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The following are excerpts from a 56th LSAA Convention workshop on Production Methods and Standards. Panelists were: Frank L. Cooke, Chairman, LSAA manager of Management Information Systems; Robert B. Knaggs, LSAA manager of Production and Delivery Operations; Arthur Rosengarten, staff industrial engineer, Bugle Coat Apron & Linen Service, New York City; John A. Temofeew, director of Industrial Engineering, Consolidated Laundries, New York City. Standards and Their Uses TEMOFEEW: At Consolidated Laundries we describe a standard as a measure of the amount of work that a properly trained operator following a specified method is expected to produce to earn a minimum wage. A standard is a management tool. We use standards to evaluate performance of our production operators. Any operator who does not consistently produce at standard or above is liable to dismissal. Our unions are in complete accord with this thinking. We believe standards give our operators a strong feeling of confidence. A napkin feeder who knows what is expected can strive to accomplish it. We use standards to schedule work flow, estimate labor costs, determine selling prices and in the preparation of our budgets. KNAGGS: As applied to a laundry, standards are the pieces or pounds or pockets per hour which a normal operator would produce following a specific method. Time standards have always been connected with individual operators or team performance, and this is by far their most important application. Time standards provide a means of letting the operator know how well she is doing in respect to other operators measured 'against the same base. Time standards are a management tool in controlling productive labor and aid in depicting management inefficiencies in the use of labor. Standards are essential in determining the labor cost vital in determining sales prices for individual rental items. They are important as the basis for timing and scheduling work through the plant. They are the means of determining plant capacity, manpower requirements and evaluating equipment capacity, design and layout. They are also useful in evaluating suggestions and ideas regarding possible changes and resulting savings. They can certainly be used to determine the most economical method of performing an operation. Standards can be the basis for wage incentive programs. Incentives directly affect operator effort and should be thought of as a final step in any good standards program. Standards are also beneficial as training aids. Since standards are based on a step-by-step operation procedure, the outline can serve as a basis for job instruction. ROSENGARTEN: A production standard is that level of performance which can be attained by an average employee with average skills and with an average effort. It is the proverbial fair day's work for a fair day's pay. It can be expressed in units per time, as 600 sheets an hour, or in time per unit, as in 0.17 hours per 100 sheets. When used as the basis for an incentive or piece work plan, a standard is frequently expressed in terms of monies per piece or points per piece. Production standards are aids to both operators and supervisors. The operator knows exactly what is expected and, therefore, how well she is doing. She is also motivated to produce above standard to earn more money, if an incentive plan is in effect, or to satisfy a sense of pride. Standards help the supervisor know what is expected of him, how well he is doing and how much he can ask of his employees. Standards also can be used as the basis of supervisor incentive plan. The standard also is very important in predicting productive capability, which is necessary to carry out the planning function of management. Standards Program TEMOFEEW: Do not attempt to develop standards without the services of a competent industrial engineer. Errors in development of standards by inexperienced personnel can cause a future of endless problems. You will be happier with the knowledge that a professional is attending to your requirements. We have had occasion to work with several consulting engineers who are familiar with the linen supply field. They know their business and they are good. Please have patience with standards development. Even with the use of experienced engineers, time is necessary to study any operation and understand it enough to be able to develop a proper standard. At Consolidated Laundries, we use several techniques to implement any new standard that is developed. First of all, we make very sure that everyone concerned knows what we are doing, why we are doing it, and—more important—that everybody cares about what we are doing. You must feel that you know what to expect when a standard is installed. Will installation of a standard lead to lower labor costs if the plan is successful? Will labor turnover or absenteeism be reduced? Will you have a better flow of work through your plant? Do Not Expect a Panacea Do not expect the installation of a standard to be a panacea for all production problems. In fact, if properly administered, the installation of any standard will require more attention at the outset to the operation placed on standard. Make sure you have union cooperation and participation prior to installation or development of any standards. Most of today's unions recognize the value of equitable standards as the basis of