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The American bicycle industry

Incorporated in 1847 and 1863 respectively, The McCormick Harvesting Machine Company and the Singer Manufacturing Company were two of the giant factories of the 19th century manufacturing. The McCormick Company adopted important elements of the American system and a new product was born which would serve as a bridge between that system and mass production. This product was the bicycle.

The American bicycle industry played a transitional role in the development of mass production for a number of reasons. The physical nature of the product itself provided a stepping-stone to the automobile. Singer, McCormick, Pope and the Western Wheel Works (bicycle company) all held one characteristic in common – although they sold the most expensive product in their respective industries, they were the dominant firms. However, it was only with the rise of the Ford Motor Company and the Model T, that there clearly appeared an approach to manufacture that was capable of handling an output of multi-component consumer durables ranging into millions each year. (Hounshell D, 1984)

The Ford enterprise may not have been the inventor of ‘mass production,’ but was certainly responsible for its rise and development. Peter Drucker long ago maintained that Ford’s work demonstrated for the first time

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that maximum profit could be achieved by maximizing production while minimizing cost. He added, that “the essence of the mass production process is the reversal of the conditions from which the theory of monopoly was deduced.” Drucker saw mass production as an economic doctrine as well as an approach to manufacture. For this reason, if for no other, the work of the armories, Singer, McCormick, et al differed substantially from Ford’s.

Ford was able to initiate this new ‘economic revolution’ because of advances in production technology, especially the assembly line, which came about in 1913. His Highland Park plant, opened in 1910 on a green field site at Detroit, was designed from the outset to facilitate the flow of the new Model T through the assembly process. Rigorous attention to detail (partly influenced by new ideas on ‘scientific management’ articulated by men like F. W. Taylor) and ruthless abandonment of unsuitable techniques increased output massively and reduced costs. With the line assembly, the Ford engineers witnessed productivity gains ranging from 50 percent to as much as ten times the output of static assembly methods. Thus with highly mechanized production, moving line assembly, high wages, and low prices on products, “Fordism” was born. (Hounshell D, 1984)

During the years between the birth of “Fordism” and the widespread appearance of the term mass production, the Ford Motor Company expanded its annual output of Model Ts from three hundred thousand in 1914 to more than two million in 1923. By the mid 1920s, the motor industry had become the largest mass-production industry in America, and a similar trend could be observed in Europe. (Wild R, 1972) Ford’s work and its emulation by other manufacturers led to the establishment of what could be called the ‘ethos of mass production in America.’ The creation of this ethos marks a significant moment in the development of mass production and consumption in the States.

In Britain, mass-production as well as innovative distribution methods were adopted in soap-making (Lever), cigarettes (W.D and H.O Wills), chocolate (Cadbury’s and Rowntree), biscuits (Hunley and Parmer) and other foods (Cross & Blackwell and J.J Colman). Whiskey distilling, and to a lesser extent beer making became continuous manufacturing processes. After 1880, these sectors faced a rapidly growing national market based on rising per capita incomes that could support large-scale production (Boyce G and Ville S; 2002). According to Chandler, except in the production of primary metals, a manufacturing enterprise rarely became and remained large, until it had built its own extensive marketing organization.

Paradoxically however, the rise of this ethos of mass production soon witnessed its own decline as result of various factors. As argued by Piore and Sabel, mass-production had reached its limits when the markets for mass-produced goods had become saturated and were breaking up because consumers were now demanding more differentiated goods. The view had been that the largest of firms would dominate the economy more and more with the passage of time, as they would benefit from this technology. However, this had not occurred. The concentration of large firms in industrialized economies remained remarkably stable over the past years, and the ‘flexible specialization’ theory developed. This could be explained better by coming back to the Automobile Industry of America.

By 1926, Ford and his production experts had driven mass-production into a deep cul-de-sac. In response to the declining demand by American buyers, he finally gave up on the Model T after fifteen million of them had been produced. Changes in consumers’ tastes and gains in their disposable incomes made the Model T obsolete. Automobile consumption in the late 1920s called for a new kind of mass-production – a system that could accommodate frequent change and was no longer wedded to the idea of maximum production at minimum cost. General Motors proved to be in tune with changes in American consumption with its explicit policy of “a car for every purpose and every purse,” its unwritten policy of annual change, and its encouragement of “trading up” to a more expensive car. The times thus called for a new era, that of “flexible mass-production.” (Hounshell D, 1984)

Moreover, Ford’s innovation of the assembly line factory had a limited field of application and Ford did not provide a strategic model which his successors imitated. His production techniques only had an overwhelming cost advantage in the production of complex consumer durables, initially cars and electrical goods, and subsequently in the field of electronics. However, for simpler consumer goods, like clothing and furniture, mass production techniques had little advantage.

