In his “Wealth of Nations,” Adam Smith memorably described the advantages wrought by specialization and the division of labor in the “very trifling manufacture” of pins. He showed that by dividing the work into several different branches, output could be dramatically increased. If each worker performed a different function, one straightening the wire, others cutting, pointing, and grinding it at the top to receive
the head, etc., then ten persons working on the project could “make among them upwards of forty-eight thousand pins in a day … But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day.” In this same way, the advantages of specialization and the division of labor can be demonstrated in almost any field.
Dr. Govindappa Venkataswamy joined the Indian Army in 1945 and soon came down with rheumatoid arthritis, threatening his dreams of a medical career. Through long and grueling therapy, he trained his gnarled fingers to hold a surgeon’s scalpel and then went into ophthalmology.
India is a large country, with a large population and large problems to match. Rural blindness was almost epidemic, with an estimated 20 million blind eyes, 80% of them due to curable cataracts. Dr. V researched Vitamin A deficiency and began organizing rural fairs where peasants gathered for eye treatment.
In 1976, at age 58, he started an eleven-bed clinic, the Aravind Eye Hospital in southern India. Dr. V began his operations with two other doctors, his sister and her husband, both eye surgeons. His intention was to cater to rich and poor alike, but largely to the poor in southern India. He asked only $40 for cataract surgery, or nothing if a patient couldn’t afford that; he believed that the volume of paying customers would support the rest. Banks wouldn’t lend for such a venture, so he mortgaged his own home. Within a year, the clinic quadrupled in size. By 1981, a 250-bed hospital was complete. Aravind has now become a five-hospital system.
Venkataswamy’s business model has revolutionized eye surgery. The advantages of the division of labor are apparent especially in the Aravind operating room. In a beautifully appointed modern operating room with state-of-the-art equipment, several surgeons are at work. Each works two tables, one for a patient having surgery, the other for a patient being prepped. Operating microscopes swivel between two tables. One surgeon, working a 12-hour da)’, can perform 2,000 surgeries annually, nearly ten times the Indian national average.
He was inspired by McDonald’s assembly line model, after attending McDonald’s Hamburger University in Oak Brook, Ill. He even investigated the possibility of franchising his operations, along the lines of McDonald’s and Burger King, and actually laid the groundwork for such operations. Several hospitals in India have followed his assembly line method, and teams from Aravind have advised hospitals in East Africa and the Far East. Dr. Venkataswamy also went into the manufacture of low-cost lenses, producing 6-7% of the low-cost lenses sold worldwide in 2002 – though not in the U.S., because of the obstacle imposed by FDA regulations.
Dr. V died July 7, 2006 at the age of 87. Management of Aravind is still largely with his family. In the course of his operations, Dr. V’s Aravind Eye Care System has served 2.4 million through its efficient, effective assembly-line system. Adam Smith must be turning over in his grave with pride at seeing Dr. V’s spectacular success in demonstrating the advantages of the division of labor.