MANUFACTURING ORDERS
22. One of the principles that must be kept in mind when installing a system of any description is that provision must be made for recording every detail of the work intended to be cared for by the system. While this holds true in respect to the systems in every other department of a business, it is of special importance in the manufacturing branch. Accurate costs are out of the question unless every detail of the operations of the plant is properly recorded.
Experience has shown but one method that will insure accurate records, and that method is to manufacture all goods on definite orders and to charge all work not applied to a specific manufacturing order, to expense or operating accounts. The receipt of an order to manufacture before starting the work, is of the same importance to the superintendent as that the commercial department shall receive an order from the customer before shipping goods.
Few managers will accept verbal orders for the manufacture of expensive goods, without asking for a confirmation in writing. When those orders are transmitted to the manufacturing department, it is just as important that they shall be in writing.
Manufacturing orders are of two classes: general orders to the superintendent to manufacture a certain quantity of goods, and specific orders to shop foremen to do some part of the work. For convenience, these orders will be referred to in this discussion as Production orders and Shop orders.
23. Production Orders. The production order is the written instructions to the superintendent to manufacture certain goods. It is his authority to secure the necessary material, to employ the required number of men, and to convert that material and labor into the finished product. The production order may call for the manufacture of the quantity of goods of a certain type required to fill one or more customers' orders; the manufacture of a certain quantity of goods to be placed in stock, from which to fill future orders; the conversion of a definite quantity of raw material into finished products; or even the manufacture of an indefinite quantity of raw material into an equally indefinite quantity of the finished product, but within a definite period of time.
Usually the production orders of one factory will be confined to one class, though there are some exceptions. In the first class, we find shops manufacturing special machinery, jobbing foundries, and mills manufacturing underwear and hosiery. In the latter business the goods are sold in advance, from samples, and only the quantities or particular styles required to fill orders are manufactured.
The second class includes furniture factories, typewriter factories, the manufacture of tools, and numberless similar industries in which a stock of standard goods is manufactured for future sale.
An example of the third class is found in a harness factory. In this business, a certain number of sides of leather are issued to the cutting room to be cut. Since the leather is not uniform in weight or texture, it is not possible to cut an entire side of leather into pieces of the same size, or the same parts of a harness—as lines or traces. The cutter must use his best judgment, so cutting the leather that it will produce the largest possible volume of usable stock, with the least waste. The definite factor is the side of leather which is to be converted into an indefinite quantity of finished, or semi-finished product.
The last class is illustrated in the manufacture of salt. The brine—raw material—is pumped from the wells into storage tanks, from which it is drawn into evaporating pans or grainers. An order may be issued to make what is known as common fine salt in three of these evaporators. Evaporating processes are influenced by atmospheric conditions—the same heat will evaporate the brine much more rapidly one day than another. Also, the brine is of different degrees of strength—the same quantity does not always contain the same amount of salt. The only definite factor is time—an indefinite quantity of brine is converted, in a given time, into an indefinite quantity of salt and, it might be added, of an indefinite quality.
When all these conditions are considered, together with the fact that each manufacturer has his individual methods of conducting the business—methods probably different from those of his competitors in the same line—it will be seen that the variety of forms of production orders is almost without number. But the important thing is to have an order of some kind—to provide a record.
If there is one essential feature to be incorporated in the production order, it can be expressed in two words—definite instructions. The order should be made perfectly clear, leaving no room for doubt, as to what is desired. When No. 3 dining-room chairs are wanted, the order should state the fact very clearly, and not read chairs, leaving the superintendent to guess the style and size.
Fig. 39. Production Order to Superintendent
Fig. 40. Production Order Which is an Exact Copy of the Customer's Order
The form of the production order need not be complicated; indeed, a simple form will serve the purpose much better, an illustration of which is shown in Fig. 39. The heading of this order shows the number and date, with instructions to the superintendent to carry out the work as specified. The body of the order is blank, providing space for entering such details as may be necessary. The blank at the bottom, which is filled in by the superintendent's clerk, shows the date received, date started, the shop order number, and the date finished.
Fig. 41. Sub-production or Shop Order
This form is suitable for almost any kind of business or class of order. The production order should always be made in duplicate, a copy to be kept in the office. The office copy will be used to follow up the manufacturing order.
In many lines of business, goods are manufactured only as required to fill customers' orders. The order to manufacture should, in such cases, be an exact copy of the customer's order as entered. With the modern method of entering all orders in manifold—with a copy for each record required—one blank should be included for the factory, this becoming the production order. A form of this kind is shown in Fig. 40. This is an exact copy of the order as entered, the instructions in the heading taking the place of the name and address of the manufacturer. The particulars include the number, date received, and date to be shipped. The body of the order contains the necessary instructions; in the column at the extreme left—quantity ordered, quantity shipped, size, and description. This is one of a set of blanks that include the invoice, office copy, cost department copy, and copy for the shipping department.
24. Shop Orders. The shop order is the written instruction of the superintendent to the foreman to do certain work or to manufacture certain articles. The order may call for the manufacture of a certain article complete, or it may be for parts to be later assembled into a complete article. Shop orders are as varied in form as production orders.
