FROM A MANAGEMENT VIEWPOINT. 49 



purpose and in the simplest possible way. The writer has in mind, as an example 

 of a method installed without having been given proper consideration, a case of 

 keeping time to tenths of an hour without any provision having been made to pro- 

 vide the next job for the man. From the cost-accounting point of view this was 

 fine, but it did not mean more accurate costs for the very simple reason that the 

 actual costs depended entirely on how soon the foreman could find the next job 

 for a man to work on. In other words, in this particular case, keeping time to 

 tenths of an hour was a perfectly useless refinement, did not tell the true story 

 and, worst of all, was in no sense a fair measure of man efficiency. Incidentally, 

 the above method of keeping time was installed at the suggestion of the account- 

 ing department and is a good illustration of the tail wagging the dog. Had the 

 matter been referred to a properly qualified management expert from the outside, 

 no such half-way measures could have been the result of even a superficial analy- 

 sis of contributing factors. As a general rule it has been found to be a safe policy 

 to secure the services of such experts, when circumstances warrant, on the theory 

 that, having a specific problem to solve and not being directly concerned with the 

 daily activities of a going business, they have everything in their favor. 



Assuming that the organization, management and methods fulfil requirements, 

 the only remaining factor under control is the men. On this factor hinges final 

 costs after defects in the other factors under control have been remedied. It may 

 be of interest to know that the results of analytical studies of operations in over 50 

 per cent of the steel yards engaged on construction for the Emergency Fleet Cor- 

 poration during the war indicate that less than 20 per cent of the faults developed 

 were chargeable to the men. This is simply another way of saying that other fac- 

 tors under control were responsible for some 80 per cent. Accepting this statement 

 as correct, it will be shown that the combined result of reducing the faults of both 

 men and management is a very material reduction in construction costs. In fact, the. 

 practicability of so doing is what confirms the writer in his belief that the shipbuild- 

 ing industry will have itself to blame if it cannot stand on its own feet in the face of 

 foreign competition. 



In investigating the costs of ships of diflferent types and cargo carrying capacity 

 an intimate relation developed between fabricating capacity, number of ways, con- 

 struction program and man efficiency, the last expressed in deadweight tons of out- 

 put per man per year based on the entire force engaged on ship construction, ex- 

 clusive of office force and men engaged on plant construction. A 7,500-ton dead- 

 weight cargo vessel was used in the calculations, with material costs as follows : — 



Hull, $212,952 (plates at 3}ic.; shapes at 3c.; bars at 2.9c.). 



Machinery, $266,515 (2,899 horse-power reciprocating engines; three 13 feet x 

 12 feet Scotch boilers). 



Equipment, $104,371 (military requirements, $30,000). 



A certain fixed overhead per ship per day was used and due allowance made for 

 the extra cost of military requirements to bring the final costs down to a strictly 

 commercial basis for a ship of this type and specifications. 



