Reynard P. C. (2000) Manufacturing quality: finding value in diversity

Reynard Pierre Claude (2000) “Manufacturing quality in the pre-industrial age: finding value in diversity”, Economic History Review, 53/3, 493-516.

Introduction

Recent historiography has insisted on the dynamism of West European manufactures at the eve of the Industrial Revolution. This was due to the multiplication of workshops, and – to a lesser extend – to new techniques. The author focuses his attention on a third cause: acceleration and intensification of existing processes. He uses the hand-made paper industry as an example of this ‘speeding-up’ process (493).

Early modern production lacked standardized quality (which increased uncertainty and information costs), but the growing number of producers also widened the range of commodities offered, which gave consumers the possibility to choose, may have triggered the creation of a mass market (494). Product differentiation, through innovation or alteration, even became an essential component of early modern marketing. Yet, the use of highly skilled workmanship went along with important risks requiring managerial adaptations (495).

Production
As paper consumption increased rapidly (in England from 0.25lb per caput in 1600 to 2.5 in 1780), the sector became one of the most significant proto-industrial productions (496). Usage was varied (from letters to wrapping), this diversity of the demand proved crucial for the viability of the industry. Production required qualified workers and division of labour. A team could produce up to 80kg a day (i.e. 6,000 sheets, one every ten seconds). Such output could only be reached at the end of the period after a steady rate of productivity improvement since the 13th century (498).

The quality of output was always uncertain; as a result automatic discounts were granted in the contract if the quality was below expectations: dissatisfaction was to be expected (499). An internal audit by 18th century French papermaker, the Mongolfiers brothers, acknowledge that only 75% of the reams met quality standards (501). This figure is consistent with other estimations made during the same period.

Solving a dilemma

To diminish scrap and discard, managers devised several strategies: they could improve and maintain their mills, chose the best primary materials, train and reward their employees and pool their best employees to produce higher quality paper. But the problem of unreliability could never be totally solved. For major firms, an option was to distinguish between up to 7 classes of paper: it limited the buyers’ uncertainty over the paper quality (503).

“In a mechanized environment, long production runs deliver a small number of distinct product lines. In each line, patrons expect large numbers of items to meet specifications and answer their needs. Early modern paper mills, however, delivered a vast array of papers of distinct formats, each in limited quantities. In response, consumers defined their needs narrowly and searched for lesser quantities […] (a practice naturally suited to the diminative runs of pre-industrial publishing). In effect, the diversification of marketed products transferred some of the ‘quality burden’ on to customers who had to define their needs more precisely and shop more attentively.” (504)

Marketing strategy

Retailers could have up to 70 different types of paper (505). Still, as wide price variations indicated, this important homogeneity of the offer may not have been enough to consistently guarantee consistency within a same type of paper. “In effect, the irreducible uncertainties of accelerated hand production added several smaller ‘echoes’ to each principal call for production.” (506)

The product lines were shaped by the papermakers’ understanding of the market as well as by the empirically by the quality of the output. As intensiveness increased over time, it is likely that the control over marketing categories shifted toward an ex post choice. This created some specific side effects: the completion of an order would increase the stock of other paper qualities (i.e. added cost but also wider potential range of consumer acting as a insurance against the buyer’s potential default) (508). Uncertainty over the quality of the output and related increase of lesser quality stock for any production of higher standard product line was prevalent in the proto-industrial sector (be it for silk or knife production) (509).

Labels and brands were the only way to reduce information costs. Some regions, famous for their higher quality, ended by acquiring quasi geographical rents, while other focused on a lower but broader strata of consumers (510). At the retail level, this variety induced sellers to propose a large array of small series of goods slightly different one from another. In turn the buyers were more interested in quality than price. This did not induce papermakers to change their productive system, as consumers wanted choice more than clearly defined and widely available series (511).

Conclusion
Thus craft production replicated the hierarchical division of society. Over the whole period, producers had to arbitrate between speed and quality. This dilemma was only to be (gradually) solved by the mechanisation of papermaking (512).

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