The assembally line was invented for the Ford Motel T and was presented to Ford Motor Company by William Klann.
William came up with the idea after visiting a Slaughterhouse in Chicago, they had a process called the disassembly line, which is where animals were butchered and moves along the convayer belt.
Ford's cars came off the line in three minute intervals, which was much better than the previous methods. Increasing production eight to one.
The assembly line was first created in October of 1913 in Highland Park Michigan. Once made, the Ford Model T could be produced in three hours.

Beacuse of the assembly line, the automobile industry became one of the largest industries in the 19th century. The sale of cars tripled from 1914-1916. because cars were able to be produced faster and cheaper. The assemply line also helped out with the first world war. Tanks, planes, and other military weapons were now being made using an assembly line. Because of a new demand for more streamline cars, the car manufactures had to find a way to increase production. This solution was found in 1909.

When Ford first started think about making a system to make cars faster, the first improvement was the time it took to make the car went from 12 hours to five and a half hours. Then once, he installed conveyor belts the production decreased to a hour and a half for the production of a car. This shows that the production of the assembly line increase productivity by almost 12x as fast.

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Source:

Beetz, Kirk H. "Assembly Line." Dictionary of American History. Ed. Stanley I. Kutler. 3rd ed. Vol. 1. New York: Charles Scribner's Sons, 2003. 334-336. Gale Virtual Reference Library. Web. 17 Feb. 2011.

Tompkins, Vincent. American Decades: 1910-1919. New York: Gale Research, 1996. Print.