Literature Review

Mass production was developed at the beginning of the 20th century, as an alternative to
Craft/Customized production. Craft production provided the consumers with tailor made
products of their choice and exactly what they wanted, by using highly skilled workers and
simple and flexible tools. It was a slow process and productivity was low.
For mass production, producers began to use costly and sophisticated machinery operated by
semi skilled workers, to produce very high volume of standardized goods. The machinery was
costly and operated without any disturbance, so in order to ensure smooth production mass
producers safe guarded the process by adding additional supplies, additional workers, and
more space. This process resulted in low cost goods to consumers but with less variety.
(James P.Womack, Daniel T.Jones, Daniel Roos, 2007).

Under mass production system a wide range of commodities are produced. Economies of scale
are achieved as a result of mass production. For manufacturers, production services are usually
costly and rigid, but variable production costs remain low. Smooth production requires
production facility to be flexible to an extent, that can allow manufactures to switch between
alternatives with few delays and at low cost, thus realizing economies of scale.
(P Zipkin - Harvard Business Review, 1997).

Division of labor is strongly related to the allocation of work roles, standardization of

production and development of large-scale manufacturing.
The expertise is achieved when whole operation is divided into parts, such that the workers
with experience in particular area of operation perform a specific task, then time is saved and
productivity increases many a times, than if each worker had to prepare the whole product.
Problems that arise as a result of division of labor include the repetitiveness of attention on
schedule jobs, workers whose skills are not in demand would become technologically
unemployed, and finally continual unemployment in case the economy does not grow rapidly
enough to readjust the displaced work force.
(R. A. Brady, Organization, Automation, and Society (1961); E. Durkheim, The Division of
Labor in Society (tr. 1965); H. R. Bowen and G. L. Mangum, ed., Automation and Economic
Progress (1967); T. Kiss, International Division of Labor in Open Economies (1971).

Mass production is typically described as keeping lower costs of production by economies of

scale. (Laetitia Radder, Lynette Louw, (1999) "Mass customization and mass production").

Mass production is achieved through techniques of assembly lines, specialization, and

standardization in achieving cost efficiency. (SI Kim,1999).

The mass producer uses supportive production technology to offer specific set of standard
products and lower the cost of range. Mass producer invests in system costs reduction to judge
the level of product mix flexibility linked with technology. Mass producer has the choice to
invest sufficient to make its technology entirely flexible. (Alptekinoglu.A, Corbett.C.j ,2005).

In industrial organization, mass production has remained an important concept for US

manufacturers till the end of the 20th century. But now this system has been surpassed by the
flexible/agile production in various sectors. To keep pace with the technological progress it is
important for firms to properly utilize the abilities and creativity of the work force except for
relying only on the expertise of the managers and specialists. In the 21st century, firms in
pursuit of manufacturing excellence should focus on a more flexible and innovative type of
organization and to keep pace with the changing environment.

(CR Duguay, S Landry , 1997).

 Supportive Theories

Following theories relate to the topic of cost minimization through mass production;
Economies of Scale Theory, Labor Return Theory, Theory of Production.
According to economies of scale, by expanding operations on large scale firms can avail
efficiency in costs.
Labor Return theory suggests that division of labor (specialization) play an important role to
realize large return on production.
Production theory presented by Adam Smith (Neo Classical School of thought) explains that
cost of production comprises of the rewards of four factors of production.