a wage incentive plan. Spend time and effort to train your operators in the specific methods you wish to use with new standards. Quality requirements must be made clear. Make sure you can provide at least 10 hours of standard output work to be processed in an eight-hour day if you want your standards program to be successful. You cannot expect an operator to produce over standard if work is not available. Be frank with your operators. Explain that there may be errors in newly - developed standards, and that errors will be yours and theirs alike, and together you can correct them. No matter how competent the engineer, in development of standards, errors may occur. Be ready to face and accept them. How you treat them may be the difference between the success and failure of any new standard. Involve All Concerned Make sure everyone concerned— from management to the operator— is well aware of the progress of a new standard. Show everyone in the plant you mean business, and I assure you that others will follow your lead. If you do not attain your expected rate of production, search for reasons why. They are usually reasons that are not readily seen or which seemed to be insignificant. KNAGGS: Standards are always developed from some form of time study. A trained observer needs only a decimal minute stop watch, clip board and observation for him to perform a time study. Notice the word "trained," which is very important. To conduct a time study, the procedure for the job must first be determined. Make sure the method and equipment used are proper. The foreman or supervisor should be consulted regarding the operating procedure and the standard of quality. The job is then broken into elements as small as practical to time on a watch. The number of cycles of readings taken is dependent upon the length of time of the cycle, the number of elements involved and the amount of time variance found for each element. The observer rates the operator's performance during the study to compensate for fast or slow workers, based on their skill and effort. Allowances can be built into the time study to compensate for fatigue, working conditions, or the weights of loads which must be handled. There may also be allowances for personal needs (rest room time and etc.) and for minor delays. Perhaps maintenance must be performed on a machine while the operator is working. The final standard is determined by applying the rating to the timed elements and adding allowance times.  ROSENGART EN: A production standard should be based on actual study and analysis of a particular job in the location in which it will be performed. The many variables from one plant to another make it dangerous to lift a standard out of one plant— even within the same company— and use it in another plant. It is of utmost importance to study and set a standard for a particular job and not the operator who happens to be performing it on the day that you are observing it. The sequence of steps which I generally follow in setting a standard is first to observe the job and break it down into elements. In establishing these elements an important rule to remember is to separate and isolate machine time from operator time. My next step is to decide on what I feel is the best layout and the best method. After the operator has been trained in this method, the actual study is taken making sure to rate for the efficiency level at which the operator is working. Allowances are then added for personal time, fatigue time and unavoidable delay time. Make sure that the standard established is an attainable one and not limited by machine time. In implementing new standards, first instruct and gain the commitment of the supervisors as they will be charged with enforcing the standard. Employees also must understand and agree with any standard set for them. Their unions always have the right to question a standard, too. Generally, a trial period will be permitted, during which time the union will keep well informed of how things are progressing. If at the end of the trial period there is still a question, it is subject to negotiation. Once the approval is gained for the standard, it is established as a job specification. Incentive Systems TEMOFEEW: When an incentive program is installed, it should be possible for every first class operator, working day in and day out and without undue fatigue, to produce above standard and thereby earn extra wages. We convert our standards into money value and call it a piece work rate. This system of wage incentive rewards the operator in direct proportion to his or her output. We do not control the output of our superior operators, but have instituted a system whereby no one is permitted to pay an operator more than a stipulated amount of bonus without the written approval of our engineering department. Our limit on automatic payoff is 41½% above standard. The primary reason for our caution is to enable our engineers to determine if the operator is following the specified procedure and if the quality of work produced is as high as required. Also, we check to see if—in fact—the operator is actually capable of producing at the reported rate of output. Naturally, we check the accuracy of the production records that indicate a seemingly extra-ordinary rate of production. Many times, honest mistakes or misunderstandings occur and we believe we should not have to pay for these errors. If