Factory System

 Factory System

The factory system has given rise to a new system of production which is characterised by large size and complexity in various respects. The workers now work in large factories located not in the homes of workmen, but in buildings constructed for the purpose in the cities and towns. The scale of production is enlarged and the products cater to the needs and tastes of consumers within and outside the country. The old machines and tools are replaced by modern and sophisticated machines driven by power to produce standardised products. For largescale production with specialised machines, large amount of capital is needed. Capital thus becomes the dominating factor of production, and the supplier of capital owns industrial unit. He is known as entrepreneur.

The most important features of the factory system :

a) Mass production : Factories in modern times are engaged in production for markets much wider than those served under the old domestic system. Production of goods on a mass scale is, therefore, the first distinctive feature of the modern factory system.

b) Mechanisation: Mass production of goods has necessitated the use of costly machines with high degree of efficiency and precision. Employment of machinery has reduced the workers’ position to that of a mere operator. His manual skill has less significance now.

c) Standardisation: The employment of expensive machinery for mass production has naturally led to the standardisation of products. The products no longer bear the stamp of the workers’ personal attention and artistic talents. All products of a particular variety or lot are now identical and inter-changeable because they are produced with highly specialised and accurate machines.

d) Aggregation: Aggregation refers to the increase in the size of industrial establishments, and the concentration of industrial power. Mass production of standardised, machine-made goods necessitated an increase in the size of the premises, and the staff of the industrial establishments. Besides, the ownership of industrial units passed on to large and powerful joint stock companies which collect their capital from a large number of people, rather than an individual or a few partners. Later on, the industrial world came to be controlled by powerful groups of large and small companies.

e} Automation

f} Complex division of labour

g) Management Information System

h) Growth of industrial areas

i} Increase in Trade both national as well as international

j} Research and development

k) Cut-throat competition

l) Changes in the industrial scene: Changes in the size of markets and the complex consumer needs, led to increase in the scale of business operations. Large scale business is the order of the day. Technology has started playing a significant role. It has become so complicated that only qualified people can handle it. People have to be employed in such large numbers in the factories that only trained people can handle their recruitment and management. Finance and marketing functions equally have become complicated. Workers have also got organised themselves into unions to protect their interest against management—giving rise to industrial disputes which also require careful handling. In view of its welfare responsibility, the state has also started interfering in economic activities. All these have made business and its management a highly technical, specialised and complicated activity. Management of business is fast becoming a professional job. It calls for expertise, know–how and skills guided by the responsibilities of the business enterprise to the owners, government, and society at large.

Important words used in connection with factories are explained below:

1. Manufacturing process — It means any process used for

a) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal,

or b) pumping oil, water or sewage, or

c) generating, transforming, or transmitting power, or

d) composing types for printing, printing by letter process, lithography, photogravure or other similar process or book binding.

e) constructing, reconstructing, refitting, finishing, or breaking up ships or vessels. Thus to produce a product, there must be transformation, and use of a process to change the character of the raw materials i.e., the article to become commercially different from its original character. For example, bidi making is a manufacturing process, so is making computers.

2. Occupier — Occupier of a factory means the person who has ultimate control over the affair of the factory. Where the factory work is entrusted to a Manager or similar such person, such person is deemed to be the occupier of the factory. Occupier of a factory may be a firm or association of individuals. A person may occupy factory either himself or through his agent. The occupier of the factory has the right to occupy the property and dictate the nature of management. He needs not be only its proprietor, or be in possession of it, but may also control its working. The occupier is not merely a servant entrusted with specific duties in regard to the control of the machinery, workmen or office.

3. Workers — Worker means a person employed directly or through an agency, whether for wages or not in any manufacturing process. There needs to be a contractual relation between employer and the employee to fall within the meaning of the term worker. Thus, whether a particular person is a worker depends on the terms of contract between him and the employer. Persons coming and working at their sweet will in the factory are not workers within the meaning of the term workers. But the term worker does not include an independent contractor or his coolies or servants who are not under the control and supervision of employers. If an employer has no control over the work done by employees, they are not workers. Payment of wages is not an essential condition to categorise a person within the definition of workers. What needs to be established is his employment in the manufacturing process.

4. Power — Power means electrical energy or any other form of energy which is mechanically transmitted and is not generated by human or animal agency.

5. Machinery — The term machinery includes prime movers, transmission machinery, and all other appliances whereby power is generated, transformed, transmitted or applied.

6. Establishment — Establishment means a place permanently used for business with necessary equipment; or any office or place of business. Establishment is a far wider term than factory which has a special legal connotation and meaning.

The factors that led to the creation of factory system

1. Emergence of new market

2. Stream-lined Mass Production

3. Breakup of The guild system

4. Industrial Planning

5. Creation of large capital

5. Scientific Discoveries

6. Destruction of social relationships of feudalism

6. Rational view

7. Favorable political condition