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1、Teaching NoteManufacturing: Yesterday, Today, and TomorrowBy Major David S. VeechDefense Acquisition University Wright Patterson CampusWinter 2000The first cave man to chip a spearhead for another started the age of manufacturing. He must have demonstrated superior skills to the rest of his clan, an
2、d therefore became the first craftsman. He may have banded together with other skilled spearhead-chippers. Other cave men may have developed complementary skills, such as making the straightest shafts for those spears. If they collaborated, they may have been responsible for the first assembly opera
3、tion (Oogs Spears and Arrows, Inc.) Manufacturing has evolved over time from an age of craftsmen, through mass production enterprises, to lean and agile enterprises. Elements of the craft age still remain, and a very large segment of our manufacturing base in the United States still can be classifie
4、d as mass production. But as businesses become more competitive, and as costs escalate while customers demand more and more features or performance at reduced prices, the only option for many is to evolve into a lean enterprise.Manufacturing stayed within the realm of the craftsman for centuries, an
5、d in some specific cases, remains today. Prior to 1780, all components and end items were custom built by highly skilled craftsmen. This form of manufacturing was expensive and slow. Anything requiring assembly began with the rough shaping of the component parts, then more detailed shaping (or fitti
6、ng) to make sure the components fit together. In the early automobile industry, teams of “fitters” worked the final assembly of an automobile, taking weeks or months to complete a single car.The First Industrial RevolutionDuring the final decades of the 18th century, the first industrial revolution
7、began with the invention of three key technologies: coal-fired furnaces to convert iron ore to finished metals, the steam engine, and steam driven machines.Iron and steel have been vital materials for at least 3,000 years, but until this first industrial revolution, mining, smelting and working with
8、 iron was done by very small groups of people. Forging steel was a skill reserved for only the finest craftsmen (such as sword smiths,) some spending decades as apprentices to the masters. The first iron works in the United States opened in 1646 in Lynn, Massachusetts. Other ironworks followed and b
9、egan to produce pig iron for export to Great Britain, but the tonnage remained very low. In 1723, the colonies exported only 23 tons of pig iron. That figure jumped to over 5,000 tons in 1771, but at the dawn of the industrial revolution, and our own American Revolution in 1776, the colonies, rich w
10、ith newly discovered deposits of iron ore and anthracite coal, were producing roughly 1/7th of the worlds supply of pig iron, or about 30,000 tons annually. Coal-fired blast furnaces made possible production of this volume. As the steam age expanded, the demand for iron exploded turning iron mills i
11、nto major enterprises. The new United States found itself the world leader as the demand for iron railroad tracks from 1830 to 1861 taxed the capacity of our mills.The steam engine led to the production of high capacity machines that could run day and night processing raw materials and producing fin
12、ished goods. The Boston Manufacturing Company in 1814 opened the first factory in the United States to integrate steam-driven textile spinning and weaving machinery in the same building. By the 1850s, American companies were producing firearms, sewing machines, and agricultural equipment through the
13、 fabrication and assembly of standardized parts. These parts still required skilled fitters (craftsmen) for final assembly but this formed the basis of how manufacturers make things today. This system of assembling standardized parts became known as the American System of Manufacturing in the second
14、 half of the 19th century.In 1856, the development of the “Bessemer” process for making steel, dramatically reduced the time, energy, and money required for this task. Since steel lasts longer and is much harder than iron, it became the substance of choice for making railroad rails. From 1864 to the
15、 end of the century, Bessemer converters produced millions of tons of steel rails as the nation expanded westward. Steel mills ultimately exceeded 10 million tons annually and set the stage for a second industrial revolution.The Second Industrial RevolutionIn the last decades of the 19th century, th
16、ree more technological advances fueled a second industrial revolution: 1) the completion of modern transportation and communications networks, 2) electricity, and 3) “the scientific method.”The expanding steel market, driven by the demand of railroad networks, led to more efficient production method
