ENGINEERING IN INDUSTRIAL WORKS 259 



conditions with a confidence born of a thorough understand- 

 ing of the natural laws involved, that unerringly define, limit, 

 and control even uninvestigated phenomena. 



The fundamental engineering concept is that of efficiency 

 — the quotient of work performed by work imparted, of value 

 by cost, of effect by cause. This concept is fundamental, not 

 in engineering alone, but in every phase of business manage- 

 ment. A cost keeping system may be never so accurate, 

 but if it stops short at dollars and cents on record, it lacks 

 life. Beyond this, where the analysis is of value only as a com- 

 parison, there is the question of what each particular cost 

 should be, or the question of a theoretical efficiency toward 

 which experimental efficiencies must constantly approach. 

 It is not sufficient to insist that costs shall bear a constant 

 ratio to output. The ratio under ideal conditions must be 

 determined by calculation, and should be gradually but 

 steadily approached in practice by bringing about conditions 

 resembling ideal ones. With a few conspicuous exceptions, 

 neither the expert accountant nor the stenographer is quali- 

 fied by his training to perform such calculations. 



In the broadest sense, the efficiency of a manufacturing 

 industry is equal to its receipts divided by its expenses. This 

 industrial efficiency, is however, the product of the several 

 efficiencies of the departments in entire production, in each 

 of which there must be struck a balance between commodi- 

 ties furnished to and by it. With each department normal, 

 the combined efficiency is normal ; and an abnormal condition 

 of things shown by the sum total can only be satisfactorily 

 analyzed by one who can apply the touchstone of his own 

 training and experience to the offending element. The three 

 processes, — consumption, manufacture, disposition of prod- 

 uct, — form two gaps for loss. Incompetent superintendence 

 of plant makes the first element high, unintelligent sales keep 

 the third element low, both in proportion to the second. To 

 reduce both losses to normal (when that normal has once been 

 ascertained) there must be quantitative knowledge of the 

 operation of all three departments. This knowledge must 

 consider not only the bulk of commodities in each, but their 

 cost or value as well. The former data — consumption of raw 