the output claim does turn out to be valid we then pay anything which the operator earns. There is no limit. KNAGGS: Many suppliers use standard hours to simplify performance calculation and bonus pay- ments. However, the standard hour method is somewhat difficult for employees to understand. The standard hour method expresses a standard in hours per hundred pieces or hours per thousand pieces processed. This is the inverse proportion of pieces per hour. For example, the standard of 25 hours per 1,000 pieces processed is exactly the same as saying the operator is expected to produce 40 pieces per hour. Example Used Refer to the handout entitled "Daily Press Production." This is a form drawn up for the press department to illustrate the use of standard hours in measuring work performance. Individual garment types are listed. The numbers 30, 30, 17, etc. have been recorded by the work distributor as a record of what the individual press operator has been given to produce. For the day, the operator produced 107 short-sleeved dresses, 95 smocks, 111 short coats, and 22 long coats, for a total of 335 pieces. The standard hours per thousand, (next line) multiplied by the actual quantity produced, gives "hours earned." In this case, a total of 9.6 hours have been earned for the day's production. The next section is a description of "day work," or the time the operator spends working on a job for which there is no time standard. In this case, there was no steam in the plant for half an hour so available work time is reduced by a half hour. All information is consolidated on the bottom line. The operator started at 7:30 and finished at 4:00 for a total of eight work hours. Under "day work" is put .5 because of the steam problem. The operator worked on standard for only seven and a half hours but nevertheless, actually earned 9.6 hours according to standard. This represents a gain over available time of 2.1 hours for a performance of 128%. The same technique can be used in all departments. Incentives provide an opportunity for those who wish to use extra skill and effort to gain additional compensation. Incentives put the employee in business for himself. There are two incentive payment plans in common use with standard hours. The first is called a 100 percent employee participation plan. It pays the employee at full hourly rate for productivity above standard. An operator working at or below standard is paid for the number of hours worked at the base hourly rate. However, an employee working above standard is paid on an earned hour basis. For example, if the base rate is $1.60, an operator who works eight hours at 125% of standard, earns 10 hours pay a $1.60. This totals to $16.00 and averages to $2.00 for each of the eight hours actually worked. The second type of incentive plan is called "less than 100 percent participation." Increased productivity is shared with the company. Thus, an employee works above standard pace and earns additional hours of pay but is paid at a reduced rate. Each unit above standard is produced at lower unit labor cost. The proportion may be a 50-50 split, (half of over standard earnings to the company, half to employee) or one-third/two-thirds, or so forth. Most plants pay incentive bonus on a weekly performance average to each operator. Output (earned hours) is averaged over a one week period to minimize the effect of an extremely high pace one day and a loafing pace the next. Some plants prefer to pay a bonus on less than standard. They may start an incentive at 92% or 95% of standard. Receiving a bonus at this level is intended to give psychological encouragement to the operator to produce in excess of 100%. The operator is given a taste of the incentive "carrot." ROSENGARTEN: Any incentive or bonus program should be based on a studied production standard. With standards and incentives, supervision becomes even more important than before. The earnings potential motivates operators, and, therefore, quality is likely to suffer unless carefully watched. Poor record keeping becomes even more costly and can undermine the best plan the industrial engineer may set up. Poor scheduling also becomes more costly since, because you generally must pay an average hourly rate for day work, you pay a premium for delay time. It is obvious that continued success or failure of any incentive program falls largely on the shoulders of the line supervisor. Increased benefits for increased production usually are in the form of money, but can be in the form of gifts or time off. Incentives help employees to care a little more, and bring their personal goals more into line with company goals. Incentives and good standards generally tend to lower unit costs. It has been estimated that people with no incentive produce at about 80% of standard. An additional benefit—increased capacity—is realized when present employees and present equipment become more productive through incentives. Swelling Effect ROSENGARTEN: What is the effect of a general wage increase on a piece work wage system? There is the basic question of whether an operator who performs at 110% should earn 110% of the new base rate or only the general increase granted. For example, assume a shirt finisher is given an increase from 14 cents a base rate of $1.50 up to $1.60 an hour. if the operator produces at 110%, actual earnings would go from $1.65, (110% of $1.50) to $1.76, which is 