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Henry Ford and the Model T

Henry Ford and the Model T - Henry Ford and the Model T A...

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Henry Ford and the Model T: A Case Study in Productivity People often credit Henry Ford with inventing the automobile and the assembly line. In fact, he did neither! What Mr. Ford actually did was change the way manufacturers operate. Henry Ford brought together many innovative ideas that helped revolutionize mass production. The Early Days of Ford Motor Company and the Model T When Henry Ford incorporated the Ford Motor Company in 1903, automobiles were expensive, custom-made machines purchased as a luxury item by the wealthy. Workers at the Ford factory in Detroit produced just a few cars a day. Henry Ford's ambition was to make “a motor car for the great multitude.” He wanted to build a high-quality automobile that would be affordable to everyday people. He believed the way to do this was to manufacture one model in huge quantities. Ford and his company's engineers designed a car named the Model T. First offered for sale in 1908, the Model T was produced like other cars—one vehicle at a time. But the Model T was more sturdy and powerful than other cars. Considered relatively simple to operate and maintain, the auto offered no factory options, not even a choice of color. The Model T was also less expensive than most other cars. At an initial price of $950, 10,000 autos were sold the first year—more than any other model. Vanadium Steel. Henry Ford searched the world for the best materials he could find at the cheapest cost. During a car race in Florida, he examined the wreckage of a French car and noticed that many of its parts were made of a metal that was lighter but stronger than what was being used in American cars. No one in the U.S. knew how to make this French steel—a vanadium alloy. As part of the preproduction process for the Model T, Ford imported an expert who helped him build a steel mill. As a result, the only cars in the world to utilize vanadium steel in the next five years would be French luxury cars and the Model T. The Moving Assembly Line Like parts for other cars of the time, parts for the Model T were initially purchased made- to-order from other businesses. Teams of two or three skilled mechanics in the factory would gather these parts and put them together at a workstation, using everyday tools. When parts did not fit together as needed, workers used files and hammers to make them fit. Henry Ford realized that a more efficient production process was needed to lower the price and meet increasing consumer demand for his popular new car. He needed to improve productivity—the amount of goods and services produced from a given amount of productive resources. Economists refer to goods and services as output. Henry Ford's output was the Model T. The productive resources used in production—natural resources, capital resources and human capital—are inputs. Ford's inputs were the steel, workers,
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and other resources required to manufacture the car.
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