Week 6 Questions & AnswersMass ProductionGroup 2: Blue sky Samurai

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

Table of ContentsPart 1 ............................................................................................................................................................. 3 1. Review craft production section of the background materials and consider from your own experience whether craft production approaches necessarily disappeared in the eighteenth century for all products (or services) or can they be found in the 21st century? Why should that be and what conditions might encourage? ................................................................................................................... 3 2. Can you think of any ways in which modern process innovations such as use of ICT has led to an increase in demand for more traditional methods of working to reinforce its use? .......................... 3 Part 2 ............................................................................................................................................................. 4 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. What were the key characteristics of Henry Fords approach to mass production? ....................... 4 What is meant by standardization and why was it important? ........................................................ 5 In what sense is standardization likened to quality? ........................................................................ 6 Why is factory layout important in mass production? ..................................................................... 6 Why are interchangeable parts important? ..................................................................................... 7 How did Fords approach to the motor car differ from his competitors? ........................................ 8 How did the Ford system affect the way work was conducted? .................................................... 9 How did Ford manage to combine quality, reliability and low price? .............................................. 9 How was the Model T suitable for US market conditions?............................................................. 10 Briefly define Taylorism .............................................................................................................. 11

References .................................................................................................................................................. 12

Page 2

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

Part 11. Review craft production section of the background materials and consider from your own experience whether craft production approaches necessarily disappeared in the eighteenth century for all products (or services) or can they be found in the 21st century? Why should that be and what conditions might encourage?Craft production approaches necessarily disappeared in the eighteenth century for all products/services, however, I believe it can be found in the 21st century, because it is the process of manufacturing by hand, require high skilled therefore the final product is unique with extremely high quality. The value of the hand crafted product is frequently more desirable because of its attention to detail. In addition, the background synthesis also mentions that the number of craft workers continued to rise along with the rise of the factory system, and craft production continues today, with high performance cars, space rockets. Other example, in the fashion industry, clothes of well-known brand name such as Valentino, Prada, Chanel, etc. are always made by hand to represent the sophistication in each design. This is also true toward handmade shoes and Swiss watches. Those may be more expensive than others but if people love craft products, they would love to buy. Or in the case of antiques, they are highly prized because of the attention and unique details inherent in the design.

2. Can you think of any ways in which modern process innovations such as use of ICT has led to an increase in demand for more traditional methods of working to reinforce its use?Based on background synthesis (2009) the process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software. The delivery methods are associated with the physical movement of the product from the factory floor to the end user, i.e. the logistics of the company. This includes any system that is implemented in improving the delivery of the product to the customer such as computer systems, tracking systems and any associated equipment. There are many examples of process innovation since industry started to

Page 3

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

develop and the purchase and use of products became a way of life. Examples of process innovations include Fords first use of the production line by bringing product to the person during fabrication. Process innovations involving the logistics include the factory to customer delivery of custom-built computers by Dell Corporation; idea of a successful business is to keep the smallest inventory possible by having a direct link with the manufacture. When a customer places an order, the custom parts requested by the customer are automatically sent to the manufacture for shipment. This reduces the cost for inventory tracking and massive warehouse maintenance. Or the use of barcodes, scanners and the Internet that allows customers to track parcels in real time as couriers are transporting them; and the innovation process used by organizations to arrive at the best ideas for commercialization.

Part 21. What were the key characteristics of Henry Fords approach to mass production?Henry Ford's approach of manufacturing applied in-depth analysis of processes in order to improve production output. The key characteristics can be summarized as follows (Bessant & Tidd, 2007): * Standardization of all entities within manufacturing, e.g. products, components, equipment and tasks. * Analysis of work processes to identify optimal conditions for a certain task and breaking it down into small, controllable and repeatable steps. * Specialization of functions. After extensive review of the current tasks, it was possible to identify key activities that workers could be trained in. * Pre-defined output rates and statistical measures to determine and scale productivity. * Payment based on manufacturing results instead of fixed-rate. * Moving process control to management and relying heavily on pre-defined procedures. Mass production utilizes highly mechanized methods instead of large amounts of trained (and expensive) labour (Boyce & Ville, 2002). The results of this process are large amounts of identical goods. When designing the mass production process at Ford (for the model T) Henry Ford took the opposite