110% of $1.60. This represents an increase of 11 cents or fully 10% more than the 10 cents you have agreed upon. This is what we call the "swelling effect." To avoid the "swelling effect," some companies do not change their piece rate with each increase, but instead, add the increases on in the form of an hourly "plus-on." These companies thus pay only the increase intended. Standard hour incentive systems pay bonus hours which are calculated by subtracting hours worked from hours earned. Since pay is based on hours "earned," and not percentages, the swelling effect is avoided if the bonus hours are paid for at the original hourly rate. If a point system is used, and the bonus is computed from a bonus chart, by not changing the bonus chart and paying only the hours worked by the base rate increase, you would also pay only the increase intended. Under any of these systems, either because the employee can no longer understand how his pay is being computed, or because some of the incentive has left the plan, or because the union has requested it, the decision may be made to revise the system. Concerning the piece work system with the plus-on, I would like to describe one way of approaching it to ease the burden of the swelling effect. The first thing to do is to compute as accurately as possible a floor efficiency average for the department involved. This can be done for an entire department such as a press work department, but I suggest doing it for a smaller subdivision, such as a specific type of press unit. This average level of efficiency becomes a base for computing the new rates which will incorporate the plug-ons. One result will be that some employees will produce at a rate above standard but below the floor average. They will earn a bonus—but a smaller bonus than previously. Operators producing above standard and above the floor average would earn a larger bonus than previously. Persons producing exactly at the floor average would earn the same bonus as before. Theoretically, under this system, your total dollar pay-out would be exactly what you have contracted to pay. To illustrate, consider the press operator with a standard of 100 shirts an hour and a base rate of $1.50. If the piece rate was set when the base rate was $1.10, there is now a 40 cents plus-on. If the operator works at 115% efficiency, earnings are $1.27 from the piece rate and 40 cents an hour from the plus-on, for a total of $1.67 hourly. If the plus-on were incorporated into the rate and using 115% as the floor average, we would come up with a piece rate of $1.45. For the same 115 shirts, the operator would still earn $1.67. But, if she dropped to 110 shirts, she would earn $1.60 an hour instead of the $1.61 she would have earned previously. An operator who goes from 110 to 120 shirts an hour would show an increase of 1 14 cents compared to the 11 she would have gotten previously. The incentive becomes a bit sweeter than before, which serves as an additional motivating factor. If another general increase is required, you can do one of three things.
You would still be susceptible to the swelling effect, but to a greatly reduced extent. The final result is that you have incorporated all plus-ons, are adding increases at the 100% level, and have eased the burden of the swelling effect. Of course, you must guarantee the $1.60 to all employees. Production Methods Manual COOKE: The "Production Methods Manual" is a project of LSAA's Operations Committee, formerly known as the Production Committee. The manual's objective is to increase productivity of linen suppliers.  Robert Knaggs and I have been working with the committee preparing the new manual.
It was felt that a number of improvements over the 1954 publication could be made. Photographs, operation layouts, and very explicit job descriptions and operator procedures could be included. Also, emphasis in this manual would be on the method rather than the standard. If the emphasis is on a clearly explained method a linen supplier will be able to adopt all or part of the method and be on the road to increasing his productivity regardless of his adoption of the standard. Alternate methods are presented for each step in the production process from the soil room to route make-up. Automation is included but not emphasized. Thus far we have traveled to about 55 linen supply plants throughout the country and viewed hundreds of operations and hundreds of operators. We feel we have a good impression of what the normal pace is and what a normal operator can produce. We were not looking for "hot dogs." It is not the intent of the manual to present fantastic production rates. We have now collected enough data for the 100 case studies to be included in the final publication. Case studies, each describing one production method in detail, will be organized into 14 sections covering each step in the plant process. There will be sections on soil counting, washing, extracting, tumbling, preparation for flat linen ironing, flat linen ironing-folding-stacking, preparation for garment finishing, garment folding, dry folding, continuous roll towel processing, inspection and mending methods, packaging, and route makeup methods. There will also be text covering how to develop standards, how to use the manual to best advantage and how to use standards for wage determination. Again, alternate systems will be presented to suit the many different conditions and desires around the country. The manual will be looseleaf design to allow for updating. We expect to update periodically to cover additional existing processes, revise existing case studies, cover new linen supply rental items, cover new equipment, and to cover entirely new processes. Refer to the sample case study headed "File F-6. 