According to Adam Smith, the division of labor improves the productive powers of labor in three general ways. According to his proposition, by decomposing any non-trivial manufacturing process into its elemental tasks and assigning these tasks to many different workmen, manufacturers could increase quality, productivity, and overall profit.
The first advantage that Adam Smith explains is the specialization of the workman. By reducing a workerâ€™s job to one specific task, the worker can achieve a higher level of skill, precision, agility, and excellence, thus producing a superior fashioned product. This specialized worker can produce a single piece of the final product more rapidly and more efficiently than before. For example, if a single man decided to build his family a house he would shape every facet of the finished home, from the concrete foundation, to the plumbing, to the finished cabinetry. If instead this familyâ€™s home were built by a large number of specialized and practiced workers, it would be built sooner, more proficiently, and finer than that of the single man. The same concept applied in Smithâ€™s day, even to the manufacture of something as apparently simple as a straight pin.
Adam Smithâ€™s second beneficial observation dealt with three specific time-savings techniques that eliminated wasted time and increased worker productivity. Placing specialized workers in the same shop eliminated travel time between job sites. Specialization also eliminated the mental shift of ending one task and starting the next. Workers could perform one task all through the day. Additionally, this purged the wasted time dedicated to the set-up and tear-down time of a job position. A contemporary example of this idea can be illustrated at a car-dealership. Imagine if mechanics that worked on engines and transmissions were expected to sell cars. Before heading to the sales floor, the mechanics would have to rid