COST GETTING
In taking of time and in the application of the cost of labor to the cost of work, there are probably as many systems as there are organizations doing work; and even within any one organization using a well-defined system throughout its entire operations, there will be no two men making the same interpretation of the rules laid down, or—more especially—whose methods of attack will be the same. But in spite of these many variations of method, there are several primary systems which are standard, and which can be found in one form or another on all properly conducted work.
The starting point of all cost getting is the taking of the time in the field, and it is here that the greatest variation in individual method is found. The most common way of taking this time record from which the pay-roll and the cost distribution is made, is for the time-keeper to go over the work with a notebook and put down therein with a pencil the number of each man and the particular part of the work that he is engaged on.
Two systems of record keeping, of which small cards form the basis, are also in vogue. One of these systems uses what is known as punch-cards—that is, cards in which the records of time, distribution, and performance are made by means of an ordinary conductor's punch; and the other has the record made in a way somewhat similar to the entries in a notebook—a written record being made on the cards with a pencil. Another system bases its records upon reports turned in by foremen.
Time-Keeper with Notebook. While the manner of taking time with a notebook varies according to the training and experience of the time-keeper, it may be said that there are in general two ways in which such notes are kept. In the first, the time-keeper has a list of the numbers of all men on the work, and, as he goes over the work, simply checks off the numbers, showing that each particular man is at work and indicating upon what branch of the work he is engaged.
A more common way, however, is for the time-keeper to make headings corresponding to the distribution used in making up the office records, and to write under each of these headings the numbers of the men working upon the part of the work so named. This method is often simplified by the time-keeper becoming so familiar with the foreman, and the numbers of the men under the particular foreman, that he is able to dispense with the headings entirely, and simply use the foreman's name or number in place of it. This, of course, makes the time-keeper's notes more or less unintelligible to anyone but himself, and makes it necessary for him to do office work as well as his field work. Moreover, not being a permanent or intelligible record, it is impossible for even the man who made the notes to return to them in case any dispute arises or a mistake is found to have been made, and get information after the notes have "grown cold." The time-keeper becomes so familiar with the appearance of the men who are on the work, that he learns to know their numbers, and often attempts to put them down without seeing their numbered checks. This is often a source of error, as the uneducated foreign laborer is very liable to make a mistake in stating his number; and if he does, there will exist no record of his having worked that day, and he will get no pay for it. The apportioning of the cost of his labor to any work that he may have been on, will also be the cause of trouble.
Of course, the time-keeper's memory serves him if any men are absent from the gang for any reason, and he is able to ask the foreman whether or not that particular man is working. A man may be away from the gang and be missed by the time-keeper altogether. In this case, no chance is given for correction of the record, unless the time-keeper goes over the work again soon after; and the consequence is that costs will be in error, and the men will be short of pay at the end of the month. This is especially liable to be true when night work is being done.
Men may be changed from gang to gang, or a whole gang may be changed from one job to another, and the time-keeper knows nothing of it unless he happens to be on the spot at just the right time. Such a change would not show in his time record; and while the men would get credit for their full time, the distribution of costs would be much in error. The difficulty in recording such changes can be seen from the following extract from a report of a Consulting Engineer after inspecting work upon a road-making contract:
"In one case, at 10:30, there were eight men carrying stone to the crusher, and three men on the crusher platform. Two others were in the cut, loosening earth and loading; and half an hour later, two of the four men who had been blasting were also loosening and loading."
Fig. 1. Time-Keeper's Slip.
Duplicate record is made
automatically on a similar slip
by carbon paper.
This, of course, indicates an unusually loose organization, but is an example of what a time-keeper with a notebook has to contend against.
In case of emergency—say in steam shovel work—a train of dump cars goes over the side of a dump, and a track gang is called upon to help the regular dump gang so that the difficulty may be overcome as soon as possible. The time-keeper might fail to make record of an hour or an hour and a-half which the track gang put on this work, because he did not see them at work at that particular time. This, of course, affects the distribution of cost. One advantage from the notebook is that much of the distribution is made in the field, with a corresponding reduction of office work.
Punch-Cards. The keeping of time by means of punch-cards has been tried with considerable success on many jobs, but only recently has it been reduced to a practical basis for use on large construction work.
The Construction Service Company of New York City has developed a system of time and cost keeping, using the duplicate punch-card almost entirely. Several of these cards are reproduced in connection with this text.
As a general thing, the punching of the cards is done by foremen of the gang, or by someone who has the performance of the gang under direct observation. The cards show not only the time worked by each man upon any one day, but just as exactly the time worked upon any job by all the men. A duplicate of the record is made automatically, to be kept in the time-keeper's office, the other going to headquarters for permanent record.
The record thus obtained is absolutely exact, especially as to distribution; but the system has some of the same objections that the notebook has. For instance, unless the cards are kept by the foreman himself, whoever punches them may inadvertently miss a man. This, however, is not so liable to happen as when a notebook is used. Whenever a single punch appears opposite a man's number, it is apparent that all his time must be accounted for in some way or other; while, with a notebook, it may be that, having been missed once, no record of any time will appear.
There is absolutely no opportunity for a time-keeper or for a foreman to "fudge" his account in any way, for a punch mark once made in the card cannot be erased or destroyed in any way. The record stands.
