The factory system is a method of manufacturing first adopted in England at the beginning of the Industrial Revolution in the 1750s and later spread abroad. It replaced the putting-out system. The main characteristic of the factory system is the use of machinery, originally powered by water or steam and later by electricity. Other characteristics of the system mostly derive from the use of machinery or economies of scale, such as the use of unskilled labor, division of labor, thecentralization of factories, and standardisation of interchangeable parts.

Characteristics[edit]

The defining characteristics of the factory system are:

Use of Unskilled labor. Before the factory system many products such as shoes and muskets were made by skilled craftsmen who usually custom-made an entire article. In contrast, factories practiced division of labour, in which most workers were either low skilled laborers who tended or operated machinery, or unskilled laborers who moved materials, semi-finished and finished goods. There were a few skilled mechanics. Division of labor was also practiced by the putting out system in which, for example, pieces of leather were cut off-site and brought to a central shop to be made into shoes or other articles.[1]

Economies of scale. Factories produced product on a much larger scale than the putting out or crafts systems. Because factories could oversupply local markets, access to transportation was important so that goods could be widely distributed. Factories used far less manpower per unit of production and therefore lowered product cost.

Location. Before the widespread use of steam power and railroads, most factories were located at water power sites and near water transportation.[2] Railroads became widespread (itself a consequence of steam power becoming more efficient and affordable), so factories could be located away from water power sites but nearer railroads.[3]

Centralization. The cost and complexity of machinery, especially that powered by water or steam, was more than cottage industry workers could afford or had the skills to maintain. The exception was the sewing machine, which allowed putting out of sewing to continue for decades after the rise of factories. Home spinning and weaving were displaced in the years following the introduction of factory production, especially as distribution became easier.[1]

Workers and machines were brought together in a central factory complex specially designed to handle the machinery and flow of materials. Although the earliest factories were usually all under one roof, different operations might be done on different floors. (Multi-story buildings were common because they facilitated transmission of power through line shafts.) In large factories, such as Baldwin locomotive works, different processes were performed in different buildings.[2]

Foundry and blacksmith operations were normally kept in a separate building for reasons of safety, cleanliness and health.[4]

The efficiency of steam engines increases with size. Because of this, the smallest steam engines were about 2 horsepower, which was larger than needed by most workshops. Consequently until electrification in the 1910s and 1920s most workshops relied on manual power or rented space in power buildings which provided a centrally powered line shaft.[2]

Standardization and uniformity. Components were made to standard specifications, such as soles, heels and uppers for shoes themselves made to uniform sizes. Uniformity was mainly due to the precision possible from machinery, but also, quality was overseen by management. The quality of many machine operations such as sewing was superior to hand methods.[1] Near the end of the 19th century metal interchangeable parts became widely used.[5]

Guarantee of supply. Factories were able to produce and distribute a steady supply of goods.

Workers were paid either daily wages or for piece work, either in the form of money or some combination of money, housing, meals and goods from a company store (the truck system). Piece work presented accounting difficulties, especially as volumes increased and workers did a narrower scope of work on each piece. Piece work went out of favor with the advent of the production line, which was designed on standard times for each operation in the sequence, and workers had to keep up with the work flow.