We need to find the point in time when....

[johnmrson]

.........cost control became a big part of manufacturing a product.
An early example where cost didn't matter was the Duesenberg. These cars were made up until 1937 and there would have been no concerns about how much the car cost to make because they knew they could recover the cost in the sale price. They made the best cars that they could. At what point in time did the Accountants become an important part of the manufacturing process, and not just capturing the numbers?
Plenty of early razors seem to have been made using the same philosophy. Now it's all about saving $0.000001 cents per unit by making the plastic thinner. When did the tipping point happen? Why, as consumers don't we demand better products more often? The shaving community seems very happy to support cottage industries that are interested in making great products and we are happy to pay for it.

That's it, I'm off to bed. It's 2:27am and when I start thinking about deep topics like this I think I need to get some sleep.

 

[Seraphim]

How popular/affordable was the Deusenberg back in it's day?

 

[luvmysuper]

.........cost control became a big part of manufacturing a product.
An early example where cost didn't matter was the Duesenberg. These cars were made up until 1937 and there would have been no concerns about how much the car cost to make because they knew they could recover the cost in the sale price. They made the best cars that they could. At what point in time did the Accountants become an important part of the manufacturing process, and not just capturing the numbers?
Plenty of early razors seem to have been made using the same philosophy. Now it's all about saving $0.000001 cents per unit by making the plastic thinner. When did the tipping point happen? Why, as consumers don't we demand better products more often? The shaving community seems very happy to support cottage industries that are interested in making great products and we are happy to pay for it.

That's it, I'm off to bed. It's 2:27am and when I start thinking about deep topics like this I think I need to get some sleep.

A lot of the cost cutting measures are a result of adopting Business models such as Six Sigma (1981) and its predecessors with the inherent "Cost-Benefit Analysis" processes.

It occurs because most folks don't complain.

We who do are such a small minority that the profit gained in cost cutting versus the calculated loss in profit from sales to the 2 percenters favors the cost cutting.

This is the heart and soul of a Cost-Benefit Analysis.

Which is not to say that there were not cheap, shoddy products back in "The Goode Olde Days" too.

 

[82R100]

I daresay that cost control was a huge factor for Ford (and its competitors) from the 'teens on. The old man did his part by promising ridiculously low prices on his cars before knowing how the company would be able to meet them.

The Duesenberg was the epitome of the moviestar status symbol.

Maybe I don't understand your point.

- Chris

 

[luvmysuper]

I daresay that cost control was a huge factor for Ford (and its competitors) from the 'teens on. The old man did his part by promising ridiculously low prices on his cars before knowing how the company would be able to meet them.

The Duesenberg was the epitome of the moviestar status symbol.

Maybe I don't understand your point.

- Chris

I think he's just editorially commenting on the idea of a process whereby people make a quality product and then have the "bean counters" think of a way to reduce the cost, versus a process whereby the "bean counters" mandate a process under which a product must be manufactured.

I could be wrong.

 

[ajkimmins]

I think the problem is who are you selling to, how much can you sell it for, what will they pay. For the Duesenberg. they knew they were selling to very rich people, we have Lambhorgini's and Ferrari's today. If you can only sell a product for $100 and it cost $95 to make, market, ship, etc. then you only make $5 on each. If you can decrease those costs $1 then you make that much more. It has been this way for "normal" stuff for years. If you don't want to worry about cost then you have to find the people that will pay so much that you don't care.

 

[Tha Baron]

A lot of the cost cutting measures are a result of adopting Business models such as Six Sigma (1981) and its predecessors with the inherent "Cost-Benefit Analysis" processes.

Add industry norms like these with the adoption of the computer and enhanced inventory management systems... Heck, Microsoft Excel did a lot in terms of analyzing and tracking costs of production.

 

[Greybeard]

Add industry norms like these with the adoption of the computer and enhanced inventory management systems... Heck, Microsoft Excel did a lot in terms of analyzing and tracking costs of production.

You are a young man. It was actually Lotus 1 2 3.

 

[Agent8426]

Cost control need not result in a reduction in quailty. The real question is when did companies begin to use quality reduction as a cost control method?