Page 4

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

approach of what was common at the time. Until then, employees worked on cars as a whole, assembling all the required parts directly towards the final product. Due to the complexity of individual assembly steps, workers needed to be highly-skilled and eventually posed a bottleneck for production volume. Ford then reversed the process. Instead of moving workers to the car, Ford split the assembly into small, simple steps and moved the work to the employees. By breaking down tasks into simple operations that required less skill of workers, speed could be increased and costs could be lowered at the same time. Manufacturing workers took fixed positions in an assembly line and conveyor belt systems helped to minimize individual moving of parts, all this lead to the final system of the assembly line, the same principle that is used today. Ford's innovative thinking was closely related to Frederick Taylor's approach of "scientific management" (see below) that takes an analytical perspective to production processes in order to optimize production output, without necessarily regarding the workers as people. This approach yielded massive improvements in terms of productivity, which then lead to lower prices for cars, which allowed the products to enter major adoption. The process innovation of the assembly line directly influenced the success of the model T as individual product on the market.

2. What is meant by standardization and why was it important?Standardization was the process of developing technical standards in order to unify tasks and increase productivity. Henry Ford, applying methods from Frederick Taylor, heavily relied on standardization in his manufacturing process. All entities within the process, from components over equipment to the final product, were standardized to reduce uncertainties in the assembly line and increase production output (Bessant & Tidd 2007). If no standardization is in place, workers have to waste resources to determine the right parts to use for a certain task, which adds time and cost overhead to the production process. Examples for standardization can be found in many industries. When designing and working with the internet, the World Wide Web Consortium (W3C, 2009) is the organization that publishes relevant recommendations and develops standards, for example HTML. Independent of industries, the International Organization for Standardization (ISO) is the world's largest developer and publisher of international standards. While Germans are known for over-standardization and regulation frenzy, it is ultimately the end-user that benefits from standards. If our group decides to build a car today, we could be sure to get additional spare parts in a few years because all the screws, bolts and tools use standardized formats. In addition to this, standardization in production helps manufacturers to keep costs down and offer low prices to customers. While we agree that technical standards are important and actually useful, we think that standardization of human resources and social processes can be

Page 5

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

difficult. One problem with Taylor's scientific management or Max Weber's concept of bureaucracy (Boddy, 2007) is that people are considered a simple resource, a part of the production process. Individual characteristics, talents or preferences are not considered which can cause dissatisfaction. With organizations growing larger and more complex standardization is oftentimes the only way to prevent chaos but it can also demotivate employees, which ultimately leads to lower productivity. Still, we consider standardization as one of the most important drivers for a globalised society because it allows different people to rely on the same basis and be productive.

3. In what sense is standardization likened to quality?In the 18th to 19th century Europe, hand craft industry is the symbol of high quality. However, the rise of factory production re-defined the relationship between mass production and high quality. Today the quality can be focus on two parts from a quality management view: Quality control: The goal for quality control is to make the products or services that do meet the demand standards of quality. It is highly involved with the production process. Quality control includes products, services, and processes, but also the employees play an important role in it. Standardization is a kind of customization for the ultimate goal of quality. It arranges the resources mentioned above to meet the quality standard. The method of quality control includes quality insurance, failure testing, statistic control, company quality and total quality control. Quality assurance: Standardization is a set of activities which intend to insure the quality of product or service meet the customers requirement. A planned production process increases the confidence of producing a quality product, but not a 100% guarantee. It tries to make the product reach the ultimate quality goal. Therefore, standardization makes the process of production simpler, which means worker can concentrate on each task, and decrease the chance of making mistakes. Standardization also benefits for indicating problems and improve the process.

