The Business Book

(Joyce) #1


See also: Stand out in the market 28–29 ■ Creativity and invention 72–73 ■ Thinking outside the box 88–89 ■ The
learning organization 202–07 ■ The value chain 216–217 ■ Lean production 290–93 ■ Kaizen 302–09

of a process that was successfully
simplified is steel manufacturing.
During the Industrial Revolution,
huge quantities of steel were needed
to build bridges, ships, and railroads.
Steel was in short supply because it
was expensive to produce. In
Britain, steel had been made in
high-temperature, coke-fired
furnaces since the 1740s. Small
quantities of iron were loaded into
small clay crucibles (containers that
withstood heat) and placed inside
the furnace. After three hours,
impurities were scraped from the
crucibles, leaving the steel behind.

Simplifying the process
In the 1850s the production method
was simplified by the British
engineer Henry Bessemer. His
so-called Bessemer process did not
require crucibles. Instead, the
impurities generated from heating

iron to create steel were removed
from the metal by blowing air
through the iron during the
production process. Bessemer’s
simpler production method was more
fuel efficient. As a result, the cost of
making steel fell from as much as
$97 (£60) per ton to $11 (£7) per ton.
In some cases, simplifying a
process can mean using different
materials. In 1946 in the US, James


unnecessary steps.

In competitive markets,
consumers look for value
for money.

Costs can be reduced by
streamlining processes
or simplifying products.

To reduce the price of their
products, companies may choose to
lower their production costs.

Watson Hendry invented plastic-
injection-molding technology, which
was used to produce one-piece
chairs and tables much more
cheaply than wood.

Mass production
In the early 1900s, Henry Ford
revolutionized manufacturing
by standardizing the method
used to make cars. Before Ford’s ❯❯

Steelmaking was revolutionized by
Henry Bessemer’s new converter. It
raised the temperature of the iron so
that more impurities could be removed
during the oxidation process.

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