Time-Keeper's Cards. Instead of the time-keeper keeping his records in a notebook, as has been described, he may be provided with slips of tough paper of such size and shape as will readily go into his pocket, or will fit in a filing cabinet.
The modus operandi of these cards or slips is as follows:
Each card or slip is devoted to but one gang and one ledger account—such, for example, as placing ties in railroad work, gang No. 6. It will show the foreman's name; the name or number, or both, of each man; and the amount of time that he spent on this particular class of work. The sum of the amounts for the gang on this classification, will be the cost for this gang and this account for the day in question.
If a man has been working at more than one piece of work on that day, the time-keeper makes the apportionment of time on the spot; and the portion of his time that he has spent placing ties is put on the "Placing Ties" card or slip. The remainder of his time is placed on another slip corresponding to the other ledger account. If the time-keeper is uncertain as to which ledger account the work belongs to, he writes a description of the work at the top of the card or slip. A convenient form for a slip is illustrated in Fig. 1; and a convenient form for a file card, in Fig. 2.
Fig. 2. Time-Keeper's Card.
Duplicate record is made automatically on similar card by carbon paper.
It is frequently of advantage to have time-cards show, in addition to their pay and work performed, a log of the conditions, such as temperature and weather; the causes and duration of each delay; the general conditions on the work; the kind, condition, and the make of tools, machinery, etc.; and any further details that may be important. How this can be done on the various cards illustrated in this volume, can be seen from a study of the illustrations.
Written Time-Cards have the advantage of the minimum of departure from existing methods; the disadvantages that arise are slight; and it is difficult to so arrange the cards as to obtain duplicates. A foreman with a dirty thumb will make a paper sheet on which he writes in the field look as if it had been dragged through the mud; while, with a punch, he can bring his card in with comparatively small damage. In general, it may be said that for the time-keeper's use the written card has a slight advantage over the punch-card; while the reverse is the case for records to be obtained by the foreman, or whenever the men, such as drillers or teamsters, hold their own cards.
A TYPICAL FOUNDRY FOR LARGE CASTINGS IN THE TORONTO, CAN., PLANT OF THE FAIRBANKS-MORSE COMPANY
Foreman's Report. When the making-up of the pay-roll and the distribution of cost depend upon the reports of foremen, many serious difficulties are introduced into the work. Most foremen are intelligent enough to make a satisfactory report, and even more of them are honest enough to make a correct report. It is a curious fact, however, that among men of this class, while they would use every care in accounting for money entrusted to them, there is no tendency to consider time in the same light; and in consequence the reports of time given are liable to be very lax.
Moreover, if a foreman felt so inclined, if there were no one checking him or his reports, it would be a very simple matter for him to "fudge" his accounts so as to be able to acquire considerable graft.
If the foreman is intelligent and conscientious, a report and a distribution can be obtained from him which would be very easy to work into an excellent office record. Unfortunately, the desired combination seldom obtains, and there are very few large works carried on with such a system of time-keeping.
Cost Distribution. The time having been taken in the field, it now becomes necessary to make a distribution of costs in the office. The cost is that which is paid for producing work, being the material and labor cost of production, added to the proper proportions of expense cost, the expense being incurred in carrying on the operation and so making the actual work a possibility. The distribution of the cost is necessary in order that the contractor may see whether or not any particular operation is profitable; and a detailed analysis of the distribution, such as will be given later, will indicate in what respect the work may be made cheaper and more profitable.
In all cost distribution, there are certain items which cause trouble; and their proper disposition has led to much discussion among authorities on them, and has been the source of many different arrangements for their proper apportioning to the various operations on the work. For instance, there is the time of such men as are engaged upon water-supply service, drainage systems, the blacksmith, machinists, electricians, water boy, the time of watchmen, police, etc., which may come under the heading of "general labor;" and there are such items as the transportation and distribution of coal to various parts of the work, the transportation and handling of stores, and numerous other items which, while seemingly affecting the whole work, are directly chargeable to some particular operation.
In many instances of distribution, the item of General Expenses, which includes the expense of storekeeper, time-keeper, bookkeepers, clerks, and such office force as may be required, is rather difficult of disposition. Those items which are usually monthly, may be distributed daily at a rate per day found by dividing the monthly rate by the number of days in the month, or they may be lumped at the end of the month and apportioned to the various operations. If they are distributed from day to day, it is rather difficult to tell just what proportion of them should go to each operation, as the cost of any operation is liable to vary greatly from day to day. If they are left to the end of the month, it is impossible to tell from day to day the exact cost of the work.
Overhead Expenses are another source of difficulty. Under this heading can be placed all salaries which do not ordinarily appear upon the pay-roll, such as the salary of the General Manager of the work, the Chief Engineer, and the officers of the company, and such expenses as office rent, telephone, office furniture, stationery, etc. Just where General Expenses leave off, and Overhead Expenses begin, is rather hard to determine, the line of demarcation varying in almost all cases.
One of the greatest troubles in distribution is caused by overtime of men who are on a daily and monthly basis. Under the same head might be placed Lost Foreman's Time—that is, the time which the monthly and daily men are paid for, and which produces no output.