8. A typical example of nonproductive labor.—A machine shop, for instance, employing a superintend ent and a foreman would be called upon to supervise the efforts of 125 men or more. They are perhaps given clerical assistance to the extent of two or three clerks; and such a situation might be considered an ideal one by many managers. The so-called nonpro ductive labor has been reduced to the minimum. Such managers, however, lose sight of the fact that the brain energy—namely, the planning which must accompany every operation—forms the greatest part of the work. It is the same old story again of making tbe brain save the heels ; and in an office, shop or factory, when the heels of the employes are working, generally some machine or other important costly device is being left unused, and the output is being restricted by the un productive activity of both men and machine. A flock of "order chasers" running thru a plant is a sure sign that there is little direct supervision or centralized con trol of the productive process.
The motto of many business executives seems to be : "Millions for machines and expert machinists, but not one cent for supervision." Money spent for men who would plan the work before it enters the operating de partment is looked upon as tribute. It appears that one of the best aids in overcoming the handicap im posed upon the manager by the extensive operations which must be carried on under modern business con ditions, is the establishment and maintenance of a planning department.
9. Planning is specialized management.—Planning is carrying into the supervising activities the idea of specialization, which has been operating in the produc tion side of our industries for the last hundred years. Specially trained men must plan and analyze all the work, methods, etc., and prepare the way for the work ingman to produce at his highest efficiency. The workingman is skilled in his trade; he is a specialist. The man in the planning department is skilled in analysis, and he also is a specialist. The duty of the planning department is to find "the one best way" for doing a thing before a cent has been spent in either labor or material. It designs the job, prepares proper details and drawings, analyzes the work in its various elements, and routes it in its future progress thru the office, store or shop. It is easily seen that when this is done the greatest part of the work has been accom plished, for planning means brain work. The sav ings made after the introduction of such a department are not always of the spectacular kind, such as were effected when the new tool steels were first introduced ; nevertheless the gains are important even tho they are made up of innumerable small savings.
10. Planning and overhead expense.—The chief ob jection offered by many managers to the introduction of the planning department is the added overhead ex pense. They look upon all planning expense as non productive, and when it means that there shall be one man for the planning department for every three to five men in the operating department the proposition appeals to them as absurd. Besides this, the outlay for printed forms and office supplies is largely in creased. But before judgment is passed it is well to
look at the results. If the total net cost is not in creased it makes little difference whether the money is spent on producers or on the so-called nonproducers. In the case presented by Mr. Hathaway the total num ber of men employed under the new system is not more than that employed under the old system. They were simply distributed differently. Under the old system he employed 125 men in the operating end and two clerks in the office. With the planning depart ment added, he now has 100 men in the shop and 25 in the planning room.
11. Overhead actually reduced per unit.—Tlie overhead charges naturally increased but they were far from being "nonproductive." The product turned oUt was three times what it was before this new aid to the management was added. Such an outcome simply puts the addition of a planning de partment on the basis of any other investment. It is in reality spending money looking to future increased returns. Mr. Parkhurst claimed that for a shop em ploying a few hundred men, only about six additional employes in the new planning department were nec essary. The cost for the six additional men, in wages, totaled about $4,000 a year. For additional sta tionery, office room, etc., this sum was increased by $1,000. But this change brought about a doubling of output, not to mention the permanent assistance ob tained by the manager thru having at hand a force of men investigating, collecting and utilizing knowledge which Ile could not possibly get unaided.
12. Evolution of the planning department.—The organization of the planning department is a natural evolution of much interest to the student of manage ment. Under the traditional system of management the foreman and workingmen, after deciding in a gen eral way what the work was, put the job into the shop and studied how, when and where it was to be done after the operation had been set in motion. It is perfectly evident to most managers today that it is not safe to trust the planning of what is to be done to the men who are to supervise the execution of the work. But it took many years before the establish ment of the drafting department was considered any thing else than an extra expense or burden. Just as the planning of what was to be done before the work is put into the shop was found to be even more economi cal when put into the hands of experts, so it will be found that there will be even greater savings when the planning of how, when and where the work shall be done is taken from the shoulders of the foreman and the men in the shop, and is put in a special de partment called the planning department. It will be seen at once, therefore, that nothing is done in the planning department that does not have to be done by someone in the place, under any scheme of manage ment. Some workmen are good at planning their work, but others are not. Thus, it appears that if the best man in this respect is selected for the planning, all the less efficient men will get the advantage of his greater sagacity.