A STUDY OF PRODUCTION
CONTROL SYSTEMS IN SMALL PLANTS

Thesis for the Degree of M. S.
MICHIGAN STATE COLLEGE

Clare J. Rawson
1948

    
  
   
  
 
 
   
   
  
   

This is to certify that the
thesis entitled

A Study of Production Control Systems
in arm Plants

\ presented by
Clare James Benson

has been accepted towards fulfillment
of the requirements for

, I. 8. degree in Mechanical Engineering

 

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Dam November 24, 1948

 

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A STUDY OF PRODUCTION

CONTROL SYSTiMS IN SHALL PLANTS

BY

Clare J. Rawson

A THESIS
Submitted to the School of Graduate Studies of
Michigan State College of Agriculture and
Applied Science in partial fulfillment of
the requirements for the degree of

MASTER OF SCIENCE

Department of Mechanical Engineering

1948

 

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PRODUCTICN

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Production control is, in its broadest sense, the control of
the quantity of material and parts in the manufacturing of a finished
product. Production control regulates the flow of material in the
most orderly fashion as production progresses from the raw material
to the finished product. It takes the orders as sent in by cus-
tomers and translates them into production orders. It sends them
.through the plant at a rate and sequence that makes it possible for
the plant to do the work set out for it most easily and with the
least amount of confusion. The aims of production control are to
produce the right product at the right time, of the right quality
and quantity, by the best and least costly method.

Good production control means less work in process. This in
turn means less stock inventory. Thus, because of rapid turnover,
there is less investment in goods which are not returning a rate of
interest. If the money invested in excess material were invested
elsewhere, greater profits would be made for the organization.
Production control adds nothing directly to the value of the pro-
duct, but enables greater production at less cost to the company.

Production control involves both the planning of the pro-
duct and the control of the production of the product. Advance
planning is necessary to make a smooth line of production. The pro-
duction must be done along the pattern formed by the planning to

have an efficient way of producing the finished item.

There are many reasons for the need of production control.
Often it is thought by some organizations that their production
would follow easily without all of the preliminary planning which
a true control of production requires. This has been found to be
a great falsehood. These companies have found themselves on the
verge of bankruptcy before their product has had a fair trial at
selling itself to the consumers.

In 1850 the main portion of the population of the United
States was located in the rural areas. This was shown by the
census of that year and it was determined that eighty-seven per
cent of the persons residing in this country made their living
from agriculture. To contrast this with the portion which were
still working on farms after the industrial revolution, the 1950
census indicates that at that time only forty-four per cent of the
population lived from.cultivation of soils. The increase of popu-
lation and the shift of inhabitants from the farms to the city
for work in the factories has made industry what it is today. By
this great change, industry has grown until it is what we see
now. 'With this increase of industrialization, it is necessary to
have a system.of control over production in order that production
may be carried on efficiently.

Another great cause for the need of production control is
the division of labor. In the early days of industry a man would
complete a product by himself. Now we see that even the most

complicated of all things produced are manufactured by many men

3
doing a very small part of the job and most of them.do not know how
to complete even a small sub-assembly of the finished product.

Formerly it was the worker's responsibility to perform the
work with very simple tools or even by hand. Now many machines
are completely automatic and complete a part without changing the
setting of the machine. In this transfer of skill from the worker
to the machine it has made it possible to use unskilled labor for
the most intricate work. With mass production as diversified as
it is now, some control of production must take place for the
workman only knows that he should do the job set before him until
he is told to do another job.

As industry progresses in rapidity and economy of produc-
tion, a sepcialization is bound to take place. This specializa-
tion of labor makes it impossible for a workman to do any more
than one job or group of jobs necessary for completion of the
product. The material which has been completed by one man must,
in turn, be delivered to the man who performs the succeeding job
at the time when he is ready to perform the job. This again calls
for control of planning and execution of the production orders.

It has been shown by practice that it is easier to manu-
facture on the mass production basis than it is to produce many
different items, all of which require different jobs to be done
by the same workman. This has led to a standardization of the
products put out by one plant. This is not true of all organiza-

tions because of the demand for small quantities of odd lots of

* goods. It is true, however, that the companies which produce
standard products that are enjoyed by each family, such as the
automobile, radio, furniture and many others, have tended to make
less and less different types and models. In this effort to re-
duce the cost of manufacturing, the trend has been to change only
minor things such as color. When production is on such a mass
production basis as it is now, it is imperative that the easiest
and fastest methods of manufacture are used.

In a big organization, each department is so large that it
practically constitutes a small plant in itself. If each of these
departments is to do its job properly, then some form of coordin-
ation must be maintained between them.by a well organized system_
of performance of duties.

If no standard for work were available, then it would be
impossible to maintain any set incentive pay rates or even a fair
wage scale. By maintenance of the proper records for use in
determining the scale to be used, both in base wage rates and for
an incentive wage system, it is assured that each worker will
receive a fair wage for his labor. This averts many disputes over
pay systems. Likewise, if proper records were kept of the work
being done by each workman and proper planning of each job was to
be done, then many disputes over the work done by one person in
comparison with another would readily be avoided.

There are many other sound reasons for the use of produc-

tion control in industry today. Those given are only a few of the

major items which led to almost universal adoption of some form of
control over production. If one were to investigate the use of
production control, they would find that the majority of the
smooth and most efficiently operated concerns are the ones which
have the best control over their future planning and execution of

their present production orders.

PLANNING FOR PRODUCTION

To set up a system for the control of production which will
operate efficiently and smoothly is a very hard, if not impos-
sible, job. No matter how good the system looks, the human ele-
ment of mistake will influence it at times. No system.can take
into account the possibility of machine breakdown and other mechan-
ical failures.

The first step in planning for production is that of fore-
casting for production. Forecasting is the determination of what
products to produce and in what quantity, quality, and at what
future time to produce them. It can be easily seen that this part
in itself is a very difficult task. An experienced business man
can make a very close estimate from his experience in market
analysis.

One of the greatest effects on forecasting is the effect of
competition from other concerns which manufacture items that are
used for the same purpose. Each year many new items appear on the
market. If one of these items is such that it'will outmode the
article which is already being produced by a concern, then that
organization will have to make adjustments in its production or
find itself with a product for which there is no demand.

As an example, package design makes a very marked differ-
ence in the sale of a product. The package which looks the best

quite often sells a competitor's product first. A neatly packaged

item will reflect a great deal of the care involved in the manu-
facture of the product. At least this is the general impression
which is held by the consumer.

Improvements in the quality standard of a competitor will
very markedly affect the sales of other companies. Quality con-
trol is of utmost importance in keeping a product on the market.

New methods of manufacture may cause a lowering of the cost
of production of an item.and thus enable the company, using the new
methods, to lower the price of the item until it might possibly
eliminate any sales by other companies.

Advertising campaigns for a product may place the name be-
fore the eye of the public so that if that product is available
they will buy it for its name alone. A sale on the product may
have the same effect as advertising. A consumer is induced to
buy the competitor's item at the cost of production, or at a very
small profit to the manufacturer. After once using the item, it
is possible that the consumer will like it to such an extent that
he will no longer buy another product.

These effects of competition must be taken into considera-
tion in determining the quantity and quality of production. If
they are not allowed for, then the miscalculation may cause con-
siderable loss to the manufacturing concern.

The second great effect of the determination of future pro-
duction is that of the changes in trend over a period of years.

This refers to the taste of the user, and the demand for new and

improved articles by the consumer. These may change in a very
short time or may extend over a great period of years. At one

time the buggy business was considered to be a very sound one,

but it has been shown that within a comparatively short period of
years the demand for buggies has given way to the automobile. At
the present time, the demand for a buggy is so small that only a
very few small establishments attempt to make them. As the con-
sumer gradually readjusts himself to a new product, the demand for
the old product falls off markedly. If a company neglects to take
this into consideration, it may find itself making an item for ‘
which there is no demand. This would mean a drastic loss of money
and reputation for that concern.

The third major effect to view in making a forecast is that
of seasonal fluctuation in sales. Some concerns which make purely
a seasonal product, or group of products, will build up banks of
material for use during the large selling season. It costs a
large sum to keep the product in storage until the time for sale.
Other companies close during the part of the year during which
there is either no material or no demand. This requires that all
new personnel be hired each year. The cost of breaking in new
help each year and the finding of the seasonal help presents a
large problem. A good example of this type of plant is that of a
canning factory, where material for canning is obtainable only at
a certain time of year. Almost every company is affected somewhat

by this increase and decrease at certain times of the year. Dur-

ing the spring of the year, more building and construction is
started and materials are purchased for that and many other sim-
ilar purposes. During the summer, attention is turned more toward
vacations and the money normally spent for consumer goods is spent
for the vacation. In the fall, the agricultural crops are sold
and more money is put into circulation. This causes a slight in-
crease in business. Then during the winter a slight recession
occurs. This has been proven by a study conducted of normal busi-
ness years. In the automobile industry this pattern is followed
very closely. Without allowances made for this seasonal variation
the cost of storage and the flood of the market can cause a loss
in profits.

The last big effect on the prediction of future production
is that of the business cycle. It is well known that there is a
general pattern which business activity follows. Economists have
long told of the depressions which follow the boom periods. This
again is a highly indeterminate factor. The company should
attempt to take this into account when determining its products
and production.

As can be seen, the production forecast is the large part
of the risk of any business. It is on this that success very often
hinges. This forecast should be prepared with the utmost care in
order to give the business every chance of prospering. The fore-

cast should include the possibility of expanding the business to

fulfill the amount of production which is indicated by the fore-

10
cast. This will be readily apparent if the amount planned to be
produced is in great excess of the past years' average production
at full capacity.

After the production forecast has been made it is necessary
to plan for production. Production planning is the determination
of the necessary materials, machines and manpower, through an
analysis of the product, to produce a predetermined quantity of a
predetermined quality at a predetermined time.

Production planning balances the output of the plant with
the equipment available for use in production. Quite often, if
each machine is not taken into account in determining the capacity
of the plant, it will be found that some of the equipment avail-
able will not be put to use. It costs the company money every
time a machine renains idle. If all of the machines are not busy

all of their available time, then another product may be intro-

duced for manufacture. Or, if another product is not available,
then possibly some sub-contracting may be obtained. This will
utilize the machines at all times and will eliminate waste from
idleness.

If production planning is properly done, then it is pos-
sible to reduce the inventory of stock which is in process at one
time. This gives a much greater turnover of stock. By this in-
creased turnover, a smaller amount of material is required at one
time. This will increase the amount of money which can be used for

other types of investment which will return a rate of interest.

11

To obtain a smooth, even, rapid flow of work from.the time
that the raw material is first brought into the plant to the thne
that it leaves the plant as a finished product, it is essential
that some system of control is maintained. Idle time, caused by
lack of direct control, can mean many lost dollars to the company.
These wasted labor costs will sometimes determine the profit of
the company if it is one which Operates on a marginal basis.

The procedure for planning is much more definite than the
procedure for making a production forecast. In planning, more
definite things are taken into account.

The first thing to do in planning for production is to
adapt the product to production. By this it is meant that the
product must be broken down to the point that each operation which
must be performed is readily seen. Each surface which must be
machined must be listed, and a study made to determine whether or
not that Operation should be done by the company or if the fin-
ished part should be bought. Often the part is sent to a sub-
contractor who will do the job. This study should be complete and
definite. No loose ends are to be left for future determination.
If this happens it is quite possible to overload the machines which
are scheduled for that part of the work. This would cause a
"bottleneck" in the production of the finished item.

The economic lot size must be determined. The economic lot
size is the number of units which can be produced at a point in

production where the carrying charges plus the preparation costs

12
are at a minimum. The carrying costs are those costs for storage
of raw material and storage of the finished product until the en-
tire lot is produced. The preparation costs are those costs which
occur from the setup and preparation of the machinery for use dur-

ing the production of that item.(see Fig. l).

   
  

Cost per unit i

 

 

Amount produced

Fig. l. The economic lot size is at the point

where the preparation costs cross the carrying

charges. At this point the total variable

charges are the lowest.

