Unique-Product Production

What is unique in unique-product production is the product. In fact, unique-product production is always organized around standardized tools and it typically works with standardized materials.

In unique-product production the basic organization is by homogeneous stages. In the building of the traditional single-family house—one of the oldest examples of unique-product production—we can distinguish four such stages. First, digging the foundation and pouring concrete for the foundation walls and the basement floor. Second, erecting frame and roof. Third, installing plumbing and wiring equipment in the walls. Finally, interior finishing. What makes each of these a distinct stage is that work on the house can stop after each is completed, without any damage—even for a fairly long time. On the other hand, within each stage, work has to be carried right through; or else what has been done already will be damaged and may even have to be done again. Each stage can be varied from house to house without too much trouble or adjustment and without delaying the next stage. Each of these stages by the inner logic of the product—that is, the house—is an entity in itself.

This is largely how the U.S. succeeded in building ships at such a tremendous rate during World War II. It was not mass production that resulted in the unprecedented output of ships. It was the division of the work into homogeneous stages; the systematic organization of the work group for the specific requirements of each stage; and the systematic training of a large number of people to do all the work required within one stage. This in turn made possible the progressive scheduling of the work flow, which was the greatest timesaver.

(Drucker, 1974, pp. 205-206)

Using the Principles of Production

It is, in summary, of major importance in managing a business to know which system applies; to carry its principles through as far as possible; to find out which parts of production can be organized in a more advanced system and to organize them accordingly; and to know what demands each system makes on management.

Where historical and technological obstacles have barred the organization of production in the appropriate system, as in the basic-steel industry, it is a major challenge to management to work systematically on overcoming these obstacles. Emphasis should not be on working a little more effectively what is basically, the wrong system.

A business using the wrong system has to satisfy all the demands that the appropriate and more advanced system would make on management. Yet it does not have the wherewithal to pay for them, for this can come only out of the increased ability to produce which the more advanced system provides.

All four principles of production provide the foundation for both production work and achieving worker. All are compatible with the dynamics of working or can be made compatible. When they fail to do so, it is not the principle that is at fault; it is its misapplication.

Specifically, the failure of mass production to give the worker achievement is essentially poor engineering. It is either failure to understand the meaning of mechanization or it is failure to understand the difference between work and working.

(Drucker, 1974, p. 205)

Advancing Production Performance

There are two general rules for advancing production performance and pushing back limitations. First, the limitations on production are pushed back further and faster the more consistently and thoroughly the principles pertaining to the system in use are being applied. Second, the systems themselves represent a distinct order of advance, with unique-product production the least advanced, process production the most advanced. They represent different stages of control over physical limitations. This does not mean that opportunities for advance lie everywhere in moving from the unique-product system to the process-production system. Each system has its specific applications, requirements, and limitations. But we advance to the extent to which we can organize parts of production on the principles of a more advanced system and learn, at the same time, how to harmonize different systems within the same process.

There are also two general rules concerning the demands on management competence made by each system. First, the systems differ not just in the difficulty of their demands, but in the variety of competence and the order of performance. Management, in moving from one system to another, has to learn how to do new things rather than learn to do old things better. Second, the more we succeed in applying consistently the principles of each system, the easier it becomes for management to satisfy its demands.

Each management has to meet the demands of the system it ought to have according to the nature of its products and process, rather than those of the system it actually uses. Being unable or unwilling to apply what would be the most appropriate system results only in lack of performance; it does not result in lower demands on management, but inevitably increases the difficulties of managing the business.

(Drucker, 1974, pp. 203-204)

Four Principles of Production

There are four such principles of production known to us so far. Each has been worked out for industrial production, that is, largely for traditional manual work. But each is equally applicable to producing and handling information, that is, to most clerical work. The principles are applicable also to knowledge work, at least to knowledge work concerned with the learning of known knowledge (i.e., already available and learnable) and its application.

The four systems are: (1) unique-product production; (2) rigid mass production; (3) flexible mass production; and (4) process or "flow" production. Each of these four has its own specifications; each makes specific demands on management.

(Drucker, 1974, p. 203)

The Principles of Production

Production is not the application of tools to materials. It is the application of logic to work. The more clearly, the more consistently, the more rationally the right logic is applied, the less of a limitation and the more of an opportunity production becomes.

This definition implies that there must be principles of production. There must be a small number of basic models, each with its own constraints, its own requirements, its own characteristics. The definition further implies that the more closely a process of production can be designed according to one of these principles, the smoother, the more effective, and the more productive it will be.

(Drucker, 1974, p. 203)

The Analysis of Work

The manager needs to know that the logic of work analysis and the analysis of job structure are two different logics. One is the logic of work; the other, the logic of working.

The last and most common misunderstanding of the industrial engineer is the belief that work analysis is the whole job. It is only the first step in making work productive. Analysis identifies individual specific operations, their sequence, and their interrelationships. It deals with pieces. It is not concerned with the process of production as a whole, with its structures, its economy, or its performance.

(Drucker, 1974, p. 202-203)

The Analysis of Work

Work analysis does not begin with identifying operations. It begins with defining the desired end product. As Gantt showed sixty years ago, the analysis of work has to start with the questions: What do we want to produce? What is the work itself? How can the end product be designed so as to make possible the easiest, the most productive, the most effective work?

To start out with the task rather than with the end product may result, however, in beautiful engineering work that should not be done at all.

(Drucker, 1974, p. 201)