Division of labour is the term first used in Adam Smith’s the Wealth of Nations to describe the separation of manufacturing process into distinct and simple operations which are then delegated to specific hands or machines to perform. Smith thought that the quality and quantity of work carried out by a workforce organized along the division of labour principle was so superior compared to work done by non-divided labour that he said:
The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, seem to have been the effects of division of labour.
Reasons for Productivity Increase of Labour under Division
Adam Smith attributed the increased productivity of labour after division to 3 reasons:
- Workers become very dexterous and effective in their single allocated task. This is because the workers who specialize in a single task have a lot of time and occasion to practice their allotted operation. This can lead to increased speed and accuracy as well as quality of work done by a worker. Practise makes perfect!
- Another reason is that time is saved by eliminating the constant need to move from one operation to the next. Any capital machinery is also run constantly.
- some automation may arise from division of the general manufacturing into discrete and simple tasks which in turn may greatly speed up the individual tasks which are automated. This affect is caused because once the tasks needed for manufacture are broken down into simplest possible elements it becomes much more apparent to find methods or invent machinery that will save time or increase quality and accuracy of work.
It is also generally considered that because the cost of training workers to perform simple task is far less then training workers to make the whole good division of labour can lover average cost of production.
Division of the whole Workforce in the wider Society
It is generally believed that human society began to greatly develop after division of production of goods began to occur between different people. As people specialized in production of certain goods, like growing grain or concentrating on production of weapons, they began to produce volumes which were over and above their own personal needs, a surplus. These surpluses were then traded or bartered for other people’s surpluses. This process allowed people to gain far bigger range and quality of good then they would have been able to produce themselves. Human propensity to trade is generally thought encouraged division of labour further. So from general professions, like smiths, more specific branches were developed, like nail making for example.
Limitations of Division of Labour
Extent of the Market
Division of labour in the wider society is generally assumed to be naturally controlled by the extent of the market. If the market is very large, where large volumes of product or service is demanded, a firm or a worker will generally find it easier to specialise, achieving greater efficiency and thus larger profits. However small markets generally do not permit high degree of specialisation of the labour force. Thus one may expect a person who lives in isolation to carry out more jobs in order to provide a comfortable life style compared to a person who lives in a large city.
This may explain why highly and densely populated areas near the cost or a river, which effectively expands the market further by providing transport links to other populated areas, have developed quicker in their overall level of technical progress.
Drawbacks of Division of Labour
- Dependency on the whole of the labour force and fixed capital is dramatically increased with very high level of division of labour. With increased division of labour a break down of one particular machine in the middle of a production line, or an absence of a worker, can halt the whole production process.
- Very high degree of division of labour may create demand for very specific skills. This in turn may lead to the general workforce acquiring non-transferable skills and thus aquring immobolity. In the long term this may lead to technological unemployment, a type of structural unemployment, where a job is replaced by a machine and because the worker’s skill is no longer required the worker has trouble finding employment because s/he is not trained in anything else.
- A major drawback of division of labour is boredom which people may experience when carrying out very simple, repetitive tasks.
Production lines in thousands of factories across the world are based on the principles of division of labour into very specific and easy to learn tasks. However some have challenged whether this form of production really does guarantee most efficient use of labour and capital and does produce the best quality. Some have suggested that more humanistic, team based production methods, such as parallel production used at Volvo’s Uddevalla car plant, will be more efficient in the long term.
Uddevalla Car Plant
Volvo’s Uddevalla car plant used a method of production called parallel assembly where all of the required assembly for a car was carried out by a single, independent team of highly skilled workers. Uddevalla plant also partly depended on better physical layout of the factory to deliver more efficiency.
Principles of Parallel Production
The basic principles of parallel production are as follows:
- Work teams are self governing. The team has an elected leader or the leadership is rotated between all of the team-mates.
- Work is self paced because there is no physical conveyor belt moving at a certain speed.
- Work teams are not fixed in size. More experienced workers may form smaller teams then less experienced workers who may choose to form larger teams.
- Workers are highly trained about all of the mechanical and/or technical operations of the product which is to be assembled.
- Workers are given certain amount of freedom to experiment with different production methods and tools to find the more effective forms of production.
Uddevalla in Comparison to Gothenburg Car Plant
Uddevalla car plant has been compared to other car plants in Sweden which use normal production line assembly method. One such plant was Volvo’s Gothenburg car plant. Uddevalla was said to have outperformed Gothenburg in several key areas:
- Overall assembly time was faster by 1 hour per month.
- According to customer satisfaction surveys the Uddevalla plant produced cars which were of higher quality. This is possibly due to the fact that workers were better trained then at Gothenburg.
- The cost of specialized equipment on average was 50% less. This may be explained by the fact that tools used in the Uddevalla car plant were low-tech and of quite general nature. So when new car models were produced at Uddevalla fewer tools had to be replaced in order to accommodate the new designs. Also there was generally less need for more fixed capital because same tools could be used by different workers at different times as opposed to a production line where every worker needs their own tools even if some workers have nearly identical tools.
- The cost of retraining workers for new designs was about 50% less at Uddevalla compared to Gothenburg.
Some economists have argued that Uddevalla car plant was outperforming Gothenburg because Gothenburg was, at the time, not as productive as it could have been. Volvo shut down the Uddevalla plant after 3 years of operations because Uddevalla was only a place of assembly, so the cost of transporting all of the car parts to this plant was greater then any costs saved as a result of greater efficiency at the plant. Sweden was also suffering an economic slow down at the time and the domestic demand for cars was shrinking.
- Production Line
- David Begg, Economics 7th edition, 2003 (ISBN 0-07-709947-8)
- Susan Grant, Chris Vidler, Economics in Context, 2000 (ISBN 0-435-33111-6)
- Adam Smith, The Wealth of Nations, 1776 (ISBN 1-85715-011-2)
- Christian Berggren, A Dead Horse or a Car Dealer's Dream?
- Danielle Lottridge, Work at the Uddevalla Volvo Plant From the Perspective of the Demand-Control Model