How the Ford Company Gets Low Production Costs 280063

ECONOMIC factors applying to mass production are dealt with in an endeavor to show how, by following certain laws of manufacturing management based on economic laws, the Ford Motor Co. has attained its very low production costs. Some of these laws, which were put into concrete form as recently as 1926 by L. P. Alford, are quoted, and examples of methods are given to show how they operate. Summarized briefly, the principles followed with obvious success are:
  1. (1)
    Concentration upon a single product
  2. (2)
    Keeping each article distinct
  3. (3)
    Extensive use of conveyor systems
  4. (4)
    Subdividing work so that each worker has only one or very few operations to perform
  5. (5)
    Providing the required quantity of material of the specified quality at the required time and place
  6. (6)
    Assigning a definite amount of work to each man to be done in a given time
  7. (7)
    Wage payment on the straight day-rate
  8. (8)
    Acquirement of sources of raw materials
  9. (9)
    Reduction of inventories of materials in stock and in process
  10. (10)
    Foregoing the taking of intermediate profits on processes between raw materials and finished product
  11. (11)
    Keeping materials and parts in rapid motion to assure quick turnover
  12. (12)
    Using machine-tools that give the lowest production cost and require the least manual control
  13. (13)
    Employment of machines that perform several operations simultaneously with the same amount of labor as for one operation
  14. (14)
    Sending machines to the overhaul shops at standardized periods
  15. (15)
    Recognition that the obsolescence factor is more potent than depreciation of machines by wear
Discussers supplement the paper with numerous thoughts not mentioned by the author. The attainment of quality in a product, points out one, decreases cost in at least four ways, which he specifies. Another questions if the present trend toward making automatons of workmen is not fallacious and in direct opposition to the social trend of American civilization, which is in the direction of making men think. More extensive use of multiple-operation automatic machines is suggested as a possible remedy for this, and remarkable examples of such machines in other industries are cited. Regarding one of these, however, the chairman states that its successful development required 25 years, was very costly, and the product does not change in form, whereas design changes are frequent in the automotive industry. The last discusser calls attention to the importance of operating machinery continuously as many hours of the 24 per day as conditions render possible. He mentions the Ford company's policy of providing for production so that it will not be affected by such variables as weather and time of day, and of designing multi-story buildings to conform with production requirements and then providing artificial lighting of a kind that is superior to daylight.


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