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78 SMT Magazine • January 2017 grouped in departments based on common skill sets and job responsibilities. A manager was as- signed for each department in order to coordi- nate, assign and measure the activities of the group. Management's objective became one of maximizing the output and quality of the work- ers by controlling them—planning their work, reviewing their performance and keeping their nose to the grindstone. It was the Hamiltonian worldview that the workers (masses) were the beast and the beast must be controlled. See Fritz Lang's Metropolis (1927), or on the lighter side Lucy and Ethel working on the chocolate as- sembly belt in the episode, Speed it Up! So, we became chained to a production or- ganizational model that was hierarchical and laden with supervisors whose goal was optimiz- ing worker productivity. There have always been areas of specializa- tion such as wheelwrights, blacksmiths, plumb- ers and later soldering, welding, etc., but mass production for the first time brought many of these skills under one roof—working for one employer and grouped in departments. Even before Henry Ford, in the 18 th and 19 th centuries, workers were employed in ever increas- ing capital-intensive industries such as textiles. Customer demand for these products caused workers to leave their cottage operations and join together in factories. Replacing water mills and other equipment with those that were steam- driven, permitted the factories to be located any- where, not just near a source of running water. It sounds counterintuitive, but in the early days of the new republic as this transition of the workforce took place, "[the] primary rea- son for the rapid industrialization of the United States was very high labor costs...American wag- es were high because employers had to compete [for employees] with the exceptional opportu- nities of self-employment in order to attract ad- equate numbers of qualified workers 2 ." This competition in production still exists today. Because of the high levels of automation now required to deal with very small compo- nents in electronic products, companies that do their own product assembly have thought they could hire cheap labor to just push the buttons and let the machine do the hard stuff. Devel- oping, programming and maintaining the au- tomation was relegated to others with the nec- essary skill sets. This fit nicely in the hierarchy and organizational power pyramid 3 . However, now with sources of low labor rates that the global economy has ushered in, high production wages become a convenient excuse to offload the manufacturing and assembly of their products. Companies are finding that pro- ducing their products remotely to take advan- tage of these lower rates can have some serious drawbacks. To me there are only two reasons to produce your products remotely: 1. You want to sell them into that remote marketplace (a good reason) 2. You can't compete with those remote sources of production (a bad reason) In previous columns, we have talked exten- sively about the one of the controllable compo- nents of labor cost: the counterweight to com- peting against low labor rates—using automa- tion to reduce labor content. Over the next few months we will drill down into the other con- trollable component of labor cost: indirect labor. Why Do We Do Things This Way? Because We Always Have. Does art imitate life or does life imitate art? Is product production a result of our orga- nizational structure, or is our organizational structure a result of the needs of product pro- duction? It seems we have hierarchical, pyramid shaped organizational structures because they A NEW ORGANIZATIONAL MODEL USING LOGIC, PART 2 " So, we became chained to a production organizational model that was hierarchical and laden with supervisors whose goal was opti- mizing worker productivity. "