17、s and to the discovery of new deposits of coal and iron ore, dramatically reducing prices. In 1880, Andrew Carnegies companies could produce a ton of steel for about $67. By the turn of the century, a ton of steel cost only $17. Similarly, the discovery of new oil reserves and more efficient refinin
18、g reduced the cost of producing a gallon of kerosene from 54 cents to less than cent. J.D. Rockefeller held a virtual monopoly in the oil extraction, refining, and distribution industries. J.P. Morgan and Elbert Gary built the US Steel Corporation into the largest industrial enterprise on Earth.The
19、deployment of electrical power generation provided a much more flexible power source to businesses than steam. Factories had relied on kerosene lamps for illumination for years. Factories began converting to electricity and adding better illumination, which allowed for higher production rates both d
20、ay and night. Electricity provided the power behind exciting developments in chemistry and metallurgy, which were integrated into manufacturing operations. Engineering emerged as a dominant skill for manufacturing companies as they began to apply the scientific method (controlled experimentation) to
21、 solving problems with products and processes.Companies operated with high levels of capital equipment and relatively low levels of labor (high capital to labor ratio for you economists) which resulted in economies of scale and lower unit costs. But sustaining those lower costs required operation of
22、 the equipment at near full capacity. This strain on resources gave birth to the science of management and to mass production systems. These developments were put to use in two new industries born from the desire of Americans to have more control over getting around. As the railroads, the telegraph,
23、 the steamship, and long-distance cable networks brought more people together, the turn of the century witnessed the birth of the automobile industry and the aviation industry. Meanwhile in Asia, Sakichi Toyoda, an inventor who founded a company called the Toyoda Automatic Loom Works, was putting th
24、e finishing touches on an automated loom that would immediately stop if any of the threads it was handling broke. This development allowed a single user to oversee several machines instead of just one. It also significantly reduced the amount of defective material produced. This is an early demonstr
25、ation of important manufacturing capabilities for all industries.Mass Production SystemsThe automobile industry literally changed the face of America. This single enterprise led to more technological innovations in manufacturing, metallurgy, electronics, oil refining, distribution systems, road cons
26、truction, labor relations, and management practices than any other in the history of the world. Until the dawn of the computer age, the automobile industry was the absolute technological driver for the United States.Henry Ford began making cars in quantity in 1906, gradually increasing output to 10,
27、607 cars in 1908. In contrast, Daimler, working in the most integrated factory in Europe, with 1,700 workers, produced less than 1,000. That year, Fords Model T cost $850 each, which was more money than his workers made in a year of hard labor. Fords vision was to build a simple but durable car at t
28、he lowest possible cost, then pay his workers high enough wages to allow them to afford the very cars they built. At the root of this vision was a core value that a corporation exists to serve society (Henry Ford, Today and Tomorrow). To accomplish his vision, Ford needed to do something dramatic an
29、d revolutionary. In 1908, there were 253 separate automakers, mostly in the United States. While all the other automakers employed teams of fitters to custom shape the standard components to make them fit together, Ford decided to divide the labor involved among his entire workforce. In 1910, he bui
30、lt a new factory in Highland Park, Michigan and began work on a moving assembly line. In 1913, the assembly line began operations. It relied on each worker specializing in one small area of work, and bringing the work to the worker by moving the car from person to person on a moving conveyor belt. T
31、his single innovation resulted in a 900% improvement in productivity over the craftsmen fitters. In 1914, Ford began paying his workers $5 per day when the rest of the industry was paying $11 per week. By 1916, Ford was making over 730,000 cars a year and selling them for $350 each. The Government r
32、ecognized the need for new roads and passed the Federal Aid Road Act in 1916, and the Federal Highway Act in 1921.Several factors combined to enable this revolution in the auto industry, which essentially saved two other industries. First, the price of steel was low thanks to the construction of the
33、 nation-wide railroad. But the railroads were no longer expanding at the same rate as through the last part of the 1800s. A reduction in the demand for steel may have forced some steel mills to close, but now they had another primary customer, the auto industry. The oil industry was about to fall vi
