Ford Motor Company

Mass production emerged in the early 1900s as a revolutionary production system that sought to maximize profits through the production of a standardized vehicle at a low price. In order to do this goal, Henry Ford designed a system that increased motor vehicle output from the equal amount of inputs plus reduced overall time of assembly. System be stand on the rule of the assembly line, which would work on a nonstop basis without disruptions from labor or from the supply of materials, elements, plus components. Three innovative methods made the rule of a moving assembly line operational. (Behrman 141)

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The first be the utilize of large-scale, highly accurate plus automated machines & tools (Womack et al. 37) that perfected the making of “interchangeable” or standardized parts that could be just attached to each other. By reducing the number of skilled workersrequired to make a car, the utilize of specialized machines plus tools diminished labor costs, potential disruptions in the assembly line, plus overall time of assembly. (Behrman 142) It also helped both to attain higher levels of precision in the production process plus to lessen the need to reset machines (downtime or the time that a machine requires to function between pieces). One main consequence of the use of specialized machinery was a substantial increase in permanent costs, which set the first barriers to entry into the industry. (Dyer et al. 15) Therefore, producing high volumes of parts from the same machines was central for spreading those costs and, thus, reducing the overall costs of making a car. In this way, scale economies became essential for an auto maker to survive and to gain a competitive advantage in the industry. (Dyer et al. 35)

The second innovative technique was the progressive specialization of labor and the separation of skilled and unskilled tasks, which turned vehicle assembly into a deskilled and highly routine work. (Dyer et al. 25) It also created a hierarchical industrial structure where managers specified the tasks of workers. (Hoffman and Kaplinsky 330; Langlois and Robertson 367; Womack et al. 26-38) In order to avoid disruptions of each type, a system of “open shop-floor” (where workers were simply interchangeable parts of the production system) and high wages was maintained (Womack et al. 33, 42-3).

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The third innovative technique was a strong organizational capability for coordinating different stages of the production processthat takes place within plus outside the firm (Womack et al. 26-7). The complexity involved in producing a car (produce and assemble between 10,000 and 15,000 parts, each requiring different production processes) requires the masterful engineering of plants, the streamlining of production networks, including a tight and sequential connection of specialized machines and different production processes, as well as the storing of heavy inventories (Dyer et al. 29). The introduction of specialized machines in itself did not guarantee a reduction in the overall time of vehicle assembly, since a failure in the supply of any component, at the right place, at the right time, and in the right quantities, could spell disaster (White 78). A successful auto maker had to be capable of effectively coordinating, setting, plus storing thousands of interdependent components that had to be supplied to the assembly line in an uninterrupted, synchronized, plus precise manner. (Behrman 141)

References:

  • United States Federal Trade Commission, Report on the Motor Vehicle Industry, Washington, D.C.: U.S. Government Printing Office, 2006, pp. 29, 632.
  • Dyer, D., Malcom, S., Webber, S. and Webber, A. Changing Alliances, Boston, MA: Harvard Business School Press, 1987.
  • Womack, J.P. and Jones, D.T. “The new entrants: searching for a role in the world,” mimeograph, IMVP International Policy Forum. International Motor Vehicle Program, Massachusetts Institute of Technology May 1989.

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