Archive for the ‘Specialization’ Category

Enhancing Productivity by a Division of Labor

July 17, 2007

Maximum productivity is achieved when a task is divided up into sub-tasks and individuals specialize in a sub-task.

Consider the task of making a pin.  This task can be broken up into these 10 sub-tasks:

1. One person draws out the wire.

2. Another straightens it.

3. A third cuts it.

4. A fourth points it.

5. A fifth grinds it at the top for receiving the head.

6., 7., 8. Making the head requires two or three operations.

9. Putting on the head is a peculiar business.

10. To whiten the pins is another.

A person performing all these sub-tasks could make perhaps 20 pins in a day.  Thus 10 persons produce 200 pins in a day.

When each person performs only one sub-task, the 10 persons working together can collectively produce 48,000 pins in a day.  By dividing up the labor there is a 250-fold increase in productivity.

— Extracted from Wealth of Nations by Adam Smith