The Expanded and Annotated My Life and Work

HENRY FORD’S UNIVERSAL CODE
The Preface showed how Ford’s unprecedented productivity improvements 
explain the enormous surge in American prosperity during the 1910s and 
1920s. He achieved these world-class results not through a “one big hit” 
product or idea, but rather through a synergistic triad of simple, impartial, 
and incontrovertible laws of economics, science, and human behavior:

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xvi  •  Editor’s Introduction
•  Economic Law: No system can disburse more wealth than it pro-
duces. This is simply the economic counterpart of the physical law of 
conservation of matter and energy; one cannot get something from 
nothing. It is as inviolable as the laws of thermodynamics.
•  No ideology can create prosperity, and no government can leg-
islate it.
•  Speculation in tulip bulbs, mortgage-backed securities, houses, 
dot-com stocks, and anything else that does not produce value is 
a zero-sum game that eventually ends in disaster for most of the 
speculators. A stock is worth exactly what its underlying assets 
can produce, and no more.
•  A supply chain also is a zero-sum game in which one stakehold-
er’s gain is another’s loss, unless the supply chain can create more 
wealth for all its participants. Application of the scientific law can 
change the supply chain from a zero-sum or win–lose game into 
a win–win activity for all its stakeholders.
•  Scientific Law: The supply chain can create more wealth through 
the elimination of all wastes from its activities. The economic law 
says quite rightly that one cannot get something from nothing, 
but, as stated by Ford and Crowther (1926, p. 124), one can get 
something from what was considered nothing. This something is 
waste that often hides in plain view, and its elimination is the focus 
of Lean manufacturing.
•  Ford (1922, p. 329) wrote that is possible to waste exactly three 
things: time, material, and energy. It is useful to expand waste of 
time to cover the time of people (e.g., waiting and motion inef-
ficiency) and of assets (cycle time). This allows a workforce to 
concentrate on four very simple key performance indicators to 
expose all forms of waste. Ford’s workforce did, and this book 
will provide numerous examples.
•  Elimination of material and energy waste supports all the 
basic requirements of the ISO 14001 and ISO 50001 standards, 
respectively.
•  There is an adage to the effect that one can have high quality, 
low cost, or rapid delivery, but not all three. Ford proved, how-
ever, that these three goals are actually synergistic. High quality 
removes the cost of poor quality, while rapid delivery and, there-
fore, a short cycle time reduces inventory and its carrying cost.

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Editor’s Introduction  •  xvii
•  Behavioral Law: The system must provide a square deal to all its 
stakeholders including labor, suppliers, customers, and investors. 
Ford and Crowther (1926, p. 40) state explicitly that every business 
transaction must benefit all its participants fairly and equitably. This, 
in fact, defines social responsibility.
Ford proved unequivocally that this universal code works in applications 
ranging from manufacturing to education and healthcare. The next step 
is to recognize that the universal code is (1) synergistic, (2) impartial, and 
(3) implacable.