4. Why is factory layout important in mass production?Mass production is the process about producing very large amounts of products, in a standardized way. Assembly lines are used for speeding up the standardized production. The design of assembly lines

Page 6

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

causes a significant effect on efficiency of the production. For the product which is a complex one, there may be various types of assembly lines feeding sub-assemblies to a primary assembly line. (Wiki, 2009) Since the assembly lines are the heart of mass production, most modern factories are laid out on assembly lines to match the need of mass production. The layout design for an assembly line is determined by the steps of producing products. This includes simplify the movements of materials and the compatibility of work assignments, machines, and production rates. (Britannica, 2009)

5. Why are interchangeable parts important?Interchangeable parts are parts that are for practical purposes identical. They are made to specifications that ensure that they are so nearly identical that they will fit into any device of the same type. Identical parts that can be substituted one for another, particularly important in the history of manufacturing. One such part can freely replace another, without any custom fitting (such as filing). This interchangeability allows easy assembly of new devices, and easier repair of existing devices, while minimizing both the time and amount of skill required by the person doing the assembly or repair. The principle of interchangeable parts flourished and developed throughout the 19th century, and led to mass production in many industries. It was based on the use of templates and other jigs and fixtures, applied by semi-skilled labor using machine tools instead of the traditional hand tools. Throughout this century there was a lot of development work to be done in creating gauges, measuring tools (such as calipers and micrometers), standards (such as those for screw threads), and processes (such as scientific management), but the principle of interchangeability remained constant. With the introduction of the assembly line at the beginning of the 20th century, interchangeable parts became ubiquitous elements of manufacturing. Before the 18th century, devices such as guns were made one at a time by gunsmiths, and each gun was unique. If one single component of a weapon needed a replacement, the entire weapon either had to be sent back to an expert gunsmith to make custom repairs or discarded and replaced by another weapon. During the 18th century, the idea of replacing these methods with a system of interchangeable manufacture was gradually developed. The development took decades and involved many people (Britannica, 2009)

Page 7

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

6. How did Fords approach to the motor car differ from his competitors?When Ford founded Ford Motor Co., cars were fussy, unreliable and costly novelties. Ford's genius was to make them simple, solid and inexpensive necessities. A century ago, people thought Ford was crazy, as he wanted to change the every aspect of automobile business and industry. At the time Ford came up with his Model T cars, Real estate was the future, not the new-fangled automobile. He changed radically and forever dozens of aspects of business, and all within 20 yearsa very short period of time. Ford did not just borrow innovations already in place in other industries or his own (what is referred to today as benchmarking). He made changes that would thrust many industries forward, as if by a tidal wave of lean production. For example, Ford turned Midwestern farmers into assembly workers. Industrialists had tapped the farming community for labor before, but did not feel compelled to transform farmers into a skilled, coordinated workforce. Ford did, and it was no mean feat. Ford's lean production transformation, a combination in today's terms of "innovative incentive structures" of paying workers $5 a day and "workforce development," gave him a workforce that without his vision would have come to a grinding halt. Outside of the established apprenticeship programs, virtually no companies had invested as much in building a capable and motivated workforce. Another example that illustrates Henry Ford's vision is factory design. At the turn of the last century, most factories were still built on the model that power is distributed through a combination of wheels, pulleys and gravity. While many adopted the electric dynamo, allowing single-storied factories, few had Ford's vision to rearrange factory layouts to facilitate more efficient movement of people and materials for lean production. Before Ford and his colleagues came along, cars were mostly built top to bottom by the same person or a small group of people. Ford changed the manufacturing process to split up the content of the work, say into body and chassis, to be completed by two specialized teams. Then split it again into components. Then add the element of time: measure the time it takes to complete each element of work, ensuring that work moved from step to step at a standard pace. Another distinguishing characteristic was Ford's vision which was multidimensional. Henry Ford looked at every aspect of his business to achieve his grand vision: product, process and people. His product

Page 8

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

vision was based on interchangeable parts that fit together every time and a product that didn't break down as you used it; a product so cheap to build that everyone could afford it.

