Industry Insider
T
he revolving days from craft production to lean production in the auto
production industry have led the world to experience a huge transformation in
economic terms. Initially, during the craft production phase, it was primarily
focused on dozens of small enterprises that vied to establish a standard product and
process. But in the late 70s, the introduction of lean production proved to be the
revolutionary management process of product-development and production. The process
made it possible to produce one car in just over one-and-a-half hours for the master
companies. This advanced mechanization within the industry facilitated lower-cost and
faster production on the supply side of the industry.
Introduction of such mass production techniques shaped the auto industry into the
production line and assembly line. As the production division dealt only with raw
materials to develop the parts of a car or truck, the auto assemblers internalized in
gathering these semi-finished parts into the final product. This minimized the transaction
costs associated with late deliveries and parts that are not produced in exact
specifications.
The Industry that Changed the Common lives
Automotive production lines not only revolutionized the automotive industry, it also
impacted the American life. They made building cars more efficient. Because of the
upgrade in efficiency the cost in car production went down, and with the decrease in
cost, the showroom price of the cars also dipped. This reduction in price meant more
people could afford to buy a vehicle on their own. Also, because of the numerous crews
who needed to staff these lines – millions of Americans migrated from the farms to the
cities, transforming the economy from agriculture to manufacturing. Also the relatively
high wages and good benefits offered by the automotive manufacturers helped to pull
many families into the American middle-class bracket, changing America’s social
makeup for generations to come. This boom and bust years of development had an
immense impact on the domestic economy too. The number of new cars sold annually
was a reliable indicator of the nation's economic health.
July 2017
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