Fig. 42. Shop Order Showing Total Work Cards
When a superintendent desires to start work on a stated production order, he lays out the work and issues the necessary shop orders to the foremen of the different departments in which the work is to be done. A shop order is issued for each shop—usually these are exact copies. If work on an order requires work to be done in four shops, the four copies are made on the typewriter, at one writing, by means of carbon paper.
Fig. 41 shows a convenient form of shop order. This form includes the shop order number, piece number, drawing number, material, date to be completed, date of order, production order number on which the shop order applies, and the date completed. The body of the order is left blank for a description of the work and the necessary instructions. Explicit instructions must be given on every shop order—the order should leave nothing for granted.
Fig. 43. Shop Order with Name of Shop
Fig. 44. Shop Order Showing Progress of the Work
The special feature of the shop order shown in Fig. 42 is the space for card number and total cards. When an order is made out, as many copies are made as there are shops or departments through which the work must pass. The number of the copies of the order is entered under the heading total cards—that is, if the work is to pass through four shops, the figure 4 is entered in the space provided for total cards. The copies are numbered in the order in which the work will be done—that is, the order for the shop that does the first work is given No. 1, the second shop No. 2, etc.
There are two special advantages in having the shop orders numbered. Each foreman knows, when he receives his order, how many operations are ahead of his own and how many follow, and can lay out his work accordingly. It does not always follow, however, that because one foreman receives order No. 3, two other operations must be completed before his own can be started. Each shop order may call for the manufacture of a different part, to be sent to the assembly shop, but if one of these parts is in stock, no order is issued. The foreman receiving order No. 2, when his number naturally would be 3, knows that one of the parts is in stock and that his operation must be hurried accordingly.
The employes in the cost department find the numbering system invaluable, for it enables them to tell how many operations there are on a job; also operations which have been completed. This information is of considerable assistance in tracing orders through the shop.
The shop order shown in Fig. 43 answers the same purpose as the form shown in Fig. 42. Instead of the system of numbering the order copies, the plan of inserting the names of all shops is followed. Following the name of each shop is the name of the operation to be performed. This also enables the shop foreman to so lay out his work that the order can be handled promptly when it reaches his shop.
25. Work Orders. The work order is the written instruction of the foreman to the workman to do certain work. As a rule, this order is made on the production time card, as shown in preceding pages. Sometimes, however, it is unnecessary to give more explicit directions than can be written on a small card, which makes it advisable to issue a special order.
In certain classes of work, also, it is advisable to use one work order for a job which is to pass through the hands of several men. Such a work order is shown in Fig. 44. This order shows the numbers of the men and machines to which the work is to go. Another class of work for which special orders should be issued is outside repair work—as plumbing, steam fitting, electrical repairs, etc.
26. Standing Orders. Manufacturing is fast developing into a system of producing standard parts to be assembled into complete machines and appliances. Every part that goes into a machine is made from a standard pattern and is interchangeable with the same part in every other machine of the same style made in the same shop. It is no longer necessary to design each machine, and each part required to fill an order—the parts are manufactured in large quantities and carried in stock till needed. An order from a customer may require the manufacture of one special part, the balance consisting of parts to be assembled.
The manufacture of parts as standard units is not an accounting problem, but the accounting department and the manufacturing departments must coöperate in maintaining proper records of the manufacture of those parts. The manufacture of one lot of standard units involves the same operations whenever the same unit is made. Adopting this principle to accounting, it is advisable to establish standards in respect to orders. Whenever the same standard part is needed, the order should be for the same quantity; this, of course, after a standard quantity has been established. When units and quantities have been standardized, order numbers should be made standard—whenever the same work is to be done the same order number should be used. If this plan is followed, orders are soon recognized by number—and the order number informs the foreman as to the work required.
Series of order numbers should be assigned for different classes of work. Numbers 1 to 100 might represent regular plant maintenance and repair orders; numbers 101 to 200, plant construction and special repair orders; numbers 201 to 400, the manufacture of special tools; numbers 401 to 1000, the manufacture of parts; numbers 1001 to 1500, assembling or production orders for complete machines. Shop orders can be distinguished by a second series of numbers starting at, say 5000.
Illustrating the above, the superintendent of a typewriter factory might receive order number 1007, meaning that he is to assemble 1000 No. 7 typewriters. His assembling order to the foreman would bear the same number. After the parts have been drawn from the parts storeroom, it may be found that the stock of certain parts is running low. Production orders are issued for parts, No. 417 being the number for frames for No. 7 machine. The shop orders may bear the numbers 5060-a, 5060-b, and 5060-c, a being the order for the foundry, b, the order for the machine shop, and c, the order for the finishing department.
Fig. 45. Manufacturing Order Register, Showing Location of Work in the Shop
As to expense orders and construction orders, it is very necessary that the work to be charged against each order number be clearly specified. When the expenditure involved exceeds a certain amount, or where the work is of a special nature, a special order should be required. Explicit instructions for charging all expense items should be given to each foreman, preferably in printed form—or in typewritten form when the number of foremen is small. Many concerns issue printed instruction books containing the order numbers and specifications, with any rules that may be in force governing the conduct of employes, for general distribution among employes.