In 1913, Henry Ford launched the moving assembly line to mass produce the Ford Model T. Production methods have evolved since Henry Ford’s time, but our idea of the perfect factory has not.
If your business sells physical products–whether that’s car parts, handmade candles, or custom artwork–striving after this ideal is hurting your business:
- Your priorities clash with what your customers want,
- Your products take ages to make,
- Your money is tied up in excess inventory no one wants,
- And special customer requests throw you into a full-on production planning crisis.
As a production engineer and operations consultant, I’ve toured dozens of factories and witnessed these challenges firsthand. However, I’ve also seen remarkable transformations when businesses adopt modern production systems tailored to today’s market demands.
Why, then, do we intuitively organize our production in a suboptimal way? And how can we do it better? To understand how our idea of the perfect factory developed and uncover more effective ways to organize our production, let’s take a walk down production history lane…
From Craft to Conveyor Belts
Before industrialization, products were crafted by skilled artisans, one piece at a time. But all of this began to change with the first wave of industrialization, beginning around 1760.
Advances in agriculture freed up labor, allowing people to move into manufacturing, while innovations like the steam engine and iron processing created opportunities for mass output. Factories sprang up, organized around large, costly machinery that enabled faster production, but only if they were kept running continuously.
At first, these factories operated using batch production—a process where workers prepared materials in stages, running batches through machines to minimize downtime. By the early 20th century, advances in electrification allowed even more flexibility in factory layouts. No longer relying on a single steam engine, factory layouts became more flexible and machines could be organized to optimize each stage of production.
The real breakthrough came in 1913 when Henry Ford introduced the moving assembly line to mass-produce the Model T (picture a factory bathed in heavenly light, angelic choirs singing). Suddenly, production wasn’t just faster—it was continuous. Ford’s factory model was a marvel of efficiency, delivering a car every 90 minutes (instead of 12.5 hours!) and dramatically lowering costs. This system became the gold standard, and with good reason: it made once-luxury products affordable to the masses and established a template for efficiency that shaped the world’s idea of an ideal factory.
However, this ideal came with limitations. As Henry Ford wrote in his biography:
“Any customer can have a car painted any color that he wants so long as it is black.”
This restriction worked when people were just excited to have cars at all, but it didn’t match the growing demand for personalized products. As the world evolved, consumers wanted items that reflected their unique tastes and needs—not just the same basic version as everyone else. (Although, honestly, a world of all-black cars would still look pretty sleek!)
As the demand for customization grew, car manufacturers adapted by offering more options, allowing customers to personalize their vehicles in small ways. But they still tried to stay close to the mass-production ideal, keeping batch sizes as large as possible to avoid wasting time on machine changeovers.
Toyota’s Lean Revolution
In the 1950s, Toyota faced a challenge that mass production couldn’t solve. Toyota executives visited Ford and GM to study their methods but quickly realized that Japan’s market wasn’t large enough to support these high production volumes.
Unlike the U.S., where dedicated assembly lines could pump out a single model in massive quantities, Toyota needed a system that could produce lower volumes of different models on the same assembly line. This would allow them to meet varied customer demand without overstocking or wasting resources. Out of this challenge, Toyota developed a new approach called Lean Production—one focused on flexibility, efficiency, and reducing waste.
Lean Production is based on five core principles, each of which helped Toyota rethink and reshape their manufacturing process:
1. Value
Toyota began by redefining value from the customer’s perspective. They recognized that value meant more than just the physical car; it included delivering exactly what the customer wanted, when they wanted it, and at a fair price. Toyota shifted their goal from simply maximizing output to maximizing value delivered, ensuring each car fulfilled a real demand.
2. The Value Stream
Toyota mapped out all steps required to create a car, from initial design to delivery. This “value stream” approach helped them see which activities added value for the customer and which did not. Activities that didn’t contribute directly—like keeping excess inventory or making cars ahead of demand—were eliminated or reduced.
3. Flow
Lean emphasizes a smooth, continuous flow of activities. Rather than organizing production in large batches, products move steadily through the factory, one piece at a time. This dramatically reduces lead times because products no longer have to wait for the rest of the batch to be processed before moving forward. To make this possible, Toyota relied on flexible machines and manual labor over highly specialized equipment, enabling the factory to produce a variety of models on the same line without interruption.
4. Pull
Perhaps the most revolutionary part of Lean was Toyota’s “pull” system. Instead of producing cars in advance and trying to sell them (the “push” approach), Toyota only made cars when there was an actual order. In other words, a customer’s order triggered production, meaning cars were only built as they were needed. This approach reduced excess inventory, minimized waste, and created a more stable, predictable production rhythm.
5. Perfection
Lean was founded on the idea that there’s always room for improvement. Every employee is encouraged to suggest ways to eliminate waste, improve processes, and refine the value stream. This pursuit of “perfection” isn’t just theoretical—Toyota employees generate over a million process improvement ideas each year, and about 90% of these get implemented.
Car Manufacturing Today: Stuck in the Past?
Surprisingly, lean manufacturing has yet to be fully embraced by the automotive industry.
After visiting numerous European factories, I’ve observed that most still stick closely to mass production principles. Warehouses are overflowing with raw materials and parts that don’t align with actual customer demand. Each production line is dedicated to a specific model or part, resulting in idle lines waiting for demand or materials to catch up. And almost without fail, every factory I visited was rushing an “expedited order” to meet urgent needs outside of their usual (looong) lead times.
Even today, the 1913 mindset persists: “The larger the batch, the more efficient.” But in reality, these mass-production practices often result in longer lead times, higher costs, and wasted resources—problems that lean production was designed to solve.
It’s Not Where You Are But Which Way You Lean
Most businesses aren’t operating in perfect lean or mass production mode—and that’s okay. I’m not asking for perfection in either direction. But the direction you lean matters (pun intended). Unless you’re producing a commodity product like toilet paper, with stable demand and minimal variation, orienting toward lean production can help you better meet customer needs.
The Push of Mass Production
In mass production, the focus is on massive batches—ideally, infinitely large ones!—of nearly identical products, with minimal pauses in production. To keep those lines running, manufacturers churn out products in bulk and push them onto the market, guided by forecasts and hoping that demand will follow. This is why car manufacturers often pressure dealerships to buy in large quantities, leaving dealers scrambling to move those cars off the lot through discounts and sleazy sales tactics.
From the customer’s side, this model isn’t so convenient—they’re forced to buy more than they want, settle for a standardized product, or wait for something closer to their preferences.
In this setup, the factory’s efficiency often comes at the customer’s expense.
The Pull of Lean Production
In lean production, however, the focus is on aligning with what the customer actually wants. Lean encourages smaller batch sizes—often as small as one—flexible machinery, and reduced lead times, making production more responsive.
With lean, you’re moving towards a pull system where customer demand drives production, instead of producing for storage or speculation. Every customer order pulls production forward, reducing excess inventory and creating a more predictable, efficient flow.
Leaving 1913 Behind
Ford’s “perfect” mass production factory in 1913 was a groundbreaking achievement that revolutionized production and set the stage for modern manufacturing. But it’s time to move beyond that.
In today’s markets, customers value flexibility, choice, and quick fulfillment. Lean production aligns with these needs, creating systems that can respond quickly, minimize waste, and provide the products customers are actually asking for. By leaning toward lean—even if you don’t implement every principle perfectly—you’re setting up a business that’s more adaptable and attuned to a world that’s increasingly diverse and fast-moving.
Ultimately, it’s all about creating value that aligns with your customers’ needs and building a business that truly serves both you and them. And isn’t that the kind of business we’d all love to be a part of?