power is usually vested in one individual, and in 

 a gieat many cases he is merely a salaried official who occupies a 

 comfortable office where his duties require the greater share of his 

 time. He may have a limited amount of knowledge concerning the 

 various grades of lumber, acquired through reading the printed 

 rules and his association with salesmen. He has no practical knowl- 

 edge and rarely spends any time in the yard or factory where he 

 may come in personal contact with his purchases or become more 

 conversant with problems confronting the men who cut up this 

 stock. His entire interests may be superficial. Why? Simply 

 because there is no communion of interests between the purchasing 

 and operating departments. Lack of co-operation, that 's it. And 

 he is not entirely to blame. I consider that the superintendent 

 and his foremen are liable in a large measure, because they accept 

 this stock without complaint and make no effort to educate him 

 with the practical knowledge necessary for selecting the material 

 best adapted. They are so concerned with the volume of produc- 

 tion that they have no interest in anything outside of their own 

 department. This is the principal reason for ignorance in buying 

 that is conducive to the mixed grade evil and is responsible foi 



the price buyer who sacrifices all other arguments to the question 

 of price. And then we have the superintendent who insists on a 

 higher grade of stock simplj' to reduce waste, without taking into 

 consideration the difference in price on a lower grade. Let me 

 state at this point that we have been able, through our service 

 department, to effect greater, savings by inducing the manufacturer 

 to substitute a lower grade, or perhaps at least a percentage of the 

 lower grade, than in any of the reforms we have worked out. We 

 have done this by analyzing the requirements and the conditions 

 governing, then applying them to the grade or grades best adapted. 

 We merely succeeded in educating the buyer and establishing closer 

 co-operation between the purchasing and productive departments. 

 The matter of education is the direct result of co-operation. This 

 establishes our contention that all manufacturers should buy their 

 lumber in separate grades. ,^ 



I want to tell you of an instance brought to our attention through 

 the service department which will better illustrate this idea of 

 co-operation which I am trying to emphasize. A certain furniture 

 manufacturing concern reached a point where the stockholders 

 were dissatisfied with the condition of its affairs and decided to 

 reorganize the entire official staff. A new president and general 

 manager was installed and he proceeded to rejuvenate the busi- 

 ness. His investigations finally convinced him that the source of 

 all the trouble emanated from the productive departments and 

 immediately began to devote his attention in that direction. After 

 studying the situation for some time, he discovered that the exist- 

 ing conditions were due entirely to a lack of harmony between the 

 various operating departments, but when he attempted to eliminate 

 this influence and institute reforms, he was opposed by the superin- 

 tendent and his entire force of foremen. He encountered a condi- 

 tion somewhat like the fellow who interfered in a family row. 

 The system of this organization is so entirely demoralized that it 

 will require a thorough readjustment before the proper results can 

 be obtained. 



This case merely serves to illustrate to what extreme the lack 

 of co-operation may undermine any organization, and if this influ- 

 ence is allowed to continue it will finally permeate the entire institu- 

 tion and gradually sucks out the lifeblood of the properties which 

 are vital to the growth and ultimate success of any business. 



A great deal of abuse and criticism has been heaped upon the 

 heads of the lumber industry over the question of establishing a 

 set of inspection rules which will conform more closely to the re- 

 quirements of lumber consumers. While it is probable the present 

 rules can be improved upon in this respect, until this past year no 

 united effort has been made by the consumers to encourage an inter- 

 change of ideas on the subject. The Federation of Furniture Asso- 

 ciations has finally appointed a committee to confer with the rules 

 committee of the National Hardw-ood Lumber Association, and I am 

 confident that a set of rules will be drafted acceptable to all 

 concerned. 



Do you realize that timber is one of the most limited resources 

 of this country, and yet no other resource has been so wantonly 

 wasted as this precious bounty? Now, the conservation of the 

 timber resources of our country is just as vital to the consumer as 

 it is to the operator, and your co-operation is necessary to minimize 

 this waste to the greatest possible extent. It is therefore essential 

 that you adapt your requirements toward a closer utilization of 

 timber products and waste. This applies particularly to the con- 

 sumption of low-grade stock. The very principles of conservation 

 which induce sawmill operators to a closer utilization of the timber 

 necessarily increases the production of low grades and adds to their 

 burden. I want to state right here that any reforms we have made 



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