Henry Ford's Mass Production System: Workforce and Organization

The Legacy of Henry Ford's Mass Production

The mass production system pioneered by Henry Ford defined the automotive industry for 50 years, influencing almost all industrial activities across Europe and North America.

We will examine some of its most important features, focusing on labor and organizational changes.

Key Features of Fordism

• Workforce
• Organization
• Tools
• Products

Workforce Transformation

The implementation of the assembly line fundamentally altered the labor force:

• Workers on the lines became as interchangeable as the cars they produced.
• Skilled labor required for assembly and adjustment of parts was exchanged for less skilled labor positioned along the assembly line.
• This led to the emergence of production engineers and industrial engineers, tasked specifically with designing and operating the production lines.
• Only supervisors and inspectors maintained the assembly quality previously held by original skilled workers.
• Most qualified teams repaired defective parts at the end of the line.
• The rise of managerial and engineering 'intelligence' contrasted sharply with the low-skilled line workers, who rarely advanced beyond their initial roles throughout their careers.
• Engineers gained executive careers, often replacing the skilled workers who had previously left to open their own independent firms.

Organizational Structure and Vertical Integration

Ford's organizational strategy evolved significantly over time.

• Ford initially operated as an assembler, sourcing items from several other firms (e.g., Dodge Brothers Motor).
• 1915: Ford began incorporating all functions into the company.
• 1931: Ford completed this process, resulting in full vertical integration.

Rationale for Vertical Integration

Ford pursued vertical integration for several critical reasons:

• Ford perfected mass production techniques faster than its external suppliers.
• Henry Ford’s inherent distrust of external suppliers.
• The need for parts with tighter tolerances and more rigid delivery schedules than suppliers could reliably meet.

This strategy spurred the development of the modern vertically integrated corporation.

Characteristics of Integrated Corporations

The vertically integrated organization exhibited specific characteristics:

• Services and raw materials required were obtained from internal operating divisions.
• These divisions were coordinated by senior executives within the corporation itself.
• The structure often resulted in significant bureaucracy.
• Logistical problems arose due to the massive scale of manufacturing concentrated in one location.
• The corporation faced challenges posed by customs barriers imposed by government policies.

By 1926, Ford Motor assembled vehicles in 36 U.S. cities and over 19 countries, although all projects, drawings, and manufacturing plans originated and were developed in Detroit.