The facilities of the plant are the next thing to be deter-
mined. The master Route Sheet is made which lists the order of the
operations which are to be performed on each part. These route
sheets are made out for each individual part. They are used in
determining the path that the material is to follow in its flow
through the plant. The master Route Sheet is used for all of the

planning and scheduling of machinery and manpower. It contains

13
the part name, the Operation number, a description of the opera-
tion and the type of tools and machines which are to be used for
the operations.

From the information gained from the production forecast and
the planning of production, the material needed for the manufacture
is determined. The type, quantity, quality and specifications are
all decided upon.

The capacity of the plant and its machinery is again taken
into consideration for the determination of departments which will
ibe responsible for the production of each part or Operation On a
part. 'Without this careful check on the facilities at hand,
"hold-ups” in production can very easily result.

If new machines and processes are available for the produc-
tion of the parts needed, then they should be substituted for the
ones which were formerly contemplated for use. With industrial
processes becoming more automatic each year, it is possible that a
new machine would replace several old ones and produce the part at
a much reduced cost. New methods of hardening and heat treating
are becoming known regularly. The substitution of new processes
will improve the efficiency of manufacture greatly.

Labor has caused a very great problem.for.management. The
reduction of manpower wherever it is possible has caused many of
these problems. In order that no excess labor is employed, it is
necessary that a survey be made to see if one of the new processes

or one of the new machines have replaced the previously required

14
manpower. This is a prOblem which requires a great amount of tact.
Nevertheless, if production costs can be cut by reducing manpower
where it is not needed, then it is proper that this should be
done. It is possible that the increase of production has caused
a shortage of productive labor. If this is true, then a survey of
the labor market should be made to determine whether the required
labor is available. I

The preparation of cost estimates is the next item which
must be considered. There are two general methods of preparing
cost estimates. The first method to be dealt with is the method
of using an item which was previously made or is still being made
for a purpose similar to the purpose of the product in question.

In this comparison it is possible to start from the ground up. If
the product has been produced recently, such as a yearly change in
the automobile industry, than it is possible to very closely deter-
mine the cost of the parts required in the new item. Records will
give the necessary information for the computation of the variable
costs. The fixed cost will remain approximately the same provided
that there has been no great increase or decrease in capital
expenditures since the last year.

The second general method in use is the one usually used for
an entirely new product. If the product has never been in produc-
tion before, it presents an entirely new problem. In this method
it is nearly impossible to figure to any great exactness. It is

considered very good if the calculated cost is within close range

15
of the actual cost of production. Experimentation is the only
method that will give accurate results. First the variable costs
are calculated. Part of this is done by estimating the labor cost
of each operation and totaling the costs for the entire production
of the finished product. It is costed from the direct labor stand-
point only. The naterials required for each part are totaled up
and this gives the material cost. The burden or overhead expense
cannot be calculated with any degree of accuracy. Usually it
amounts to about two hundred per cent of the direct labor cost.
This is a good check on the actual figuring and will give a fairly
close approximate. The overhead, direct productive labor, and the
cost of materials will give a fair estimate of the cost of pro-
ducti on.

The next step in the planning of production is to organize
the production orders; that is, the setting up of a standard pro-
duction order which will definitely identify the work to be done.
These orders should be set up so that each job is in its place in
the order of production. After the orders are arranged in their
prOper sequence, then the master schedule, or General Schedule, is
made up. This schedule will cover a period of time ranging from
three months to one year. No detail is shown on the schedule.
Only what is expected to be made, when it is to be made, and the
approximate quantity that will be made is shown on this form. The

quantity indicated by it is adhered to as nearly as possible in

16
executing production of the product. From the master Schedule,
approximate delivery dates can be determined. This form is then
dispatched to the departments of the organization that are to do
the work.

Two general types of planning are in use today. Planning is
done according to the size of the production order. If one plant,
or one department of a plant, makes only one item, it is probable
that this department will be planned on the basis of a single pro-
duct. This is commonly referred to as mass production. The
planning for this type of production is comparatively simple, for
once it is set up it remains that way through the entire produc-
tion of an article. Each machine, once it is prOperly loaded, will
produce the same part until a new product is manufactured. This
type of planning is called product planning.

In a 30b shop, process planning is the only way to meet the
demands of certain items to be manufactured. Process planning is
routing the parts for their successive operations to different
departments which do only one operation or type of Operation. As
an example of this, all of the punch presses might be grouped in
one department, and when a punch press Operation is required on a
part, then the part is sent to that department for that Operation.
In the case of a jOb shop, this is the only way to meet all of the
needs for producing many different items.

Quite often, in the larger job shops it is found that two or

three of the items made are made almost continually. This is found

17
particularly in those shOps wnich make parts for larger companies
which require a continuous flow of those parts into their plants.
In such cases there may be a combination of these two forms of pro-
duction planning in effect. The product planniig may be set up in
one part of the plant for production of the parts required by other
companies at a continuous rate, and another part of the plant may
be set up for process manufacture of the items for which there is
no continuous demand. Wherever it is possible, it has been the
trend to switch to the product planning method.

The third major step in the planning for production is that
of procurement and storage of materials. In order to Operate effi-
ciently, a plant must carry an adequate stock of material for use
in production. This stock cannot be too large, or excessive costs
of storage will arise.

The material to be used must be determined. This varies
greatly with the type of article which is to be produced. To make
a suitable product it is necessary to meet the demands of the con-
sumer. Strength, appearance, durability and many other charac-
teristics must be taken into consideration before ordering the
material for use in manufacturing.

Upon ordering of the material to be used, it is necessary to
determine the quantity and quality of the material in order to pur-
chase the best suitable goods for the least cost. Engineering

Specifications are set up for guidance in ordering. The specifir

18
cations are for use in the vendor company for production of the
material to be used as raw material when received at the plant
which ordered the goods. The promised date of delivery of the
material is one of the major points in choosing the vendor. After
determination of the vendor, it is necessary to notify him of the
method of shipment. This may make a difference in the availability'
of the material to start production, because some systems are
faster or cheaper than others. Last of all, it is necessary to
follow up the order to see that delivery will be made when
promised.

The receiving department will receive the material and check
it to see that each item.which was shipped from the vendor was re-
ceived. It then stores the material until it is needed for pro-
duction.

The storeroom should be organized for efficient operation.
There should be some systematic method of storage. This should be
followed closely to facilitate issuance and inventory of material.
material should not be issued until proper authorization has been
received. The usual method of getting material from storage is to
present a Stock Requisition for the stock needed for production.

It is recommended that this system be followed so that the mater-
ial is not lost or misused. Upon receipt of the Stock Requisition,
the material is issued and the amount used is deducted from the
quantity on hand. A record of the quantity on hand is most con-

veniently kept by use of Bin Tags. These tags are kept on the

19
bins at all times and should not be removed until the stock has
been completely exhausted.

The fourth main step in the planning for production is
routing. Routing is the determination of the operations to be
performed, the path of the material in process, the sequence of
Operations, as well as the specific machine and the class of
worker to be utilized in the manufacture Of the finished product.

This is a more detailed determination of the Operations to
be performed as listed in the route sheets. Each minute detail is
set forth for a particular Operation. The sequence of performance
of the Operations is set up and scheduled to the particular type
of machine which will perform.the job. The lot sizes are deter-
mined for use in production. Sometimes the lot sizes are not the
economical lot size. This may be due to a Special order. A
smaller or larger lot is then produced. It is also necessary to
set up a standard system of forms to be used for the control of
the production system. The standard forms should completely carry
out the routing of the material and the execution of the produc-
tion orders.

The number of parts entering the sub-assemblies or the final
assembly and the position within the plant upon completion of the
parts is an important factor which must be kept in mind while rout-
ing the parts through their operations. If a part is finished at
one end of the plant and the assembly is at the other, it requires

time and money to transport that part to the place where it is to

20
be assembled. The processing necessary may take the part to every
division of the shop, but in routing it is necessary to keep the
finishing operation on a part as near the assembly workplace as
possible.

In routing, a major job is to determine the future avail-
ability Of the machinery. TOO much work cannot pass through a
certain division or it may cause a delay in production. While
production is slowed down by these "bottlenecks", many machines
and workers will be idle. Each department should be scheduled
according to the equipment which is available.

Human factors must be considered in routing the material
through production. Each man is willing to do as much work as the
man next to him, but it often causes hard feelings if one man can
loaf all day while the other one works. This cannot be Overlooked
in dividing the work between the different departments.

The fifth and last step in planning for production is
scheduling Of the work. Up to this point the work has only been
allotted to a particular type of machine and to a department to
which it will be sent for fabrication. Scheduling is arranging Of
specific Operations into a time-table which accounts for each indi-
vidual machine and workman, so that each Operation may be planned
for the part to arrive at and enter into assembly in the proper
order and at the proper time. The scheduling has now been done

right down to the time for starting and stopping work on a spe-

cific job, by a specific machine operated by a specific workman.

21
The scheduling job starts by translation of the customer‘s
orders into patterns, parts and symbols. This follows from the

master Schedule Of orders and approximate times which the orders

are to be run through production. The information from the rout-

ing of the parts is used and a Manufacturing Schedule is made.

This shows the actual times and places Of performance of the
Operations which have already been determined.

The manufacturing schedule should cover a period of time Of
from one week to three months, depending on the type of production
which is being carried out. For product production, the period

usually runs from one month to three months. It is generally

revised at a period Of from two weeks to one month. For process
production, the period is generally shorter due to the complexity

Of scheduling of production of a great number of items. It is

usually made out from one to six weeks in advance. It should be
revised at one to three week intervals.

By looking at the manufacturing schedule it is easy to gain
pertinent information about production. It is controlled mainly
by the minimum time required to complete production on a partic-
ular order. Sometimes it is governed by the delivery dates set by
the customer. It may be possible to begin production on an order
before the time actually necessary. If part of the Operations can
be performed at the same time another part is going through pro-
duction, it is to the advantage of the plant to start the order
and save the setup time and expense which would be required for

the job if run at the time it is scheduled. Frequently, in the

22

case of those companies which work strictly from a production fore-
cast, the delivery date or completion date is totally dependent

on the manufacturing schedule.

23

PUTTING PLANS INTO ACTION

After completion of the planning for the production of the
product, the next step is to produce the product. If the planning

has been the kind that will Operate efficiently, then the job Of
producing the article will be a fairly simple one. A.1ot of the

control of production depends upon the paper work which is involved
in the execution of the orders to production. The remainder of
the job of producing the product is dependent on each man knowing

just what he is expected to do. The system of forms set up in
planning for production should show each men, through using the
form, his responsibilities and the duties which he is to perform.

The first major step in the manufacturing of the product is
the dispatching of orders. Dispatching is the proper release of
orders to production so that the schedule is maintained. Efficient
dispatching of the production orders plays a very great part in
the prOper Operation and efficient running of a plant. If this is
not properly done, then the entire work of planning has been
wasted.

The major function Of dispatching is the issuance of orders
for production. In conjunction with this issuance of orders is
the authority to prepare, assemble and issue, to the point Of use,
all materials, tools, fixtures and gages which will be used in the
execution of the order for production.

It is necessary that a system of forms be used for the re-

porting Of the progress made in production. These forms are gen-

24
erally made out in conjunction with the dispatching operations.
The information usually covered concerns the progress of produc-

tion, payroll and cost data. It is essential to have actual and

exact data on What has been done.

It is the responsibility of the dispatdhing group to con-
trol the progress of material at each Operation. If there has
been some unexpected delay or emergency, then any necessary
rerouting of material or reloading of a machine is done by the
dispatching group. After the manufacturing schedule has been comr
pleted and the material has once been routed, all further work in

rerouting falls on the dispatching division.

Dispatching of orders covers the moving of work from one
work place or operation to another. Without specific authority
from.the dispatching group, no work can be prOperly moved.

Dispatching acts as a liaison between the planning of the

production and the actual manufacturing of the finished article.
It acts as coordinator between the staff organization and the pro-
duction organization. Many troubles which might arise between
these two»groups are averted by consultation with the dispatching
group.

