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What If Elon Musk Took Manufacturing Cars Seriously?

by Jeffrey Liker
February 6, 2019

What If Elon Musk Took Manufacturing Cars Seriously?

by Jeffrey Liker
February 6, 2019 | Comments (48)

Tesla is one of the most amazing success, and failure, stories in the history of automotive. There were a good many mavericks who tried to revolutionize auto, only to fail dramatically, such as the Tucker 48. But Tesla was even more bold, forging a new automotive segment, and just as it appears to be headed for free fall it magically rises to a new level of performance.  

The ups and downs of its stock price are also becoming legendary. Just as the short sellers are beginning to gloat over a major drop in Tesla’s price, just as steep a jump in prices will occur, sometimes in the same week. A plot of stock price over time looks like the Swiss Alps.

When Tesla first started up Toyota took a strong interest in the company. For one thing Toyota was very happy that something good would come from the NUMMI plant that it was forced to shut down after bankrupt GM walked away from the joint venture. Additionally, Akio Toyoda visited Tesla and was very impressed by the entrepreneurial spirit which was more reminiscent of Toyota as a new company then Toyota as a mega-giant global manufacturer. Toyota bought about 3 percent of Tesla for $50 million (and later made a lot of money selling its share). Toyota also sent experts on the Toyota Production System and on basic automotive manufacturing to help teach Tesla. Additionally, Toyota jointly developed a battery powered version of the RAV4 with Tesla, and attempted to teach Tesla engineers about basic project management. The high cost of the resulting vehicle, and subsequent high price, led to quickly stopping production of the electric RAV4, and Tesla and Toyota went their separate ways.

Later Elon Musk made it clear he was not interested in learning the Toyota Production System, the industry benchmark, and wanted to leapfrog it into the future of manufacturing. In a call to wall-street investors in early 2018 Elon Musk boasted:

“The competitive strength of Tesla long-term is not going to be the car: It’s going to be the factory. We are going to productize the factory… The Model T wasn’t the product. It was the River Rouge. We will have a great product. But the factory is going to be the product that has the long-term sustained competitive advantage.”

With not a small amount of hubris, and no experience, Elon Musk was convinced he could outdo a century of experience learning to engineer and build cars, overnight. And he would do it with computer technology—a level of automation the auto world had never seen. He wanted to skip over Industry 4.0 and jump directly to 5.0. I began to think, “Musk sounds more like a computer programmer than an engineer.” With PayPal it seemed like if he could think it the programmers could code it. 

I felt (and still do) that automotive manufacturing was a lot more complex than coding software. It is more than brilliant minds working out the details in their heads. So many things can go wrong in physical manufacturing and the environment is so dynamic. This is why Toyota is so obsessed with kaizen (continuous improvement). Kaizen is about continuous improvement, but it is not simply making something great even better. It is also about working out the bugs of a newly launched product that has many unanticipated nagging problems. 

Of course, one of the mantras of Toyota is “get it right the first time.” This avoids costly rework and fire-fighting. So Toyota plans, plans, and plans some more; and then does a lot of experimentation to work out the bugs in advance of new model launch. It also limits the number of changes in the vehicle, working to carry over as much as possible to the new model to limit variability and opportunities for quality, safety, and manufacturing problems. 

This of course leads to a more conservative step by step approach that is far less exciting than the big bang of Tesla. Start with a clean sheet of paper on the automotive product, start with a clean sheet of paper on the factory, start with a clean sheet of paper on the supply chain, and on the battery plant, and on the dealer network, and on artificial intelligence software. And do it with large numbers of engineers recently hired who never worked together before, with a high level of turnover to boot. Lay off workers when money gets tight and then hire a bunch of new ones.  Instability is the name of the game.

Toyota executives would be on the verge of a nervous breakdown, not because they are thin skinned, but because they could realistically anticipate the huge cost overruns, the missed deadlines, the quality problems that would have to be fixed after the fact, and the general chaos.  Another Toyota mantra is “under promise and over deliver.” Musk seems to thrive on over promising and under delivering.

The various crises in Tesla manufacturing have been well documented—slips in launch dates by months and even years, questionable quality, huge amounts of rework, difficulties reaching intended volumes. Just a few months after Musk was bragging about the vaunted new technology in his revolutionary manufacturing system he was sleeping in a conference room in the factory, trying to solve problems to squeeze out cars, and complaining that he had too much automation. He concluded they needed more people and less automation. 

When interviewed for CBS This Morning Musk was asked the reasons for what he had called “production hell.” He explained that they had gotten “complacent about some of the things that we thought were core technology. We put too much technology into the Model 3 all at once. This should have been staged.” He also admitted that the concept of a complex set of automated conveyor systems delivering parts to the point of use was not a great idea. “We had this crazy complicated network of conveyor belts. And it was not working. So we got rid of the whole thing.” The solution to getting to 5000 Model 3s produced a week was to erect a second, far less automated, assembly line under a tent.

