During 1942 U. S. war production approximated 40 per cent of the total production of the nation. During 1943 this war production portion must be upped to at least 60 per cent as a minimum. Since no half-way measures are tolerated in total war, tremendous efforts and skills are, and will be, required to distribute and utilize all available stocks of strategic scarce materials so that the final knockout blow may be delivered to the enemy at the earliest possible date.
In doing so, democratic government, inevitably entrusted in total war with enormous new powers, sets the goal and establishes and enforces new rules for civilian and industrial conduct. Under this discipline individual and group interests are subordinated to the nation’s only objective—total victory.
Five interrelated methods or programs of procedure for skillfully controlling the flow of materials and fabricated items have evolved out of America’s genius for efficient and effective industrial organization for war. Each of these methods serves an important function; each is dependent upon one or more of the other four; each possesses distinguishing characteristics setting it aside from the others; and yet no one of the five is complete and adequate in itself. Together, these five methods of production control provide the means whereby the military forces determine both the types and quantities of supplies essential for victory while the job of meeting these demands is handled by civilian industrial management. And meanwhile, the basic civilian economy is kept in a lean but healthy condition, so that it may serve as the base for the munitions program and also so that it may be in a position to shift back to normal production once the war is won.
- Schedules of production.—The function of scheduling is to arrange for and deal with the minute and voluminous problems involved in the flow of raw and fabricated products into production lines or construction projects at the proper time to permit orderly and expeditious completion of each individual job in the shortest possible time.
In the efficient construction of a large combatant vessel it is obviously necessary to have the steel for the keel arrive first on the job, followed by the plates and structural steel for the hull. The main propulsion machinery must arrive at the proper time for installation in the hull while, meanwhile, the various auxiliaries of the vessel are being received in proper sequence to be installed in their proper part of the ship, without interference with previous or subsequent construction. Thus, proper scheduling assures the flow into the shipyard of the component parts of the individual vessel from the widely scattered points of original source or fabrication at the time and in the order to synchronize most effectively and make the launching of the ship possible at the predetermined date.
In a war economy, scheduling expedites the orderly completion of an individual job but it does not avoid or prevent conflicts with other schedules of production. In fact, conflicts between various schedules under an economy driven to the limits of its capacity are an inevitable and ever recurring phenomena.
Valves required for the destroyer escort program may, for example, have been scheduled to the nth degree of accuracy. Simultaneously the valves needed to implement the synthetic rubber program may have also been accurately and scientifically scheduled. When both these schedules of vitally needed accessories reach the manufacturer where valves for both purposes are being produced, a conflict ensues. Some method of determining which need shall be met first, when all needs cannot be met satisfactorily, is an evident requisite. For such purposes, the battle-tried yardstick of priorities, supplemented by precedence lists, has no substitute.
Furthermore, scheduling does not in itself conserve the use of scarce materials for important war uses. If accurate scheduling has been agreed upon for steel to implement the production of aircraft, and simultaneously a quantity of steel is allocated for the construction of unnecessary housing, this latter decision may curtail the amount of vitally required steel for aircraft uses since the available steel is insufficient to fill all demands, both necessary and unnecessary.
Neither does scheduling exercise control over inventories. In fact, scheduling has a tendency to build up inflated inventories, since it is a natural human tendency for men charged with production deliveries to wish to have on hand at all times supplies of materials to assure maximum results to meet assigned or permitted schedules.
In addition, scheduling may solidify the improper use of strategic scarce materials in the wrong place. Illustrative of this inherent danger to the over-all production drive would be the theoretic extensive uses of types of structural steel in building construction, when wood construction would serve. Improper scheduling, in such an instance, does not eliminate the basic fault, but instead freezes it.
Scheduling without a system of priority and precedence controls would develop into an “expeditor’s paradise” for the man with the loudest voice or seemingly best arguments would win out when decisions on conflicting deliveries must be made. Such arguments, which inevitably take place along the highways and byways of industry too remote from Washington to come to its attention could, if decided improperly, cause extreme damage to the war effort.
Scheduling, in the final analysis, should bear a close relationship to the main over-all war production program and fan out into the ramifications of industry, with priorities, precedence lists and allocations of materials used as synchronizing and flexible control factors, thereby keeping schedules within do-able limits.
Sound scientific scheduling, unselfish in its objectives, and held within self-imposed limits based on an understanding of the overall production objectives, is one of the five essential methods assuring the skillful distribution of materials and fabricated items.