 

[shyrlock]

Another good example is what happened to Winchester in 1964.
Prior to that Winchester made absolutely superb rifles. They were made on a assembly line, but by skilled craftsmen. They used the finest steels and woods available, and at the end of the line each rifle was individually fitted and tuned by gunsmiths that were damned proud of their work.
A fellow could buy one of these rifles, take it on safari, target match or just plain fun shooting. The buyer knew that they would perform as advertised, right out of the box.
In '64 the accountants convinced the management that they could get rid of all the skilled workers, and use lower quality materials. They said that people will still buy them because of Winchester's sterling reputation.
They were right, for about 6-12 months. After that, The once proud firearm manufacturer became synonamous with doodoo. American hunters and sportsmen were outraged and unforgiving. They were berated in all of the hunting and sporting magazines.
Winchester could barely give the guns away. It finally took a buyout and total make-over as U.S. Repeating Arms for them to regain any portion of their previous credibility.
Today, the "Pre '64" Winchesters are sought after and command a premium price, although quality replacement parts mostly have to be hand-made.
You would think that a lesson would have been learned, but I guess not.

 

[Seraphim]

Another good example is what happened to Winchester in 1964.
Prior to that Winchester made absolutely superb rifles. They were made on a assembly line, but by skilled craftsmen. They used the finest steels and woods available, and at the end of the line each rifle was individually fitted and tuned by gunsmiths that were damned proud of their work.
A fellow could buy one of these rifles, take it on safari, target match or just plain fun shooting. The buyer knew that they would perform as advertised, right out of the box.
In '64 the accountants convinced the management that they could get rid of all the skilled workers, and use lower quality materials. They said that people will still buy them because of Winchester's sterling reputation.
They were right, for about 6-12 months. After that, The once proud firearm manufacturer became synonamous with doodoo. American hunters and sportsmen were outraged and unforgiving. They were berated in all of the hunting and sporting magazines.
Winchester could barely give the guns away. It finally took a buyout and total make-over as U.S. Repeating Arms for them to regain any portion of their previous credibility.
Today, the "Pre '64" Winchesters are sought after and command a premium price, although quality replacement parts mostly have to be hand-made.
You would think that a lesson would have been learned, but I guess not.

I'm sorry, was the above story about Winchester rifles, or Williams shave soap?

 

[Tha Baron]

You are a young man. It was actually Lotus 1 2 3.

Guilty... Somewhat ironic that your handle is 'Greybeard'!!

 

[Uncle Erik]

A lot of products went south shortly after WWII, when planned obsolescence came into vogue. Before that, the business model was to build a durable good and then keep a profit stream from servicing and repairing it. Unfortunately, the business model switched towards more disposable products where, instead of repair, it would be thrown out and replaced by something newer. The vast majority of what's made today is engineered to fail within a certain period of time - usually shortly after the warranty runs. There's no grand conspiracy about that, either. Companies are very scientific in measuring the mean time before failure (MTBF) and often can tell you to the week when something is going to fail.

This is done both to keep the planned obsolescence rolling as well as to protect them from warranty claims, which really eat at the bottom line. They need to know just how long something is going to last, so a large portion of the R&D budget goes towards figuring that out.

Also, cost accounting has become much more effective in recent decades. I know - I'm an accountant, among other things. You'd be surprised at how the little costs really stack up over time.

Sadly, the beancounters are usually turned loose after an acquisition. This is why so many products turn to crap after a company sells out. The new owner needs to carve out extra profits, so they get the cost accountants in to squeeze out the extra margin. This also happens to longstanding products because of the notion that if you're not growing, you're failing. Which is pure nonsense. There are small companies who have been doing the same thing for decades or centuries, and they get by fine with similar year-over-year sales. Anyhow, this is why McDonald's food isn't all that great any longer. I remember it being much tastier 30 years ago. The difference is that over the years, the cost accountants shaved here and there hundreds of times. No one shaving made the product lousy, but it was hundreds of small cuts that did it. Sad, really. If any McDonald's exec wants to see what happened to their product, they should look at the stacked up drive through lanes and lines out the door at In'n'Out. There's no reason McDonald's can't do the same, other than excessive cost accounting and corporate inertia.

The only goods that seem exempt are luxury products. The Duesenberg certainly was one.

If you want great quality without breaking the bank, you only have three options today. One is to buy used luxury goods, preferably ones that have gone slightly out of fashion. Second is to buy pre-war goods. You'd be surprised at how well most of them still work. Third is to DIY. Just don't expect mass-manufactured high-quality goods today. They might make a comeback with Depression 2.0, but that hasn't happened yet.

 

[garyg]

You are a young man. It was actually Lotus 1 2 3.

Guilty... Somewhat ironic that your handle is 'Greybeard'!!

Actually I think "Multiplan" pre-dated Lotus ..

But seriously, the answer to the OP's query is not a simple one. The real problem is the focus on short term profitability rather than long term. Short term profits are enhanced by shortcuts in production & design, while long term costs for warranty & lost customers are ignored. Think Pinto ..

