FORDISM VS SLOANISM

Fordism refers to the system of mass production where a single product is manufactured in bulk quantity. For example Fords T model it is produced only in black & in mass production. Henry Ford focused only on mass production & consumption Sloanism, also known as flexible mass production, refers to the modification of Fordism it is implemented by Alfred P. Sloan, president of General Motors from 1923, when he offered new models each year, and different makes, models, and prices for different niches in the market. Rather than relying on special-purpose machine tools designed to produce the parts for a single model, as Ford did with the Model T, GM used general-purpose machine tools that could be modified to produce slightly different parts for slightly different models. The hallmark of fords system was standardization -- standardized components, standardized manufacturing processes, and a simple, easy to manufacture (and repair) standard product. Standardization required nearly perfect interchangeability of parts. To achieve interchangeability, Ford exploited advances in machine tools and gauging systems. These innovations made possible the moving, or continuous, assembly line, in which each assembler performed a single, repetitive task. The moving assembly line was first implemented at Ford's Model-T Plant at Highland Park, Michigan, in 1914, increasing labor productivity tenfold and permitting stunning price cuts -- from $780 in 1910 to $360 in 1914 (Hounshell, 1984; Abernathy, 1978 Hence, the term Fordize: "to standardize a product and manufacture it by mass means at a price so low that the common man can afford to buy it." Sloans inherited a car firm that was an aggregation of different sites producing different models of cars, in comparison to Fords unitary product and production facilities. Sloans innovations, which were to allow General Motors to overtake Ford in volume of car sales and become the largest automobile manufacture in the world, were in 3 main areas.

1. What Sloan called "the breaking down of the mass market, into a Rather than allowing the five different vehicle against each other, Sloan different

mass class market".

lines that GM possessed to compete

segmented the consumer market and assigned each line a

section. One for the starting out, young, single driver with no kids and to the family car as they married and produced as targeted, aspirational

limited funds, from which the consumer could progress to the sportier market, having gained a higher wage, then progressing kids, and so on, up to the luxury market with the Cadillac for the well-to-do. In Sociation with this strategy Sloan introduced segment-specific advertising outlets. 2. Sloan introduced the first provision of consumer credit for consumer durables credit for the masses had previously been limited to land and built property only. Sloans consumer credit service they would allowed buyers to purchase the Chevrolets or Pontiacs not have been able to buy outright.

marketing, with the first use of road-side bill boards alongside other more traditional

Both of which tied into the third innovation: 3. The logic of the annual model change - enough new features confidence in the new cars to make the new model

more desirable than the old, but not too much change to threaten the consumers re-sale value - was all laid out by Sloan.

Ford ultimately made everything he needed for his cars from the raw materials on up. Ford vertically integrated for two reasons. First, he had perfected mass production techniques and could achieve substantial economies by doing everything himself. Second, given the information processing capabilities of the time, plus Ford's skepticism about accounting and finance, direct supervision could more efficiently coordinate the flow of raw materials and components through the production process than arms-length relationships Of course, total vertical integration required the organization of huge numbers of activities and employees. Workers, staff specialists, and middle managers had to be recruited, sorted out, and fitted into a hierarchical scheme.

By the 1930s, Ford's standardized product and his direct planning and control system had been rendered obsolete by innovations in marketing and organization at General Motors. These innovations were implemented by Alfred P. Sloan, who is best known for the multi-product, or M-form, organizational structure, in which each major operating division serves a distinct product market. When Sloan took over GM in the early 1920s, it was little more than a loose confederation of car and car-parts companies. Sloan repositioned the car companies to create a five-model product range from Chevrolet to Cadillac and established a radically decentralized administrative control structure. GM's operating divisions -- the five automotive divisions, the divisions making components (e.g., Fisher Body or Delco-Remy), and those making refrigerators, air conditioning, locomotives, etc. -- were managed entirely by the numbers from a small corporate headquarters, using the DuPont system of financial controls, devised by Donaldson Brown, later GM's chief financial officer. Under this system, each division kept its own books and its manager was evaluated in terms of a return-on-assets target. Sloan believed that it was inappropriate, as well as unnecessary, for top managers at the corporate level to know much about the details of division operations (Womack, Jones, and Roos, 1990: 40-1). If the numbers showed that performance was poor, it was time to change the division manager. Division managers with consistently good numbers got promoted, ultimately to headquarters. Short run coordination between GM's five automotive divisions and the divisions making components (e.g., Fisher Body or DelcoRemy) was achieved via buyer-seller relationships. Longer run coordination was achieved via the first modern capital budgeting system used in the US, also devised by Brown (Chandler 1977). Within each of its operating divisions, however, GM was organized and operated like Ford -- or any other mass-production manufacturer. In this system, assemblers were as interchangeable as parts. The mass-production system rested on the presumption that activities should be simplified to the nth degree and controlled from above, engineering and administrative functions delegated to staff specialists, and the exercise of judgment passed up the managerial ranks.

Under mass production, not only were parts interchangeable, so too were assemblers. According to Womack, Jones, and Roos "[T]he assembler ... had only one task -- to put two nuts on two bolts or perhaps to attach one wheel to each car. He didn't order parts, procure his tools, repair his equipment, inspect for quality, or even understand what workers on either side of him were doing. ... Special repairmen re-paired tools. Housekeepers periodically cleaned the work area. Special inspectors checked quality, and defective work, once discovered, was rectified in a rework area after the end of the line. The role of the assembly worker had the lowest status in the factory. In some ... plants, management actually told assembly workers that they were needed only because automation could not replace them yet." Of course, this system required armies of middle managers and staff specialists, whose job it was to gather and process quantities of data for top management to use to coordinate activities, allocate resources, and set strategy. Assembly line work is unpleasant in a mass production environment. It is physically demanding, requires high levels of concentration, and can be boring. As a consequence, Ford experienced very high labor turnover, 380 percent in 1913. (Even today, doubledigit absenteeism is common in mass-production assembly plants,)According to the somewhat stylized facts, Ford, believing "men work for only two reasons: one is for wages, and one is for fear of losing their jobs," dealt with labor turnover by doubling pay to $5 a day The point of all of this innovation was to overcome the crisis of over-production that Ford was rapidly running into. Fords Model T had opened a new mass market of people who had never had cars before; however by the mid-20s just about everybody in the USA who wanted a Model T had one. . In this sense Ford must be seen as a transitional figure, corresponding to the opening up of the market, and Sloan as the mature capitalist, overcoming the initial limit of the market by selling new cars to people who already had cars. Sloan renegotiated the relation between producer and consumer as regards the design or use value of the car. If the consumers wanted closed body cars then GM (whose

Cadillac subsidiary had first introduced the closed body car in its Model Thirty) would provide them

Despite gains to unskilled industrial workers, Ford's mass-production system always had critics. Surprisingly, one of the first was Frederick Taylor, who coined the term Fordism. Taylor directed his criticism at the deskilling of assembly line workers, likening Ford's assemblers to trained gorilla...