* Assembly Line Production: This is the most famous aspect of Ford's cost reduction. Instead of having workers build an entire car individually, he broke down the manufacturing process into smaller, simpler tasks. Each worker performed a single, repetitive action on a moving assembly line, greatly increasing efficiency and speed. This drastically reduced the time and labor required to produce each car.
* Standardization of Parts: Ford standardized parts as much as possible. This meant using interchangeable components, simplifying both manufacturing and repairs. This reduced the need for skilled labor and minimized inventory costs associated with managing a huge variety of parts.
* Vertical Integration: Ford controlled much of his supply chain. He owned mines for raw materials like iron ore, and even developed his own rubber plantations. This gave him more control over costs and quality, eliminating the markups from outside suppliers.
* Mass Production: By focusing on high-volume production of a single, relatively simple model (the Model T initially), he could leverage economies of scale. The higher the volume, the lower the per-unit cost of production.
* Efficient Management Techniques: Ford implemented rigorous management and control systems to minimize waste and maximize output. He tracked production meticulously and sought constant improvements in efficiency.
* Employee Management (Controversial): While controversial due to its exploitative aspects, Ford's high wages (compared to the time) and shorter working hours helped reduce labor turnover and increase worker productivity. This stability reduced training costs and disruptions to the production line. However, it's important to acknowledge this was coupled with significant control over workers' lives and a harsh suppression of unions.
In essence, Ford's approach was to systematically eliminate waste, streamline processes, and achieve massive scale in production. This combination enabled him to dramatically reduce the price of the Model T, making car ownership a reality for millions for the first time.
