Original Date: 07/18/1994
Revision Date: 01/18/2007

During the 1970s and 1980s, Mason & Hanger (M&H) employed a large staff of Industrial Engineering Technicians and Industrial Engineers (IEs) to maintain stopwatch standards required by contractual requirements for production work. Detailed time study sheets and process sheets were maintained for all active production items, weekly efficiency reports were generated on standards, and variance reports were generated detailing efficiencies below 90% or above 110%.

This information was used to rate employees, their performance, and establish production quotas. The use of stopwatch time studies generated conflicts between production personnel and IEs, and these time studies were labor intensive, sometimes requiring 60-80 hours per work area. Production personnel had no ownership of the standards, and it was difficult for IEs to maintain good working relationships with production personnel. As part of M&H's Total Quality Management (TQM) effort in the late 1980s, this situation was addressed by examining the concept of negotiated standards. The prime contractor agreed to the concept and modified the contract to remove the MIL-STD 1567A requirement.

In developing a negotiated standard, the production engineer generates a detailed breakout of steps for a process, broken out by work stations. The production engineer defines the planned shift rate based on schedule requirements and bottleneck areas, and meetings are held with production/quality supervision, program management, and production engineering. After each step is discussed and staffing levels are determined, a spreadsheet is generated using planned shift rate and staffing levels.

There are substantial benefits to this approach of determining negotiated standards, including: