It was not a totally new idea. The slaughterhouses of Chicago, for example, had a kind of dis-assembly line with conveyor belts in order to take apart pigs. And F. W, Taylor had promoted what he called scientific management, analyzing manual tasks and altering tools and workplace structure to make for more efficiency in doing those manual tasks. When Ford said he wanted to bring the work to the workers with the assembly line, he was echoing the ideas of Taylor and following the existing model of the Chicago slaughterhouses.
There already were also examples of factories working with big economies of scale. The Studebaker factory in South Bend IN, the biggest maker of wagons in the world, was turning out a wagon every ten minutes. But the Studebaker factory had many different levels connected by elevators, and a number of different wagons and carriages to produce. Ford had pretty much just one thing, and for it there was the same engine, and transmission, and magneto. So, it was possible for Ford to have streams of production lines for those parts simply feeding into the main assembly line by fast ramps and chutes without creating confusion, as would have happened at Studebaker.
Ford himself does not seem to have originated the idea, and I don't think he ever took complete credit for it- it came about from discussions with his staff and employees. One reason the origins of it seem to be a trifle indistinct was that it didn't just happen. It was implemented with considerable trial and error- at first they used ropes to haul cars along the lines, for example. And there was also a problem with the speed of the line: for a long while the line went quite fast, and workers were completely drained of energy at the end of the day. This was also a problem with Taylor's management ideas- they tended to reduce people to robots, doing the same motion all day long, and that turned out to be pretty destructive to bodies but also minds. Creating the assembly line concept was one thing, but making it work without damage to workers took a lot longer.
The assembly line also created a problem for Ford in the longer term. Ford was not afraid to have special-purpose machines, like a drilling machine that would drill all the head bolt holes in the engine block at one time. In order to do that, he also needed to have designed an engine block where that was possible. There was, therefore , a necessary simplicity to a lot of Model T parts. That large special-purpose equipment was also situated just where it was needed: but it was also designed for and situated where it would be needed to make Model T cars. All that created inflexibility when it came to changes, improvements. For example, it soon became apparent that many people- especially women- had a hard time manually cranking the engine to start a car, and soon there were "self-starters" that used an electric motor. Henry Ford resisted adding these- not just because there was the addition of the starter motor and a change in the transmission case, to be considered, but a considerably bigger battery was needed as well, and different wiring. Every addition, every change, affected the whole line. The need for improvements on the overly-simple Model T therefore spawned a huge market of accessories made by other companies. A popular addition was a heater ( what a concept, being able to stay warm in your car...)
Ford's staff were aware that other makers, like Chevrolet, were coming up with improved models every year, and the staff's attempts to get Ford himself to change things were sometimes tragicomic ( they once secretly built an upscale car, a more luxury model, and left it out for Ford to see when he returned from a vacation. Ford grabbed some tools and systematically smashed it to bits.) Ford was simply unable to see beyond maximizing production of his Model T. As though his production lines even extended into the rest of the world, he would try building his own coal town and mine in West Virginia, and try growing his own rubber on his own plantation in Brazil.
Eventually it was impossible to avoid a change, and his staff and his long-suffering son Edsel was able to push through a new model, the Model A. It was then found that what was efficient for building Model T's did not work for Model A's, and the factory had to be closed for more than a year just to re-tool and adapt. That economies of scale could come at the price of inflexible production was a lesson that Ford , never the most flexible of thinkers, had to learn the hard way. He would also avoid learning other lessons about successful management, and in the last years of his life let the factory be dominated by the thug Harry Bennett and Bennett's gang of enforcers. Ford has been long used as an example of the Founder's Problem: someone who is confident and forceful enough to start a company is likely to also be unwilling to listen to anyone else after the company is up and running.
Watts, S. (2006). The People’s Tycoon: Henry Ford and the American Century (Illustrated ed.). Vintage.
There’s debate even amongst the people who worked at/with Ford at the time as to where the idea for the moving assembly line came from. Ford says the idea came from the meat processing houses of Chicago while his Production Manager, Charles Sorensen, says the idea came out of an experiment where they dragged chassis on sleds past pre-staged “piles” of parts.
In the early part of the 20th century a lot of efforts towards efficiency were being made. F.W. Taylor’s theories on Scientific Management were being introduced (Ford himself says he never paid attention to Taylor and that his system was developed organically apart from Taylorism). But besides just Taylorism, Frank & Lilian Gilbreth were looking into efficiency from an ergonomic aspect with time and motion studies and architects like Albert Kahn were designing industrial buildings, like the Packard Motor Plant, that allowed for efficient material flow from incoming raw materials on one end through to outgoing finished product on the other end of the building.
Ford’s success as a manager, especially in the early days of Ford, was to encourage experimentation and continuous improvement other methods and materials. The moving final assembly line that the Ford Motor Company was famous for was almost more of a reaction of necessity after implementing assembly lines in other areas of the plant, the first one being in the Magneto assembly area and then expanding the concept to other areas until eventually establishing the Final Assembly assembly line in order to keep up with the output of all the sub-assembly lines that had been put in place
Sources:
-My 40 Years with Ford. Charles Sorensen -The Puritan Gift. Kenneth & William Hopper -Ford: The Times, The Man, The Company. Allan Nevins -My Life and Work. Henry Ford -Today and Tomorrow. Henry Ford