Page 300 - (DK) The Business Book

298 SIMPLIFY PROCESSES

assembly line, cars were made by model on gaining a cost advantage
teams of highly skilled craftsmen over his rivals. He did this in two
who produced custom-made cars ways. First, Dell specialized in
using little more than hand tools. selling custom-made computers;
The components used by early customers could design their own
manufacturers were usually Almost all quality machine, which Dell assembled in
nonstandardized. This meant that improvement comes via response to a specific customer’s
workers would spend time adjusting simplification of design, order. Dell held virtually zero stock
components so that they could be manufacturing, layout, and production was pulled through
assembled. Ford removed this stage processes, and procedures. by the buyer. The main advantage
by designing the world’s first Tom Peters of this just-in-time method was that
standardized car. Mass production Dell no longer had to pay the costs
of the Model T, made from a associated with storing stock.
standard set of components, began When a product was finished, it
in 1910 in Highland Park, Michigan. was sent straight to the customer.
Ford’s second great innovation
was the conveyor belt. In the past, Going direct to the buyer
skilled workers had to move around employee was asked to perform Dell’s second cost advantage was
the factory locating raw materials, a single task, using the same tool, that, unlike other PC suppliers,
components, and tools. In some over and over again. As a result, it did not sell its products to
factories workers were hired to there was no time wasted specialized retailers; instead, it sold
push partially assembled cars from searching for, picking up, and directly to the consumer via the
one workstation to another. Ford putting down an array of tools. Internet. This meant that the
believed these were unnecessary Finally, Ford removed variety company no longer had to lose
steps that could easily be removed. from the production process. Each some of its profit margin to third
People were taken out of the Model T produced was identical; parties. When Dell sold a computer
production process and were Ford believed in simplicity of for $400, it received $400.
replaced by specialized machinery, product, even down to the paint Eliminating retailers did not have
including a conveyor belt that took color, which speeded up production. an adverse effect on Dell’s market
the work to the worker. Each Time spent resetting and cleaning share. In fact, the reverse was true.
machines between batches was Most computer buyers preferred the
avoided. A standard product made it flexibility of being able to build
possible to institute continuous-flow exactly the sort of computer that
production, and the amount of time they wanted, and also appreciated
taken to produce a car dropped from the convenience of home delivery.
over 12 hours to just over one and a
half hours.Ford’s decision to simplify
production by removing skilled labor
and time from the process enabled
him to produce his cars at a lower
cost, which he then used to reduce Simple can be harder
the price, and that created a mass than complex: you have to
market for the Model T.
work harder to get your
thinking clean.
Custom production Steve Jobs
In more recent times, computer
US Co-founder of Apple (1955–2011)
manufacturer Dell achieved
Henry Ford made use of the conveyor
belt on the assembly line at his factory stratospheric rates of growth in the
producing the Model T. Workers 1990s by streamlining its supply
specialized in one task with one set chain. Michael Dell, the founder of
of tools, which lay within easy reach. the company, based his business