Mass production

What is mass production?

  • Mass production is the process of manufacturing a tremendous number of similar products in the shortest period possible.
  • It uses special-purpose machine tools that are systematically arranged to achieve a continuous flow of production.
  • This system reduces a tremendous amount of human labor by incorporating a sequence of machines into the production flow.
  • The downside to mass production is cost. Setting up this kind of system can be very expensive.

Mass production is the manufacturing of large quantities of goods using automated machines or worker-run assembly lines. This system of production is all about efficiency – it tries to manufacture the highest amount of related products in the quickest time period.

A 1926 article about Ford Motor Company popularized the term “mass production.” The car company used electronic motors to the then widely-used sequential production in factories. They also had special-purpose machine tools arranged systematically which avoided unnecessary movement saving production time. Company owner Henry Ford called the model done using this system a “universal car,” and a few years later, Ford Motor Company was making half of the cars in the U.S. By 1915, his factories were able to reduce the time it took to make a car by 90%.

Example of mass production

The famous candy owner Willy Wonka from the book “Charlie and the Chocolate Factory” used automated machines that operated in a sequence of the mass output (with some help from the Oompa Loompas). It is no wonder he was able to provide tasty chocolate bars to the entire world with only a single factory. In the book, a single Wonka chocolate bar goes through multiple machines, like “stations,” before it becomes a finished product. The 2005 movie adaptation of the famous Roald Dahl book shows how tons of hot melted chocolate is poured into large rectangular molds in a moving conveyor belt to be brought to the next station, cooled by several ceiling fans, and cut into regular-sized chocolate bars. Another machine then takes the chocolate bars and then wraps them in paper and foil bearing the classic Wonka bar logo.

This is a fictional example of how other companies like Ford, John Deere, and Nike utilize mass production in the real world to create lean and efficient business processes.

Advantages of mass production

This system has reduced a tremendous amount of human labor by introducing the use of high-powered machines inside the factories. It also cuts down on labor costs since the factory will only need a few workers to operate the machinery unlike before when almost all the work in factories required human hands. Labor costs eat up the majority of earnings, so this system saves up money for the factory owner. Not only that, but products can be manufactured in large quantities very quickly because of mass production. If every single Wonka bar were hand-crafted by a chocolatier, it would take ages to produce enough to share with the world.

Disadvantages of mass production

Thanks to mass production, the entire world can dip its fingers into Wonka’s chocolates—metaphorically speaking—but this manufacturing system does not go without any disadvantages. Setting up this system of production can be very expensive. Even Willy Wonka started out his sweets factory using the traditional set-up with a lot of employees hand-crafting his products. You have to give out a considerable amount of money to buy the machines initially.

Maintenance of these machines will also eat up a chunk of the income—they will eventually break down. Since the system works in a sequence, an interruption in the step-by-step production flow like the breaking of a single device will halt the entire production. Likewise, if there are changes in government policies such as an additional machine for safety and quality control, it will be hard for the factory to re-sequence the production flow.

 

Disclaimer

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stockpile assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell. There is no guarantee that any strategies discussed will be effective. Each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services and should seek advice from an independent advisor before acting on any information presented.

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