My Life and Work

“In June, 1903, the Ford Motor Company was incorporated. Together, they had raised $28,000 to start the new venture. The new company rented a building on Mack Avenue in Detroit for $75 a month. The Dodge brothers, who owned a large machine shop, made the Ford chassis, a carriage company built the body, and the wheels were purchased in Lansing. Once the parts were brought together, a dozen men assembled, adjusted, and tested the completed car.”

Chapter 2 · p. 7

Operations & Execution · Strategy & Decision Making · Business & Entrepreneurship

DUR_ENDURING

Outsourced all parts; only assembled

“While Henry Ford had been a prominent automobile manufacturer before 1908, it was this new universal car that brought a new era in America. Soon after the success of the model T was assured, Henry Ford was asked about the secret of his ability to produce automobiles. He divulged his secret in these terms: have a simple design, use the latest machinery, standardize the parts, make the entire automobile yourself, and always have a good supply of materials on hand.”— Henry Ford

Chapter 3 · p. 14

Operations & Execution · Strategy & Decision Making

DUR_ENDURING

Five principles of Ford production

“In 1915, Henry Ford sent an agent out to Dearborn to buy farm land along the River Rouge; thousands of acres were purchased. Now there would be room not only to enlarge the assembly line itself, but to manufacture more of the Ford in one factory. Here it would be possible to begin with raw materials: iron ore, sand, cotton, rubber, and the countless other materials, and convert them into steel, glass, and cloth to make the Ford.”

Chapter 3 · p. 15

Strategy & Decision Making · Operations & Execution

DUR_ENDURING

Raw materials to finished car, single site

“When the day of the race arrived, stores and shops closed, and a parade of sixty-eight cars moved out to Grosse Pointe. At the end of eight miles, Ford was trailing Winton, but then the Bullet began to sputter, and it limped to the finish line behind the racer built by Ford. The newspapers the next day reported that Henry Ford was now in the first rank of American chauffeurs.”

Chapter 2 · p. 6

Strategy & Decision Making · Business & Entrepreneurship

DUR_ENDURING

Race win generated investor attention

“By 1914, a floor conveyor was in operation at the Highland Park plant, so that the half-completed cars moved through the plant while the workers stayed in one place. This assembly line became the key to greater production. Each improvement brought new and often unforeseen problems in the never-ending task of fitting together the pieces of the huge jig-saw puzzle of production.”

Chapter 3 · p. 14

Operations & Execution · Technology & Engineering

DUR_ENDURING

Work moves to worker, not worker to work

“A real danger to Ford and his company during these early years was the threat of a patent suit. George Selden, a lawyer in Rochester, New York, had patented a self-propelled vehicle driven by an internal combustion engine. Although he never built an automobile, all those who did were threatened with infringement suits. The Ford Motor Company refused. The result was a long and involved battle in the federal courts, lasting until 1911 when the case was finally settled in favor of the Ford Motor Company.”

Chapter 2 · p. 8

Strategy & Decision Making · Business & Entrepreneurship

DUR_ENDURING

Refused patent royalty everyone else paid

“From 1908 to 1927, fifteen million Fords had been produced. Nevertheless, in order to maintain this position, it was necessary to keep pace with the times. In order to do this, the Rouge plant was silenced until a new Ford could be designed and put into production. Machine tools had to be replaced, and new dies and fixtures made. To accomplish this in the largest factory in the world was a herculean task.”

Chapter 3 · p. 16

Strategy & Decision Making · Operations & Execution

DUR_CONTEXTUAL

Shut entire factory to retool for Model A

“In October, 1908, the first model T appeared. The Ford company claimed that this new automobile would sound the death knell of high prices and big profits. Its advertisements announced that we can devote all our time and money to taking care of the orders for the car that people have actually been waiting for: a family car at an honest price.”— Ford Motor Company Advertisement

Chapter 3 · p. 13

Strategy & Decision Making · Business & Entrepreneurship

DUR_ENDURING

Positioned against high prices and profits

“Instead of continuing to work at his trade in the shops of Detroit, he went back to Dearborn. William Ford lent his son eighty acres of timbered land, and Henry Ford set up a saw mill. During the harvesting season, he operated an engine for a group of threshers. He also found time to travel about southern Michigan repairing Westinghouse portable steam engines.”

Chapter 1 · p. 3

Strategy & Decision Making · Business & Entrepreneurship

DUR_ENDURING

Multiple revenue streams while learning

“The original investment of Murphy and his friends was not enough. Improvements and changes in the model were made. Even though $68,000 was invested in the company, the hoped for production of many cars never materialized, and in January, 1901, Henry Ford left the Detroit Automobile Company.”

Chapter 2 · p. 6

Business & Entrepreneurship · Strategy & Decision Making

DUR_ENDURING

First venture failed: endless iteration

“Although Henry Ford's first two ventures into automobile manufacturing had not been successful, this third attempt showed great promise. At the end of the first year, the Ford Motor Company had sold over seventeen hundred automobiles.”

Chapter 2 · p. 7

Business & Entrepreneurship · Psychology & Behavior

DUR_ENDURING

Third company succeeded after two failures

“With a piece of gas pipe, an old wheel, some wire, and other scraps of metal assembled on a long board fastened to the kitchen sink in the Ford home, he made his first model gas engine. Although it sputtered and jumped, it worked.”

Chapter 1 · p. 4

Technology & Engineering · Creativity & Innovation

DUR_ENDURING

Proof of concept from scrap materials

“Henry was interested in the tools of the farm rather than in the farm itself. He also tinkered with watches; at the age of thirteen he was repairing the timepieces of his friends.”

Chapter 1 · p. 2

Creativity & Innovation · Psychology & Behavior

DUR_ENDURING

Attraction to mechanism, not outcome

“By the spring of 1896, he was ready to make a trial run with his own horseless carriage. First he had to tear out part of the brick wall of his shed in order to get his machine into the alley.”

Chapter 2 · p. 5

Operations & Execution

DUR_ENDURING

Built car too large for door

“When Henry finished school at the age of sixteen, he did what thousands of other farmers' sons were doing: he left for the city. Detroit was a bustling town of one hundred thousand people. His first job, at the Michigan Car Works, lasted only six days, but he soon found another one at the machine shop of James Flowers and Bros., where he became a machinist's apprentice.”

Chapter 1 · p. 3

Business & Entrepreneurship · Operations & Execution

DUR_ENDURING

Quit first job in six days to find better fit