- Adam Smith has first written about division of labor
- Breaking a complex task (e.g. building a car) into smaller steps
- Specialization
- greatly helps with Economy of Scale
- Allows for great optimizations of each small step
- reduction in production costs
- called Taylorism by Frederick Taylor
- Fordism … Taylorism for car production
- one type of car → simpler process
- McDonalds … Taylorism for food production
- 2 types of burger (hamburger, cheeseburger) → simpler process
- coffee, french fries, milkshakes, soft drinks