Page 584 - Sensors and Control Systems in Manufacturing

Economic and Social Inter ests in the Workplace
Other situations may require reports on different schedules. Since 537
labor efficiency usually changes slowly, reports on labor hours and
labor costs may be prepared weekly or monthly. Material-price vari-
ance reports may be prepared at the end of a periodic buying season
or after the second week in a month when vendors’ invoices are
received. Materials usage and efficiency reports may be prepared
daily, weekly, or monthly according to the characteristics of the man-
ufacturing process and the needs of the production manager.
In general, the amount of clerical time, effort, and cost put into a
communication system is related to the importance of the activities
being reported. If the manufacturing process uses a great deal of raw
materials and parts, automated equipment, and a minimum of labor
time, the accounting system should produce frequent reports on
material prices and usage and on equipment maintenance and repair
costs. Labor costs can be reported less often because they are not a
large part of total production cost.
On the other hand, if labor costs do make up a large proportion of
the total costs, the communication system should emphasize labor
efficiency and cost. Materials cost can be reported less frequently. The
manufacturing firm must decide how much it can afford to spend on
its communication system and how valuable the information is to its
managers.

11.3.2 The Reporting Strategy
It takes time to accumulate, calculate, and record cost data. Therefore,
cost information is generally communicated in monthly, quarterly,
and annual reports. The reports usually cannot be delivered in time
to be useful on an hourly, daily, or weekly basis. Consequently, the
more frequently issued reports contain only physical data—material
units, labor units, machine hours, number of employees, machine
downtime, work-in-process backlog, material spoilage, and so on.
These reports in terms of physical units (without dollar figures)
are useful for managers, who can take direct action to affect use of
materials, labor hours, and certain types of overhead spending. Cost
reports in dollar terms are more useful for managers who can take
action that affects prices, wage rates, overhead spending, and so on.
The form in which information is communicated can also be
important. It varies according to the circumstances and the one who
is to receive it. Sometimes an oral report is enough to get the neces-
sary action started, but more often reports are written or printed.
Reports issued frequently may be handwritten on standard forms in
order to get them out quickly. Other reports may be typed or may be
printed out by EDP equipment.
In some cases, visual displays, in the form of large graphs or
drawings are used. For instance, displays showing employee output,