The process of industrialization, though complex, can be divided into three distinct phases. The first phases consists in a division of labor. Doing so allows not only for the production of a diverse array of products but also for the development of specialization within the working population. The operational level of this phase remains rather small.
The second phase of industrialization, however, allows the process to increase in scale. During the second phase, workers who have developed specializations during the course of the first phase are gathered into a collective setting: factories. The presence of factories in the industrial process certainly increases the efficiency with which workers finish their products. In addition, factories allow for much greater productivity. This phase marks the beginnings of large scale - and even national - labor and industrial systems.
The third phase of industrialization capitalizes on the results of the first two. Where the second phase introduces the increased efficiency and productivity of the factory environment, the third phase introduces machinery into the mix. This further increases productivity and efficiency, and the design of machinery also contributes to the importance of specialization in industry. The presence of machines also marks the culmination of large scale industry.
The factory system has been noted as the first phase of industrialization. The factory system evolved from the domestic system. In the domestic system, people worked from home using hand tools and simple equipment. The factory system introduced centralized working areas with better equipment meant for standardization. The workers were brought into factories, working long hours in poor conditions.
The second phase was initiated by complex manufacturing and better working conditions enforced through better labor policies and labor unions. Complex manufacturing saw the rise of clothing, chemical, and food processing plants. The second phase also led to increasing product variety, greater specialization, and bureaucracy.
The third phase saw production overtake demand, creating the need for increased product marketing. The phase also led to the development of a sensitive customer base that was more discerning.