In The Wealth of Nations, Adam Smith demonstrates how the division of labor is the chief source of productivity gains using the vivid example of a pin factory assembly line: “One (person) draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it.” With specialization oriented around function, each worker becomes highly skilled in a narrow task leading to process efficiencies. Output per worker increases many fold; the factory becomes extremely efficient at producing pins.
