The Expanded and Annotated My Life and Work

ROLE OF SUPPLY CHAIN MANAGEMENT
The next section introduces the concept of supply chain management, in 
which parts from different sources are brought together for assembly at 
the point of consumption. The need for all supply chain participants to 
adopt the same service methods is particularly important, and it means 
that Ford’s universal code must operate across the entire supply chain. All 
suppliers and customers must give and receive square deals, and all must 
work to create more value through the elimination of waste.
* * *
The original company and its equipment, as may be gathered, were not elab-
orate. We rented Strelow’s carpenter shop on Mack Avenue. In making my 
designs I had also worked out the methods of making, but, since at that time 
we could not afford to buy machinery, the entire car was made according to 
my designs, but by various manufacturers, and about all we did, even in the 
way of assembling, was to put on the wheels, the tires, and the body. That 
would really be the most economical method of manufacturing if only one 
could be certain that all of the various parts would be made on the manu-
facturing plan that I have above outlined. The most economical manufac-
turing of the future will be that in which the whole of an article is not made 
under one roof—unless, of course, it be a very simple article. The modern—or 
better, the future—method is to have each part made where it may best be 
made and then assemble the parts into a complete unit at the points of con-
sumption. That is the method we are now following and expect to extend. It 
would make no difference whether one company or one individual owned all 
the factories fabricating the component parts of a single product, or whether 
such part were made in our independently owned factory, if only all adopted 
the same service methods. If we can buy as good a part as we can make our-
selves and the supply is ample and the price right, we do not attempt to make 
it ourselves—or, at any rate, to make more than an emergency supply. In fact, 
it might be better to have the ownership widely scattered.

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Starting the Real Business  •  37