I

CHAPTER III

BETTERING BUSINESS METHODS

N THIS country we lack the desire to do things perfectly. Inefficiency is almost a national habit.

We have gotten everything easily in a new country abounding in rich resources, and efficiency has not impressed us as a necessary factor in our life.

This apparent indifference of our people generally to the question of efficiency has revealed itself in our producing and merchandising concerns. While our better known and more progressive businesses are actively engaged in bettering their methods, processes and equipment, only a small percentage of our business concerns generally have undertaken substantial improvement work. In the average small American factory much energy is lost through inefficiency at every step from the boiler room to the selling department.

Inefficient practices in our industries, in whatever part of the organization they exist, are almost invariably due to lack of adequate information. They exist both in the factory and in the selling and administrative branches of our businesses. The direct result of inefficiency is loss. In some cases this loss is due to a decreased production because

workmen are not equipped with proper tools, or are compelled to work under disadvantageous conditions. In by far the larger number of cases the decreased production is due to lack of proper instructions and the absence of any definite planning system. A piece of work is dumped into the factory and the foreman receives verbal instructions as to what is to be done.

A workman, for example, who has finished his job will come to the foreman and remark, "Say, Bill, what shall I do next?" and the answer is, let us say: "We've got an order for five keys 1 x 1 x 4 inches long. You'd better get on that." He goes to the material pile and picks out a piece of steel which may or may not be the best size and also may not be the proper kind and proceeds to make the keys. Very likely he will not have the proper cutting tools. He will waste time running around the shop hunting for them or in regrinding others which should have been in proper repair. When the job is done, he probably has some material left over, and since this is only a small piece, it is thrown on the scrap pile. At the end of the day he makes out his time card and guesses he put in about three hours on that job, and guesses how much material he used, and after the office has guessed how much should be added for overhead, the price is named. Through inefficiency, either the customer has paid too much, which will eventually result in the loss of trade, or if the price does happen to be right from the market standpoint,

the shop has lost the value of both the wasted time and wasted material.

Still other losses may be due to the absence of proper planning and routing. Work may be done on a machine which is not adapted for that kind of work while another which is well fitted for it stands idle. A plant may not be well balanced, that is, it may have too much of one kind of machinery and not enough of another. This condition is bound to cause a great deal of idle time.

Machinery should be so arranged that in carrying material no unnecessary work is done. One manufacturer, for example, had three machines side by side and the work had to go through all three. Number one machine was fed from north to south, number two from south to north, which made a very short carry, but number three was also fed from south to north, compelling the operator to carry the work the full length of the machine or about thirty feet. When asked why he did not turn the machine around the manufacturer said that the pulley ran the wrong way. He never thought of twisting his belt in order to reverse the direction of the pulley. When told to do this he wanted to discharge his foreman for not telling him about it.

One machine in a series may be smaller than the rest. In that event the larger machines are worked only to a part of their capacity. Another fact, too often overlooked, is that many machines cost more per hour than do the men who operate them.

As a result of this oversight, machines are often allowed to stand idle while the employes are going after material or grinding tools. There is also a great deal of time lost in many factories by requiring the foremen or men to do clerical work such as making reports. Reports could be better and more quickly made and at less cost if a clerk were stationed in the factory for that purpose.

Many manufacturers take the unsound position that the machinery is there anyway, and that since they have not enough work to keep it busy all the time, there is no real loss if it is idle part of the time. At some time during the year, however, there is enough to keep it busy, and inefficient practices which may not cause a serious loss in dull times will become a habit which will cause serious loss when the plant is running full. The belief that this habit can be changed when busy times come has been proven false so often that it is hardly worth discussing.

In some cases where a concern maintains a planning department and operates a cost system, thereby running the factory in an efficient manner, losses may creep in due to the inefficiency of the selling force. The salesmen may be selling a fair amount of goods at a reasonable cost but may not be pushing the most profitable lines. This fact will not be brought out unless an analysis is kept showing just what is being sold.

In one case a salesman was supposed to be a very valuable man because the volume of his sales

was large and his selling cost low. An analysis, however, showed that 75 per cent. of his sales consisted of a staple article on which there was a very small profit so that instead of being one of the most efficient men they had he was just the reverse. Loss also occurs from a bad arrangement of sales districts, which increases the salesmen's expenses and decreases the number of customers on whom they can call.

Coöperation between the salesman and the officers of the company will increase efficiency in salesmanship. Salesmen in many instances do not have the support of their officers, and without it it is a hard matter for a salesman to go out and do big things. The salesman is quite frequently turned adrift to make good. He is not in direct touch with the president, the manager, or the local sales manager of the company and if the sales do not come up to the mark they will say, "Get rid of this fellow-he is no good." This is one of the greatest mistakes in business to-day-this lack of coöperation between officers and salesmen. Every salesman needs the direct coöperation and support of his superiors, from the president down.

I remember working as a salesman twenty-five or thirty years ago for a man in Philadelphia, who invariably wrote me a letter every week complaining about my work. I gave him the best that was in me, and still he found fault. This attitude takes the heart out of a salesman. It is like going into battle