Sunday, February 25, 2007

Put Brains into the Method

After finishing Henry Ford’s book, “My Life and Work”, published in 1922, it is easy to see the impact his approach to manufacturing had on Taiichi Ohno and the development of the Toyota Production System. Here is a great lesson from his book:

“It is not good management to take profits out of the workers or the buyers; make management produce the profits. Don’t cheapen the product; don’t cheapen the wage; don’t overcharge the public. Put brains into the method, and more brains, and still more brains-do things better then ever before; and by this means all parties to business are served and benefited”.


Peden said...

As part of a course in the history of modern manufacturing the lecturer put out Henry Ford as a proponent of the modern 8 hour work day. He also told us that he paid a wage of 5$(pr day or hour?) which was twice that of the usual level. Why did he do that? So that the people he employed could also afford the cars he produced, now that sounds like a great idea :) (Also to avoid fatigue etc. but the other reason probably sounded better)

Mike Wroblewski said...

Good question Peden. According to Henry Ford himself in his book, this high wage for the times was paid for a couple of reasons. First, employees are partners and the higher wage improves this relationship. Second, was to reduce turnover. In 1914, Ford had demand to staff at 14,000 employees but had to hire 53,000 employees that year to stay at 14,000 level. After going to the higher wage by 1915, turnover reduced and only 6,508 employees were hired to keep at the 14,000 level. Certainly saved on training and hiring costs. There may be truth to making it easier to afford the cars they were producing however Ford wanted everybody to own one so he was focused on reducing the cost to all. The work week reduction was done voluntary by Ford as an "act of social justice" and to "build for the future" of the company. Basically, stability in the workforce.