Bureau of the Mint Department of the Treasury

Bureau of the Mint Department of the Treasury

B-l 14877

GENERAL

GOVERNMENT

DIVISION

UNITED STATES GENERAL ACCOUNTING OFFICE

WASHINGTON, D.C. 20548

.,-

B-114877

178

L I

The Honorable The Secretary

of the Treasury

Dear Mr. Secretary:

f This is our report on an industrial

management

of the U.S. Mint, Philadelphia.

The report identifies

review

9(

oppor-

tunities for the Mint to improve the productivity

of men,

materials,

and machines at the Philadelphia

Mint and suggests

that the Bureau of the Mint evaluate potential economies of

discontinuing

certain in-house operations and measure the

effect this would have on the operation of the entire Mint

complex.

We are sending copies of this report to the Director,

Office of Management and Budget; the dhairman, Senate and

House Committees on Appropriations

and Government Operations;

and the Director of the Mint.

We want to direct your attention to the fact that this

report contains recommendations to you which are set forth

on page 15. As you know, section 236 of the Legislative

Reorganization

Act of 1970 requires the head of a Federal

agency to submit a written statement on actions he has taken

on our recommendations to the House and Senate Committees on

Government Operations no later than 60 days after the date

of the report, and the House and Senate Committees on Appro-

priations with the agency's first request for appropriations

made more than 60 days after the date of the report.

Sincerely yours,

Victor L. Lowe Director

Contents

DIGEST

CHAPTER

1 INTRODUCTION Mint activities Scope of review

2 ' IMPROVEMENTS NEEDED IN MINT OPERATIONS Mint productivity Labor standards Equipment use Equipment justifications

3 INCREASING MINT CAPACITY Product mix. Production of coining strip

4 CONCLUSIONS AND RECOMMENDATIONS Conclusions Recommendations Agency comments

APPENDIX

I

Letter dated June 17, 1974, from the

Director of the Mint

II

Principal officials

of the Department of the

Treasury responsible for administering

activities

discussed in this report

Page i

1 1

2

10

10 12 15

15 15 16

19

23

I

1

U.S. GENERAL ACCOLfNTl-NGOFFICE

REPORT TO THE SECRETARY

OF THE TREASURY

INDUSTRIAL MANAGEMENTREVIEW OF THE U.S. MINT, PHILADELPHIA,

PENNSYLVANIA B-114877

-D--I-G--EST

WHY THE REVIEW WAS MADE

I

However9 the Mint still has no formal machine standards for com-

Industrial management reviews

paring actual with expected equip-

are useful in determining an

ment output.

organization's

efficiency and

how it affects the cost of items'

Labor standards for both production

being produced. These reviews

and maintenance work are needed.

evaluate the organization's

total

Developing such standards would help

system of operation, management

improve workload planning and overall

and cost control, and procedures

Mint productivity.

(See ch. 2.)

used to achieve efficiency and

economy.

An expected increasing demand for

coins will require an inwease in

GAO reviewed the U.S. Mint in

total mint ~~~~~c~~~~ c~~~c~~~~ The

Philadephia because (I) it is a

Mint could increase its production

major industrial activity,, (2)

by changing its product mix to one

it is a new facility having the

which maximizes output of the entire

latest in coinage methods and

strip production line. A further

equipment, (3) it has a major

increase in coin production might be

financial investment in manu-

attained by purchasing a larger

facturing facilities

and equip-

proportion of coining strip and con-

ment, and (4) a new facility is

verting to coining operations some

being planned for Denver.

or all of the space currently used to

FINDINGS AIVD CONCLUSIONS The Mint needs to improve its

pro-d..u. c-e---- in-h_o--u~s--e--_~-s_trip. ~~ These meas-

u_ge might make it possible todefer.

__

construction of a nroeoseflew mjnt

in Denver. (See ch . `3.)

productivity

measurements to pro-

vide management with data to

RECObBlENDATIONS

measure operating efficiency.

The Bureau of the Mint can improve

Equipment was not fully used,

the productivity

of men9 materials,

and data was not adequate. The

and machines at the Philadelphia

Mint recently tried to correct

Mint by

the latter problem by developing

a downtime reporting system for

--developing accurate measures of

the strip production line.

Mint productivity,

Tear Sheet. Upon removal. the report cover date should be noted hereon.

i

s

--developing labor and machine

The Bureau stated that the Mint

standards,

initiated an equipment downtime

reporting system in November 1973

--developing a comprehensive

which will be used in conjunction

program to evaluate equipment

with a scheduled maintenances

use,

planning, and control system to eval-

uate equipment use.

--developing equipment justifi-

cation procedures and verifying techniques, and

--determining the!,,lowest cost product mix.

In August 1973 the Bureau began to

I

develop a facilities

and equipment

management system which is designed,

!

among other things, to justify future

facility and equipment expenditures.

AGENCYACTIONSAND UNR&SOL'vFIDSSUES

-;

The Bureau of the Mint agreed that

more accurate measures of Mint

productivity

can be developed.

I

The Bureau hopes to improve its pro-

duct mix by using its automatic

t

data processing capability in planning I

production.

i

The Bureau stated that it realized

the need for developing machine

standards and plans to provide

the necessary technical talent to devel'op such standards.

The Bureau believes it must retain an in-house capability to produce

! I

The Bureau _c--o--ncurs that labor-standards can contribute to more

at least 50 percent of the strip

- required for coinage. GAO suggests further study of the economics of

effective management decisionmaking

in-house strip production after

and plans to carefully evaluate

the cost effects of other current

i

its approach to the development

and planned improvement actions

of labor standards.

are determinable.

I

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