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The American system of manufacturing involves semi-skilled labor using machine tools and templates (or jigs) to make standardized, identical, interchangeable parts, manufactured to a tolerance. The system is also known as the armory practice because of the history of its development by the United States Department of War in the Springfield and Harper's Ferry armories (Hounshell 1984).

Since parts are interchangeable, it is also possible to separate manufacture from assembly, and assembly may be carried out by semi-skilled labor on an assembly line - an example of the division of labor. The system typically involves substituting specialized machinery to replace hand tools.

In the late 18th century, French General Jean Baptiste Vaquette de Gribeauval suggested that muskets could be manufactured faster and more economically if they were made from interchangeable parts. This system would also make field repairs easier to carry out under battle conditions. He provided patronage to Honoré Blanc, who attempted to implement the Système Gribeauval, but never succeeded (Hounshell 1984). Until then, under the English System of Manufacturing, skilled machinists were required to produce parts from a design. But however skilled the machinist, parts were never identical, and each part had to be manufactured separately to fit its counterpart—almost always by one person who produced each completed item from start to finish.

Gribeauval's idea was conveyed to the United States by two routes. First, Blanc's friend Thomas Jefferson championed it, sending copies of Blanc's memoirs and papers describing his work to Secretary of War Henry Knox. Second, an artillery officer named Louis de Tousard who served with Lafayette was an enthusiast of Gribeauval's ideas. Tousard wrote two influential documents after the American Revolution; one was used as the blueprint for West Point, and the other became the officer's training manual (Hounshell 1984).

The War Department, which included officers trained at West Point on Tousard's manual, established the armories at Springfield and Harper's Ferry and tasked them with solving the problem of interchangeability. The task was finally accomplished in the 1820s by Captain John H. Hall, an inside contractor at Harper's Ferry (Hounshell 1984).

Eli Whitney is generally credited with the idea and the practical application, but both are incorrect attributions. Based on his reputation as the inventor of the cotton gin, the U.S. government gave him a contract in 1798 for 10,000 muskets to be produced within two years. It actually took eight years to deliver the order, as Whitney perfected and developed new techniques and machines, but he did go on to produce a further 15,000 muskets within the following two years. Whitney never actually expressed any interest in interchangeability until 1800, when he was exposed to the memoirs of Blanc by Treasury Secretary Wolcott (Hounshell 1984), but he spent far more time and energy promoting the idea than developing it.

The idea migrated from the armories to industry as machinists trained in the armory system were hired by other manufacturers. Manufacturers thus influenced included American clockmakers, the Singer Corporation sewing machine manufacturer, and McCormick Harvesting Machine Company (Hounshell 1984).

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The idea of interchangeable parts and the separate assembly line was not new, though it was little used. The idea was first developed in Venice several hundred years earlier, where ships were produced using pre-manufactured parts, assembly lines, and mass production. The Venice Arsenal apparently produced nearly one ship every day, in what was effectively the world's first factory.

• Manufacturing
• American System of Watch Manufacturing
• Eli Whitney
• Inside contracting

• Hounshell, David A. From the American System to Mass Production, 1800-1932: The Development of Manufacturing Technology in the United States. Baltimore: The Johns Hopkins University Press, 1984. ISBN 0-8018-3158-X