Two general types of dispatching are in common use. The
first type to be mentioned is that of centralized dispatching. In
centralized dispatching, the main office which governs the issuance
of production orders will issue orders to all sections of the

shop. This means that each man receives his orders directly from

25
the central office and that all orders for any job originate in
that office and are dispatched from that office. All orders are
sent directly to the machine or work station. The big advantage of
this type of dispatching is that the work performed, the backlog of
work and the work scheduled for each machine can be readily seen.
Usually the foreman has the right to object to any work assigned
in that department if he can show any good reason for not doing
the work.

The second type of dispatching in common use is that of
decentralized dispatching. This differs from centralized in that
the orders are sent in blanket form to the department where they
are to be done. The department then issues the orders to the indi-

vidual machines or work places under their jurisdiction. This is

not as good as direct control of each machine, as in centralized
dispatching. If each department contains well trained men, then
decentralized control will work with less confusion than will
centralized control. But it is recommended that for average use
the centralized system be used. This way the number of persons
requiring sufficient skill to schedule machines will be kept at a
minimum.

No matter what type of dispatching is used, there must be
some type of communication for use in the dispatching. Some of
the most popular ones in use are the telephone, teletypewriter,
teleautograph, messengers, pneumatic tubes and interstation loud

speaker systems. Any one of these may be used. Each one is very

26
good and the efficiency of its operation depends upon the personnel
who control and use it.

Some system of easy check on the progress of production
should be used. hecently some manufacturing firms have built dif-
ferent types of production control boards. There are three general
types now on the market. The Produc-trol is a board with adjust-
able lengths of cord to indicate the production rate and the
materials on hand (see Fig. 2, p. 27). Several companies have use
this system and like it very much.

The second type is that of the Visible indexed file. This

control board is manufactured under the name of Sched-u-graph. It
uses the principle of different colored cards to indicate the dif-
ferent operations which have to be performed. These cards are
placed in a row in the order in Which they are to be completed.
The bottoms of these cards show through a visible tab, and when
they are properly arranged, form a graph of the work to be com-
pleted (see Fig. 3, p. 28). This has been found very satisfac-
tory by many organizations.

The third type of control board in general use is the three
card racks. A board is set up with a compartment to hold three

cards. Bach compartment represents an individual machine or work-

place. The top card is the job order for the job presently being
worked on. The middle card is for the next job, and the last card

is for the job which is to be done after the next job is complete.

 

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29
Three cards are kept in the rack at all times. This gives machine
scheduling for three jobs in advance. As one card is completed,
another is put in the rack (see Fig. 4, p. 28).

There are other means of recording the progress of produc-
tion. International Business Machines Company installs the punched
card system. Many firms use tabulated file cards. This is known
as a Kardex system. Still others use a Gantt chart. This chart
is a mechanically drawn illustration of essentially what appears
on the Produc-trol or the Sched-u-graph. many other possible forms
or graphs are easily used. This has been only an attempt to men-
tion some of the most popular varieties.

The second and last major step in the production of the
finished item is that of follow-up. Follow-up is seeing to it
that the schedule which has been set up and the production orders
which have been given are not delayed as they progress through the
processes and operations. A good follow-up system is essential
for the maintenance of efficient production.

There are three bases for followaup. They are material
purchased, the Work in process and the final assembly or erection.
Each must be checked to determine that each production order and
purchase order is being properly carried out. In all three types,
the main key to efficient follow-up is to anticipate and prevent
any delays. Granted, this is hard, if not impossible, to do; but

an experienced man will find that it will be possible to prevent

30
many errors in production by looking ahead. The checking of each
order to see that it has not been sidetracked is a routine duty of
the follow-up group.

Errors in routing, scheduling and dispatching cause a lot
of the delays that appear in production. Other causes of mishaps
in the execution of the production orders are labor difficulties,
breakdown of equipment, lack of tools, jigs and fixtures, lack of
material, inadequate material in floats or banks while in process,
and excessive rejections of material by the inSpection division.
There are many other interferences to production, and if all of
them.were to be known in advance, then follow-up would be a simple
thing. As it is, the followeup of the orders is one of the major
problems involved in the production of the finished product.

This by no means exhausts the subject of production control,
but it will give a general picture of the need for production con-
trol, the procedure for setting up production control and the

difficulties which are encountered in production.

31

PRODUCTION CONTROL SYSTELS NON IN USE

In making this study of production control systems now in
use in small plants, actual control systems were chosen for study.
It is the aim of this paper to develop a system which can be used,
with minor adaptations, in any plant ranging roughly in size from
fifty employees to two hundred and fifty employees.

The types of industry used for this report are: (l) The
manufacture of heavy machinery which does not require too great
precision in the assembling of the parts; (2) the manufacture of
machinery which does require a precision type of assembly; (3) the
manufacture of sheet metal stampings; (4) the manufacture of
forgings; and (5) the manufacture of many different models of
precision small parts and assemblies.

The Robey manufacturing Company of East Lansing, Michigan
was chosen for the company illustrating the heavy machinery which
does not require great precision in their work. The company manu-
factures farm.machinery and equipment for cultivation of soils.

The Hill Diesel Engine Company of Lansing, Michigan was
chosen for the illustration of the company which produced heavy
machinery which required precision work to complete their pro-
ducts. The products of this company are diesel engines of vary-
ing sizes.

The Dail Steel Products Company of Lansing, Michigan was

chosen to represent the company which made only sheet metal stamp-

32
ings. This shOp makes only punch press stampings for sale to other
manufacturing companies.

The Federal Drop Forge Company of Lansing, I chigan was
chosen to illustrate the company which makes only forgings. The
entire production of the plant is forgings. Most of the work is
done for the automotive companies. No machining of the finished
forgings is done.

The'Wohlert Corporation of Lansing, Michigan was chosen to
represent the company which manufactures many diversified products
each requiring precision work in the production of finished assem-
blies.

Each one of these plants was studied individually and a
procedure Chart was made for each organization. A procedure chart
shows a graphic presentation of the methods used to control pro-
duction. It indicates each step in the procedure, tells where it
happens and the interrelationships of each step.

The following sections of this report show just how these

companies control their production.

Company "A"

The Robey manufacturing Company will be used for the first
illustration in this study. It will be known as Company "A" for
this discussion. The manufacturing plant is located one block
south of Grand River Avenue on the east side of East Lansing,
Michigan.

The Robey manufacturing Company is a comparatively new
organization. It was incorporated in 1937. The company was
started by Mr. Robey and his three sons.

The establishment started out on a very small scale and has
grown to cover about forty thousand square feet of floor area. The
manufacturing is all done in a single story building. The company
now employs about ninety persons. Seventy-five of the ninety are
hourly wage earners, and about fifteen are in the salary classifi-
cation. Two shifts are maintained and operated forty hours each
week under average conditions.

The president of the organization makes all sales predic-
tions and initial shop orders to begin production. At the present
time the forecast of all sales is very dependent on the supply of
steel which is available. The plant operates at its full capacity
according to supply of material for working. If material is obtain-
able in the future, the present plans are to expand to meet the

demand for their products. The big job in forecasting is to

determine the product which the available supply of raw material

34
is to be used for.

The products made by this company are those used in culti-
vation of soil. The work is almost entirely the making of farm
machinery. Four main products are produced. First is the Culti-
tiller. This is a product designed by the founder of the company.
Three models of the Cultitiller--six, nine and twelve foot models--
are made. The six and nine foot models come in three types; the
unmounted, the mounted‘with manual lift, and the mounted with
hydraulic lift. The twelve foot model is made only with the
mounted manual or hydraulic lift. The Cultitiller contains
about one hundred and ten major parts for the unmounted type and
about one hundred and seventy parts for the mounted type. All of
the Robey products are of heavy structure and do not require a
great amount of precision work. About one hundred and ten Culti-
tillers are made each month on an average over the entire year.

The second product made is the field cultivator. This
comes in two types, either tractor mounted or mounted on wheels
for towing. About one hundred and seventy-five major parts are
used in this product. Approximately four hundred and fifty of
these are made each month when figured over a yearly average.

The third product is the Field Harrow. Two models are made
of this product, the open model and the closed model. About
twenty-five major parts are contained in one assembly. Approxi-
mately two hundred of these are produced each month.

The last major product is the Bean Puller. This is a

55
standard mounted model. It contains about one hundred and twenty
parts to each unit. No figures are available as to the production
of this item. It is on a variable production schedule and any
relative figure is hard to estimate.

The Robey organization carries on its own experimental work.
This refers to new design of products as well as improvements of
the items already in production. All tools and dies which are
used in the manufacture are made by the company tool and die shop.
Some punch press work is sub-contracted, but this is a very small

part of the total production.

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.‘Diio’. . IIIIIIIII .

 

 

 

 

37

Explanation 2f the_procedure chart for Company ”A". Each

 

 

step, as shown on the procedure chart (see Fig. 5, p. 36), is

taken separately and explained in detail. The action during the

steps is as follows:

1.

2.

The president determines the requirements of the com?
pany output. This is written up in the form of a shop
order (see Fig. 6, p. 38). The information given on
this order is the type, model and number of units which
are to be produced. Seven copies of this order are dis-
tributed to other executives in the plant, and the
master copy is filed by the originator.

One copy of the shop order is sent to the purchasing
department. Upon receipt of the shop order, the pur-
chasing department makes out a purchase order (see

Fig. 7, p. 39). Also two forms of reports called
purchase records (see Figs. 8 & 9, pp. 40 & 41) are
made out and filed so that the material on hand and
ordered may be readily seen. These two records are
filed for future use in both inventory control and
future ordering. Two copies of the purchase order are
filed for comparison with the receiving records as the
material is received. One copy is sent to the vendor
as a notice to send the material required. The last

copy of the purchase order is sent to the production

 

 

 

 

 

 

 

 

 

 

 

 

Fig. 6. The shop order
used by Company ”A".

38

 

 

 

 

 

 

 

 

 

Fig. 7. The purchase or-
der used by Company ”A”.

39

4O

 

Fig. 8.

 

 

One
of two purchase records used by Company ”A"

 

 

noun am.
5136!. REQUISITION

 

 

 

 

 

 

 

 

 

 

 

 

Fig. 9. Above: The purchase
record used by Company "A".
Below: The stock or steel
requisition used by Company "A".

41

3.

4.

5.

42

control department.

Upon receipt of the purchase order and comparison with
the copy of the shop order which has been received in
the meantime, a production order (see Fig. 10, p. 43)
and a steel requisition (see Fig. 9, p. 41) are issued
from the production control department to the foreman.
On the production order is shown the work to be done,
when it should be done, which department it should be
done in, and the type, model and number of units which
are to be made. One of two copies is retained by the
production control department and the other is sent to
the foreman in the department where the work is to be
done. The steel requisition is made out in duplicate
and one copy is retained by the production control
department while the other is sent with the production
order to the foreman.

When the foreman is ready to start the job, according
to the availability of machines, he sends the steel
requisition to the worker in the steel shed. The fore-
man retains the production order until the job has been
completed and then destroys the copy given to him.

The material has been delivered to the company and re-
ceived at the steel shed, and a receiving report (see
Fig. 11, p. 44) is made out in triplicate for the quan-

tity received. Each bundle of steel is tagged according

 

not. a. own I. Mn N.
H but. To Proton-3 Supt.

 

 

 

 

 

 

8—0. 0' wo- in. Clam
”v 0‘” min ("9'9 resu- .

 

 

 

 

 

 

Fig. 10. Above: The production
order used by Company "A". Below:
The job card used by Company "A".

43

 
      
       

”ECFIV'NG "TCORD

Roboy Mnnu.‘nr‘huun0 (‘ump MW

.1 Va 'A'MINI I'VI'IN ' l l\$

." V" 7" ("NI NO A .1 .4.

 

Fig. 11. Above: The receiving re-
port used by Company WA". Below: The
”next job" ticket used by Company "A'.

6.

7.

8.

45
to weight and time received. This tag (see Fig. 12, p.
46) has a stub which is filed and used as the running
inventory. When the steel has been used, both the tag
and tag stub are destroyed. The steel requisition which
has been received from the foreman is filled out as to
quantity of steel issued and the steel is sent to the
shop for use on the production of the product set forth
in the shop order. The steel requisition and two cop-
ies of the receiving record are sent to the production
control departnent. One copy of the receiving record
is sent to the purchasing department for comparison
with the purchase order, to be sure that complete ship-
ment has been received.
The receiving record is checked with the purchase order
and with the purchase records to afford a complete
check on the quantity and quality received, and also a
complete inventory of the material on hand.
The receiving record is used to obtain data for use on
the Produc-trol. The notation used is that steel is
available for production of the Shep order. It is then
sent to the cost department. The steel requisition is
filled out as to the number of units made and the part
number of the units. The steel used is also entered,
and then the COpy is sent to the cost department.

