COSTS REDUCED

Evening Post, Volume CXXXVI, Issue 74, 24 September 1943, Page 8

COSTS REDUCED

MAKING OF GRENADES

CHEQUE FROM ENGINEERS

In December of last year a cheque for £16,032, representing the saving made over a period by changes in engineering methods in the manufacture of hand grenades, was forwarded to the Government by the directors of the Precision Engineering Co., Ltd., and the story of the company's action and the steps taken to demonstrate the feasibility of its contentions were made known today. It is claimed that the saving amounts to 37 per cent, of direct and indirect production costs under a group of contracts held by the firm.

The story goes back to February, 1942, when a demonstration was staged to show how costs could be cut by varying the "tolerance" requirements of the specifications laid down, by permitting "commercial" accuracy, whereas "toolroom" accuracy had been required. By "tolerance" is meant the difference allowed in dimensions to tolerate unavoidable imperfections in workmanship; the larger the tolerance allowed in a product the cheaper will be the cost of that product.

IMPORTED GRENADES CHECKED.

At this demonstration 24 imported grenades were checked by the Army Department's gauges and it was found, it is stated, that these grenades did not comply with the degree of accur? acy called for in New Zealand. A main purpose of the demonstration was to "show that the locally-produced grenade, made to high-costing toolroom accuracy, cannot possibly give a better performance than the cheaply-pro-duced .commercial accuracy, imported grenade."

The directors of the company state that subsequent to the demonstration the Munitions Department agreed to some of the variations recommended, with the result that the cost of production was reduced by 37 per cent., and in forwarding the cheque for £16,032 to the Minister, they wrote:

"In arriving at the amount of saving we took the. total quantities delivered from November 1, 1941, multi-. plied by the contract price per unit, and from that result deducted our full costs of production. . . . Our cheque herewith is the complete answer. With the earnest hope that the War Cabinet will have a fuller appreciation of the latent capabilities of the metal trade in New Zealand. . . ."

This letter was formally acknowledged by the office of the Minister of Supply and Munitions on behalf of Mr. Sullivan. - This reply, dated December 30, \ 1942, expressed rio: thanks or appreciation, the implication being that the Department was almost resentful.

The Chief Ordnance Officer, 17 months later, sent an account for £12 12s for the 24 English grenades used in the demonstration. The company paid.