Inspiration from a business that changed the world

In the history and economic development of the United States, there are great business, also great visionaries who were the responsible for changing the direction of the country, they were encharged to make the country a financial potency that remains today.

To take a look into the past of the United States of America, read this article and get updated about the story of J. P. Morgan. A man with a specialty of seeing opportunities in the crisis. In this case, the main character is the industry who is the largest manufacturer of cars, the same that transformed the industrial processes, the workforce concept and the serial production.

The Ford Motor Company, better known as Ford is an American multinational automaker, that produces cars, trucks and minibuses. The main factory is located in Dearborn (Michigan, United States). It was founded on June 16, 1903 by Henry Ford in Detroit, also in Michigan. For many years, Ford has been the global number one ahead of other companies. Ford remains as one of the 500 largest corporations by its revenue. It currently has assembly plants in several countries around the world.

A quick look at the past

This giant company was founded on June 16, 1903 with only $28,000 contributed eleven investors, including the partner who gave name to the company included Henry Ford. During its early years, Ford produced a few cars a day at its factory on Mack Avenue in Detroit.  His production team was made up of groups of two or three men worked with each car using components manufactured in other companies.

Over time, the Ford Motor Company grew up to be one of the largest and most lucrative companies in the developed world, as well as one of the largest companies by a family run: the Ford family has maintained control of the company for almost 100 years. And it is essential to emphasize that Ford was one of the companies that survived the Great Depression of the ’30s.

By 1913, the company developed an evolved method at all the basic techniques of production line and mass production. Ford created the first moving production line in the world that year, which reduced assembly time chassis 12 hours to 100 minutes. That was actually the first approach to mass serial production.

ford_car_patrick dwyer_american financial titan_henry ford
Image courtesy of rachel_bernadette at Flickr.com

Success in the eyes of a visionary

Henry Ford, besides being the founder of the Ford Motor Company, is the father of modern production lines used for mass production.

Thanks to him the term Fordism was created, which is a system that spread between the late ‘30s and early seventies and that consist in manufacturing a large number of low-cost cars through the production chain. This system carried with it the use of specialized machinery and a large number of workers in high-wage workforce.

The intense commitment of Henry Ford to cost reduction led to a lot of technical inventions and business, including a franchise system that established a dealership in every the United States of America, Canada and in major cities across five continents.

The transformation in production methods

Henry Ford was responsible for creating a socio-economic system based on industrial mass production, that promotes specialization, the transformation of the industrial scheme and reducing costs.

A lower costs and higher production, lower are the prices of products, which encourages consumption. That’s why Henry Ford was also one of the greatest visionaries who transformed the economy of the United States of America, his management as an entrepreneur and projections in business led him to be one of the most prestigious entrepreneurs of the country.

The central elements of the Fordist model are:

  • Increased division of labor
  • Deepening the control of productive times of the worker
  • Cost reduction and increased circulation of the goods and interest in increasing the purchasing power of employees
  • Policy agreement between organized labor and the capitalist
  • Serial production

After the Industrial Revolution many manufactured products were made individually by hand way. A craftsman or group of craftsmen could create each part of a product, aspect that made the production a process that took a long time to be completed. They used their skills and tools like sanders and knives to create individual parts. Later they would join each of these parts to generate the final product, making changes of trial and error to parties until they were well and could join.

The evolution towards process efficiency, better production time, efficient use of resources and better labor was the creation of productive lines, which required specialization at work, matter that came to transform completely the economy.

An assembly line is a manufacturing process, most of the time called progressive assembly, where the parties are added as the assembly that is semi-finished, and moves from workstation to another workstation where parts are added in sequence until the final assembly occurs.

The Ford case is a vivid example of how a business can build an economic model, which remains in effect even though it is been over a century after its creation.

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