The shop order has been received and the receiving

N? H77

"(0‘0 U “mun

 

 

 

Fig. 12. The steel tag used
for inventory by Company "A".

46

9.

10.

47
records with the steel requisition are used to prepare a
cost sheet (see Fig. 15, p. 48) which will show the cost
of production of that particular part. This cost sheet
is filed with the receiving records and the steel
requisition for future use in estimating the cost of
a particular part and for checking with past costs
to determine any inconsistencies.
The drafting and engineering department receives a copy
of the Shep order and proceeds to make a master route
sheet for the product which is to be produced. This
route sheet (see Fig. 14, p. 49) contains all of the
operations, and the sequence in Which they are to be
performed, which are necessary for the completion of
the product desired. The route sheet is made in seven
copies, of which six are filed for reference and the
original is sent to a meeting of a joint board.
A.joint board meets which is made up of the president
and other top executives of the company. This board
studies the Shep order and the master route sheet and,
by use of the facilities available, assigns the work to
the different foreman. Verbal orders to the foreman
are then given as to what work is necessary for them to
complete. Upon receipt of the verbal orders, the fore-
men then schedule the work which each man is to do, and

make out a next job ticket (see Fig. ll, p. 44) which

 

Fig. 13.

The cost sheet used by Company "A".

48

 

M .- ‘ loot-w".- -

e, “.4..-— ......—

.Mm_mcwvc;\no~a

III-33¢“. momucnono

 

IMF. KORE" NANL'FAFTK'RINH t0
ROUTE SHEET
ahfl‘" ...... -
- .- ”“2“”

 

 

WM“ ' “ML-0-

 

 

 

 

 

 

 

‘7“: 'r‘.’ r':
—

 

 

Fig. 14. The route sheet
used by Company "A”.

49

ll.

12.

13.

14.

15.

50
is given to the individual worker before the completion
of the job on which he is now working.

The worker holds the "next job" ticket until he has
completed his present job and then takes it to the
production control department.

The route sheet has been sent from the joint board to
the cost department. The cost department then makes
out a job card (see Fig. 10, p. 43) for each Operation
listed on the master route sheet and sends these job
cards to the production control department. On the job
card is given the operation, Operator and part which is
being worked on, and also the wage rate for that job.
The route sheet is filed as part of the permanent
record of the establishment.

The production control department exchanges the next
job ticket, brought in by the worker, for the job card
corresponding to the job listed on the ticket.

The worker holds the job card and punches the time in
when he starts the job and time out when he completes
the job. He then returns the job card to the produc-
tion control department.

The production control department records on the
Produc-trol the information on the job card and sends
it to the cost department.

The cost department checks the job card with previous

51
similar jobs for discrepancies in the time resuired to
complete the work, and records that time for the pay-
roll. After this, the cards are filed as part of the

permanent file.

This completes the cycle of procedure.

52

Company "B"

The Federal Drop Forge Company is the second illustration
which will be used in this study. It will be known as Company
"B" for this discussion. This company is located on South'Wash-
ington Avenue, Lansing, Michigan.

The organization is now in its twenty-eighth year of active
Operation. It was founded in 1920 and has been operating contin-
ually since that tine. The company now employs about two hundred
persons. One hundred and seventy-five are hourly wage earners and
about twenty-seven are salary employees. Two shifts are maintained
and Operated forty hours each week under normal Operating condi-
tions.

No sales forecast is used. This is strictly a job shop
where the products are not manufactured until after they have been
sold. Usually the company makes a bid for a job, and if that bid
is accepted the order is placed with the company and production is
started. NO product is offered directly for sale. Since this is
a forging shop, the product in its finished form is what is usually
thought Of as raw material. This makes any open market sale impos-
sible. Each item.manufactured is already sold before it is made.

The shortage of steel has seriously affected the production of this

company. The company is now operating at about sixty per cent of
its total capacity because of this shortage.
The Federal Drop Forge Company does all types of forgings

which are not too heavy. The presses used range from sixteen hun-

53
dred pounds for the lightest work to five thousand pounds for the
heaviest of forgings. The greatest amount of their production is
done on sixteen hundred, two thousand and twenty-five hundred
pound presses.

A very great number of different forgings are made. This
is due to the fact that any type is made within the range of the
capacity of their presses. About seventy-five per cent of their
total production is sold to the automotive industry. This includes
parts for many makes and models of cars and trucks. About ten per
cent of the total production is sold to the agriculture implement
manufacturers. About fifteen per cent of the total production of
the company is sold to miscellaneous industrial machinery manu-
facturers. This takes in many brands of shop tools and machines.

The production of this organization is measured in tonnage.

Full capacity production of the Federal Drop Forge Company
is about fifteen hundred tons of raw steel used per month. The
production at the present time has been cut to about nine hundred
tons per month due to the steel shortage. The average finished
forging will weigh from one and one-half to two pounds per part.
No assemblies are made because no machining of parts is under-

taken by this company.

 

 

 

 

 

 

 

 

 

 

 

 

  

 

   

 

 

 

 

 

   

 

 

 

 

 

  

 

 

 

 

 

 

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- . ._M \V. Ii - .r..!:_.L!-.v . -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

55

Explanation 2i the_p£ocedure chart for Company "B". Each

 

 

step is taken separately and the action taken as the forms pass

from one department to another is explained (see Fig. 15, p. 54).

The action during the steps is as follows:

1.

2.

3.

4.

Company "B" submits a bid for a certain job to the pros-
pective customer. If the bid is accepted by the cus-
tomer, an order is sent and an acknowledgment of the
order is returned to the customer (see Fig. 16, p. 56).
A release with the delivery date is sent to Company "B"
for a part, or all, of the original order for the job.
This sales order is received in the form of a purchase
order and reviewed by the president of the organiza-
tion. This is only for the information of the presi-
dent, and no action is taken on the form at that time.
The sales order is then received by the treasurer of
the company and at this point the price of the quan-
tity ordered is entered on the sales order. The
treasurer also notes the information given on the sales
order.

The sales order is then sent to the production manager,
who schedules the work to be done according to priority
and the date requested for delivery. The scheduling is
only as to date to be started and weight of press to be
used. This information is entered on the schedule

board.

 

 

 

m . mum FORGE COMPANY

LA’ubiNG MICHLOAN

 

 

 

|
l
l
I
i
‘ t 1.7
u ‘ ‘ 3
..‘Nk
| \->- I
'.\ \- -
J ‘ \‘,\ l l
‘ I .\\ ‘ I
g I 1 ' '
. . . Ԥ_\\" 1
l l \\\‘
7 .\.
1 l
, | '
L i ‘
:-:

 

Fig. 16.

 

The order acknowledgment used by Company ”B".

 

56

5.

6.

7.

8.

57
The billing clerk receives the sales order next, and
copies the information given on the sales order on a job
card. Five cepies of the job card are made (see Figs.
17, 18 & 19, pp. 58, 59 a 60). These c0pies are sent
to the production manager, production and production
control department, shipping department, cost depart-
ment and the sales department. The original sales order
is then filed in a permanent file of all orders.
Each department mentioned above reviews the job card
for information given on it which pertains to them.
It is then filed by the departments for future refer-
ence. The production manager determines the quantity,
type and quality of materials necessary to produce the
product called for, and makes out a purchase order (see

Fig. 20, p. 61) for the material required. One copy

is filed by him, and one copy is sent to the production
and production control department for their informa-
tion. The original purchase order is sent to the vendor
company which has been chosen to supply the material
needed.

The vendor company receives the purchase order and ships
the material ordered to Company "B". A shipping notice
is made by the vendor company, and this accompanies the
material in shipment.

The material is received in the steel room of Company

"B", and the items received are checked against the items

 

 

Fig. 17. The job card used by Company "B",
which is sent to the cost department.

 

58

 

 

 

 

 

 

 

Fig. 18. Job card used by Com-
pany "B", which is sent to the
production manager and the pro-
duction and production control
departnent.

59

 

Fig. 19. The job card used by
Company "B", which is sent to

the shipping and sales depart-
ments. '

60

 

 

61

[DERAL .rT-'_ 077:? .8"

LANIINO. MICHIGAN
PUNCH“. anon

 

 

Ytlll._ _ iv o I
I. ttttt o-
|
l
I
conomom
... "4" mm -' ... “- I“ W"- I-N'U' m one! long: com-AM
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n.....-.. I!u¢".:“|v~ w-
nu . . "M u. ”unlock-u a“ I D. . — ._.— m...
1' ' -,_ tr" --‘-—--— A "W" ‘

 

 

 

Fig. 20. The purchase order used by Company ”B".

9.

62
listed on the shipping notice. If the shipping notice
is correct as to quantity and quality received, it is
signed by the steel room foreman and sent to the pro-
ducin' on and production control department.

Upon receipt of the shipping notice, the production and

production control department makes out the master book
(see Figs. 22 and 23, pp. 64 & 65). This book contains
all of the necessary information to identify the steel
or other material completely. The steel book is also
made out (see Fig. 21, p. 63). This book serves as a
running inventory of the steel on hand. Each lot of
steel is given one page of the book, and as steel is
used out of this lot it is deducted until no steel of
that lot is left. This steel book provides an imme-
diately available and exact inventory of all steel on
hand. A lot card (see Fig. 24, p. 66) is made out and
sent to the steel room. This is put on the bin where
that particular lot is stored. This serves to identify
each bundle of steel in storage. A receiving slip (see
Fig. 25, p. 67) is made from the signed shipping notice.
This receiving slip contains all information necessary
to cost the items and pay whatever bills are due on

the shipment of material. This receiving slip is made
in duplicate and the copy is kept by the production and

production control department while the original is sent

a... ._;.- 3a-”: t' -Jv'v_
4805“"

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v ..., ,
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9‘ . no
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1‘.;. .u
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Fig. 21. One sheet of the
steel book used by Company ”B".

63

64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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’-u 2"..‘- ' .. ‘3 l ’ 46"
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. ‘ ‘ I

 

 

Fig. 22. The left hand sheet of
the master book used by Company ”B".

 

 

 

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In. ‘
Arm 75-9” Ln u w
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Fig. 230

 

The right hand sheet of

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It:

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he)

’4‘
)9.

 

n».
p

the master book used by Company "B”.

 

Fig. 24. Upper: The banner slip used
by Company "B". Lower left: The shear
order used by Company "B". Lower
right: The lot ticket used by Com-

pany "B".

66

menu DROP FORGE COMPANY
RECEIVING Sun

{171'

IICIIVIO 'IOU -

VIA,-_ __ _e 'IT.ONO|.V
mum-no. ,- ,0-

""'""~! "W’x-m“ I 7

e.-

t
' V

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fig. 25. Upper: The receiving
slip used by Company "B". Lower:
The steel card used by Company "B".

67

10.

ll.

68
to the cost department.
Costing of the material and payment of all bills due
is done by the cost department. The information from
the receiving slip is transferred to a steel card (see
Fig. 25, p. 67) which is used as a double check on the
quantity of steel on hand.
When the time has arrived for the starting of produc-
tion of the job, the production and production control
departnent makes out the daily work sheet (see Fig. 26,
p. 69). This is a schedule for each machine and press

and the jobs Which are to be done that day on those
machines. Eight copies of this schedule are made and

distributed. One copy is sent to the production man-
ager, steel room, chief inspector, hot inspector, die
storage, and two cOpies are sent to the shop foreman.
One copy is kept and filed by the production and pro-
duction control department. A shear order (see Fig.
24, p. 66) is also made out by this department which
specifies the steel to be used during production and the
length it will be cut. This form.is sent to the steel
room. A hammer slip (see Fig. 24, p. 66) is made and
sent to the time study department. This slip contains
the necessary information for the setup of the job
which that press is to do at the completion of its pre-

sent job.

lv:.J"

’;_/‘2ll .,"I./Ii-.’ ,Z.

