The assembly line brought car ownership to the middle class and forever changed how things are made.
On December 1, 1913 in Ford’s Highland Park, Michigan factory, the first production assembly line was put into motion. A series of chains, ropes and pulleys kept car parts and chassis moving along as teams of workers assembled discrete Model T elements. Other workers carried parts to keep the line supplied and productivity high.
The assembly line enabled an astounding leap forward in productivity and efficiency. Previously it took 12 hours to put together the 3,000 parts in a Model T. With the assembly line, it took only 90 minutes and 84 steps to assemble one.
This astounding advance in productivity was made possible by a number of factors. Mass-produced, standardized, interchangeable parts meant workers needed less training. Moving the work to the workers saved time and minimized mistakes. Specialization of labor, with workers focusing on a single step in the production process, also improved efficiency and precision.
Ford’s assembly line had a profound and far-reaching impact. The cost of a Model T plummeted from $850 to less than $300. Assembly lines soon spread to other car manufacturers and other industries, transforming production and manufacturing products for a burgeoning middle class.
While many innovations lead to incremental progress, every so often an innovation is utterly transformative. The assembly line is an excellent example of a transformative innovation that benefited numerous industries and capital markets, more broadly. Even if you yourself aren’t an innovator, you can still reap the rewards by investing in companies that drive innovation.