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The consumers at any economic levels but the highest few have only a limited amount to spend. All kinds of products are offered to them in various enticing ways. Competition as a result is keen and ruthless. The only way an industrial unit can hope to survive under these conditions is constantly to seek to keep production costs as low as possible.
Not many years ago, when cost reductions were necessary for one reason or another, they were obtained by reducing wages. The possibilities of obtaining cost reductions by increasing the production of the workers were not at the time generally recognized. Recently, however, there has been a marked change. The employer has come to realize that the worker is also a consumer and that, if wages are reduced, purchasing power is reduced. Therefore, a better way toward cost reduction lies in waste elimination so that greater production is secured with less effort.
Methods engineering is primarily concerned with devising methods that increase production and reduce costs. Hence, it plays an important role in determining the competitive position of a plant. As competition appears to be becoming keener, it is probable that methods engineering will become increasingly important.
Methods engineering in an industrial unit can never be considered as completed. Costs that are satisfactory and competitive today become excessive in a comparatively short time because of the improved developments of other units of the industry. If the producer who is in a good competitive position today decides that his costs have reached rock bottom and that no further attempt to improve them is necessary, within a short while he is likely to find himself facing loss of his commercial standing as owner of an efficiently managed plant. Only by constantly seeking to improve can any unit safeguard its competitive position. Conditions in industry are never static, and steady progress is the only sure way to success.
- —Harold Bright Maynard, Operation Analysis, 1939