ILLL .. ILLh l/
“Lupin/br- wrin- '7
was. v.11”.

LOMIVV)’ why». 'I

am

1’6 2 If}

 

Fig. 26. The daily work
sheet used by Company "B".

69

12.

13.

14.

15.

16.

17.

18.

70
The steel room foreman takes the stock indicated on tie
shear order from the steel room and shears the steel as
indicated on the order. The sheared steel is then
delivered to the area where it is to be used.
The shear order is returned to the production and
production control department where the quantity of
steel used is deducted from the steel book.
The shear order is then received by the cost department
which deducts the steel used from the steel card made
out in step number 10.
When the t'me study department receives the hammer
slip, the number of blows necessary in forging the
product is entered on the back of the slip. This
serves as instructions to the hammer Operator.
The hammer slip is given to the setup men and the job
is started. At the completion of the job, the hammer
slip is returned to the time study department for use
in checking the time taken with standard times for
that job. The worker makes out a time card (see Fig.
27, p. 71). This card gives the necessary information
for payroll use and the costing of the job.
The foreman signs the time card, which serves as a
check on the times entered by the workman.
The time card is sent to the production and production

control department, where the day’s production is com-

71

"Ml (\th HUI
FEDERAL DROP l-ORUI; u».
uuuxxn \nu

...-

 

 

v..—._.-.

I, , ' ’ "fl
’9 ’I lL-V3:’p“.Q‘-‘l

PI 4. .
TIME SLIP mn__,‘ i _ , ,_‘- ,
FEDERAL DROP FORGE CO, hall-o. Nick
noon-o «out —
I’ll. ILI' HUI? II YUIIID II A? I’ll CLOII O' VII DAV'I'OII

g..- _ u-I-te QDIIA'tr‘e

I“

 

 

 

 

 

 

 

 

 

 

 

 

u..." tr;’_.”‘—"-—m ......

 

 

Fig. 27. Upper: The time card used
by Company “B” for non-productive
labor. Lower: The time card used
by Company "B" for productive labor.

piled and recorded in the form of a daily production
report (see Fig. 28, p. 73). This is made in tripli-
cate and sent with the time cards to the cost depart-
ment.

19. The cost department enters this information from the
daily production report on the job card made out in
step number 5, and sends on a copy to the president,
production manager and the time study department. The
original of the time card is filed in the cost depart-
ment and a c0py is given to the workman who performed
the job.

20. The president, general manager and time study depart-
ment study the daily production report for information
on production and possible improvements of the pro-
cesses.

This completes the cycle of forms and controls used by

Company ”B" in their control of production.

DAILY PRODUCTION REPORT OFFICE

 

 

 

Fig. 28. The daily production
report used by Company "B".

 

73

74

Company " C"

The Hill Diesel Engine Company is the third illustration
which will be used in the formation of this study. It will be
referred to as Company "C" in this discussion. The plant is
located on Mill Street near the downtown section of Lansing,
Eichigan.

This organization is a part of the Drake America Corpora-
tion. It acts independently so far as production goes, but the
order for the manufacture of the items comes from the parent com-
pany. Parts which are not made at the local plant are usually
bought from other divisions of the corporation if one makes that
particular part. This branch was established in 1913. The
original engines made were gasoline engines. In 1919 the first
diesel engines were made. Both gasoline and diesel engines were
made then until 1926, when the company dropped the manufacture of
gasoline engines, and since then their only product has been diesel
engines. The plant now occupies fifty-five thousand square feet of
floor area used in manufacturing. It now employs about ninety
persons. Seventy of the ninety are hourly employees and about
eighteen are of salary classification.

No sales forecast is made by the local organization. This
is due to the fact that the parent company issues the orders for

production. This makes it unnecessany to determine any volume of

production, because the production orders from the parent company

75
cover the entire volume of the plant's production.

The steel shortage has not seriously affected the produc-
tion of this company. This is primarily due to the fact that most
of the metal worked with is cast iron. The steel that is used is
not sufficient to curtail production. ‘At the present time the
plant is Operating slightly below its maximum production. It is
estimated that it is working at about eighty-five to ninety per
cent of full capacity. The plant operates on a forty hour week
and maintains production on two shifts.

Three types of diesel engines are now in production. A.two

cylinder, four cylinder and six cylinder engine are made. The two

cylinder engine contains about fourteen hundred parts, while the
four cylinder contains about fifteen hundred parts and the six
cylinder contains about sixteen hundred parts. Diesel engines
reqiire a great amount of precision work.

About one thousand diesel engines of the three combined
models are made each year. If necessary, in case of national
emergency, by adding another shift it would be possible to speed
up production to about double the amount now turned out. This
would make the absolute maximum production about two thousand
units per year.

These engines are put to three major uses. many of the
heavier engines are used for marine engines on small power driven

boats. Other engines are used for power take-off drives for heavy

machinery. The third big use to which these engines are put is

76
use as prime movers in the generation of electricity. Each engine
is given a running test of usually about one to two hours before

it leaves the factory.

 

 

   

   

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78

 

 

Explanation 2: the_procedure chart used Ey_Compagy "C".

 

This explanation of the procedure used by Company “C" follows the

chart (see Fig. 29, p. 77) of their system.as shown here. Each

step is elaborated on as the forms and controls follow through the

system.

1.

2.

3.

The parent company to this organization authorizes this
company to produce a given number of a certain product.
Upon this authorization a tentative production schedule
is made (see Fig. 30, p. 79). This states the type and
quantity of the product which is to be made. Four cop-
ies are made, one each for the engineering department,
production control department and the plant superin-
tendent. The original is filed by the president.

Upon receipt of the tentative production schedule, the
engineering department determines the parts needed and

the number of each part which will be used. This is
compiled and made up as a bill of material (see Fig.

31, p. 80). One cepy is filed by the engineering
department and the second copy is sent to the produc-
tion control department.

The service department receives orders from outside con-
cerns for repair parts needed for that same type of the
company's product. These orders are grouped into a
repair parts order (see Fig. 32, p. 81). It contains

the number and kind of parts needed. This is made in

79

 

 

 

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t ‘ I n I I ' ‘ ‘~
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b’.i\.I.| ".Q-In‘, Hm um
I- 1‘! I tit. I .. l 'r- Itsfl.
r In In. yo-n. 10,1 1 VP. 4-. ‘a
In. .nt ”100, ‘1‘caliml, box no.
I
‘ 5 th; I'RTCTY I A‘VCW.
Jen-ah A, If”.
1m
ALL
I
| ‘HI '0 ‘ _ vp‘s.‘m at.» uni ‘_w . '70- v .- !

 

 

Fig. 30. The tentative production
schedule used by Company "C".

 

80

' I
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" o o a c
A. ‘J‘ot ”'0 \I'I ' ..“p"
. n ‘ ‘0‘ ’|
A D LJG.D
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.vl- .‘..' : .‘.r o, ‘1 :‘z .ll.-.'t1‘-3. ~‘. \ ‘.' 1
‘ 1.3-". I Com-mm :4. o .d “H... a L-n‘u-bly 2 '
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I 03:24 ‘ mm m a. tun-1 .1: salt a
a; '; . Rou- gsL-a ban-3.; 21.1! ‘
' fl._ L-‘l RCA? lhrulf. culls? 2 ‘
52-12(6-' Front 1:11 annu- 1
5-; N-u 50.:- M'. dingo!- 1
3.1.} ha!" :nflv Co'ul‘ 1
Long; m one cow:- aht 1
1-17:3 Sou:- 0-." cover out 2
1,.151. arena, in. m" IMGI 5/) x 1 1:83 1
32",.) Loco-nan, max-a, 30001. 5 7
w
?

 

 

 

Fig. 31. The bill of
material used by Ccmpany ”C”.

 

 

 

 

 

 

 

Ol' ‘
4. 9“
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Fig. 320

The repair parts

order used by Company "C".

81

4.

82
three cOpies. One is filed by the service department
and the two others are sent to the production control
department.

The tentative production schedule, bill of material and
the repair parts order arrive in the production control
department. From this information the requirements are
checked and the ledger sheets are made (see Fig. 33,

p. 83). Three sheets are made. One for the rough
castings record of raw material bought from vendor or
another branch of the parent company. The second sheet
is used for a record of the material which is out at a
sub-contractor's being processed. The third sheet is

a record of all requirements, material ordered, material
received and material on hand of all finished parts.
These three ledger sheets are filed by the production
control department for their use. The requirements for
production and assembly are checked for quantity of
material and finished parts on hand. If necessary, a
purchase requisition (see Fig. 34, p. 84) for the
material needed for that part or for the finished part
itself is made out. This shows the material or part
needed, the quantity and specifications. The purchase
requisition is made in two copies; one is filed by the
production control department and the original is sent'

to the purchasing department.

 

Fig. 330

 

 

The ledger sheets used by Company '0'.

83

Fig. 34.

 

PURCHASE REQUISITION — DIRECT MATERIALS V0

Him." 00' m no. u v-u “...... u"

 

 

 

The purchase requisition used by

 

84

5.

6.

85
When the time has come to start work on the production
of the authorized product, a work order is made out
(see Fig. 55, p. 86). This order is the "go-ahead" on
production. It gives the work to be done and when it
is to be done. Three cepies of this are made. One
copy is filed by the production control department, one
is sent to the plant production superintendent, and the
other is sent to the foreman in whose department the
'work is to be done. Along with the work order, a stock
requisition is made out (see Fig. 36, p. 87). There
are two copies of this. One is filed in the production

control department and the other is sent with the work

order to the foreman. This requisition contains
authorization for the foreman to get from.the stock-
room the necessary parts or material for the work
ordered to be done.

The purchasing department receives the purchase requis-
ition and makes out a purchase order for the material
needed (see Fig. 37, p. 88). Three copies are made.
One copy is filed by the purchasing department for fu-
ture use in checking material received. One copy is
sent to the production control department for use in
maintaining the ledger sheets. The original is sent to
the vendor company for shipment of the material.

Upon receipt of the purchase order, the vendor company

. SHOP won! 01mm .

 

Fig. 350

 

 

The shop work

order used by Company "C".

86

 

 

——————-— —-_____-

 

 

Fig. 36. The stock requisition
used by Company 'C'.

87

 

 

 

 

 

 

 

 
 
   
   
  

 

 

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Fig. 37. The purchase order
used by Company "C".

7.

8.

9.

10.

89

ships the requested material.

The foreman receives the work order and the stock
requisition. He gives verbal orders to the workmen
upon the authority of the work order. The work order
is retained by him until the job is complete, and is
then destroyed. The stock requisition is taken to the
stockroom and material is issued for use on that job.
The plant production superintendent receives the tenta-
tive production schedule and the work order. These

are compared and the delivery date is set for com-

pletion of the product and delivery of the finished
material.

The material is received from the vendor company by
the receiving department. A receiving record (see

Fig. 38, p. 90) is made which states the material and

quantity received. Four copies of this record are made.
One copy is filed in the receiving department for their
permanent record. One copy is sent to the purchasing
department for comparison with their purchase order to
be sure the whole shipment was received. One copy is
sent to the cost department for payment of any bill

due on the shipment. One cepy is sent to the produc-
tion control department.

Upon receipt of the receiving record, the information

is transferred to the ledger sheets made out in step

Fig. 380

 

 

 

 

 

 

The receiving record used by Company "C".

90

ll.

12.

91
number 4. The stock requisition is also received and
the material used is deducted on the ledger sheets.
These forms are filed. A stock requisition is issued
against the finished parts to fill the repair parts
orders. This is sent to the shipping department which
ships the material to the customer. .A shipping order
(see Fig. 39, p. 92) is sent to the shipping depart-
ment for shipment of any sub-contracted material.

This material is sent to the sub-contractor for pro-
cessing by the shipping department.