7. How did the Ford system affect the way work was conducted?The assembly line developed for the Ford Model T had immense influence on the world. Despite over simplistic attempts to attribute it to one man or another, it was in fact a composite development based on logic that took 7 years and plenty of intelligent men. What was worked out at Ford was the practice of moving the work from one worker to another until it became a complete unit, then arranging the flow of these units at the right time and the right place to a moving final assembly line from which came a finished product. Regardless of earlier uses of some of these principles, the direct line of succession of mass production and its intensification into automation stems directly from what we worked out at Ford Motor Company between 1908 and 1913. Henry Ford is generally regarded as the father of mass production. He was not. He was the sponsor of it. As a result of these developments in method, Ford's cars came off the line in three minute intervals. This was much faster than previous methods, increasing production by eight to one (requiring 12.5 manhours before, 1 hour 33 minutes after), while using less manpower. It was so successful, paint became a bottleneck. Only black would dry fast enough, forcing the company to drop the variety of colors available before 1914, until fast-drying duo lacquer was developed in 1926. In 1914, an assembly line worker could buy a Model T with four months' pay.

8. How did Ford manage to combine quality, reliability and low price?Model T "Quality" in material to give service in use, vanadium steel is the strongest, toughest, and most lasting of steels. It forms the foundation and super-structure of the cars. It is the highest quality steel in this respect in the world, regardless of price. (Extract 3 Henry Ford Recalls Accomplishments) (My Life and Work 1922) "Reliability" - As it was designed in a huge number, and was easy, cheap to repair made this model more reliable.

Page 9

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

According to Absolute astronomy.com 2009 and wiki, The car was very simple to drive, and easy and cheap to repair. It was so cheap at $825 in 1908 (the price fell every year) that by the 1920s a majority of American drivers learned to drive on the Model T. Ford created a massive publicity machine in Detroit to ensure every newspaper carried stories and ads about the new product. Ford's network of local dealers made the car ubiquitous in virtually every city in North America. As independent dealers, the franchises grew rich and publicized not just the Ford but the very concept of automobile; local motor clubs sprang up to help new drivers and to explore the countryside. Ford was always eager to sell to farmers, who looked on the vehicle as a commercial device to help their business. Sales skyrocketed several years posted 100% gains on the previous year. Always on the hunt for more efficiency and lower costs, in 1913 Ford introduced the moving assembly belts into his plants, which enabled an enormous increase in production. Although Henry Ford is often credited with the idea, contemporary sources indicate that the concept and its development came from employees Clarence Avery, Peter E. Martin, Charles E. Sorensen, and C. Harold Wills. Sales passed 250,000 in 1914. By 1916, as the price dropped to $360 for the basic touring car, sales reached 472,000. (Using the Consumer Price Index, this price was equivalent to $7,020 in 2008 dollars.) By 1918, half of all cars in America were Model T's. However, it was a monolithic block; as Ford wrote in his autobiography, "Any customer can have a car painted any colour that he wants so long as it is black". Until the development of the assembly line, which mandated black because of its quicker drying time, Model T's were available in other colors including red. The design was fervently promoted and defended by Ford, and production continued as late as 1927; the final total production was 15,007,034. This record stood for the next 45 years. This record was achieved in just 19 years flat from the introduction of the first Model T (1908).

9. How was the Model T suitable for US market conditions?Huge number of immigrants into US: Increase of US immigrants generated not only surplus of labour force but also potential buyers (i.e. demands). Fords price policy on Model T, which aimed to lower price for labour workers and low income people triggered popularization of car, which also called put America on wheels. Fords philosophy (Fordism): The main idea of the Model T was not only durable and easily repairable with interchangeable parts, but also affordable to working class at low price. To cut the price and increase speed, Ford broke down tasks into simple operations which can be done by deskilled workers. In addition to Taylorism, Ford improved its process by developing moving assembly line system to

Page 10

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

maximize productivity and it enabled to achieve economies of scale and mass production. In 1901, the price of cars made by Ford was $950 and the price of Model T was $350 in 1916 (Boyce and Ville, 2002, p.152). Later, Fords production scheme is challenged by high turnover of workers and he offered higher wage which encouraged workers and maintained high productivity.

