Origins and evolution of industrial organization
In 1936, T. P. Wright observed that every time the number of aircraft built doubled, the hours per aircraft dropped to 80 %. With that rule, unit one hundred takes less than a quarter of the time of the first.
01The precursors
Industrial organization was born with the factory. In The Wealth of Nations (1776), Adam Smith described how, in a pin factory, dividing the work into simple operations multiplied output: each worker gained dexterity, did not lose time switching tasks and could use specialized tools. In 1832, Charles Babbage added that the division made it possible to pay for each task according to the skill it demanded. The Industrial Revolution —the steam engine, textile mechanization, interchangeable parts— put those ideas into practice on a large scale.
02Scientific management and general management
| Author | Contribution |
|---|---|
| Frederick W. Taylor | The Principles of Scientific Management (1911): study each task with a stopwatch, set the best method and a standard time, select and train the workers, pay for performance |
| Frank and Lillian Gilbreth | Motion study: break work down into elementary motions and eliminate the unnecessary ones |
| Henry L. Gantt | The bar chart for planning and controlling production |
| Henri Fayol | General and Industrial Management (1916): the functions of forecasting, organizing, commanding, coordinating and controlling, and principles such as unity of command |
| Henry Ford | The moving assembly line (1913): the work goes to the worker; mass production of a standardized product |
The studies at the Hawthorne plant of Western Electric, between 1924 and 1932, in which Elton Mayo took part, showed that productivity also depended on social factors and on the attention that work groups received: the human relations school was born.
03From statistical quality to the Toyota system
Walter Shewhart, at Bell Laboratories, invented the control chart in the 1920s; W. Edwards Deming and Joseph Juran brought statistical control and quality management to postwar Japanese industry. At Toyota, Taiichi Ohno developed a production system aimed at eliminating waste: making just in time what the next process asks for, with kanban cards, and stopping the line when a defect appears. In the West it was spread from the late 1980s as lean production. Today Industry 4.0 adds sensors, connectivity, data and flexible automation to those ideas.
04The learning curve
In 1936, T. P. Wright published a study on the cost of building aircraft: every time the cumulative quantity doubled, the labor hours per unit were multiplied by a constant factor, the learning rate \( r \). The time of unit \( n \) is:
The time of each unit (blue) and the cumulative average time (yellow) for a run of N units, on a logarithmic scale, where the curve becomes a straight line.
05In the laboratory
Assemble the same simple circuit ten times on a breadboard, time each assembly and fit the learning rate.
Place the contributions on this page on a timeline and relate them to the technological changes of each era.
Walk through the university laboratory or a workshop and identify examples of the Toyota system wastes: waiting, motion, transportation, inventory, defects.
06Common mistakes
- Reducing Taylor to the stopwatch. His proposal included methods, selection, training and incentives.
- Believing that lean production is just keeping little inventory. It is a complete system of flow, quality and continuous improvement.
- Applying the learning curve without limit. At some point the time settles at the one set by the machine or the process.
- Confusing the learning rate with the reduction per unit. It is the reduction each time the quantity doubles.
07Self-assessment
With T1 = 100 h and r = 80 %, how long does unit 8 take?
\( 100 \cdot 0.8^3 = 51.2 \) h.
And unit 100?
About 22.7 h.
What management functions did Fayol define?
Forecasting, organizing, commanding, coordinating and controlling.
What is a kanban?
A card or signal with which the next process asks the previous one to produce or deliver parts: production is pulled by demand.
08Further reading
- Idalberto Chiavenato. Introducción a la teoría general de la administración. McGraw-Hill. (In Spanish.) The schools of management, from Taylor and Fayol to the present ones.
- Taiichi Ohno. Toyota Production System: Beyond Large-Scale Production. Productivity Press, 1988. (Spanish edition: “El sistema de producción Toyota: más allá de la producción a gran escala”, Gestión 2000.) The system told by the person who created it.
- James P. Womack, Daniel T. Jones and Daniel Roos. The Machine That Changed the World. Rawson Associates, 1990. (Spanish edition: “La máquina que cambió el mundo”, McGraw-Hill.) The study that spread lean production in the West.