Upon receipt of the stock requisition in the shipping
department, the material indicated is sent according to

the repair parts order. The material indicated on the

shipping order is sent to the sub-contractor. At the
end of each day a daily shipping report is made out
(see Fig. 40, p. 93). Two copies of this report are
made. One is filed in the shipping department and

the other is sent to the production control department
where the information is entered on the ledger sheets.
The inspection department receives the incoming material
from the receiving department. The material is in-
Spected and if some rejects are found, then a reject
ticket (see Fig. 41, p. 94) and a rejection report (see
Fig. 42, p. 95) are made out. Each form contains

information as to the part, quantity and defect. Two

 

 

92

 

     
 

_,—..- ..__._

HILL DIBIL MINI co.

_— —___ ”I'YO——_-——

 

on n‘-. vim-9 u-I

 

—_l n. v
sun-Mus one“ No. ' ' '_ " '

 

 

 

 

 

 

 

 

 

 

 

  

REMARKS AND S'uIAL INSTPUC' £55

 

 

.mAslu I I

 

 

Fig. 39.

The

shipping order used

by Company "C".

 

 

 

 

 

 

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+——-+~-~---*-——- ; <~~

 

 

l T
+_1_...t -»

 

...—..-

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L
I 4

 

Fig. 40.

The daily shipment report used by Company "C“.

93

Li

H!LL_ D'ESEL
T ,
‘ 1‘” REJEC . ENC-"Hf CO

The rejection ticket used

REJECT —

Company

HULL cum
(some m.

 

"C".

HILL DIESEL ENGINE COMPANY

MON). In“. 0..

own. r-

"OUOC" ~o

5“, unm-

 

 

 

l O - . ‘r n "
Rig. 42. The reJection report used by Company C

13.

14.

16.

cepies are made of each. One copy of each is filed in
the inspection department and one copy of each is sent
to the producti:n control depe tment.

Upon receipt'of the rejection report and the reject
ticket, the production control department makes an
inspection report (see Fig. 43, p. 97) end a shipping
order for the return of the defective material to the
vendor. This is made in three copies. One is filed by
the production control department and two are sent to
the inSpection and salvage department.

when the shipping order is received in the inspection
and salvage department, the material found defective is
returned to the vendor with a COpy of the shipping
order. When the material has been sent, the second cepy
of the reject ticket is sent to the production control
department. One copy of the shipping order is filed in
the inspection and salvage department.

When the second cepy of the reject ticket is received

by the production control department, a copy of the
inspection report is sent to the vendor and a copy is
sent directly to the chief inspector of the vendor com-
pany. This serves as information to the vendor as to
the defects and reasons for return, and also serves as
record of return for credit.

When the individual workman has completed the day's

V.“ NVl l‘w-‘v

 

Fig. 43. The inspection
report used by Company "C".

98

work, he makes out a time card (see Fig. 44, p. 98) and

gives it to the foreman of his department.

17. The foreman approves the time card and sends it to the

cost department for payroll purposes and for costing

of the individual jobs.

This completes the cycle of forms and controls used by Com-

pany "C" in their control of production.

 

 

 

 

 

Fig. 44. Upper: The time card used by
Company "C" for productive labor. Low-
er: The time card used by Company "C"
for non-productive labor.

100

V It 6
Company D

The Wohlert Corporation is the next illustration which will
be used in this study. It will be known as Company "D" for this
discussion. The manufacturing plant is located on East Grand River
near the north town shopping district of Lansing, Iichigan.

The Wohlert Corporation was established about twenty-five
years ago. Since that time it has grown to be about the size of a

full city block. All work is done on the ground floor. There is

no second story to the plant. The company now employs about two

hundred and thirty-five persons. One hundred and ninety are hourly

wage earners and about forty-five are salaried help. Two shifts
are maintained and Operated on a forty-five hour week. This repre-
sents a nine hour day and five days a week. ‘At the present time
he plant is operating at full capacity in production. If
materials will permit, the company plans to expand its facilities.

The president studies the sale of the products and deter-
mines what products and what quantity to produce. Some work is
contract work for other companies. This requires no particular
forecast. Other products are for direct sale on the retail market.
This forecasting is all done by the president.

Ring gears for engine flywheels are made as a chief product.
One hundred different kinds of these gears are made. This quan-
tity will cover almost every common type of engine made in this
section of the country. The combined production of these one

hundred different gears amounts to about fifty thousand finished

101
pieces per month. This is taken as an average figure over the
period of one year.

About seven hundred different small assemblies are made.
These are mostly repair parts for engines. Some of these are
obsolete and some are now in common usage. Chief examples of these
are oil pumps and water pumps for various types of engines. No
estimate of production for these items can be given because of the
periodic production of the parts. First one type will be manu-
factured and then a switch to another type is made. On an average,
about fifteen major parts are used in eadh small assembly. These

small assemblies are marketed under the WOhlert name.

 

 

 

 

 

 

 

 

 

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105

Explanation 2f the procedure chart for Company_"D". Each

 

 

step on the procedure chart (see Fig. 45, p. 102) is followed and

a full description of each detail is given.

1.

2.

The president of Company ”D“ determines, from his own
sales forecast, what should be made during the follow—
ing week. This information is written up and presented
to a committee for study. This committee is made up of
the top executives of the company and is called a group
board. In the group board meeting, each item is care-
fully studied and the quantity on hand is checked and
the information is noted as to supply. The minutes of
fiiis meeting are written up in tabulated and condensed
form and sent to the departments concerned (see Fig.
46, p. 104). One copy is filed in the permanent file
and cepies are sent to the purchasing, production and
production control department, shipping department and
sales department.

Upon receipt of the minutes of the joint board meeting,

the purchasing department makes out a purchase order
(see Fig. 47, p. 105) for the material which will be
needed for the production of the products listed on the
minutes of the meeting. Four copies of the purchase
order are made. Two copies are filed by the purchasing
department and the other copies are sent to the produc-

tion and production control department. The original

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III-H4.
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Fig. 45.
meeting used by Company "D".

The minutes of the group

 

105

n‘nmm‘ m
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I \\~|n.\ HIfllkuN

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Fig. 47. The purchase order used by Company "D”.

3.

4.

5.

6.

106
copy is sent to the vendor company. The purchase order
may cover a greater supply than is immediately needed.
By comparison of the minutes of the group board meeting
and the purchase order, the number of pieces which are
needed immediately for production is determined by the
production and production control department. This
number of pieces is recorded on a purchase order before
it is sent to the vendor. This states when shipment
is needed and the number of pieces which are to be sent
at that time. .

Upon receipt of the purchase order, the vendor company
will send the required material to the receiving depart-
ment of Company "D“. The material will be accompanied
by a packing slip which contains the quantity and parts
which are sent.

The receiving departnent then checks the material which
has been received against the packing slip. Part num-
bers and quantity are checked. The packing slip is
signed by the stock checker and is sent to the purchas-
ing department.

The purchasing department makes out, from the informa-
tion on the packing slip, a daily material received
sheet. This form contains all information necessary to
completely identify the articles received. Four c0pies

of the daily material received sheet (see Fig. 48, p.

107

25:21. a:
.I-l a...) Dan-I'd Jam to.

m 0 Mon.-

Dun-u I hur- vr.
tan-mm ...”? Ifr.

{canon- a" I LII
bnfion war 3 10”)

:0? H 29“":

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.

 

 

Fig. 48. The daily material re-
ceived sheet used by Company "D".

7.

8.

9.

108
107) are made. One copy is filed by the purchasing
department and a cOpy each is sent to the production
and production control department, shipping department
and to the sales department.
Upon receipt of the daily material received sheet, the
production and production control department issues a
written order on memorandum paper to the shOp foreman.
This memorandum is called "avoid verbal orders" sheet
(see Fig. 49, p. 109). Two copies are made. One is
filed by the production and production control depart-
ment and one is sent to the shop foreman. This tells
the foreman what job is to be done next. It contains
the item to be made, quantity to make, and specifica-
tions of the product.
The foreman then gives verbal orders to the workmen as
to their individual duties in the setup of the job. The
avoid verbal orders sheet is kept by the foreman until
the job is set up.
When the job has been set up, the production and pro-
duction control department issues an official work
order (see Fig. 50, p. 110). The work order contains
essentially the same information as appears on the
avoid verbal orders sheet. This form is made out in
two copies. One copy is filed by the production and

production control department and the other is sent to

109

Avoid‘ Y9.'b'.l, ‘Ordcn

 

Fig. 49. The avoid verbal orders used by Company "D”.

110

 

Fig. 50. The official work order used by Company ”D".

10.

11.

12.

15.

14.

15.

111

the foreman as official notice to start production on

the item named on the work order.
The foreman retains the work order until the job is fin-

ished. Upon completion of the job, the foreman returns

the work order to the production and production control
department.

The production and production control departnent studies
and notes that the work is completed on their cOpy of
the work order. The work order is then sent to the cost
department.

The cost department uses the work order to cost the job
and figure the total cost of production. This informa-
tion is used for future use in estimating the cost of
production of a new product.

At the end of each day the workman makes out a daily
time ticket (see Fig. 51, p. 112). This form contains
all information necessary for the payment of the
employees and data on the total production by each
employee for that day. One cOpy is made of this form
and it is given to the foreman.

The foreman checks to see that the employees have not
made any errors and signs it as his approval. The time
ticket is then sent to the production and production
control department.

The work done is entered on the graduated work sheet

112

 

Fig. 51. The time card used by Company "D".

113

(see Fig. 52, p. 114). This sheet shows the part in

process, the Operations which have been completed and
the time Which has been used in the production of each
part. This form serves as a record of the production

in progress for every part which is being manufactured.
One copy is made of this form, and it is kept in the
production and production control department. After
the recording of this information, the time ticket is
sent to the cost department.

16. The cost department figures the payroll from the time
ticket. The time ticket also serves in estimating the
time required for future jdbs and for individual Opera-
tions.

17. The inspection department issues a daily inspection
report (see Fig. 53, p. 115). This gives the part and
the quantity discarded. This form is made in tripli-
cate. One copy is filed by the inspection department.
One cOpy goes to the purchasing department to serve in
future ordering, and one c0py goes to the production
and production control department.

18. The production and production control department enters
the information on the graduated work sheet so as to
give an up-to-date number of pieces in process.

This completes the cycle of the forms used in the manu-

facturing of Company "D".

114

 

 

 

 

A‘ ’V
1.
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Fig. 52. The graduated work schedule used by Company "D".

115

 

 

 

 

 

 

 

Fig. 53. The daily inspeC‘
tion report used by Company "D".

Company "E"

The Dail Steel Products Company is the last illustration
which will be used for this study. It will be known as Company
"E” for this discussion. The manufacturing plant is located on
East Main Street, Lansing, Michigan.

The Dail Steel Products Company was established in
1913. _The founder of the establishment died in 1941, and his sons
and the former purchasing agent are now operating the organiza-
tion.

This plant is a job shOp which Specializes in steel stamp-
ings. Any job of stamping will be accepted if it is within the
capacity of the company. The products are made on a contract
basis. The finished product is not made until the order is re-
ceived for the shipment. A catalog is made which covers the stand-
ard items of production. The products shown in tiis catalog com-
prise most of the products manufactured. Very little work for
small orders and individual jobs is done.

The company now employs about one hundred and seventy-three
persons. One hundred and fifty are hourly wage earners and twenty-
three are of the salary classification. Two shifts are Operated

on a standard forty hour week. At present the shOp is working at

full capacity.
The products made are all steel stampings. One thousand
different items are listed as standard products. These standard

items include nearly every type of stamping, and are manufactured

117
for nearly every common type of industry. An estimate of the quan-
tity of production is nearly impossible since most of the presses
will turn out about five thousand pieces per hour of finished
parts. This figure does not include setup time and repair time
which would normally be figured in determining the production over

a period of time.

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Explanation of the procedure chart for Company n . Bach

 

 

step illustrated on the procedure chart (see Fig. 54, p. 118) is

explained in detail in the following paragraphs.

1.

2.

3.

The customer determines is needs and sends to Company
"5" his requirements in the form of a sales order. Two
copies are sent for the use of the compan".

The general manager receives the sales order and studies
the order for information of general interest. The two
copies are then sent to the production control depart-
ment.

