The Factory System: Origins, Development, and Impact on Manufacturing During the Industrial Revolution

The factory system is an approach to manufacturing that arose during the Industrial Revolution in England to replace the cottage industry and putting out system. Its primary innovation was to combine machinery and other new technologies with the division of labor in order to lower production costs and increase efficiency.

Due to the rise of the factory system, production began leaving households and artisan shops to be located in plants and factories instead. The experience of workers changed dramatically as a result of being in coordinated, disciplined factory settings instead of a household. Not all early factories took the same approach to managing labor.

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Distinct systems, such as the Slater System and the Lowell System, arose in the United States. After the Industrial Revolution, the factory system continued to develop and innovate with features such interchangeable parts and assembly lines.

Before the Factory System

Before urbanization and industrialization, most production was accomplished by a system called the cottage industry. In the cottage industry, peasant families produced more goods than they needed to use themselves and sold them to others. In some areas, this developed into a type of protoindustrialization when entrepreneurs provided raw materials and paid peasants for their labor to turn them into finished goods. A businessman might provide one peasant with wool to turn into yarn, then provide the yarn to a different household to be woven into cloth. Scholars sometimes call this the putting out system.

There were also some centralized workplaces before the Industrial Revolution. In some cases these were created because production was too large to be accomplished in a home or small shop or required specialized energy sources such as a furnace or waterpower. Examples include fulling mills, where workers cleaned woolen cloth, as well as hammer forges, glassworks, breweries, and early paper mills. In other cases, industries developed protofactories that relied on traditional hand technology for purely organizational reasons.

Overseers could directly supervise the production process to ensure quality control, a quick work pace, and enforce the division of labor. Examples included calico-printing shops, wool scribbling and finishing mills, handloom weaving sheds, Swiss watchmaker’s workshops, woodworking shops, and clockmaking shops. Some of them began introducing small-scale machinery and waterpower.

The Rise of the Factory System

The rise of the factory system was a defining aspect of the Industrial Revolution, which took place in England between the late eighteenth and mid-nineteenth century. The revolution primarily consisted of the introduction of industrial technology in manufacturing, but it was also notable for increasing the use of mineral sources of energy and advancing transportation methods.

In addition to mechanization and the development of new technology, the newfound factory system had three other key features: centralization and increased sale of production, changes in organization, and an extensive division of labor. These features were important because they allowed early factories to lower production costs, increase efficiency, and utilize technology more effectively. Although the revolution began in England, its influence quickly spread to the United States and continental Europe.

Most scholars pinpoint the beginning of the modern factory system specifically within the British textile industry. Several important inventions during the Industrial Revolution made sweeping changes in the textile manufacturing. The industry previously revolved around the spinning of wool into yarn using spinning wheels and the weaving of wool cloth using traditional hand looms. In the early eighteenth century, the industry switched to cotton and workers struggled to keep up with the demand for cotton fabric.

Technological Developments

The spinning jenny, the mule, and the power loom significantly decreased production time, allowing Britain to ultimately produce 200 times more cotton cloth. In the late eighteenth century, cotton-spinning mills were already using waterpower and strategic layouts to allow for the continuous flow of materials. By 1800, new technologies had essentially eliminated older methods of spinning cotton. The wool industry was slower to industrialize and still produced a significant amount of hand-spun yarn in the mid-nineteenth century.

Continental Europe and the United States slowly followed in Britain’s footsteps. Although French Alsace had an advanced cotton-spinning industry in the 1830s, other parts of France still had significant handweaving sectors forty years later. Silk factories in France did not effectively industrialize until the late 1870s. Swiss cotton spinning mechanized in the first two decades of the 1800s. By the mid-nineteenth century, the Swiss cotton-spinning industry was second only in size to Lancashire.

Germany had a mechanized cotton-spinning mill established in the Rhineland in 1784, but after that progress slowed and hand-spinning did not disappear until the mid-nineteenth century. The cotton-spinning industry in the United States began to mechanize at the end of the eighteenth century when Samuel Slater (1768-1835) copied the design of the water-frame from British factories. He also initiated a specific approach to factories known as the Slater system. Soon after, Francis Cabot Lowell (1775-1817) introduced the power loom to the United States and pioneered his own version of the factory system, known as the Lowell or Waltham-Lowell system.

Several other industries were shaped by the rise of the factory system. The iron industry was transformed by coke smelting and the puddling and rolling process. The metalworking industry began using steam-powered machine tools, the division of labor, process supervision, and strategic workshop layouts. Pottery production was revolutionized by transfer printing, steam-powered lathes, and mechanized clay-cutting equipment.

Organization in Early Factories

Over time, factories have altered the standard organization of their workers in order to adapt to new approaches to manufacturing. The extensive division of labor characteristic of the factory system made workers interdependent and meant that organization was crucial. Early factories had to create an atmosphere that differed sharply from household production in order to ensure high output and low costs.

Many early factories used direct supervision, established rules, and positive or negative incentives to motivate workers. Factories typically had fixed work hours and expected punctuality and consistent attendance from their workers. They also wanted workers to put high effort into their jobs, ensure accuracy and uniformity in products, and take good care of expensive equipment and materials.

While smaller factories could accomplish these goals through close supervision, larger factories found it necessary to create work rules to set expectations and deal with disciplinary issues. Many used deterrents, such as dismissal, fines, or even corporal punishment for violating rules. Positive incentives, such as providing extra pay to workers who consistently met or exceeded expectations, gradually became more common.

