Inside contracting
Encyclopedia
Inside contracting is the practice of hiring contractors who work inside the proprietor's factory. It replaced the putting out system, where contractors worked in their own facilities. Inside contracting was the system favored by the Springfield
and Harper's Ferry
Armories. Since the manufacturing system developed in the armories also became popular (the American system of manufacturing
), manufacturers in the early 19th century tended to hire people trained in the armories as managers. They brought with them the practice of inside contracting.
The manufacturer hired inside contractors and provided materials and machinery. Each inside contractor was expected to hire his own employees and meet certain production and quality goals, but everything else was left to him. As a result, the system rewarded ingenuity, but also rewarded local optimization. For example, it was to the inside contractor's benefit to allow machinery to deteriorate toward the end of his contract since maintenance was costly and he might not reap the long-term benefit if he didn't get another contract. The system was eventually replaced with the factory system
, in which everyone was an employee of the manufacturer directly.
Springfield Armory
The Springfield Armory, located in the City of Springfield, Massachusetts - from 1777 until its closing in 1968 - was the primary center for the manufacture of U.S. military firearms. After its controversial closing during the Vietnam War, the Springfield Armory was declared Western Massachusetts'...
and Harper's Ferry
Harpers Ferry Armory
Harpers Ferry Armory, more formally known as the United States Armory and Arsenal at Harpers Ferry, was the second federal armory commissioned by the United States government located in Harpers Ferry, West Virginia , the first federal armory being the Springfield Armory located in Springfield,...
Armories. Since the manufacturing system developed in the armories also became popular (the American system of manufacturing
American system of manufacturing
The American system of manufacturing was a set of manufacturing methods that evolved in the 19th century. It involved semi-skilled labor using machine tools and jigs to make standardized, identical, interchangeable parts, manufactured to a tolerance, which could be assembled with a minimum of time...
), manufacturers in the early 19th century tended to hire people trained in the armories as managers. They brought with them the practice of inside contracting.
The manufacturer hired inside contractors and provided materials and machinery. Each inside contractor was expected to hire his own employees and meet certain production and quality goals, but everything else was left to him. As a result, the system rewarded ingenuity, but also rewarded local optimization. For example, it was to the inside contractor's benefit to allow machinery to deteriorate toward the end of his contract since maintenance was costly and he might not reap the long-term benefit if he didn't get another contract. The system was eventually replaced with the factory system
Factory system
The factory system was a method of manufacturing first adopted in England at the beginning of the Industrial Revolution in the 1750s and later spread abroad. Fundamentally, each worker created a separate part of the total assembly of a product, thus increasing the efficiency of factories. Workers,...
, in which everyone was an employee of the manufacturer directly.
See also
- Putting-out systemPutting-Out systemThe putting-out system was a means of subcontracting work. It was also known as the workshop system. In putting-out, work was contracted by a central agent to subcontractors who completed the work in their own facilities, usually their own homes....
- Factory systemFactory systemThe factory system was a method of manufacturing first adopted in England at the beginning of the Industrial Revolution in the 1750s and later spread abroad. Fundamentally, each worker created a separate part of the total assembly of a product, thus increasing the efficiency of factories. Workers,...
- Independent contractorIndependent contractorAn independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement. Unlike an employee, an independent contractor does not work regularly for an employer but works as and when...