On my own farm at Dearborn we do everything by machinery. We have eliminated a great number of wastes, but we have not as yet touched on real economy. We have not yet been able to put in five or ten years of intense night-and-day study to discover what really ought to be done. We have left more undone than we have done. Yet at no time--no matter what the value of crops--have we failed to turn a first-class profit. We are not farmers--we are industrialists on the farm. 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.
Lack of knowledge of what is going on and lack of knowledge of what the job really is and the best way of doing it are the reasons why farming is thought not to pay. Nothing could pay the way farming is conducted. The farmer follows luck and his forefathers. He does not know how economically to produce, and he does not know how to market. A manufacturer who knew how neither to produce nor to market would not long stay in business. That the farmer can stay on shows how wonderfully profitable farming can be.
The way to attain low-priced, high-volume production in the factory or on the farm--and low-priced, high-volume production
means plenty for everyone--is quite simple. The trouble is that the general tendency is to complicate very simple affairs. Take, for an instance, an "improvement."
When we talk about improvements usually we have in mind some change in a product. An "improved" product is one that has been changed. That is not my idea. I do not believe in starting to make until I have discovered the best possible thing. This, of course, does not mean that a product should never be changed, but I think that it will be found more economical in the end not even to try
to produce an article until you have fully satisfied yourself that utility, design, and material are the best. If your researches do not give you that confidence, then keep right on searching until you find confidence. The place to start manufacturing is with the article. The factory, the organization, the selling, and the financial plans will shape themselves to the article. You will have a cutting, edge on your business chisel and in the end you will save time. Rushing into manufacturing without being certain of the product is the unrecognized cause of many business failures. People seem to think that the big thing is the factory or the store or the financial backing or the management. The big thing is the product, and any hurry in getting into fabrication before designs are completed is just so much waste time. I spent twelve years before I had a Model T--which is what is known to-day as the Ford car--that suited me. We did not attempt to go into real production until we had a real product. That product has not been essentially changed.
We are constantly experimenting with new ideas. If you travel the roads in the neighbourhood of Dearborn you can find all sorts of
models of Ford cars. They are experimental cars--they are not new models. I do not believe in letting any good idea get by me, but
I will not quickly decide whether an idea is good or bad. If an idea seems good or seems even to have possibilities, I believe in doing whatever is necessary to test out the idea from every angle. But testing out the idea is something very different from making a change in the car. Where most manufacturers find themselves quicker to make a change in the product than in the method of manufacturing--we follow exactly the opposite course.
Our big changes have been in methods of manufacturing. They never stand still. I believe that there is hardly a single operation in the making of our car that is the same as when we made our first car of the present model. That is why we make them so cheaply. The few changes that have been made in the car have been in the direction of convenience in use or where we found that a change in design might give added strength. The materials in the car change as we learn more and more about materials. Also we do not want to be held up in production or have the expense of production increased by any possible shortage in a particular material,
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so we have for most parts worked out substitute materials. Vanadium steel, for instance, is our principal steel. With it we can get the greatest strength with the least weight, but it would not be good business to let our whole future depend upon being able to
get vanadium steel. We have worked out a substitute. All our steels are special, but for every one of them we have at least one, and sometimes several, fully proved and tested substitutes. And so on through all of our materials and likewise with our parts. In the beginning we made very few of our parts and none of our motors. Now we make all our motors and most of our parts because we find it cheaper to do so. But also we aim to make some of every part so that we cannot be caught in any market emergency or be crippled by some outside manufacturer being unable to fill his orders. The prices on glass were run up outrageously high during the war; we are among the largest users of glass in the country. Now we are putting up our own glass factory. If we had devoted all of this energy to making changes in the product we should be nowhere; but by not changing the product we are able to give our energy to the improvement of the making.
The principal part of a chisel is the cutting edge. If there is a single principle on which our business rests it is that. It makes no difference how finely made a chisel is or what splendid steel it has in it or how well it is forged--if it has no cutting edge it is not a chis-el. It is just a piece of metal. All of which being translated means that it is what a thing does--not what it is supposed to do--that matters. What is the use of putting a tremendous force behind a blunt chisel if a light blow on a sharp chisel will do the work? The chisel is there to cut, not to be hammered. The hammering is only incidental to the job. So if we want to work why not concentrate on the work and do it in the quickest possible fashion? The cutting edge of merchandising is the point where the product touches
the consumer. An unsatisfactory product is one that has a dull cutting edge. A lot of waste effort is needed to put it through. The cutting edge of a factory is the man and the machine on the job. If the man is not right the machine cannot be; if the machine is not right the man cannot be. For any one to be required to use more force than is absolutely necessary for the job in hand is waste.
The essence of my idea then is that waste and greed block the delivery of true service. Both waste and greed are unnecessary. Waste is due largely to not understanding what one does, or being careless in doing of it. Greed is merely a species of nearsightedness. I have striven toward manufacturing with a minimum of waste, both of materials and of human effort, and then toward distribution at a minimum of profit, depending for the total profit upon the volume of distribution. In the process of manufacturing I want to distribute the maximum of wage--that is, the maximum of buying power. Since also this makes for a minimum cost and we sell at a minimum profit, we can distribute a product in consonance with buying power. Thus everyone who is connected with us--either as
a manager, worker, or purchaser--is the better for our existence. The institution that we have erected is performing a service. That is the only reason I have for talking about it. The principles of that service are these:
1. An absence of fear of the future and of veneration for the past. One who fears the future, who fears failure, limits his activities. Failure is only the opportunity more intelligently to begin again. There is no disgrace in honest failure; there is disgrace in fearing to fail. What is past is useful only as it suggests ways and means for progress.
2. A disregard of competition. Whoever does a thing best ought to be the one to do it. It is criminal to try to get business away