Upon receipt of the sales order, the production con-
trol department sends one copy back to the customer with
a notation on it as an acknowledgment of the order. The
other cepy is used for making a Kardex file card (see
Fig. 55, p. 120). This card contains all of the
information on the sales order and space is left for
scheduling and shipment of the finished item. This
form serves as a record of just exactly where the

order is and how much is to be sent and when it is to
be sent. One copy is made, and it is filed by the pro-
duction control department. Cost cards (see Fig. 56,

p. 121) are also made for the cost department. These
cards contain the information necessary for costing of
the entire job. The cards are sent to the cost depart-

ment for their permanent files and future use in deter-

120

 

 

 

Fig. 55. The Kardex file
cards used by Company "B".

121

 

 

 

 

 

 

 

Fig. 56. The cost card used by Company "E".

4.

5.

n Operation. A production order

0

mining the cost of ea

*1

is made out for the work to be done (see big. 57, p.
125). This form contains the information necessary to
determine the work to be done and the complete shipping
schedule for that material when finished. Four copies
of the production order are made. One is filed by the
production control departnent and the others are sent
to the purchasing department, sales department and the
shipping department.

Upon receipt of the production order, the purchasing
department determines the materials needed and the
vendor company from which the goods are to be bought.
This information is made out in the form of a purchase
order (see Fig. 58, p. 124). This form contains the

quantity and specifications of the materials ordered.

Four copies of the purchase order are made and one is

filed by the purchasing departnent. One cOpy is sent
to the production control department and one to the
steel room. The original copy is sent to the vendor
company for shipment of the required material. The
production order is then sent to the production depart-
ment for use in producing the item.

The vendor companyreceives the purchase order and
sends the material ordered to Company "B". A packing

slip is made out by the vendor and it is shipped with

 

OML STEEL “CL“.(Y': (LE -‘-"
"June Crew

 

 

 

 

 

Fig. 57. The production
order used by Company "E".

1

3

124

 

 

Alum-um“. air-o I"!

orb-Haunt at no. .vhr .w‘ .
* m Run! n.» ar- 1- - ,
m D IN. cvdov

 

 

Fig. 58. The purchase order used by Company "B"

6.

7.

8.

9.

125
the material. The packing slip contains all information
necessary to completely identify the parts and the
order sent.

When the material is received in the steel room, the
stock checker checks the material against the packing
slip and it is signed and sent to the cost department.
The material received is entered on a receiving report
(see Fig. 59, p. 126). This contains essentially the
same information as the packing slip. Two copies of
this form.are made and one is filed in the steel room.
The other is sent to the purchasing department.

The purchasing department checks the receiving record
against the purchase order to see if the prOper amount
of material was received as ordered. The receiving

report is then sent to the production control depart-

ment.

The production control department enters, on the
schedule section of the Kardex file made in step number
3, the quantity of material on hand for production of
the item ordered. The receiving record is then sent to
the cost department.

The cost department uses the receiving record for pay-
ment of all bills due on the received material and for
costing of the production of that item. The packing

slip and the receiving record are then filed in the

Fig. 59.

RECEIVING II'OIT
.-
un an. m on

0.0.0.0....

 

 

The receiving report used by Company "E".

126

10.

ll.

12.

127
cost department.
The production department receives the copy of the pur-
chase order which was sent to the steel room. The
information on this form combined with the information
found on the production order, which the production
department has previously received, enables them to make
out a Kardex file exactly like those used in the produc-
tion control department. The Kardex file is kept in

the production department for their use.

The production record is also made by the production
departnent (see Fig. 60, p. 128). This form contains
the quantity to make, the order number, the part number
and leaves a Space for the entry of each day's produc-
tion. One copy is made and it is filed by the produc-
tion department for their use.

The sales department receives a cepy of the production
order. This gives them.the general information which

is required as to the order receipt, and the progress

in the production of the order. When this information
is acquired, the sales department sends the form on to
the billing department .

The billing department makes the packing slips and
invoices for the shipment of the finished goods from

the information found on the production order (see

128

...... paoouc'non mono 0...... an»;

1

I

C
O
9
V
0
a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“...-..-. ~..——._...—.—.—--O-
. . --. -, . -..—...AA._ “w

 

 

 

-..—-_.-..._.-o.._..... —--. .. -._.

 

 

Fig. 60.

The production record used by Company ”E".

 

129

.1; Rib-V» /U x)

- --- ~-- ...!“- .

. mvonc: .

OAIL STEEL PROOUCYS CO.
-' Oxlfll.’ a

II I
MUM $VAM~6$ no A‘HI‘IV Iron
LAO-140.6 r Inc-06M

. .
w IOI ’Uw' ~1- 5 n .4 u- m u“
‘
‘t—. N '
aka-Aces" cave-cu an on w ovum nus-ovo- -~ ~ -
7.

 

Fig. 61. The packing slips and
invoices used by Company "E”.

13.

14.

130
Fig. 61, p. 129). The packing slips and the invoices
are identical except that the packing slips do not show
the selling price of the article. These forms contain
all of the information necessary to completely identify
the goods sent. Four copies of the packing slip are
made. Two COpies of the invoice are made. One copy of
each is filed by the billing department. One copy of
each is sent by mail to the customer in advance of the
shipment of the goods. One copy of the packing slip is
sent to the cost department and one is sent to the
shipping department.
Upon receipt of the packing slip and the production
order, the finished goods are sent to the customer. The
packing slip is sent along with the shipment of the
ordered material. As the material is shipped, a ship-
ping schedule is made (see Fig. 63, p. 132). Three cop-
ies of this form are made. One copy is filed by the
shipping department, and one copy is sent to the cost
department and one to the production control department
to certify that the shipment has been made.
A production schedule (see Fig. 62, p. 131) is made out
by the production control departnent. This form shows
the part, the number ordered, the number shipped, and

the status of production on the parts. This gives a

131

 

 

Fig. 62. The production schedule used by Company "B".

 

 

DAILY sum/«ems

 

 

Fig. 63. The shipping
schedule used by Company "B".

132

15.

16.

133
complete picture of the entire production and possible
delivery date. Four cepies of this form are made. Two
are retained in the production control department for
use in answering customers' questions of delivery
dates. One copy is sent to the production department
and one to the shipping department.

Upon receipt of the production schedule, the production
department schedules the work for the individual
machines. This is done on a schedule board. This
board contains two spaces for each.machine; the top
space is used for the job now being worked on, and the
bottom Space is for the job which that machine is to

be used for next. The scheduling of each machine is
indicated on this board from.the information on the
production schedule. A work sheet containing the same
information, but in more detail, is made out for use in
the department. This form is a memorandum pad used in
the office of the production department.

The foremen receive verbal orders from the production
department, and also have access to the schedule board
and the work sheet regarding the work which is to be
done in their department. The foremen in turn issue
verbal orders to the workmen as to their specific jobs.
At the end of each day the foremen make out a time

ticket for each workman (see Fig. 64, p. 134). One copy

134

 

 

Fig. 64. The time ticket
used by Company "B".

135
of this is made. It contains all of the necessary
information for payment of the employee. The time
ticket is sent to the time office.

17. The time office completes the information on the time
ticket necessary for costing the job and sends it to
the cost departnent.

18. The cost department takes the information given on the
time ticket and uses it for the payroll and for the
determination of the cost of each operation and for
each sales order received.

This completes the cycle of Operations used by Company "B”

in the control of their production.

136

THE FORMATION OF A RECOMhENDED SYSTEM

Each of the systems illustrated earlier in this report has
been studied in an effort to pick out the good points and combine
them into a system which would be suitable for use in a small plant
of less than two hundred and fifty employees. Each individual
manufacturing firm has its own characteristic problems. This may
be due in part to the difference of ability of the men employed to
head the different departments. Also, the arrangement of depart-
ments and the duties which are assigned to those departments are
very often different in each organization. The product itself
will cause major variations in the procedure.

As a general rule, small plants will have many functions
combined as the duties and responsibilities of one department
head. This is a direct result of the small amount of time which
is required for performing the functions of some of the lesser
departments. This results in many prOblems which will have to be
allowed for if a standard system is to be made. A.typical plant,
of the usual departments, has been assumed for this stidy. If fliis
system is to be adopted, the departments may be rearranged as is
seen fit by the company which is adopting the System.

A procedure chart has been.made for the typical company,
and each step is explained as the forms progress through their
routes for the control of production.

The procedure presented below is one which it is thought

137
will be applicable in any plant of less than two hundred and fifty
employees.

The forms chosen to represent the typical company are taken
from the forms used by the different companies studied. They are
the most suitable ones to serve the purpose indicated in the

procedure chart.

Recommended Procedure

Explanation of the recommended procedure. The recommended

 

 

procedure which Should be followed for a small company within the
range of fifty and two hundred and fifty employees is shown on the
hart (see Fig. 65, p. 135). This is a compiled method made from
the study of the small plants in this report. each step is ex-
plained in detail as it is given on the procedure chart.

1. Some organizations work from a sales basis. These
companies do not make the finished item.unti1 an order
for the article is received. For these companies, it
is recommended that a formal sales statement be sent to
the company in two copies. By request, it is usually
possible to have the ordering company send two copies
of the order for use of the producing company. 'Where

it is impossible to obtain two copies, then the general

manager will have to make an order acknowledgment and
return it to the ordering company. For those companies
that work on a sales forecast rather than on an order
basis, this step will be neglected.

2. Upon arrival of the sales statement (see Fig. 66, p.
140) at the producing company, the order should go first
to the president and then be circulated among the com-
pany executives whom the president feels must have

knowledge of the individual orders. This usually will

139

Recommended Procedure

Ex.lanation of the recommended procedure. Tne recommended
P .

 

 

procedure which Should be followed for a small company within the

range of fifty and two hundred and fifty employees is shown on th

chart (see Fig. 65, p. 138). This is a compiled method made from

the study of the small plants in this report. each step is ex-

plained in detail as it is given on the procedure chart.

1.

2.

Some organizations work from a sales basis. These
companies do not make the finished item.until an order
for the article is received. For these companies, it
is recommended that a formal sales statement be sent to
the company in two copies. By request, it is usually
possible to have the ordering company send two cepies
of the order for use of the producing company. Where

it is impossible to obtain two copies, then the general

manager will have to make an order acknowledgment and
return it to the ordering company. For those companies
that work on a sales forecast rather than on an order
basis, this step will be neglected.

Upon arrival of the sales statement (see Fig. 66, p.
140) at the producing company, the order should go first
to the president and then be circulated among the com-
pany executives whom the president feels must have

knowledge of the individual orders. This usually will

 

 

 

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Fig. 66. This form might serve as a

 

sales

statement for any manufacturing company.

5.

lél
not be very many pcrsons-—possitly one or two at the

Q

most. Each of these .xecutives who must see the indi-

l-xo. [iv
‘41.’
Lfioo ul

- 1 1 f
Vidual order Should make a sales record \se

(U

3
p. 1&2) which w'll contain the information given on

the sales statement, and this record should be kept by
him for use in reference to orders. The sales state-
ment is then sent to the general manager.

In the case of companies which work on the order basis,
the general manager, who is usually the president, will
make up a general schedule (see Fig. 68, p. 143). This
schedule will contain all of he information given on
the sales statement for all of the orders which are on
hand at the time. The orders covered should extend over
the entire range of orders ahead; provided that the

orders are not received for more than three months in

advance. In the event that the orders on hand are for

a greater period than three months, then the orders
should be filed for use when they are within three
months of their production. The schedule should be
revised at not any greater intervals than one month
periods. The scheduling need only be an itemized list
which will give the sequence for filling of the orders.

This need not be a detailed schedule havin«

5 the general
priorities of the orders and approximate tines of pro-

duction. Six copies of the general schedule are made

 

142

 

 

 

Fig. 67. This type of form
could be used for the sales
record for the typical company.

 

 

 

Fig. 66. This form could be used for the
C;eneral schedule for the typical company.

1‘13

lid
and one is filed by the general LnnaJer. The copies
are distributed as follows: One to the production
department, one to the engineering department, one to
the production control department, one to the sales

department and one to the shipping departnent.