Thus Ford’s innovations may have been important but they are hardly responsible for the whole trajectory of development in the advanced economies. Rather they created, what Mitsui called assembly industries. Even, within this field, Ford did not provide a model which his successors could intimidate and for that reason alone, the concept of ‘Fordism’ is misleading. Post-Fordism as stated before, however, saw the development of new flexible production systems based upon the deep application of information technologies.

Flexible specialization or craft production which stands in a neat polar opposition to mass-production is based on skilled workers who produce a variety of customized goods. The flexibility of production challenges mass-production in various aspects. It makes clear that a high volume of output is no longer necessary for high productivity and this can be achieved through a diversified set of low-volume products. Besides, the new technologies allow a profitable focus on segmented, rather than mass, markets.

In their book, ‘The Second Industrial Divide,’ Piore and Sabel triggered off much of the Post-Fordist debate; which sees the hegemony of Fordism as being replaced by a new regime of flexible production and smaller organizational units. They said that the flexible production technologies lead to the resurgence of small, independent entrepreneurial firms emancipated from the tyrannies of mass production by the new flexibility which permits small-scale operations to serve small markets.

This also sees the process of reskilling of labour as opposed to the relatively low-skill characteristic of Fordism. (Dicken P, 1998) The key to production flexibility however, lies in the use of information technological machines and operations which permits a more sophisticated control over the production process. Sabel repeatedly claimed that the spread of flexible specialization now amounts to a revival or ‘return to craft methods of production’. He said that under flexible specialization, adjustment to the market is not a major problem and macro regulation is not crucial because producers employ general purpose equipment which enables the enterprise to shift within and between families of products. (Karel Williams et al, 1987)

The most spectacular example in the textile industry of technology that reduced the cost of shifting products was the Jacquard loom which was perfected for industrial use between 1800 and 1820 by Lyonese silk weavers. However, the concept of flexible specialization also faced criticisms and there seems to be a lack of criteria to decide whether flexible specialization or mass production dominates. The initial theory of flexible specialization relied too much on the concept of industrial district areas where similar firms would agglomerate and cooperate. Besides, the theory focuses so much on production techniques that political and institutional factors are ignored.

Moreover, it is said that Ford’s combination of process innovations had an overwhelming economic advantage over the ‘craft methods’ of production as Sabel and Piore could not present any evidence on the cost of producing cars, or any other complex durable, by alternative methods. The case of Model T suggests that there never was a viable craft alternative to mass production of complex consumer durables. This throws light upon another argument concerning the necessity of mass-production in the era, against the choices available. That explains why Piore and Sabel are unable to cite any examples of successfully surviving craft production in the key industrial areas where mass-production developed – because there weren’t any. (Williams, K et al, 1987)

In conclusion, over the timescale of development of industrialization, the production process has developed through a series of stages each of which represents increasing efforts to mechanize and to control the nature and speed of work. The stages, with increasing time, passed through Manufacture, Machinofacture, Scientific Management, Fordism and Post-Fordism. The essay dealt with mass-production emerging as the dominant industrial process during the late 19th/ early 20th centuries and the Fordist era, where it was combined with consumption and consumer demand. After Fordism, the new regime had considerable disagreements because of which it is simply known as the Post-Fordism period.

Having had the debate of flexible specialization against mass production, the opposition seems unworkable because empirical instances cannot be identified. Mass production seemed more like a necessity in that era, and could not be substituted with craft production. At the same time, there were many industries where the principles of mass production were less suited than those of flexible specialization.

References:

Books

1. Boyce, G & Ville, S (2002). The Development of Modern Business. Palgrave Publishers, Wales.

2. Dicken, P. (1998). Global Shift: Transforming the World Economy. Paul Chapman publishing, London.

3. Hounshell, D. (1984). From the American Systems to Mass Production, 1800-1932. Johns Hopkins UP, Baltimore.

4. Huczynski, Andrzej and Buchanan, David (2001). Organizational Behaviour: An Introductory Text. Prentice Hall, Europe.

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