34、ctim to electricity until the automobile created the demand for a modified version of kerosene called gasoline. The availability of cheap raw materials, a shortage of skilled labor, and the high demand for cars drove Ford to mechanize the manufacturing process. This in turn drove the consolidation o
35、f the automobile industry so that those 253 independent auto makers of 1908 turned into 44 makers in 1929. Of those, the big three (Ford, General Motors, and Chrysler) accounted for over 80% of new car sales in America.AviationThe early days of aviation werent quite as active. This industry was born
36、 with the Wright brothers flight at Kitty Hawk, North Carolina in 1903, and their winning a government contract for Wright Flyers shortly thereafter. Unlike cars, there wasnt a huge public demand for flying machines, but the military recognized the significant capability of the airplane, and the gov
37、ernment took steps to shore up the industry. In 1915, the government created the National Advisory Committee on Aeronautics (NACA) to strengthen and regulate the industry. The aviation industry was characterized by a limited market and high research and development costs. The NACA contracted for bas
38、ic aviation-related research and then shared technical reports with the manufacturers, leading to dozens of improvements in materials, design, and construction of aircraft. World War I failed to provide a consistent market for American airplanes since most of the aircraft that fought were of Europea
39、n design and manufacture. To create a realistic market for commercial airplanes, Congress passed the Kelly Air Mail Act in 1925. This required the US Postal Service to contract with airplane manufacturers and operators to carry the mail coast to coast. This provided the cash flow these companies nee
40、ded to grow, without having paying passengers. Today, virtually all major passenger airlines trace their roots to their contract carrier days.ManagementAs mentioned earlier, the introduction of mass production systems required a focused, scientific approach to manage the resources involved in manufa
41、cturing. The leader in this field was Alfred P. Sloan, who became president of General Motors in 1923 after serving as GMs Vice President in charge of the Accessories Division. General Motors was already a large and diverse company, having bought or otherwise consumed over 30 companies between 1908
42、and 1910, including 11 auto makers. Sloan took a very disciplined approach to management, centralizing control of policy making and coordination, and decentralizing control of operations. He also applied lessons he learned in Accessories throughout his company, emphasizing styling in his automobiles
43、 above utting edge technology. He cut costs and reduced prices focusing on profits rather than engineering. This paid off as Americans grew tired of the plain black Fords and began buying GM cars for their variety in styles, colors, and optional extras. By 1927, GM and Sloan took the sales lead from
44、 Ford and retained it until 1986. Sloan also gets credit for a technique that draws attention today in the computer industry: planned obsolescence. He applied this principle to the cars GM built. These cars were generally well built, but Sloan ordered subtle changes in styling every year or two, pro
45、mpting the buying public to want a new car every few years.Unfortunately, as the industry turned its focus on price and profit versus engineering and quality, automakers introduced few innovative technologies into new cars between the late 20s and the 50s (the automatic transmission and drop-frame c
46、onstruction being two notable exceptions.) In Japan, the Toyoda Automatic Loom Works, under the leadership of Kiichiro Toyoda, entered the automobile manufacturing business. Kiichiro had earlier traveled to Highland Park to learn from Ford how to manufacture cars. The Japanese market, though, was no
47、thing like the American market, so Kiichiro set his mind to work on how to employ Fords practices to the small production volumes typical in Japan. Ford and GM had been manufacturing cars in Japan as early as 1925, but after Toyoda had built 3 only passenger cars (in 1935,) the Japanese government p
48、rompted the company to focus on trucks instead. In 1936, the winning entry in a national contest for design of a corporate logo changed the company name from Toyoda to Toyota. The following year, the Toyota Motor Company became an independent entity and began construction of new facilities designed to manufacture 1,500 trucks and passenger cars a month. This facility would become Toyota City, modeled after Fords huge complex at River Rouge, Michigan.World War IIThe mass production lessons of the auto industry found their way into the defense industry largely through the Defe