1" covering bib aprons (Figures 3 and 4). Let us go through this sample together and cover some of the highlights. Heading for the first table is "Output Rates for This Particular Method." "Particular," of course, is redundant as a word, but it is important for emphasis. We do not wish anyone to get the idea that this is the standard output per operator for bib aprons. It is not the standard per se but merely the standard for this particular method and layout of personnel and equipment. Column headings on the output rate table are: three feeder, five folder ironer team (the entire ironer crew), one feeder, one and two-thirds folder team (one ironer lane) and per employee. Per employee is the lowest common denominator as far as productivity comparison is concerned. It is the means of comparing this method with alternates. Headings at the left side start with "Output per 60 minute hour." This is to emphasize that this is a pure hour with no time deducted from it. "Best Observed Rate" is included for credulity. We do not wish anyone to say that the given rate is unattainable. It indicates that the persons actually observed were producing higher than the rate put forth as the standard per 60 minute hour. They were producing at a higher rate because of their effort, skill, superlative working conditions, or a good incentive program. The "Two Minute Spot Check Minimum" is a new feature for this type of presentation. Many times production managers wish to verify output from a particular piece of equipment and this enables a quick check using a wristwatch. It is inexact but convenient. A qualifier, at the bottom of the table, notes that the rates include the feeding of aprons requiring strings or other repairs. As the ironer feeder has no control over the work received he should be given credit for spotting and disposing of rejects. The second table is "Standard Times for This Particular Method." Standard minutes and standard hours are given for different degrees of operation completion. From the table it may be determined that the complete job for ironing and completely folding with two and two-thirds employees requires .2461 minutes (2-2/3 times .0923). You can use this information for costing purposes. If your hourly rate was $1.80 or three cents a minute, direct labor cost would be about three-fourths of one cent. It is pointed out that there are no personal time allowances included in the times, and the reason should be fairly obvious. Personal or nonproductive time varies from plant to plant. In order that the manual be useful to the majority of linen suppliers, it is necessary that data be presented in a way that it doesn't matter what the plant practice is regarding non-productive activity such as washup, rest periods, etc. Regardless of plant practice for personal time, the time for one productive cycle, of course, remains the same. Costing standards however, should include a little time for all non-productive activities. A simple conversion table will be included in the manual to enable pure operating standards to be used for costing purposes. Please note that times are in decimal minutes and not in seconds. A conversion table of seconds to decimal minutes will be included in the manual. Under "Operation Outline" we list the major equipment and give the description of the operation in general terms. The text there is keyed to the layout sketch. The sketch is a generalized one which shows the position of men and equipment. On the reverse side are three photographs illustrating the operation. We tried to get photographs that would really tell a story. Detailed "Operator's Procedures" are given for (A) feeders, (B catcher/half folders, (C) final folder/inspectors. I think you will agree that the procedures are fairly de tailed. This manual is intended to communicate. Hopefully, linen suppliers will be able to pick up a case study and duplicate the operation in their plants providing they have the equipment. The box at the bottom of the case study says: "If you have a refinement for this method, please let LSAA know. Use the reporting form in the appendix." An addressed form will be included in the appendix and it is our hope that users of the manual, if they know of a better technique, will let us know. In turn, we can disseminate the information in the form of revised or new case studies for the benefit of the entire industry. We advise you to take a critical look at all of the methods the manual presents and then take a critical look at your own procedures. You may not adopt anything that the manual presents, but from critical examination of your own techniques you may be able to make some methods improvements. If you do this, you will undoubtedly increase your productivity, and the LSAA manual will have met its objective. A "Proudction Methods" manual containing 65 case studies became available in mid-September. The final 35 case studies will be ready in early 1969. Persons requesting the 65 case study manual will automatically be sent the remainder when available. —Frank L. Cooke, LSAA Staff. |