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Fordism - It's Impact on the Industry

In: Business and Management

Submitted By Prizate
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Levitt saw the "production-line approach" as one by which services could significantly improve their performance on both cost, largely through improved efficiency, as well as quality. Services could achieve this by looking to manufacturing and borrowing some of the thinking exemplified by one of the founders of mass production, Henry Ford. Ford designed his moving assembly line in order to produce affordable automobiles (Hounshell, 1984), where the guiding principles of "Fordism" and mass production was the substitution of equipment for labour to reduce production costs (Piore and Sabel, 1984). Mass production also reduced unlimited production variety to single models. Services that adopt the (mass) production-line approach could gain a competitive advantage with a cost-leadership strategy (Fitzsimmons and Fitzsimmons, 1994). The defining characteristics of the production-line approach include:
Limited discretionary action of personnel. Employees perform well-defined tasks. This results in standardization and quality, i.e. consistency in meeting specifications, the prized outcomes of the production-line approach in manufacturing. Levitt's prototypic service example, McDonald's, is able to promise customers a consistent service package across geographically dispersed operations.
Division of labour. The total job is broken down into groups of tasks which allows specialization of skills. The entire process is divided into routine tasks. This narrow division of labour made possible limited spans of control and close supervision. It also minimized both worker skill requirements and training time.
Substitution of technology for people. Certainly, at the time Levitt wrote his seminal pieces, the systematic substitution of equipment for people had been a source of progress in manufacturing. Systematic substitution of equipment for labour aligned with well conceived use...

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