The Age of Big Business [54]
that there were millions of people in this country whose incomes exceeded $1800 a year; all in that class would become prospective purchasers of a low-priced automobile. There were 6,000,000 farmers; what more receptive market could one ask? His only problem was the technical one--how to produce his machine in sufficient quantities.
The bicycle business in this country had passed through a similar experience. When first placed on the market bicycles were expensive; it took $100 or $150 to buy one. In a few years, however, an excellent machine was selling for $25 or $30. What explained this drop in price? The answer is that the manufacturers learned to standardize their product. Bicycle factories became not so much places where the articles were manufactured as assembling rooms for putting them together. The several parts were made in different places, each establishment specializing in a particular part; they were then shipped to centers where they were transformed into completed machines. The result was that the United States, despite the high wages paid here, led the world in bicycle making and flooded all countries with this utilitarian article. Our great locomotive factories had developed on similar lines. Europeans had always marveled that Americans could build these costly articles so cheaply that they could undersell European makers. When they obtained a glimpse of an American locomotive factory, the reason became plain. In Europe each locomotive was a separate problem; no two, even in the same shop, were exactly alike. But here locomotives are built in parts, all duplicates of one another; the parts are then sent by machinery to assembling rooms and rapidly put together. American harvesting machines are built in the same way; whenever a farmer loses a part, he can go to the country store and buy its duplicate, for the parts of the same machine do not vary to the thousandth of an inch. The same principle applies to hundreds of other articles.
Thus Henry Ford did not invent standardization; be merely applied this great American idea to a product to which, because of the delicate labor required, it seemed at first unadapted. He soon found that it was cheaper to ship the parts of ten cars to a central point than to ship ten completed cars. There would therefore be large savings in making his parts in particular factories and shipping them to assembling establishments. In this way the completed cars would always be near their markets. Large production would mean that he could purchase his raw materials at very low prices; high wages meant that he could get the efficient labor which was demanded by his rapid fire method of campaign. It was necessary to plan the making of every part to the minutest detail, to have each part machined to its exact size, and to have every screw, bolt, and bar precisely interchangeable. About the year 1907 the Ford factory was systematized on this basis. In that twelvemonth it produced 10,000 machines, each one the absolute counterpart of the other 9999. American manufacturers until then had been content with a few hundred a year! From that date the Ford production has rapidly increased; until, in 1916, there were nearly 4,000,000 automobiles in the United States--more than in all the rest of the world put together--of which one-sixth were the output of the Ford factories. Many other American manufacturers followed the Ford plan, with the result that American automobiles are duplicating the story of American bicycles; because of their cheapness and serviceability, they are rapidly dominating the markets of the world. In the Great War American machines have surpassed all in the work done under particularly exacting circumstances.
A glimpse of a Ford assembling room--and we can see the same process in other American factories--makes clear the reasons for this success. In these rooms no fitting is done; the fragments of automobiles come in automatically and are simply bolted together. First of all the units are assembled in their several departments. The rear axles, the front axles, the
The bicycle business in this country had passed through a similar experience. When first placed on the market bicycles were expensive; it took $100 or $150 to buy one. In a few years, however, an excellent machine was selling for $25 or $30. What explained this drop in price? The answer is that the manufacturers learned to standardize their product. Bicycle factories became not so much places where the articles were manufactured as assembling rooms for putting them together. The several parts were made in different places, each establishment specializing in a particular part; they were then shipped to centers where they were transformed into completed machines. The result was that the United States, despite the high wages paid here, led the world in bicycle making and flooded all countries with this utilitarian article. Our great locomotive factories had developed on similar lines. Europeans had always marveled that Americans could build these costly articles so cheaply that they could undersell European makers. When they obtained a glimpse of an American locomotive factory, the reason became plain. In Europe each locomotive was a separate problem; no two, even in the same shop, were exactly alike. But here locomotives are built in parts, all duplicates of one another; the parts are then sent by machinery to assembling rooms and rapidly put together. American harvesting machines are built in the same way; whenever a farmer loses a part, he can go to the country store and buy its duplicate, for the parts of the same machine do not vary to the thousandth of an inch. The same principle applies to hundreds of other articles.
Thus Henry Ford did not invent standardization; be merely applied this great American idea to a product to which, because of the delicate labor required, it seemed at first unadapted. He soon found that it was cheaper to ship the parts of ten cars to a central point than to ship ten completed cars. There would therefore be large savings in making his parts in particular factories and shipping them to assembling establishments. In this way the completed cars would always be near their markets. Large production would mean that he could purchase his raw materials at very low prices; high wages meant that he could get the efficient labor which was demanded by his rapid fire method of campaign. It was necessary to plan the making of every part to the minutest detail, to have each part machined to its exact size, and to have every screw, bolt, and bar precisely interchangeable. About the year 1907 the Ford factory was systematized on this basis. In that twelvemonth it produced 10,000 machines, each one the absolute counterpart of the other 9999. American manufacturers until then had been content with a few hundred a year! From that date the Ford production has rapidly increased; until, in 1916, there were nearly 4,000,000 automobiles in the United States--more than in all the rest of the world put together--of which one-sixth were the output of the Ford factories. Many other American manufacturers followed the Ford plan, with the result that American automobiles are duplicating the story of American bicycles; because of their cheapness and serviceability, they are rapidly dominating the markets of the world. In the Great War American machines have surpassed all in the work done under particularly exacting circumstances.
A glimpse of a Ford assembling room--and we can see the same process in other American factories--makes clear the reasons for this success. In these rooms no fitting is done; the fragments of automobiles come in automatically and are simply bolted together. First of all the units are assembled in their several departments. The rear axles, the front axles, the