"...In order to reduce costs,
it has been suggested that I should put my machine operators on piecework and hire an
industrial engineer. Just how does an engineer install piecework, what else can an
industrial engineer do for my company and how do I know if and when to proceed? C.B., Texas
THE INDUSTRY ADVISOR
BYE BYE ENGINEERING?
By Gene Levine - www.genelevine.com
There are alternatives to industrial engineering and piecework. Are you aware that classical
approaches to industrial engineering, in many progressive companies are becoming obsolete?
Are you interested in an easier, less expensive alternative?
Have you thought about empowerment, which creates a climate where the employees – who do the work – become their own engineers. They are assisted by a new breed of engineers called Engin"ears" – listeners. Enginears are very people-oriented. They are doers rather than talkers, they sell rather than tell and inspire rather than impress. They are not clever clerks who can only work up very accurate time studies. Instead, they increase production and reduce costs by simply working with and for the people who do the work. Their way of accomplishing goals is to simply ask the workers, "What can I do to help you" and then they go out and do it.
I suggest that before you make the decision to proceed with traditional engineering, you first define what your engineering department should be responsible for, who they should be responsible to and what authorities they should be given to enable them to fulfill their assigned tasks. Your engineering department should provide annual documented cost-avoidances equal to (for example) a minimum of 20% of the factory direct labor payroll or two (2) times your Engineering Department's overall operating budget, whichever is greater.
I suggest you look for a forward-thinking engineering candidate who deals with and focuses more on people-dealing than on data. If a candidate has had in-depth successes with module installations it would be a plus. Allow candidates to walk around your company and give you a written list of what they see — that they could improve.
Once hired, as the engineer begins searching for the areas to improve your bottom line, s/he should simultaneously video tape all your existing jobs. These tapes will document exactly what you are now doing and will provide the springboard to improvements.
Here is something else to consider. Your letter indicated you used time work exclusively. For now, while you make the suggested changes, keep it that way or consider a merit bonus plan. Piecework is a traditional method of compensation because it only provides a money motivation. Today, workers want more than money — from their jobs. Most companies cannot effectively use piecework — as a wage determinator — because they have too many products, designs and problems. All of the various pay schemes, including Merit Pay are covered in depth in my Improving Your Incentive System's Manual.
If you limit your thinking and install piecework, you will soon have the problems associated with setting and maintaining standards. Any rate setting technique has inherent problems. Stopwatches have limitations. Time studies can only determine the time it should take. The time study due to the leveling/rating procedure (which requires judgment), it is an art, not a science and certainly not a cure-all.
I will not argue that there are many benefits that can be gleaned from properly executed time studies, but, the main goal is still piecework, a compensation method that is fast becoming passé.
Before you plunge into stopwatch engineering, ask questions of astute management in "well engineered" companies. They will admit that stopwatches have evolved into crutches that are difficult to discard and have become pieces of furniture some engineers unknowingly hide behind to avoid dealing with workers. They will confide that time study evolved into a technique that . . .
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