- Allocations.—Allocations provide the means whereby production plans and schedules are supplied sufficient strategic materials for delivery at the right time, and not before the right time, to bring these plans and schedules to completion.
Under the Controlled Materials Plan, which went into partial operation on April 1, 1943, and into full operation on July 1, 1943, copper, aluminum and steel are being allocated in quarterly allotments to the various claimant agencies. These fourteen claimant agencies include: War Department, Navy Department, Maritime Commission, Aircraft Resources Control Office, Office of Lend-Lease Adminstration, Board of Economic Warfare, Office of Civilian Supply, Department of Agriculture, Office of Defense Transportation, Office of Rubber Director, Facilities Bureau of the War Production Board, Petroleum Administration for War, National Housing Agency, and Office of War Utilities Director.
It is the responsibility of each claimant agency to distribute its own allocations of copper, aluminum, and steel between its various prime contractors who, in turn, hand down the necessary allotments to their various subcontractors. Since the supplies of critical scarce materials are potentially one of the most limiting factors in the war program, the skillful allocation of these materials is one of the most important of the five methods of controlling the flow of materials and parts.
Nevertheless, there are many problems which the allocation of scarce materials does not solve, including the proper scheduling of end products produced from these materials and the arranging for substitutions of less critical scarce materials, when substitutions can be made. Furthermore, unless proper control is kept over inventory, the allocation of materials on a bill of material basis tends to freeze large inventories, making them permanent. Moreover, these allocations of materials must take into account the relative priority of programs if the decisions of the strategic planners are to be properly followed.
It is essential, too, that schedules be coordinated to time with the availability of allocated scarce materials. Unless this is done, items not dependent on the use of scarce materials will be completed long before they can be meshed with items using scarcer materials, thereby causing excessive unbalance of parts and programs and resultant inefficiency in the use of facilities and man power.
- Inventory controls.—Inventory controls are necessary if the users of strategic scarce materials are to have sufficient material on hand to maintain orderly production schedules and not more than enough material on hand for that purpose. Thus, the function of inventory control procedure is to keep inventories at practical minimums in relationship to war production and not at desirable maximums, in accordance with normal civilian industrial management objectives.
However, the proper control of inventories does not arrange schedules of delivery of materials into production lines or construction projects. Neither does inventory control solve the frequent necessary decisions resulting from conflicting demands for strategic scarce materials nor does it have any bearing on conservation.
- Conservation.—The United States is the proud possessor of over a century of achievement and resourcefulness based on enterprise, experimentation, and innovation. In no fields have these attributes, unmatched elsewhere in the world, been more apparent than in industry. In this respect, then, our nation is better prepared for total global war than any other nation or combination of nations.
Because of this national “know how,” this technological reservoir of steadily improving efficiency of production, the broad fields of conservation and substitution offer great promise, if properly exploited and understood, in expanding U. S. war production to heretofore undreamed-of heights.
Conservation, according to Webster, implies the preservation or protection by official supervision of essentials. Related to war production engaged essentially with directly dealing out death and destruction to the enemy, programs of conservation are concerned with production problems that are strategically vital, fundamental and essential, in contrast to those important at the current moment—tactical problems which shift rapidly like a moving spotlight.
Thus conservation is an essential part of the grand strategy of the war effort and deals with considerations involving decisions of far-reaching importance to the main strategic plan. Conclusions reached in accordance with this principle, it should be clearly noted, are not made on the basis of the day-by-day operating levels of the industrial and productive capacities of the nation.
Should a drill hall for use by cadets be constructed, involving the use of steel, or should an existing structure be taken over for this purpose? Should cambric, so dear to the hearts of American housewives, be used for its long established domestic purposes, or reserved for the manufacture of heat and flame resistant cable in power transmission, fire control, and communications systems—the nerves of the modern combatant ship? Should a new power project be undertaken, or should restrictions be placed on the use of electricity in the region in question so as to balance supply and demand?
Questions of this type could be given indefinitely. Those cited indicate the skill, resourcefulness, and vision required in planning the grand strategy of the war production effort, and further illustrate the close working relationships essential between military leadership and industrial management so that such demands may be promptly met by industry.
War production, to date, is progressing extremely well, allowing for a small percentage of lag in a program possibly set a bit higher than human ingenuity could carry out, but to the impetus of this previous performance is now added the need to reach and exceed all originally projected goals.
