An efficient navy yard must have a properly organized planning and estimating section. This implies adequate personnel of proper qualifications, well trained. It is evident that the number, qualifications, and training of members and the organization of the section are dependent on the functions the section is expected to perform.
At the start, the difference between the production at a navy yard with its varied and varying output, and a private manufacturing establishment with a fairly standardized product should be clearly recognized. A navy yard is not at all a manufacturing plant in the usually accepted sense. Except for the manufacture at certain yards of a limited number of products developed to meet special navy needs, there is little repeat work outside of some shop processes. Quantity production methods used in commercial manufacturing have little application to ship repair and alteration work or new ship construction. These facts have a strongly controlling influence in the assigning of functions to a navy yard planning and estimating section.
There is still some divergence of opinion as to the proper make-up and functions to be performed and the extent of the usefulness of the section. However, past experience gives us valuable information upon which to base opinions. Young officers assigned to navy yard duty, having had little experience in such duty, could well be better indoctrinated in the essentials of efficient management. One of these essentials is the part played by the planning and estimating section.
The functions of the planning and estimating section may be divided roughly into two main but interdependent categories:
- Planning and estimating for the purposes of securing work and allotments of funds therefor, and estimating labor requirements. This includes preliminary procedure to decide on items, priority and scope of work to be undertaken.
- Planning and estimating of work actually to be performed and issue of job orders with accompanying papers, follow-up of jobs during performance, and analysis of costs of partially completed or completed jobs. Included in the preparation of job orders are the securing of plans (ordering new plans or sketches if needed), references to pertinent specifications and instructions extant, the furnishing of bills of materials needed (showing the kinds, quantities, sources, and time of availability required), and the taking of steps to obtain the materials, including purchase of materials not on hand. This category has the purpose of maintaining and enhancing the efficiency with which work is performed, with reflected reduction in costs of work.
Category (a) needs little explanation or stressing, it is essential, but the less important of the two. Only fairly approximate figures are needed, unless the competitive feature—between different navy yards or between navy yards and private concerns—enters the picture. Even in the case of competitive estimating, it is believed that the estimating is often unduly stressed. While the figures should be fairly accurate for competitive purposes, it should be recognized that they are at best only good estimates, the Navy not being an organization based upon competitive production. The competitive cost feature as between the several navy yards, while of value, should not be given undue importance as to do so almost inevitably develops an undesirable tendency towards a certain amount of local control of charges designed to make the best showing. If the total output of two compared navy yards could be standardized, then comparisons of costs, considering the plant lay-out, equipment, climate, etc., might be of considerable value. Such a desideratum could never be achieved, and as usually the compared costs represent only a fraction of the total costs of the whole yard output, the opinion expressed above appears well founded.
Category (b) is the part of the function that was the primary reason the most efficient planning and estimating sections were built up. In planning and estimating a job, the estimates should reflect a performance based upon the most efficient execution of the work. This involves wide knowledge and long experience on the part of the planner and estimator* as well as on the part of the supervisory civilians and the officers who finally pass on the planned job in the planning division. Data and knowledge of past performances on similar work are essential. Production division forces should be freely consulted. Advantage is taken of all the best suited processes and material available or that can be developed. The estimate should then be considered as a standard for or a gage of the efficiency of executing the job, not merely a good guess at what it may cost.
(*The term "planner and estimator" is used as a matter of convenience hereafter although there is now no such actual rating—the work is performed by mechanics assigned to the planning and estimating section.)
It naturally follows that to attain the best results in production, the jobs should be followed up by the planners and estimators to a reasonable extent throughout execution to see that they are executed as planned, no important changes being made in the processes, materials, or methods of procedure without the knowledge and approval of those responsible for planning the job. The planning and estimating personnel should be readily available for consultation at any time after the job orders are issued.
It is inevitable that as work is opened up on a job, cases will arise where the work is more or less extensive than could possibly be foreseen, and the planning and estimates should be modified accordingly. Interferences with more urgent work may intervene. Improved processes or materials may become available. Advantage should be taken of the knowledge and initiative of production forces engaged upon the work, as it develops. These are about the only reasons for which the planning and estimating of a job should be revised, never to cover up inefficiency in execution, In fact, the showing up of inefficiency in order that conditions may be corrected or improved and the consequent taking of such action as appears advisable are two of the primary functions of efficient management.
Cost analysis as an aid to efficiency is one of the most important functions of It the planning and estimating section. It involves a more or less detailed comparison of costs of a completed job with the estimates. If too wide differences are found, a prompt investigation is in order to determine the reasons therefor. Lack of agreement between costs and estimates is an evidence that there is an error somewhere, either in the planning and estimating or execution of the work. Analysis of job costs may show up errors even where the total cost and the estimate reasonably agree. Subsequent action is dependent upon what such an investigation discloses, and requires the exercise of excellent judgment. Without cost analysis of jobs, attempts to improve efficiency lack the important comparison with the gage or standards as previously indicated.
The planning and estimating section, if fully utilized, is of distinct value as an aid to the management. This fact is now more generally recognized than formerly, but its importance as a factor in reducing the cost of production is still not, except possibly in certain yards, given the full emphasis it merits. The author believes that more funds can be saved by adequate planning and follow up of work and by job cost analysis with subsequent appropriate action to than by almost any other efforts to that end. The converse merits noting, inadequate functioning of the planning and estimating section will inevitably lead to higher costs of work. Efforts along the lines indicated must be sustained over a long period in order to obtain permanent improvement. Intermittent spurts may help temporarily but often their reactions leave reduced efficiency rather than otherwise. If efforts are eased up or are not kept in the right channels a falling off of efficiency may naturally be expected.
It is possible, in a navy yard, to go too far in attempts to cover too much detail in the planning and estimating and the analyzing of costs of work. The cost of excessive planning and estimating activities can well come to exceed the possible savings in the execution of the job orders. A happy medium must be maintained in the work of the section. It is realized that the striking of such a medium is rather difficult and there is some difference of opinion extant in the matter. Past practice has varied from time to time, but it is believed that now in general too little rather than too much is attempted.
The planning and estimating section is assigned to the planning division and properly so. However, it should be borne in mind that its services can and should be of high value to the production division. It need hardly be emphasized that the closest possible co-operation between these two divisions is essential in order to obtain best results.
The production division does not have the personnel, detailed data, or time to analyze costs of work. If such analyses are attempted by this division, unnecessary duplication of functions is involved. A planner and estimator originally analyzed and planned each job in question and his data are on file; he should be in the best position to compare costs of performance with his previously prepared data. The production division should avail itself of the data and services already available in the planning division. It is true that the planner and estimator may be considered to some extent an interested party and when his reports are reviewed by his seniors in authority, this fact should be kept in mind. Final judgment may be required of the manager in case prior agreement cannot be reached. An interest in and review of cost analysis work are important functions of the manager in enhancing the efficiency of his regime. The manager cannot well divest himself of this important responsibility.
The idea that any good mechanic would make a good planner and estimator has also been too prevalent in the past. Planning and estimating require a particular bent on the part of the mechanic concerned, and experience has amply demonstrated that not all good mechanics have it. If mechanics after assignment to this specialized work show an inaptitude for it, they should be promptly returned to the shops.
The author believes that the present limitation on the number of mechanics assigned for work in the planning and estimating section is too low by about 20 per cent. Work cannot be planned to an adequate extent to obtain best results. The following up of work during production is practically impossible. Time for gathering data and analyzing costs is practically unavailable. The idea long prevalent that only large jobs merit planning was very detrimental to efficiency. The only true criterion is the total cost of work rather than just the single factor of planning and estimating cost in the overhead.