A planning department aims to do for the pro ductive branch of the factory exactly what the en gineering department has accomplished for the scien tific branch. The engineering department predicts what is to be done; the planning department aims to predict how the work is to be done. The planning department is, of course, an integral part of the pro duction department.
Obviously the degree to which it is possible to pre dict methods of production will depend on the char acter of the industry and the amount of study that has been put upon this phase of the particular industry under consideration. In general, the possibilities of predicting productive processes are not well de veloped as yet, but the tendency is in that direction and should be carefully studied in connection with cost-finding systems; for the general philosophy that underlies these movements holds true also for cost finding and is closely connected with its growth. The discussion, for the present, will be confined to the problem of finding costs as they accrue, but a later section will discuss the more advanced idea of pre dicting costs in advance of construction.
4. Specifying the material.—It should be noted in this connection, however, that if costs are to be de termined intelligently, the methods of securing them must be planned in advance. Just as the designing engineer should plan in advance all the constructive features of the product, and just as the superintend ent of production should foresee all his productive processes, so the cost keeper should know in advance what costs he needs to collect and should lay his plans to collect them without, at the same time, gathering a mass of information he does not want. One of the most common and most drastic criticisms that is ap plied to many cost-finding systems is that they waste money in finding detail costs that are not useful, while neglecting, perhaps, cost data that are extremely valu able. It is for this reason, as before noted, that a good cost system cannot be installed in the abstract. It must be prepared with special reference to the par ticular business in which it is to be used.
In a well-organized modern factory of the inter mittent type, therefore, the engineering department will turn over to the production department drawings and specifications which show just what is to be done. Each piece called for will bear an identifying number or symbol, as explained in Chapter IV. In best
practice the engineering department will also furnish complete bills of material showing in detail just what direct material is needed for each part. Detailed statements such as these enable the order clerk, or whoever is charged with the duties of that office, to authorize with accuracy the withdrawal of material from the storeroom, and also, as will be seen, to identify the material with the costs of fabrication that belong to it. Where material lists are not made out by the engineering department, bills of material are made out by the order clerk (Figure 2, page 21) . Obviously, the more accurately these material lists are compiled, the more accurately can the raw material be drawn from the storeroom.
5. Production orders.—The order clerk can now issue a production order, as illustrated in Figure 10, above, to the foreman under whom the work is to be done. If the amount of material to be drawn is comparatively small, this production order may also be, for convenience, the material list, as illustrated by Figure 10. This is not an essential point, however, since the material list may be on a separate sheet, or may be a permanent record, made on the drawing it self. The production order will, in general, give all necessary information regarding time of completion and the disposition of the part when finished. This order will also bear the specification number or the drawing number of the part referred to, and the production-order number to which the cost of the pro duction is to be charged. Thus the part is identified with the time cards recording the details of its pro duction, which are to be returned from the factory.
Clearly, the issuing of production orders requires not only an intelligent understanding of the costs that are 'desired, but also a thoro comprehension of the manufacturing problems concerned. A single pro duction order might be made to cover a battleship, or a separate order might be issued for every individual part going into this same ship. On the one hand, it may be of great importance to know with accuracy the cost of one line of goods in which competition is very keen, whereas, on the other hand, in some other line, where the margin of profit is very high, it may not pay to obtain very accurate costs.