- Part 1
- Part 2
- Part 3
- Part 4
One product over time
From a historical point of view the continuous increase of division of labor with ongoing new
products and new professional jobs is responsible for the growing
productivity in organizations and the higher standard of living in societies.
Looking just at single products today productivity rises steadily with the overall production.
The reason are the continuous learning effects during production –
effect is called “silent productivity increase”. Included in this
learning process of course are also the improvements on machine tools.
A good historical example is the price of the Ford Model T which was very
closely tied to the manufacturing costs:
(Source Abernathy/Wayne, Limits of the Learning Curve, Harvard Business Review, 1974).
Another example are the costs of one ton shipped by the Prussian Railways 1844
In general today you can expect a 20 to 30 % decline of costs after doubling the accumulated production.
Sometimes companies starting mass production first achieve considerable cost advantages over companies starting later into that market.