Document XOEqq4ZormLNZE4vNVywEKQLR

i m r a Story behind the story... No one expected anything unusual when two Western Electric engineers presented a paper* on power-plonl modernisation at ASME's spring meeting. You could have predicted its nature--an analysis of the problem, a de scription of the new plant, a report of savings effected. And the paper did all that in on exceedingly workmanlike fashion. But so do many articles on modernisation. What made this different? Just one thing, we believe. The authors didn't stop when they'd figured out the answers. They knew they'd have to enlist active support of management. So they put real thought and imagination into "translating" their findings from Btu'a and kwhr to management's own terms of costs, savings and profit*. To top it off, they hit their key points hard with easy-reading charts and diagrams. The result? Management listened understanding!/, went along with the proposals. And we have a relatively rare case study in the ort of "selling" engineering ideas to manogement. We've freely adapted this paper, on these two pages and the two that follow. You'll find here the broad out* line of the modernisation problem and its solution. More important, we think, you'll find key examples of the way facts wero interpreted in management terms. Use them to stimulate your own thinking when you have a moderniza tion plan to put over with management. How for bacfcgroundi Hawthorne Works of Western Electric Co (Cicero. III.) b a major link in the menu* factoring chain supplying the Bell Telephone System. Engineers there were fully aworo of dollar savings a modernized power plant could produce. Yet they recog nized that light manufacturing, characteristic of most Western Electric operations, grew up with o history of high ratios of manpower to heat-produced energy. This ratio ones ran so high that energy cost had little effect on product cost. But an undeniable change had taken place over tho years. Use of more power per worker was making energy cost a vflslly.greater part of the total. And so Hawthorne's old power plant was exacting an ever greater toll in need less fuel and labor costa. The answer seemed obviouscall management's attention to the situation and toke steps to correct it. The engineers began by compiling data on past and probable future labor-energy ratios and the effect of energy cost on production. Next they isolated and traced the past experience of the two major Influences on energy costs--fuel and labor. They were then ready to work out new plant cycles that would cut these costs and do it in a way that offered quick recovery of capital expenditures. Up to this point, they followed the thinking and methods typical of engineers. Then they took the extra step of translation to management terms which is emphasized in the remainder of this article. These basic facts Pictured this way Produced these conclusions /WUtitiUliM 0/ ImdmtrUi Cmm, Pbi, by C B Morrow. Power S Otnrlco VectUvU* Gnftnoor, end tv 9 flam, Miebonleal Bnaionr Co\ Chl#fo. IU. Paper No, SS-S-14. Spring Mooting. ABMC, Colombut, Onto. ENOINEMING AND MANAGEMENT SECTION worn, show, up a, decided trend in In- " u,ht menufocturing is no exception. At West- the term "poer" meone monulocturing energy. ''PSS the heel equlrelenl ol net plenl output, includ- 11 "nSriellT ptoeeM eteem, compreeeed oir, building beet- i"` not for grsphicei rep'rceenlotlon o single yordwclt wee '"`/.o' Electric energy tree chosen beceure mere accurate j'JL available then lor eteem or other Corme of energy. dramatically pictures ho. electric energy end ' Sclent menufactnring methods here ohonged tho Sol nenpower to energy. In 1929. llh plant personnel 'three time* over 1910. plant operltlonl look 1 times el I'.h electrical energy. In 1951, employment wee down to <d,oi 1929. but electricity uengo wee up 11%. Other-date collected In the study indicate .Imllir tele- tlonibip* l uwm tmd 0,t"r toTM ol ""*2- Enw*>' Fuel and labar are major elements la eoergy coat Since 1914, both wages and coal eosU tripled. You'd expect energy cost to increase in about this proportion unleu energy-generation improvements compensated for increases. That's what happened at Western Electric. In 1928 they completed s -power rehabilitation program based on a study , made in 1926. This report, with its complete 1926 operating data, aerved as on Ideal reference point for the 1949 survey. Generation in 1926 was 62 million kwhr, compared with 94 million in 1949. But boiler output to produce this demand, plus other manufacturing energy, was about the tamo. This shows improvement in eyele efficiency over the period. But same amount of fuel was needed in 1949 as in 1926, so gains took plaeo outside of the steam-generating equipment In 1949 cos! costs ran 91% higher than in 1926 and labor was 186% higher. Variable cost per million Bta of manu facturing energy was up 64% by 1949. y Studies of growth in energy requirements indicated that. If trends established over a 25-yr period bold true, normal production levels would produce maximum demands averag ing 26,000 kw for the nest ten years. Load factor would run over 50%. By i960, maximum demands as high os 28,000 kw u!d be expected. While these figures received full atten tion, modernization plans were based on a conservative 23,000k* maximum demand and 45% load factor. ' j , f process-steam needs reveoled generally similar ren<Js.*Rlaiion*hipt were developed to penult making longl4ge estimates of steam demands. These figures made it imperative to find ways to reduce costs. This investigation got under way in the Intler part of 1949. In April, 1950, it was accelerated because insurance carriers said that the old boilers In the separate 26th. Street plant had to be replaced in two years. So total annual energy costs went under the microscope. Only unit cost considered wss that per million Btu of manu facturing energy. Two alternatives were apparent: (1) Pur chase all or part of electric eoergy from the utility. (2) Con tinue power generation but with a cycle Improved to reduce fuel cost and with equipment needing minimum personnel. Auoun 1093 'ENGINEERING AND MANAGEMENT SECTION turn page ^ I