Henry Ford was a visionary entrepreneur and innovator and a talented engineer who went on to become one of the celebrated industrialists and business tycoons of the twentieth century. Born in Michigan, the US on 30th July1863, the Founder of Ford Motor Company was a pioneer in assembly line production in the automobile industry, which not only revolutionised the automobile industry but the entire industrial landscape of the twentieth century.
He is also regarded as the developer of ‘Fordism,’ a movement characterised by the mass production of inexpensive goods and high wages for workers.
Mass Produced Car
One can say Model T of the Ford Motor Company was world’s first car for the mass market that was affordable to middle class. Before Ford Motor Company’s Model T, cars were meant for the rich only. For Model T, Ford was not finding the right material. But finally, Ford found it. It was French steel, with vanadium. In fact, the visionary industrialist had to commence the material’s production on his own, as at that time there was no other manufacturer in the US who was able to produce this type of steel.
From this incident, business leaders could be inspired by the dogged persistence of Henry Ford whose spirits couldn’t be dampened by adversities.
Assembly Line Production
Henry Ford wanted to tap the mass market more deeply and for that he came up with the path-breaking innovation of assembly line production, which entails breaking the manufacturing process of a product into specific steps that are to be executed in a pre-defined sequence.
Today assembly lines are the most commonly used method employed in mass production. The assembly line production significantly reduces production costs and time of production, thereby vastly reducing the cost of products as compared to custom production in small quantities. In assembly line production, workers specialise in a single activity or a limited range of activities of the entire production process, such as fixing the tyre or bolting the machine, and the entire production process is distributed across several such workers with different assigned set of jobs.
With assembly line production, Henry Ford gave a fillip to the era of mass production in the then automobile industry, which was at its nascent stage, and enabled to drastically reduce the production time and cost of production of cars, thereby making cars further affordable for middle-class people in the US. It set in motion a revolution in the transportation.
He also introduced conveyor belts in production process, which increased his workers’ productivity by almost four times.
In 1913, Ford introduced the assembly line for the mass production of automobiles. This novel technique drastically reduced the amount of time it took to manufacture a car at Ford Motor Company, which enabled lowering the cost of the Model T from $850 in 1908 to $260 by 1924.
This trend in the long-run greatly influenced the twentieth century life and business as mass produced automobiles became one of the important conduits of industrial growth of our times.
From Henry Ford, business leaders of today and tomorrow can be inspired to think out of the box and tailor their products according to their specific market needs. Before Model T, Ford Motor Company had other models of car but instead of continually producing them Ford focused his resources and energy on a single model of car -Model T, which was specifically targeted for the mass market. From Ford, today’s entrepreneurs can learn to focus or concentrate their resources on product/s which give the greatest value to their target market.
Welfare of Workers
Henry Ford can also be credited to be one of the early pioneers of welfare capitalism. He introduced much higher daily wage for his workers as compared to the prevailing market rate, which enabled him to attract top quality work force. Besides altruism he also calculated that if his workers could have more to spent they may be the potential purchasers of his Model T too.
He became one of the first significant industrialists to introduce five-day work week and eight hour per day work week which not only benefitted his workers but also gave momentum to a healthy trend where workers and other professionals could have proper work-life balance. When Henry Ford introduced five-day 40-hour work week (in 1926) in his company, employees across the world mostly used to work six days a week and their working hours were also mostly longer than eight hours per day.
Ford also realised much before other industrialists that adequate leisure time is needed for labour force to fuel any consumer movement. In a 1926 interview to a magazine, World’s Work, Ford said: “Leisure is an indispensable ingredient in a growing consumer market because working people need to have enough free time to find uses for consumer products, including automobiles.” Of course, he was also guided by welfare concerns of his workers. “It is high time to rid ourselves of the notion that leisure for workmen is either ‘lost time’ or a class privilege, “ he forcefully noted.
What is more, Ford Motor Company also introduced profit sharing with employees who had worked in the company for six months or more and also conducted their lives in a manner of which Ford’s ‘Social Department’ approved. However, Ford’s entry into his employees’ private lives attracted controversy, and he soon withdrew most intrusive aspects of his company’s Social Department.
The business leaders of today and tomorrows should get inspired by Ford to create new welfare measures for their employees so that their quality of life increases; this in turn can improve their quality of work or performance too, which in turn would benefit the companies concerned. By paying handsome salary/wages much above market rate, today’s employers, like Ford, can attract top quality work force to fuel their company’s growth.