![]() Parallels include decisions to build a “giga” factory to make batteries that are currently sourced from Panasonic in Japan, paying a premium wage to workers to reduce turnover, and planning to make an electric vehicle priced for the mass market – the upcoming Model 3.Įven model names – Tesla sells the Model S and soon the Model X – may be more than coincidental. Elon Musk and Tesla Motors are looking to bring the electric car to the masses much the way Ford did with the Model T. What Huxley missed, in other words, was the impact of computers and IT innovations, considered one of the key facilitators to modern supply chain management. ![]() Then in the 1990s, the internet made physical proximity unnecessary for achieving economies of scale since manufacturers didn’t need to control every component in the supply chain. Yet by the 1980s, local area networks meant computers could autonomously control machines and make multiple products from the same facility at relatively low costs. To offer multiple lines of vehicles and options, Ford’s integrated supply chain had to be broken into separate companies supplying specialized sets of products. So why did this prediction not come true? Maybe it is because not long after the book was written, the growing design complexity of cars and the demands of customers made Ford’s black-only Model T no longer competitive. Huxley correctly saw so many things to come, yet clearly we don’t all worship Henry Ford today. Huxley also saw Ford’s approach to be so central to the future that Fordism – Ford’s system of mass production – would become the primary religion! Huxley anticipated a world with intercontinental rocket plane travel and TV networks, in vitro fertilization, cloning and genetic engineering. ![]() That put the Model T at two to four months of a typical factory worker’s wages, something comparable to or less than today’s economy car! Huxley’s Brave New World and Fordismįord’s significance can even be seen in Huxley’s classic futuristic science fiction work Brave New World from 1932. Working to make his car affordable, Ford sold the Model T for $260 by 1926, leading to massive market share – over 50% of the automobiles on the road worldwide were Ford’s.įord also paid his workers a startling $5 per day to reduce employee turnover.īy this time the average working household income had reached about $1,300 per year. Prior to the Model T, the typical car’s sticker price would often hit US$2,000, or almost five years of wages, which put cars out of reach for all but the rich. Putting folding roofs onto Model T’s in 1915: part of Henry Ford’s moving assembly line and standardized work process. No options were available as they are for today’s cars, but standardization led to lower prices. In fact, he claimed to mine iron ore in Minnesota, ship it to the famous River Rouge facility in Detroit and have it sitting as a Model T in a Chicago driveway in 84 hours! However, at the time, complete standardization (yes, Ford is said to have stated “You could have any color you wanted as long as it was black”) was necessary to make this happen. In his 1926 book, Today and Tomorrow, Ford claimed his integrated approach was the key to his success (“if you want it done right, do it yourself”). Will it work out the same as for Ford? Putting Ford in the black Now Musk is building a new “giga” battery factory, giving Tesla more control over this strategic component. Henry Ford took control of his supply chain and made his own parts rather than buy from suppliers, which gave the company the scale needed to improve performance and lower costs. Is Tesla, with its tightly integrated supply chain, following the strategy of another one-time dominant automaker – the Ford Motor Company – of over 100 years ago? Can it revolutionize the world by making an affordable electric car for the masses, much the way Henry Ford did with the Model T in 1908? The share price of Tesla Motors shot up this week after a financial analyst said that the electric vehicle maker is “ uniquely positioned to dominate” the auto industry.
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