10.

Briefly define Taylorism

Taylorism (or Taylor System), introduced in the early 20th century by the US industrial engineer Frederick Winslow Taylor in his book Principles of Scientific Management (1911), is the scientific management that aims win-win situation for both workers and employers by achieving efficiency in production process. At Taylors view, labour is also considered a part of manufacturing or production process like other elements such as machinery. In other words, workers were not required to have sophisticated skills (Boddy, 2007). One of the problems under the rise of the continuous production process (e.g. mass-production) was slowdown strike by labours that led to low productivity. To resolve the issue, Taylor used task management methodology with time study and motion study. With this methodology he broke down tasks into simplified segments and set standardized task goals for workers incentives. By achieving task goals, productivity was dramatically increased, slowdown strike was reduced, and average production costs were flatted which led company to maximize profit. But later, George Mayo proved lack of consideration in labour force by trying to control human resources like machinery brought limit in maximizing efficiency. The Taylorism also can be summarized as follows: aims to achieve maximum job fragmentation to minimize skill requirements and job learning time separates execution of work from work-planning separates direct labor from indirect labor replaces rule of thumb productivity estimates with precise measurements introduces time and motion study for optimum job performance, cost accounting, tool and work station design makes possible payment-by-result method of wage determination.

Page 11

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

References Assembly line [Online], Available: http://en.wikipedia.org/wiki/Assembly_line#Ford_Motor_Company_.281908-1915.29 {Accessed: 2009, Nov 8} Bessant, J. & Tidd, J. 2007, Innovation and Entrepreneurship, John Wiley Boddy, D. 2007, Management: An Introduction, FT Press. Boyce, Ville, 2002, The Development of Modern Business, p. 150-155 Business dictionary, Definition of Taylorim [Online], available: http://www.businessdictionary.com/definition/Taylorism.html {Accessed: 2009, Nov 8} Encyclopedia Britannica, Assembly line [Online], Available: http://www.britannica.com/EBchecked/topic/39246/assembly-line {Accessed: 2009, Nov 8} Henry Ford [Online], Available: http://en.wikipedia.org/wiki/Henry_Ford#Model_T {Accessed: 2009, Nov 8} History of Ford Motor Company [Online], Available: http://en.wikipedia.org/wiki/History_of_Ford_Motor_Company {Accessed: 2009, Nov 8} ISO International Organization for Standardization [Online], Available: http://www.iso.org {Accessed: 2009, Nov 8} Lean Production, The roots of Lean Henry Ford? [Online], Available: http://www.beyondlean.com/lean-production.html {Accessed: 2009, Nov 8} Mass Production [Online], Available: http://en.wikipedia.org/wiki/Mass_production {Accessed: 2009, Nov 8} Merriam-Webster, quality assurance [Online], Available: http://www.merriamwebster.com/dictionary/quality+assurance {Accessed: 2009, Nov 8} Quality assurance [Online], Available: http://en.wikipedia.org/wiki/Quality_assurance {Accessed: 2009, Nov 8} Quality control [Online], Available: http://en.wikipedia.org/wiki/Quality_control {Accessed: 2009, Nov 8} Quality control [Online], Available: http://www.wisegeek.com/what-is-quality-control.htm {Accessed: 2009, Nov 8} Quality management [Online], Available: http://en.wikipedia.org/wiki/Quality_management {Accessed: 2009, Nov 8}

Page 12

EBIN504: INNOVATION

WEEK 6 QUESTIONS & ANSWERS

09/11/09

Shin J. 2004, Taylorism [Online], available: http://cafe.naver.com/cafesocio.cafe?iframe_url=/ArticleRead.nhn%3Farticleid=278 {Accessed: 2009, Nov 8} Taylor and scientific management, 2007[Online], available: http://history.sandiego.edu/GEN/soc/taylor.html {Accessed: 2009, Nov 8} W3C, 2009, W3C Technical Plenary Convenes [Online], Available: http://www.w3.org {Accessed: 2009, Nov 8}

Page 13