Hopp, Wallace, and Mark L. Spearman. 1996. "1: Manufacturing in America." in Factory Physics. Chicago: Irwin.

American manufacturers rose to prominence because they made products better and cheaper than anyone else. No this isn't true -- Japanese and German firms now often lead markets.

America was born with a respect for "rugged individualism" , from the myth of the frontiersman to the myth of the self-made man. The rise of the Protestant work ethic also fueled the drive toward industrialization in American. A third cultural force was an underlying faith in the scientific method and reductionism, where tasks are broken down and separately optimized. Eastern systems have retained a more holistic approach.

First Industrial Revolution

Previously work was done either in domestic (at home) systems or craft guilds. The textile industry started the industrial revolution in the mid-1700's, culiminating with the invention of the steam engine by James Watt in 1765. At the same time Adam smith formulated the "invisbile hand" system of capitalism and division of labor.

In the US Samuel Slater began a cotton mill using the English production techniques. Unlike England, there was no established guild systems to resist the movement to integrated manufacturing. Also, the availability of water power caused manufacturing to also become more centralized.

The American system of manufacturing arose in the small arms industry, and later in the mechanical reaping -- all based on the concept of interchangeable parts and specialized machinery. The American system also required less skills of workers, which kept wages lower. Transferring knowledge to the machines also further broke down the difference between unskilled and skilled workers.

Railroads ignited the second industrial revolution, becoming the first big business where large-scale management hierarchies and accounting practices were needed. Their contstruction created a large market for mass produced items (iron rails, wheels, spikes). And they more importantly created a national mass market for products. Middle managers also emerged to run the railroads.

Mass-distribution systems like Sears also changed accounting practices. Inventory turns began being measured in the late 1800's. Advertising became important to sell new goods nationally.

Horizontal and Vertical integration began as well, most notably with Andrew Carnegie and the steel industry. He also started the continuous work flow and estabilished a strict accounting sstem learned from his intial work with the railroads.

Later Ford ushered in the assembly line and it's resulting increase in productivity and production speed. He also recognized and applyed the concept of low inventory management.

Scientific Management

The notion that management could be a profession rose out of the creation of engineering associations, most notably ASME in 1880. Taylor created his principles of scientific management in the early 1900's proposing the use of science and engineering to break work down to smaller units and optimize each. He advocated the strategic use of the differential piece-rate system, and matching of work tasks with worker abilities. He was a big proponent of work standardization.

His principles were:

1. Use science to manage work and business.

2. Scientifically select the workman

3. Education and develop the workman to the task at hand.

4. Managers should manage and workers should work. Planning and doing are distinct activities

Other pioneers in scientific management were Henry Gantt and Frank Gilbreth, who advanced Taylor's time study to the concept of the motion study, and categorized human motion into 18 basic components.

The first modern manufacturing corporation was probably Dupont, who used ROI as a way to measure departmental performance. Alfred Sloan worked with Dupont to reorganize General Motors as a group of divisions run by a general office. They developed new procedures for demand forecasting, inventory tracking, and market share estimation.