Eighth. Non-Productive Labor

(a) Wages of all employees not working directly upon the product. This includes superintendent, foremen, gang bosses, clerks, laborers, and others, except when on work properly chargeable to production orders.

Ninth. General Office

(a) Real estate charges as explained in the first paragraph; (6) Interest, 5 per cent on furniture and equipment; (c) Insurance, 5 per cent on same; (d) Maintenance and renewals of same; (e) Office supplies; (f) Lighting, as explained in third paragraph; (g) Heating, as explained in the fourth paragraph; (h) Legal, traveling, telegraph, telephone, postal, express, freight, and trucking expenses.

Tenth. Machine Rate

Made up for each machine, (a) Interest, 5 per cent on value and installation; (b) Depreciation, 5 to 10 per cent, according to the kind of machine, class of work, and hours used per week, month, or year; (c) Maintenance, renewals, and repairs; (d) Floor rate, including space occupied by the machine and the space necessary for handling its work; (e) Power for operating the machine. The sum of these expenses for a month or more is to be reduced to an hourly rate, as already explained.

Eleventh. Man Rate

(a) Floor rate; (b) Consumable tools and supplies; (c) Liability insurance. The floor rate chargeable to each man is to be computed as follows: From the entire area of floor space or surface subtract the amount assigned to machines plus that occupied by the power plant. Divide the remainder by the number of productive men. This method will place the proper burden upon such departments as the assembling room, which contains few and often no machines. The amount so determined is reduced to an hourly rate to be charged as a burden to all productive labor. This rate is assessed separately to the departments equipped with machines of varying numbers and sizes, or with no machines at all.

Twelfth. Productive Labor

(a) Wages of all employees working directly at hand or machine operations on the actual product or output of the plant, (b) Man rate as explained in the eleventh paragraph.

The Sales Department, while connected with the general office, is an entirely separate matter in relation to its accounts, in consequence of its work being that of marketing the product, and its expenses are entirely commercial expenses rather than manufacturing expenses. It must bear its proportion of the real estate charges of the general office building according to the space occupied by it, and its entire expenses are distributed as a percentage over the product after it is completed and ready for the market.

Actual manufacturing operations begin with ordering the work into the shops. In every well conducted manufactory there should be nothing commenced until definite, written orders, regularly issued by competent authority, have been received. These orders should specify exactly what is to be done, and generally give a time limit for completing the work. In cases where a lengthy description is necessary and cannot be written on the regular order blank, reference should be made to specifications or drawings, or both, attached to the order and forming a part of it. There should be nothing left indefinite or about which a doubt or question may arise in the future as to the precise nature of the work described. The importance of this point cannot be too strongly emphasized or overestimated. In cases of emergencies a new order may be issued, or an existing order changed or suspended by a subordinate official, who will report the fact to his immediate superior as soon as possible after such action, giving in writing the reasons for doing so.

Theoretically all orders are issued by the Manager or General Manager, as the case may be. If there is a General Manager in charge of the entire business, and a Factory Manager in charge of all manufacturing operations, both may issue such general orders as are appropriate to their positions. Thus the General Orders for the regular product of the plant may be issued by the General Manager, while the others for, (a) operation of the plant, (b) maintenance and renewals of equipment, and (c) maintenance and renewals of real estate will be issued by the Factory Manager.

The form of these orders is as follows: Fig. 216 shows the General Production Order, issued by the general manager for making a specified lot of machines for stock. In the line "machines, attachments, tools, fixtures," such words as are not required are to be erased by drawing a line through them. They are serially numbered and dated. When necessary a date may be given for their completion; or for the completion of certain parts, or groups of parts, and the balance at a later date. The date "received in factory" will be the beginning of the time limit for completion, in case it has been given as "30 days," "3 months," etc. This order is to be made in duplicate, one copy of which is sent to the Factory Manager and one retained by the General Manager, or in triplicate, and one copy sent to the Engineering Department, so that the necessary drawings may be furnished.

General Production Order Card.

Fig. 216. General Production Order Card.