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60 SMT Magazine • May 2016 tHE HEnRY FoRd diviSion oF laboR PRoduction ModEl ing it at a price that the masses could afford. This brings us to the second basic economic principle that is in play in our discussion: The economies of scale. Why is it less expensive to build a product quantity of a million than it is to build a hundred? One reason is that all the up front, non-recurring costs for engineering, set-up, tooling, fixturing, etc., are spread (amor- tized) over a million instead of a hundred (i.e., these costs add 10,000 times less to the cost a single unit when building a million instead of a hundred!). Offering the car in only black cut the set up and carrying costs of producing and inventory- ing cars in multiple colors. But Ford went further, and here is the big thing: To cut recurring assembly costs, Ford di- vided the total labor needed to assemble the Model "T" into many packets of about the same size (line balancing) and assigned a wag- on puller(s) to each packet. Further, each work packet was done in the same place in the factory by moving the product past the wagon pullers instead of having the wagon pullers move to the product as the "craftsmen" of pre-industrial rev- olution days did for the most part. The assem- bly line was born. The relatively small amount of the same labor each wagon puller applied over and over again was not only small, but relatively elementary (and, unexciting). Rocket scientists need not apply! Marx was dead, but communists (the Bolshevik revolution in Rus- sia was around the corner in 1918) jumped on the class struggle between manager and worker. So here, the two great world views of free mar- ket economics and collectivism (centrally con- trolled economies) had real world laboratories to collide in—the United States and the new So- viet Union. The collectivists (from Marx predic- tions) pointed to worker unrest and alienation as greedy capitalists squeezed every ounce of la- Figure 3: Magnetos and flywheels being assem- bled on the first moving assembly line in 1913, Highland Park, Michigan. (Courtesy US Depart- ment of the Interior) Figure 4: The ratio of the costs that the direct labor has been called on to absorb, to the direct labor itself, can become 1x, 2x and even 3x the cost of the direct labor.