Concept of time in business economics
Time, along with space, is one of the coordinates that define the context in which to place and evaluate any business event. In this sense, economic time differs from physical time, in that it is measured by taking as its unit the degree and type of connection existing between past management, present management and future management. It is, therefore, the interweaving of the investment-realization cycle that marks the rhythms of economic-business time.
It follows that, in business economics, time assumes a relevant importance, so much so that situations of equilibrium are examined by considering the action of exogenous and endogenous variables which, without solution of continuity, erode, if negative, the positions reached, or, if positive, allow their restoration, maintenance and improvement; it is not by chance that the conditions of business equilibrium are typically prospective, that is, “valid over time”.
This approach is not, on the other hand, taken into account in the field of political economy, where the temporal dimension is generally not considered, since the equilibrium situations are examined statistically, assuming that the variations occur and act instantaneously.
From a more strictly operational point of view, the consideration of time, understood in an economic-business sense, requires that all planning and programming activity be developed according to periods dictated by the influences existing between present, past and future management.
It is called time and method calculation the technical analysis of the way of producing under conditions of maximum economy. In an industry, the number of people dedicated to this analysis varies according to both the size of the company and the type of production. The time and method calculation has a twofold task: the first is to check whether the current production method is economically viable, the second is to allow a cost balance to be made for the possible replacement of production processes. In order that a method realizes the greater profit it must tend to the contraction of the costs of all the necessary items in order to reach the finished product (materials, machines or systems, staff).
If there are no reasons of aesthetic or functional order for the manufactured article, a method is reputed to be better when it provides a product at a lower cost than another. For manufacturing industries, the cost of the raw material has a limited influence on the cost of the finished product, while the technological process directly linked to the transformation of the raw material has an ever-increasing importance: this is due to the continuous increase in the cost of the time required to employ manpower and machinery. Therefore, the method that employs plants and personnel for a shorter time tends to prevail; this gives rise to the need for an in-depth analysis of times.
The time taken by a machine to produce an automatic process is closely linked to the type of work and decreases only with technological improvements; on the other hand, the time taken by operators to feed the machine and remove pieces at the end of the process is the object of analysis.
Natural difficulties are encountered in evaluating with precision the average time necessary to carry out a series of operations considering an ideal operator who works with capacity, commitment and average fatigue, when even just the measurement of time, during an operation, becomes an element of disturbance for the operator himself who, feeling observed and controlled, reacts negatively.
In order to obtain these data, different methods are used: the simplest is direct timekeeping, carried out by specialized people (timekeepers), who perform a certain number of measurements of the time taken to carry out the same operation at different times during the day and with different operators. In addition, it is appropriate that the survey is also carried out by different tempists to make the method of detection objective. But if such system allows to analyze a production process already in progress with modest expense, it proves expensive to analyze a method in phase of project, in how much it is necessary to prepare a system or to simulate the operation or at least to mimic the movements that are necessary in order to carry out the production: in this way however the naturalness of the operations is notably altered.
Currently, direct timekeeping is always valid for a posteriori control of the expected times, but during the project the times are determined with the MTM system (Methods Time Measurement) which consists in breaking down the actions necessary to carry out the operation into elementary movements of every single part of the body and in determining the times corresponding to each operation by means of special tables, where the times necessary to carry out every single movement appear, calculated on a large number of surveys carried out also by means of cameras.
The times thus determined must be increased in percentage both to take into account the unforeseen events that always compromise the linearity of operations, such as the accidental fall of a piece from the operator’s hands, and because an operator cannot work continuously for eight hours. Even for break times, diagrams have been drawn up to indicate the optimum balance between activity and rest times so that performance at the end of the day is higher.
While respecting the human dimension of the worker, there are consequently limits to the full application of the results of an analysis of the work cycle of a product based only on the concepts of calculating times and methods. It follows that the reduction of the costs cannot go down, for this way, under of a value limit. Therefore, other analysis techniques are spreading which, respecting these limits, have the same aim of reducing costs.