Subcontractor Sperry

The 400-end triple-ply ribbon for pioneer excellence in the crucial art of sub contracting has long been worn by instrument-making Sperry Corp., which has been at it since 1936. Of Sperry's $250,000,000 backlog, almost all defense orders, 50% (in man-hours) is farmed out to more than a thousand firms. Half of these companies and 35% of the man-hours represent pure subcontracting (as distinguished from normal purchases from vendors). This week Sperry President Thomas A. Morgan described Sperry's subcontracting methods, gave some pointers that Floyd Odium's Defense Contract Distribution Service might well note.

Sperry, said Mr. Morgan, has expanded its own plant by only $8,000,000 to handle its war load. It would have had to invest another $32,000,000 if it had not developed subcontracting. Furthermore, it would have been two years behind its present rate of output.

Sperry's procedure: 1) the total manufacturing load is forecast as far ahead as possible; 2) a Methods Department determines what operations must be undertaken by Sperry itself; 3) the remainder are turned over to a Subcontracting Department which, on showings made on educational orders, farms them out. Full technical assistance is lent subcontractors; so sometimes is money.

Not overnight come results. Tony Failla of New Jersey Gear Co. testified to that:

"We cut plenty of gears before Sperry came along . . . we thought we were pretty good . . . we showed tolerances of a thousandth of an inch or less, and we thought the first Sperry order was just more of the same. . . . For nearly seven months we sweat. . . . We found we weren't so hot. . . . We had good men and good machines but we learned to get better work from both. . . . Rejects got less and less. Now we turn out 1,100 different types and sizes of gears and our rejects are less than 1%."

Sperry subcontractors now put in about 860,000 man-hours monthly, will shortly exceed 1,000,000. This means that Sperry, besides its own 18,500 employes will keep about 7,500 people on full time for defense. Excerpts from Sperry's "Creed for Subcontracting":

> Give your subcontractors "as much help as though they were new departments of your own company. . . . Don't hold back any manufacturing secrets."

> "Set a liberal price. . . . Your subcontractor must make a profit to stay with you."

> "Remember that educational orders may be necessary for six months on difficult work. . . . Subcontracting is a long, tough job."

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