The Winchester example is great, but then there are some who opine that the Winchester '94s are only great if built before WWII. What's ironic is that the automotive industry that invented planned obsolescence (SP?), has gone the other direction. Now it takes more than 10 years to rust through, and then only in certain climates, as opposed to six months in the late 60's.

Home appliances, on the other hand, now have the half life of a fly.

So when did things start getting cheap? It varies by industry, by company, but my humble opinion is that it occurs at the precise moment an accountant is put in charge of a company. Unless it is an accounting firm of course.

 

[johnmrson]

I think he's just editorially commenting on the idea of a process whereby people make a quality product and then have the "bean counters" think of a way to reduce the cost, versus a process whereby the "bean counters" mandate a process under which a product must be manufactured.

I could be wrong.

I'm looking to a time when the process was a business made the product and it was the best they could make. The "bean counters" weren't invovled in the process except to tell the manufacturing people how much profit was made at the end of the day. The product was designed and made by craftsmen, engineers etc. Now products are designed by marketing people and the production is managed by the "bean counters" and is made by the cheapest labour that can be found.
I think that the process started in the early to mid 1960's and rolled on until the late 1970's when pretty much everyone had adopted the new process.

 

[toucanlamp]

People don't buy cheap made in China goods because they're stupid, they buy them because they leave them with more income left over to spend on other things, and they do the job well enough.

In almost all cases, the premium you pay for a luxury good over a common one is not even remotely matched by added function.

I can buy a necktie for $20 at the department store, or $100 at the fancy menswear shop. What do I gain by sacrificing an extra 80 hard earned dollars? It's made of really nice silk, etc. But, what does that matter to me? How many people could stand back and look at someone and pick out if they're wearing a high or low quality necktie? Almost nobody.

You have the choice, luxury goods.

I don't think any of this kind of thing makes any sense because I don't think you guys could name a single good or service for which there isn't an expensive high quality version produced by somebody for those who want it.

Otherwise the argument seems to be that being satisfied with decent, basic, bare bones products is somehow bad and the average person with limited disposable income should have to shell out a greater chunk of their earnings for quality that is really for the most part superfluous to function.

Things changed because now businesses have to compete with other businesses all over the world because consumers have vast choice and have for the most part shown their preference for no-frills kind of items.

I'd be willing to bet that the average income for posters on this forum is substantially higher than that of the average American, you have to put yourself in the shoes of the person who often has to make the choice of "one or the other" rather than ok, good, better, or best.

 

[Desdinova]

Actually I think "Multiplan" pre-dated Lotus ..

But seriously, the answer to the OP's query is not a simple one. The real problem is the focus on short term profitability rather than long term. Short term profits are enhanced by shortcuts in production & design, while long term costs for warranty & lost customers are ignored. Think Pinto ..

Proper cost control results in long-term profits.

Corner cutting is short-term, but that is not the same thing.


Using the example of cars, back in the 90's Ford stopped painting the inside of the ashtrays on some vehicles. This resulted in a savings of millions.

Changing tire suppliers could realize a savings of $5 per vehicle. $5 x 10 million cars is a $50 million savings per year.

 

[raisindot]

In the American Civil War, there was a great deal of scandal over the procurement of uniforms, boots, blankets and other commodities for the Union soldiers. The manufacturers who won the bids, nearly always through bribery, charged the army an arm and a leg for purposely shoddy, low-quality goods that began to fall apart shortly after they were worn. This may have been the first documented case of deliberate "low-cost, low quality" manufacturing in the country (as opposed to low cost, low quality stuff produced because of poor craft skills, rather than deliberate economic reasons).

Jeff in Boston

 

[soapbox]

You are a young man. It was actually Lotus 1 2 3.

Actually I think "Multiplan" pre-dated Lotus ..

Visicalc was the first computerized spreadsheet I know of. I think it was the first, period, that ran on a personal computer.

In the American Civil War, there was a great deal of scandal over the procurement of uniforms, boots, blankets and other commodities for the Union soldiers. The manufacturers who won the bids, nearly always through bribery, charged the army an arm and a leg for purposely shoddy, low-quality goods that began to fall apart shortly after they were worn. This may have been the first documented case of deliberate "low-cost, low quality" manufacturing in the country (as opposed to low cost, low quality stuff produced because of poor craft skills, rather than deliberate economic reasons).

Since the Industrial Revolution made mass-production of many goods possible, I expect this answer is the closest to correct.