There were two general structures that many of the early factories chose. For factories that required a large amount of skilled labor (such as iron production or engineering), factory managers often used a type of subcontracting. They would hire master craftsmen or machine operators who would then hire their own division workers. The master craftsmen would supervise, discipline, and fire these workers themselves. In the United States, this approach was particularly common in nineteenth-century metalworking establishments.

The alternative to a subcontracting system was using foremen to supervise workers. This was typically preferred in factories where many of the workers were unskilled or semiskilled. A group of foremen would be the lowest level of the managerial hierarchy, but still wielded significant power over the workers they supervised. Sometimes they would establish policies for promoting and paying workers, determine the expected work pace, and coordinate workflows. They also enforced discipline and attempted to motivate workers to increase the factory’s output as much as possible.

Problems with the Factory System

Many contemporaries criticized early factories, particularly in Britain. The poet William Blake (1757-1827) referred to factories as “satanic mills” and Charles Dickens (1812-1870) was known for criticizing the living and working conditions associated with them. It is true that in the early Industrial Revolution, wages, living conditions, and working conditions were bad. Many factories employed women and children because they could pay them lower wages.

Worker housing was crowded and often did not have enough sanitary facilities, leading to the spread of typhus and cholera. Workers would be forced to endure monotonous 14-hour workdays, six days per week. Sometimes work conditions were dangerous. Occasionally people would protest or revolt, leading to events like the Luddite Rebellion, when groups of hand weavers set out at night to smash power looms.

Continuing Development of the Factory System

By the end of the Industrial Revolution in the mid-nineteenth century, the factory system was well-established in Britain, continental Europe, and the United States, although in some areas factories continued to operate alongside small-scale forms of production. Throughout the nineteenth and twentieth centuries, new production strategies and organization methods continued to increase the productivity of factories.

One of the first innovations in factory production was the American System, a set of manufacturing methods developed in the late nineteenth century that changed factory organization and management across the world. In this system, workers assembled a complex product using mass-produced interchangeable parts that had been created with specialized machines and did not require hand fitting. One of the outcomes of these strategies was that assembly required less skill and could therefore be completed at a much lower cost. But some industries struggled to effectively produce interchangeable parts.

The use of interchangeable parts was quickly followed by the continuous flow process, or assembly line. In a continuous flow process, workers remain at fixed points while mechanized systems move work between workstations. Industries such as petroleum refining, chemical production, and agricultural processing began to utilize this strategy in the second half of the nineteenth century.

The Rise of Fordism

Henry Ford combined the use of interchangeable parts with continuous-flow production using an assembly line. Although the assembly line was already in use in other factories, Ford’s factory introduced the moving assembly line, or conveyor belt, to the automobile industry. Some workers felt less satisfied performing the same task repeatedly for an entire day. It was to make up for this loss of job satisfaction that Ford introduced higher wages (famously known as the $5 workday) and decreased shift lengths. Between 1908 and 1925, the price of a Model T decreased from $825 to $260.

The automobile industry continued to refine production processes after the world wars. Detroit-type automation used automatic work transfer and positioning devices to allow machines to do work automatically and successively, vastly increasing the volume of identical parts a factory could produce. Meanwhile, factories began replacing steam power with electricity. This provided more flexibility in the way machines in a factory could be arranged and therefore increased efficiency.

Advances in production processes during the late nineteenth and twentieth centuries led to further changes in factory management. The foreman-based systems of the earlier nineteenth century were not effective for managing the new processes being used in factories.

Firms began using a shop ticket system, in which tickets indicated which departments an order needed to pass through and what parts would be used to assemble it. Foremen were now unnecessary for coordinating work. The ticket system also gave plant managers a way to evaluate the efficiency of processes and workers. In order to motivate workers to use these new systems and exert strong effort, many managers adopted profit-sharing plans.

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Sources

“Factory System” in The Oxford Encyclopedia of Economic History. Edited by Joel Mokyr. Oxford University Press, 2003. p. 247-253.

“The Moving Assembly Line and the Five-Dollar Workday.” Ford Motor Company. Accessed October 1, 2020.

Hause, Steven C. and William Maltby. Western Civilization: A History of European Society. Vol. 2: Since 1550. Belmont, CA: Wadsworth, 2005.

Levack, Brian, Edward Muir, and Meredith Veldman. The West: Encounters and Transformations. Upper Saddle River, NJ: Pearson Education Incorporated, 2014.

Reese, Ty M. “Industrial Revolution (1780s-1840s).” The American Economy: A Historical Encyclopedia, edited by Cynthia L. Clark. Vol. 2, Essays and Primary Source Documents. Santa Barbara: ABC-CLIO, 2011.

Further Reading

“Assembly Line.” Encyclopedia Britannica.

“Domestic System.” Encyclopedia Britannica.

Elvira, Andres. “Waltham-Lowell Textile System.” In Technical Innovation in American History: An Encyclopedia of Science and Technology, edited by Peg A. Lamphier and Rosanne Welch. Vol. 1, Colonial America to 1865. Santa Barbara: ABC-CLIO, 2019.

Rosenberg, Chaim M. The Life and Times of Francis Cabot Lowell, 1775-1817. Lanham, Maryland: Lexington Books, 2010.

Updated: March 14, 2024