Two relatively new ideas spread like wildfire after the Civil War: continuous-flow production and scientific management. Continuous-flow production implies that materials move steadily through the factory where they are steadily transformed into finished products. Scientific management implies business procedures with a laboratory-like exactness. Let us consider each of these developments in turn.
Ever since Oliver Evans’s first attempts at continuous-flow milling in the 1780s, entrepreneurs had understood the advantages of moving materials continuously through the production process. But it was after the Civil War that continuous-flow production revolutionized production. Indeed, for some students of the history of manufacturing, it is continuous-flow production that distinguishes the second Industrial Revolution, the period of rapid growth of manufacturing after the Civil War, from the first. One of the earliest applications was in meat packing. The famed Chicago meat packers, Gustavus Swift and Phillip Armour, set up long “disassembly” lines in which the carcasses were continuously moved past fixed stations where they were butchered and turned into a wide range of final products. Cigarettes were another early application that demonstrated the potential profitability of continuous-flow production. But it was Henry Ford, the great automobile entrepreneur, who devised the first progressive, moving assembly-line systems for large, complex final products. In 1914, a chassis that had formerly been assembled in 12 hours could be put together along a 250-foot assembly line in a little over one and one-half hours. Before 1920, motor-driven conveyors were moving motors, bodies, and chassis at optimum heights and speeds to workers along greatly lengthened lines. By this time, the moving assembly line had spread throughout the automobile industry, the electrical industry, and the budding household-appliance industry.
Mass production helped change the face of industry in the early part of the twentieth century.
The large scale of the new industrial giants required new forms of management. The railroads, the first of the huge employers, led the way (Chandler 1965). Before the railroad companies, most businesses, even the largest, were typically managed by single owners or partners on a day-to-day basis. Supervisors often were added, but owners usually oversaw the business operations and made key managerial decisions.
Faced with unmanageable size and complexity, the railroads developed a host of new management practices and concepts. Managerial innovations and organizational changes were essential to better coordinate the activities of thousands of employees who ran the trains, sold the tickets, loaded freight, repaired track and equipment, and performed endless other tasks. In the 1850s, Daniel McCallum of New York, president of the Erie Railroad, proposed a series of new management principles with wide potential application. First, managers’ authority to make decisions should match their level of responsibility. Internal reporting systems (accounting) should be used to identify trouble spots and allow prompt solutions. Performance evaluations, for employees and managers alike, should be routine. Other large businesses in the late nineteenth century soon adopted these and other management systems, and today, McCallum’s concepts are routine in virtually all large business organizations.
With increases in size of plant and complexity of layout, the problems of efficiently handling a large labor force also became apparent. Frederick W. Taylor, ultimately the most famous contributor in this regard, argued that worker efficiency could be improved by (1) analyzing in detail the movements required to perform a job, (2) carrying out experiments to determine the optimum size and weight of tools and optimum lifts, and (3) offering incentives for superior performance. From such considerations, Taylor went on to develop certain principles pertaining to the proper physical layout of a shop or factory, the correct routing of work, and the accurate scheduling of the production of orders. Taylorism was and remains to this day a highly controversial subject (Noble 1977; Nelson 1980). Some observers saw it simply as a way of exploiting labor by speeding up and dehumanizing production. Others saw it as a way of using science to increase productivity and improve living standards for all. These productivity-enhancing improvements helped push real wages upward, softening somewhat workers’ resentment to change and faster product processing.
World History
