Mass Distribution: The Mail-Order House

A later and even more direct response to the new transportation and communication infrastructure than the department store was the mail-order house. Both relied, of course, on the railroad and telegraph for the effective operation of their purchasing organizations, but the department store customers came to their counters largely by horse car, carriage, or

Mass Distribution: The Chain Store

Although the chain store had its beginning and first growth in the post- Civil War years, it did not become a significant retailing institution until the first decade of the twentieth century. By the 1920s, however, such stores were established widely enough and had become efficient enough to receive the brunt of the political

Mass Distribution: The Economies of Speed

The coming of mass distribution and the rise of the modern mass marketers represented an organizational revolution made possible by the new speed and regularity of transportation and communication. These new enterprises, in turn, made it possible to increase the speed and lower the cost of distribution of goods in the United States even

Mass Production: The Basic Transformation

The revolution in production came more slowly than did the revolution in distribution, for it required further technological as well as organiza- tional innovation. The new methods of transportation and communication, by permitting a large and steady flow of raw materials into and finished products out of a factory, made possible unprecedented levels of

Mass Production: Expansion of the Factory System

As emphasized earlier, the beginnings of factory production in indus- tries other than textiles had to wait for the opening of the anthracite coal fields in Pennsylvania. Before the mid-183os, when coal became available in quantity for industrial purposes, nearly all production was carried on in small shops or at home. American manufacturing was still

Mass Production: The Mechanical Industries

In the late 1870s and early 1880s, however, mass production did come to some mechanical industries not using heat. Machines did more than replace manual operations. They were used to integrate several processes of production. Such innovations came in several industries at almost precisely the same time, and they appeared primarily in those processing

Mass Production: The Refining and Distilling Industries

Mass production came in much the same way in the refining and dis- tilling industries as in continuous-process mechanical industries, though in a less dramatic manner and at an earlier period in time. It appeared earlier because of the ease in integrating the flow of liquids through the processes of production and because the

Mass Production: The Metal-Making Industries

Modern factory management was first fully worked out in the metal- making and metal-working industries. In metal-making, it came in re- sponse to the need to integrate (that is to internalize) within a single works several major processes of production previously carried on in different locations. In metal-working, it arose from the challenges of

Mass Production: The Metal-Working Industries

In the metal-working industries, the technical and organizational chal-lenges were more difficult than those facing Carnegie and his competitors. Processing of materials required greater skills and more precision, the use of more complex machinery, and a greater variety of raw materials. For these reasons, major technological innovations took longer to be perfected and organizational

Mass Production: The Beginnings of Scientific Management

When the prolonged economic depression of the 1870s brought a continuing drop in demand and with it unused capacity in metal-working, manufacturers began to turn their attention from technology to organiza- tion.56 The new interest led to the beginnings of the scientific management movement in American industry. Organization and management improve- ment became a

Mass Production: The Economies of Speed

The rise of modern mass production required fundamental changes in the technology and organization of the processes of production. The basic organizational innovations were responses to the need to coordinate and control the high-volume throughput. Increases in productivity and de- creases in unit costs (often identified with economies of scale) resulted far more from

The Coming of the Modern Industrial Corporation: Reasons for Integration

Integration of mass production with mass distribution offered an oppor- tunity for manufacturers to lower costs and increase productivity through more effective administration of the processes of production and distribu- tion and coordination of the flow of goods through them. Yet the first industrialists to integrate these two basic sets of processes did not

Integration by Users of Continuous-Process Technology

The most dramatic examples of the integration of mass production and mass distribution came in those industries adopting continuous- process machinery during the decade of the 1880s. Such machinery was, it will be recalled, invented almost simultaneously for making cigarettes, matches, flour, breakfast cereals, soup and other canned products, and photographic film. These innovations

Integration by Processors of Perishable Products

Whereas many of the mass producers of semiperishable packaged products continued to use the wholesaler to handle the physical distribu- tion of their goods—even after they had taken over that middleman’s ad- vertising and scheduling functions—the makers of more perishable products such as meat and beer, in building their marketing networks, began to sell

Intergration by Machinery Makers Requiring Specialized Marketing Services

The other manufacturers to by-pass the wholesalers were the makers of recently invented machines that were produced in volume through the fabrication and assembling of interchangeable parts. The marketing needs of these machinery makers were even greater than those of the meat packers and brewers. They found that the volume sale of their products

The Coming of the Modern Industrial Corporation: The Followers

The pioneers of the 1880s soon had their imitators. Nevertheless, the giant, integrated industrial enterprise remained the exception until after 1900. Nearly all American manufacturers, including those using the new mass production techniques, continued to employ existing marketers to sell and distribute their products. The makers of consumer goods relied on the wholesaler and

Integration by the Way of Merger: Combination and Consolidation

American manufacturing firms became large, multiunit enterprises in two ways, by adding marketing and purchasing offices or by merger. The first embodied the strategy of vertical integration. The second was almost always an expression of the strategy of horizontal combination. The first aimed at increasing profits by decreasing costs and expanding productivity through administrative

The Mergers of the 1880s

During that formative decade of the 1880s a very small number of manufacturers first moved from cartels to legal consolidations. All the successful mergers of that decade went beyond legal consolidation to administrative centralization. Not all, however, went the whole course— that is, moved beyond administrative centralization of processing facilities to vertical integration. Despite

Mergers in 1890-1903

All six of the successful pioneering trusts of the 1880s had been formed to concentrate and rationalize production. During the 1890s the number of consolidations increased rapidly. At the same time the motive for merger changed. Many more were created to replace the association of small manufacturing firms as the instrument to maintain price

The Success and Failure of Mergers in 1890-1903

The systematic analysis of success and failures of early mergers made by Shaw Livermore tells much the same story. Livermore selected from an initial list of 328 mergers occurring between 1888 and 1906 156 that were large enough to affect the market structures of the industries in which they operated. He defined success in