In doing so, the civilian economy is now forced to “patch” and “pray” as regards equipment and maintenance as the industrial machine is driven beyond any statistical potential totals now theoretically accepted as the economic body of the nation, just as a physical organism in a moment of crisis draws upon its reserves of tissue and heart.
The task of keeping the steel furnaces from failing in their vital part in the war program is far more than normal economics can cope with. The tissues to be drawn upon, continuing the above analogy, are the stores of discarded or partly used iron and steel built up during times of industrial plenty while the heart is the desire of loyal Americans, conscious of the crisis faced by the nation, to willingly do a job paid for in more than money alone.
This nation, accustomed to the highest standards of living in all recorded history, used to building the best of everything and having the raw materials to do so without stint, is now faced with the fact that a second, third, or even fourth “best” must be substituted for the duration.
Conservation and substitution, then, are the order of the day—the use of possibly less desirable but more available materials in necessary projects. Thus, cantonments and warehouses can be built entirely of wood rather than partly of steel; electric light fixtures aboard ship can be made of steel rather than aluminum; an icebox shell, for use in war-housing projects, can be made of wood fiber asphalt impregnated instead of steel; and the use of alloy steel extended only where such use is necessary, not desirable.
Conservation and substitution are not only essential in the war production program itself, but probably represent the best hope for keeping many industries producing civilians goods alive.
- Priorities and precedence.—The problems involved in the proper distribution of strategic scarce materials and fabricated parts may be simplified by picturing a chariot drawn by four horses. The horses pulling the chariot, the economy of the nation, are Schedules, Allocations, Inventory Controls, and Conservation. The Strategic Plan is the charioteer directing and guiding the war production effort, while the reins, the control mechanism so essential if the chariot is to arrive on time at its destination by the shortest route, are Priorities and Precedence.
The primary function of priorities is to set up a facilitating and control procedure so that strategically important needs are assured strategically scarce materials, the use of scarce production machinery, and the use of available man power, to assure prompt completion of essential projects. As such, priorities are a synchronizing, guiding, and restraining force used to keep schedules and allocations in step with the main strategic plan of war production.
Priorities come into use only when conflicts in delivery dates make it imperative that certain projects be delayed or stopped to permit completion of more urgently required war materials on schedule.
The arrangement of the minutiae of production schedules is not a proper function of priority controls. Neither do they, with sufficient accuracy, implement production schedules with strategic scarce materials. Furthermore, priorities exercise only a secondary control over conservation projects.
When used as an expediting medium the function of priorities, as the major controlling mechanism, is vitiated. Actually, when requests for out-of-line priority ratings become numerous in any given field, such efforts usually indicate the presence of a basic condition requiring correction to assure maximum flow of war production activities.
If priorities are combined with improper scheduling the result may actually assist in the maldistribution of materials. For instance, if the production of more ammunition is scheduled than is necessary to fulfill the needs of the main strategic plan, the fact that ammunition has a high priority rating will assist such an improper schedule in withdrawing strategic scarce materials away from other uses momentarily more essential.
The strategic importance of Time in relationship to military needs is an integral factor in planning proper priority controls. An aircraft carrier scheduled for completion in 1943 is obviously more important to the war effort than one scheduled to come off the ways in 1945. On this basis, all war products of equal strategic importance which can be utilized against the enemy in the immediate or near future deserve a preference over identically similar projects scheduled for completion at a later date. The precedence list is the best method of implementing this aspect of priorities.
Priorities, perhaps more clearly than any of the other interrelated methods previously discussed, illustrate the fact that the whole system of the skillful distribution of strategic materials and fabricated items for war needs is a matter of checks and counterbalances—a continuing necessity for decisions resolving conflicts—and a system of elimination whereby the nonessential is ignored in favor of the essential which directly deals death and destruction to the enemy.
“Damn the Torpedoes”
The classic phrase of Farragut typifies the spirit animating the economy of the country today as it drives itself to goals undreamed of even six months ago. The latent powers of American ingenuity, resourcefulness, and skill will find in the broad fields of conservation and substitution, in particular, the means whereby some leader of fascism will some day write, as did Hindenburg in 1918:
Her brilliant, if pitiless, war industry had entered the service of patriotism and had not failed it. Under the compulsion of military necessity a ruthless autocracy was at work and rightly, even in this land at the portals of which the Statue of Liberty flashes its blinding light across the seas. They understood war.
Meanwhile the flexible system of closely interrelated programs of schedules, allocations, inventory controls, conservation, and priorities speeds war production to the final victory.