For those companies that work on a bank of material or
direct sales of a finished item on the Open market, a
general schedule should be made for the anticipated
yearly production. A sales forecast should be made for
the coming year from information received from the

sales of the previous year, and from a business forecast
and the general knowledge of the markets for each item
of manufacture. From this information, a schedule of
production for the entire year should be made up. lhis
will not be too detailed, but it should contain the
general picture for the year. Some seasonal products
are usually produced, and tnis should be included in

the general sdiedule. The schedule will show the pro-
ducts to be made, the quantity of products to be made
and when production will start on them. This should be
revised in periods not longer than every three months.
Six copies are made, and the distribution of this Will be
the same as for those companies who operate on the order

basis, as given above.

4.

5.

6.

145
Upon completion of the general schedule, the second
copy of the sales statement is returned to the order-
ing company with a note on it to the effect that the
scheduling of the production has taken place and the
contemplated time of production has been set. The
other copy is permanently filed.
From the general schedule received from the general
manager, the engineering department will make a bill of
materials (see Fig. 69, p. 146) for the product which
is to be manufactured next. This bill of material will
contain the individual parts and the number of each
part which will be needed in the production of each
finished item. This does not apply to those companies
that make forgings or stampings, etc., where a single
part is the finished product. Three copies of the bill
of materials are nade, and one is filed by the engin-
eering department. One COpy is sent to the production
control department and the other is sent to the pro-
duction department. The general schedule is filed by
the engineering department for a permanent record for
reference and future use.
The production control department reviews the bill of
materials and the general schedule which they have re-

ceived, and determines the material needed for produc-

146

 

l r
‘ .
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‘yf C:-_: ': ., L. 11., l1"'~15/’ l 1'33 7
‘ .“. ;,m. an. r, .2-): 1, steel, 2,“ 7 '
i

 

 

 

Fig. 69. This form could be used as the
bill of material for the typical company.

7.

147
tion of the item. The raw stock to be ordered, or the
finished parts to be used in the production, is entered
on the purchase requisition (see Fig. 70, p. 148). This
is a note to the purchasing department requesting that
certain material or parts be ordered for use in the
production of the scheduled item. The purchase requis-
ition will contain all of the information necessary to
order and identify the raw material used. Two copies
are made and one is filed by the production control
department. The other copy is sent to the purchasing
departnent.

Upon receipt of the purchase requisition, the purchas-
ing department will determine the vendor that the
material will be ordered from. This is determined from
the price of the material and the date of delivery
which the vendor will give._ After the vendor has been
chosen, the purchasing department makes out a purchase
order (see Fig. 71, p. 149) for the required material
as specified in the purchase requisition. The purchase
requisition is then filed and the original of the pur-
chase order is sent to the vendor. Three other copies
are made of the purchase order. One is filed by the
purchasing department for checking the material received

with the amount ordered. One copy is sent to the pro-

 

 

 

PURCHASE REOUISITION — DIRECT MATERIALS

WKNAIIDIO I)!" nun 009‘ u ‘u vac-” on an!

m

(In-II, 1 1 an "I urn-n
— —. v — ~
\ ‘

nun-:-

'* - IV. E I
N'LL OICOIL ham ‘2’)"
L“- .‘w.

 

 

 

 

 

 

Fig. 70. This form represents
the purchase requisition which
could be used for the typical

company.

148

o » . - ... ' a url - 0- Ovv-donnbt—
v _ . ...-AM

\\ "mun (‘HRI'ORATIOS
I “an“. Mamas.“

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I.."I .....4... .--l—l.—-~I.
..»---....—u—Mu~\--

... manna. ‘wvovl‘ ....v n... can .ubmh II- vfiiu;;bup~ihwoih;;fi I‘M- -
II ‘3‘

 

I. ...-OH.- wd ”fl.

 

 

B
Q
L
p-
I
-
I
.:
-
j!
,5
1
';

m rm'nn

WI"! Chrymuinn

Fig. 71. This form represents the pur-
chase order used by the typical company.

 

149

8.

9.

10.

150
duction control department to show that the material
has been ordered. The last cepy goes to the general
manager to give general information on materials being
ordered.
The vendor receives the purchase order and either starts
production or ships the ordered material from its supply
on hand. In either case the material is finished and
shipped to the ordering company with a packing slip
(see Fig. 73, p. 152) attached to the material for con-
venience of checking the shipment when it is received.
While awaiting receipt of the ordered materials, the
engineering department makes out a route sheet (see
Fig. 72, p. 151) for each part of the finished assembly.
A route sheet is made for each part which will go into
the finished product. This will show each operation
which the individual part goes through as production
is completed on the item.scheduled. Three copies are
made and one is filed by the engineering department.
One is sent to the production control department and
one is sent to the production department.
When the route sheet is received from the engineering
department, the production control department schedules
each operation for each part according to the machine

to be used, the operator to do the job, and the exact

 

.m“. In _ FIF‘CAYIONI

aruguL INIYRUCY'ON.

lllE ROBE" MANUFACTURING (0

E ROUTE SHEET

‘- -M -—- »»-—--"""
. “3:.- is...»

 

m..- o' DOC-“0" ‘

——— l

.— .., " ...“
__

 

 

 

 

 

 

 

 

 

 

 

Fig. 72. This form represents the

route sheet used by the typical company.

151

 

152

V~I.~»-- -

1' f} A) ”53.3) . ..

o u- -.- _—

mono:
DAIL SYEEL "000675 CO.
lwctm at
W“ “M“S no “‘1 won
MN. I

 

 

Fig. 75. This form represents the packing slip which would
arrive with the material ordered by the typical company.

153
true when the work is to be done. This information is
set up on a manufacturing schedule (see ig. 74, p.
154). There are numerous ways that this schedule may
be set up. For this size of company, the information
should be set up on a sheet which can be issued either
daily or once each week. It is recommended that some
type of control board be set up in the production con-
trol office. The Kardex system or the Produc-trol are
two very good systems available for use. These systems
give a visual picture without too much time being wasted
looking for the parts which are behind in production.
The manufacturing schedule will serve as a work order
to the shop. It is recommended that this be issued
daily from the production control department. This
gives a closer control over the items which are falling
behind in production. Six copies of the manufacturing
schedule are made. One is filed by the production con—
trol department and one is sent to each of the follow-
ing: the company executives, general manager, sales
departnent and shipping department. The main purpose
in sending out these copies is to give general informa-
tion relative to production. The original cepy is sent

to the production department.

For each job or operation which is listed on the manu-

154

 

 

Fig. 74. This form represents the manufactur-
ing schedule used for the typical company.

More detail will be shown and a shorter period
of time covered, but the setup will be the same.

ll.

12.

155
facturing schedule, there is a job card made out (see
Fig. 75, p. 156). This gives all of the information
needed to completely identify the work to be done. One
copy is made of this card, and it is sent with the

manufacturing schedule to the production department.

For each job requiring raw stock which is drawn from
the storeroom, there is a stock requisition (see Fig.
76, p. 157).made out which Specifies the stock which
can be used for the manufacture of that part listed on
the manufacturing schedule. This form is made in dupli-
cate. One copy is filed by the production control
department and the other is sent with the manufacturing
schedule and the job cards to the production depart-
ment. All of this material should be sent to the
production departnent the day preceding the time it

is scheduled to start production on that job.

The production department receives the manufacturing
schedule accompanied by the job cards and the stock
requisition. The manufacturing schedule is retained

in the department for guidance in performing the work.
The job cards and the stock requisition are given to
the department foreman, where the work is to be done,
as the individual jobs are to be started.

The foreman of the department assigned to the work

 

WT It. own I; ”I! ”or

 

 

 

 

 

 

.2:
..- -... M “II I —'l
‘
m Iv _ Ouu on“. tau-c. 1‘ .m—
0—- ‘ an ; can ”7‘ ‘ nu- no... ‘°"" '° '0' .

 

*- ... hut-INCL Int—Q otl‘gvov-oub‘. o.
____l, __

 

 

 

 

Fig. 75. This form (lower) repre-
sents the job card which could be
used by the typical company.

156

157

nous um.
SEEL, _ REQUISITION

 

 

 

 

 

 

 

 

 

 

 

 

Fig. 76. This form (lower)
represents the stock requisition
used by the typical company.

13.

14.

158
gives the workman the job card for his job and the stock
requisition for the material which is required for that
particular operation.

The workman will put his name on the job card and punch
the card in on a time clock. He then takes the stock
requisition to the stockroom and draws the material
needed.

The material has now arrived from the vendor company
which was chosen to supply the raw material. A pack-
ing slip has been attached to the material for each
shipment sent or for each order, whichever one is
smaller. Upon receipt of the material, the receiving
department checks the material received against the
packing slip. Any material which was billed and not
received is noted on the packing slip. From the pack-
ing slip, the receiving department makes out a stock
tag (see Fig. 77, p. 159). This tag contains all the
information necessary to completely identify the
material. The tag is placed on the mv erial as it is
received. The stub of this tag is pulled off and used
as a check and running inventory. When the stock is
used up, the stub and the tag are destroyed together.

A receiving report is also made out (see fig. 78, p.
"' . 1 ' z '- i Sam 'nf r; i fl&u a.ac s
160 Tiis ceitains the r a 1r 0 mat on t ‘t 0pgear

on the packing slip. Four copies of this are made.

 

l 137?

"(0‘0 0 “Am”

mono U “Haul

 

-.I..nu. u.”

 

 

3. 77. This form represents the
co; tags used by the typical co::1pan‘~ .

100

I": mm

I 1"

I." _a

:, ~-;fi :

In -

F20" :"° » A?
B'ewvfm'm

rand Tm' ',. . _ _— 3.”
- 3’ , x u
:—,__ j
A. root ' a.”
m

m;,r “ .

 

 

: the receiv_
-01 an 1 COmDany.

 

17.

161
One is filed by the receiving department. One is sent
to the production control department and one to the pur-
chasing department. Th, last copy is sent with the

packing slip to the cost department.

Upon receipt of the stock requisition, the storerocm
in the receiving department issues the listed material
to the workman and deducts the stock used from the

stock tag. The stock requisition is then sent to th ‘

 

production control departnent.

The workman upon receipt of the stock completes the

job as Specified on the job card. He then punches the
time finished on the job card and gets another job card
for a different job. The job cards are picked up by

the production control department.

The production control department enters the jobs fin-
ished on the control board, which is kept for the conven-
ience of the department in spotting the slow points in
production. The job card is then sent to the cost
department.

The cost department uses the job card for costing the
individual Operation and for the costing of the entire
job. The time, at the piece rate given on the job card,
is allotted to the individual workman and this is used

for the making of the payroll.

18.

20.

receives the stock

911
’1
d-
:7
E
i
d"

mhe production control dep

requisition from the re~eivine department storeroom and

C‘

deducts the material used from the stoche' material
record (see Fig. 79, p. 165). It is then sent to the

cost department.

The receiving record is received and the information is
recorded on a stocked material record. This record is
for the use of the production control department in
rdering, through a purchase requisition, the material
needed for future production. The receiving record is
then filed for future reference.
The purchasing department compares the receiving record
with the purchase order for checking the material re-
ceived with the material ordered. The receiving record
is then filed with the purchase order for future refer-
ence.
The cost department receives the receiving record with
the packing slip and makes all necessary payments on
the material received. They are then filed for a

permanent record of the material received.

The stock requisition is used for costing of the mater-
ial for a particular job. It is then filed away for

future reference in estimating the cost of future pro-

 

163

 

 

 

Fig. 79. This form.represents the stocked material
record which could be used by the typical company.

 

duction.

This is considered by the author as the most efficient
method which could be employed by a small company in the Operation
of their production control procedure. It is true that the indi-
vidual company will have to make some adjustments for its partic-
ular plant, but it is believed that if this pattern were to be
followed then an efficient production control system would be in
use.

The system embodies all of the principles and aims of pro-

 

 

ducticn control. They are briefly restated here:

1. To regulate the flow of material from the entry of the
raw material to the shipping of the finished product.

2. To take the customers' orders and translate them into
production orders.

3. To send the product through the plant at a rate and
sequence that will produce the product on time and with
the least amount of expense and confusion.

4. To produce file right product at the right time and with
right quality and quantity.

5. ~To reduce work in process.

If all of these aims are taken into consideration, then it

is very likely that the procedure will be a very good one.

l‘

I‘M A

 

...» ll.‘ .fllIIllll-l' IIIIII

 

 

 

175 8398

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