Ford Model T vehicle on display at a park.

Innovation: Happy Birthday Moving Assembly Line!

Oct 8, 2013 • Demand, Supply, and Markets, Economic Growth, Economic History, Households, Innovation, Labor, Macroeconomic Measurement, Tech • 448 Views    No Comments

Yesterday, the moving assembly line celebrated its 100th birthday.

Before October 7, 1913, in one place, a car was built by teams of workers. The chassis took 12 hours to finish while magneto production required 15 minutes and 29 workers. (A magneto helped to start the ignition.)

Imagine people’s astonishment when they experimented with conveyor belts that streamed parts to the worker. Yes, they suspected they would slice some time off production. But the results were stupendous. Using 14 workers doing repetitive tasks, magneto assembly time  plunged to 5 minutes. Chassis production time dropped from 12 hours to 2.3. As for the cars, output soared from 68,773 in 1912 to 170,211 the next year and 735,020 in 1917.

From: Car and Driver

Magneto production on one of Ford’s first moving assembly lines. From: Car and Driver

 

For economists, the story is really about productivity. Using land, labor and capital more efficiently, volume soared and per car cost dropped. The result? During the mid-1920s, the lowest price Model-T was $260 ($3474.74 today according to the BLS inflation calculator).

Now, 100 years later, this BMW video conveys a hint of future innovation.

Sources and resources: A wonderful out-of-print book edited by Alfred D. Chandler, Giant Enterprise provides a unique primary source history of the auto industry while this car and driver article clearly describes the impact of the moving assembly line. The BMW video and links to others like it are here.

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