Lesson #3: Be Efficient
Lesson #3: Be Efficient
It was as a child on his father’s farm when Ford first developed his eye for waste. Noting the significant amount of hard manual labour that went into his father’s business for what seemed like a miniscule and strikingly disproportionate return, Ford recalled that, “Even when very young, I suspected that much might somehow be done in a better way.”
According to Ford, only 5% of the energy a farmer spent during his workday served a useful purpose; the other 95% Ford considered an inefficient waste. He found that powered machines were hardly utilized, with everything being done by hand, and that even these manual tasks were being done with little logical or systematic arrangement. For instance, he observed that farmers would often climb up and down a rickety ladder over a dozen times in one day and manually carry buckets of water for miles instead of thinking to install a few lengths of pipe. “The worst factory in Europe is hardly as bad as the average farm barn,” said Ford. “It is waste motion – waste effort – that makes farm prices high and profits low.”
When Ford’s father gave him 40 acres of land for his own cultivation to help support his family, Ford mechanized almost the entire process to cut costs and increase his earnings. “We are not farmers – we are industrialists on the farm,” said Ford. “The moment the farmer considers himself as an industrialist, with a horror of waste either in material or in men, then we are going to have farm products so low-priced that all will have enough to eat, and the profits will be so satisfactory that farming will be considered as among the least hazardous and most profitable of occupations.”
For Ford, one of the most unpleasant features of any business was the amount of resources that were wasted on a daily basis. If only a small amount of time was directed towards identifying and eliminating waste, businesses would see their profits rise almost instantaneously. And more important than the money for Ford was the ability to follow through with his vision of delivering a car to the masses. “Every time I reduce the price of the car by one dollar I get one thousand new buyers.” By reducing waste, Ford could cut his costs and therefore cut the price he had to charge his customer.
Ford felt that the waste generated by most companies was completely unnecessary and due “largely to not understanding what one does, or being careless in doing it.” In recognizing this for almost 50 years, Ford strove to manufacture his cars with a minimum amount of waste of both materials and labour and was thus able to successfully provide his cars at a low cost to the masses.
Lesson 3 Be Efficient
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“We are never satisfied with the way that everything is done in any part of the organization,” said Ford of his operations at Ford Motor Co. “We always think it ought to be done better and that eventually it will be done better. Everything can always be done better than it is being done.”
It was as a child on his father’s farm when Ford first developed his eye for waste. Noting the significant amount of hard manual labour that went into his father’s business for what seemed like a miniscule and strikingly disproportionate return, Ford recalled that, “Even when very young, I suspected that much might somehow be done in a better way.”
According to Ford, only 5% of the energy a farmer spent during his workday served a useful purpose; the other 95% Ford considered an inefficient waste. He found that powered machines were hardly utilized, with everything being done by hand, and that even these manual tasks were being done with little logical or systematic arrangement. For instance, he observed that farmers would often climb up and down a rickety ladder over a dozen times in one day and manually carry buckets of water for miles instead of thinking to install a few lengths of pipe. “The worst factory in Europe is hardly as bad as the average farm barn,” said Ford. “It is waste motion – waste effort – that makes farm prices high and profits low.”
When Ford’s father gave him 40 acres of land for his own cultivation to help support his family, Ford mechanized almost the entire process to cut costs and increase his earnings. “We are not farmers – we are industrialists on the farm,” said Ford. “The moment the farmer considers himself as an industrialist, with a horror of waste either in material or in men, then we are going to have farm products so low-priced that all will have enough to eat, and the profits will be so satisfactory that farming will be considered as among the least hazardous and most profitable of occupations.”
For Ford, one of the most unpleasant features of any business was the amount of resources that were wasted on a daily basis. If only a small amount of time was directed towards identifying and eliminating waste, businesses would see their profits rise almost instantaneously. And more important than the money for Ford was the ability to follow through with his vision of delivering a car to the masses. “Every time I reduce the price of the car by one dollar I get one thousand new buyers.” By reducing waste, Ford could cut his costs and therefore cut the price he had to charge his customer.
Ford felt that the waste generated by most companies was completely unnecessary and due “largely to not understanding what one does, or being careless in doing it.” In recognizing this for almost 50 years, Ford strove to manufacture his cars with a minimum amount of waste of both materials and labour and was thus able to successfully provide his cars at a low cost to the masses.
Lesson 3 Be Efficient
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