“Things are cheap, people are expensive.” That is a key element o Drucker’s argument here. I learned that phrase when I worked for Oldsmobile, a company that no longer exists. It was supposed to make you remember not to substitute human labor for things.
Drucker is actually going a step further than that. He is close to arguing that systems engineering is the dominant field of the corporation. He sees four key elements into a company. (And here, he is talking about a manufacturing company.)
The first element is to divide any good into a collection of interchangeable parts.
The second element is the reduction of the manufacturing process into a series of single steps.
The third element is the design of a plant that integrates the individual manufacturing steps.
The last is the ability to train and prepare workers to operate that plant.
Since all of those element depend on people, they become the central part of the organization and hence, the expensive aspect.
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