Specialization of every sector of business – The Assembly Line Concept

Today I’d like to disucss the trend that continues to shape the living dynamics of the upper-class citizens of the 1st world countries, and that is a movement that Mr. Ford started way back when. He invented the assembly line, and his concept was simple – get each guy to do only a certain part of the job, become really good at it, and as a collective, the finished product will be made. It was a revolution in terms of increasing productivity and achieving a higher level of efficiency, as well as a greater degree of quality (at least, this applies for manufactured goods – I’d still prefer a hand-made mahogany acoustic guitar over a factory-pressed guitar that sells for less than $500).

“The Assembly Line” – a concept that revolutionized the manufacturing world which brought greater profits to the companies and cheaper goods for the consumers, is still evolving throughout civilization, in places you never would have thought about. In fact, it is a market dynamic that was created thousands of years ago (at least to some degree) and has been affecting human life every since – and the spread and grasp of the concept is what is growing stronger every day.

What the hell am I rambling on about? Well, think about this. There was a time and age when each family self-supplied. They would farm a small patch of land, hunt some, and also the women made their own clothes in their own home. As society evolved, they developed the concept of currencies, so that a common trade value can be established for different items. You have a few guys in the town that farms all year to provide the grain, and then there’s the other few households who ranch. And down the old dirt road there’s the blacksmith making the tools for the farmers and ranchers, next to the stitching shop where they weave fabric and make clothing.

Without realizing it, the “Assembly Line” has been a concept growing within mankind’s culture all along. Henry Ford applied it in a much more specific and targeted way, so that one guy stamps the wheels on while the other guy sets the pistons in the engine block. Now, this is going to a whole different step.

The most significant difference in the economic production model between a 1st world country and a 3rd world country is the size of the 3rd (and 4th) sector of industry. According to some economic theory I learned a long time ago, here’s how the industrial sectors divide.

  1. 1st level – Primary material and goods. This includes farming, mining, ranching, etc.
  2. 2nd level – Manufacturing. Based on what was harvested/grown/collected from the 1st level industries, this sector makes the goods and sells it. Manufacturing of computers, furniture, etc. falls in this category.
  3. 3rd level – Service Industry. This sector provides purely the service, instead of the actual manufacturing, etc. Logistics, hair dressers, teachers, entertainers, retail (although with a blurry line with the 2nd level industry) falls under this category.
  4. 4th level – IT (information technology). This is often argued to be part of the 3rd level industry, and it is sort of true. But I like to segregate them because I value the IT industry as a very unique and valuable asset of our industrial world, and the operating dynamics are quite different from the 3rd level. But, I guess, for the sake of this article, it can be in 1 category. Not a big deal.

The 3rd and 2nd world countries largely rely on level 1 and level 2 industries. And then when you get to the 1st world countries, it’s reliancy on level 1&2 of industry declines while the weight of the 3rd level industry weighs in a lot more.

The 1st world countries are the ones who reap the benefit of cheap costs provided by the 3rd world countries who support the 1st&2nd level of industrial production and with the extra disposable income we are able to generate even more services. By having more, we are able to spend more. Kids in Africa barely have food, yet we have more than enough food, and what money we have left is spent on watching movies, eating snacks, and drinking.

Back to the “Assembly Line” topic – the 1st world country, especially the richer ones, are out-sourcing so many more parts of their lives. I, for one, don’t clean my own bathroom – it’s too much time wasted for me, and I can afford to pay somebody to do it. I’d rather spend more time on work, or have more quality time with my friends or on my own. Some rich people can’t even be bothered to cook for themselves. They either eat out, or they have a personal chef (my roommate is a personal chef for some of these people). They also have people doing their everyday housework including laundry and what not. They can’t even be bothered to drive themselves, so they hire drivers.  They don’t want to try to work out on their own, so to feel more motivated, they just dish off that part to a personal trainer. They don’t want to clean their own cars, so they put it through the car wash centre and pay the price for it.

The richer you are, the bigger your assembly line gets, and the more services you will use. The richer society has such a dense 3rd level industry sector, and according to statistics and economists, that trend is expected to grow.

Watch for an influx in the growth of agencies that help with what was considered a personal task. Housecleaning, cooking, dog walking (I know a professional dog-walker in Yaletown – one of the richest neighbourhoods in Canada), driving, laundry, etc. These sectors will grow to a tremendous degree, and the growth has only begun.

Also, apply this to the business sector. More and more companies are going for the lean mean slim business model of outsourcing a lot of their own services. Hiring employees is outsourced to Apple One, Monster, Workopolis, etc. Marketing and surveys are handed out to consulting firms. Design, web, and printing arrangement as well as database work is given to me. Many companies, especially those that are smaller in scale (and SMEs are on the rise) find it more cost-efficient and sensible to outsource many aspects of business instead of having in-house staffing.

The Assembly Line is still growing and developing, and it keeps on changing the scope of our world.

By |2007-04-22T22:49:19+00:00April 22nd, 2007|Categories: General, Hot Issues, Marketing and Media|4 Comments

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CEO Of Brixwork Real Estate Marketing Inc.