It always seemed curious to me that NUMMI, which at its peak produced over 400,000 units (in 2006) with 5500 people turned into Tesla in 2017 making about one hundred thousand units with about 10,000 people. One of the biggest problems of human resources at Tesla was parking. How could one of the most automated auto plants in the world be one of the least productive plants in the world? The Wall Street Journal published statistics confirming my suspicions.  Their conclusion: Tesla makes six cars a year per person it employs. Other luxury auto makers churn out three times as many.

This leads to asking what if? What if Tesla took Toyota’s help seriously in learning basic manufacturing before undertaking disruptive technology change? What if Tesla had the labor productivity of average auto plants? What if Tesla built in quality and did not have to rebuild most Model 3s to get quality right? What if its vehicles launched on time and shipped on time? What if Tesla took manufacturing and logistics seriously and was as good at execution as it was at product ideation? In a post last year Jim Womack quipped that the ideal automaker might be a blend of Toyota execution with Tesla bold entrepreneurial thinking.

What will happen in the future we do not know. As physicist Niels Bohr once said, “prediction is very difficult, especially if it’s about the future.” I do suspect that with all of its stumbles and execution problems Tesla vehicles will continue to be exciting and attract enough buyers for the company to stay afloat. It is also becoming clearer that the competition is heating up in the battery-powered vehicle space. The tightest competition in the short-term might be coming from traditional luxury automakers like Audi and Porsche. And in its usual quiet, under the radar way Toyota is investing many of billions of dollars of R&D in next generation battery technology, artificial intelligence software, and ride-sharing companies like Uber. They are sure to emerge with a raft of new electrified vehicles as the relatively tiny all-electric battery vehicle market grows. How this competition will affect Tesla I do not know, but Tesla would surely be on a more solid foundation if it took manufacturing seriously from the beginning.

Learn more on this topic and others in Jeff Liker and Jim Morgan’s new book Designing the Future

 

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48 Comments | Post a Comment
Bob Emiliani February 06, 2019
2 People AGREE with this comment

It is to be expected that when one trades on hype (Musk) they would, as a matter of routine, dismiss the work of Toyota -- and everyone else.

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Bob Emiliani February 06, 2019
7 People AGREE with this reply

But looking at the bigger picture, the vast majority of CEOs across all industries have ignored Toyota's management methods. Musk is the norm, not the exception. Efforts to promote Lean have been unable, so far, to conquer executive prerogative.

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Jason Yip February 06, 2019
4 People AGREE with this comment

I wouldn’t say automotive manufacturing is more complex than software development so much as automotive manufacturing has more irreversible (or at least expensive to correct decisions) than software development.

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Mike Rother February 06, 2019
10 People AGREE with this reply

One may or may not like cars, but one can admire the remarkably complex human endeavor. First off there's the massive, and massively expensive, effort to create body platform, powertrains, and manufacturing plants & machinery. A vehicle model may have thousands of buildable combinations. About 30,000 individual components get coordinated through worldwide supply chains, to arrive at a 60-second assembly time-slot. But wait, there's more! This product has to function perfectly for 12 years and 150,000 miles or more, in every imaginable weather environment and roadway condition, while also protecting its passengers and other traffic participants from harm in the case of a crash.

I admire us humans for what we have been able to achieve in the automotive sector. Now, if we can apply that same drive, creativity and ingenuity to the issue of climate change...

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Eoin Barry February 10, 2019
1 Person AGREES with this reply

The stakes are high: the health of the planet and the wellbeing of the people on it. From the productivity numbers and descriptions of the workplace in this message thread it appears the issues are serious but fixable.  It would be something if this group of people, some of the foremost lean thinkers and doers, could get together to create an experience to might help change Elon Musk's beliefs about the TPS and his mind as to the way through current obstacles.  

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Mark Graban February 12, 2019

You can't make anybody change. Is Elon open to an "experience" like that? I agree that learning through experience is key. He'd have to open his own eyes and learn. Lean people lecturing him to do differently won't really do anything.

Ernesto Jorge February 06, 2019

That phrase made some noise to me, too. It resembled that of "here is different, we make no cars, we can't apply TPS".

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Mark Graban February 07, 2019
3 People AGREE with this reply

It's perhaps an interesting historical tidbit that some of the TPS practices and concepts were developed at a time when Toyota's main product was weaving looms.

I've always wondered if some of the early Toyota automotive people thought, "These ideas don't apply... we don't make weaving looms!"

Probably not.

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Bob Calico February 11, 2019
1 Person AGREES with this reply

Ah, but the key to understand is process and framework remains consistent regardless of product or outcome.  You plan, design, deliver.  Whether your're building a pyramid, a loom, or a car that flys to the moon.  

Jeff Liker February 07, 2019
1 Person AGREES with this reply

Good point!  I was thinking about 2 things: 1) In the virtual world you can make anything happen if you can code it--flying cars, submarine cars, travel to Pluto.  2)  When you finish with the code and distribute it it will act just as the original code.  With hardware in the real world when you design it each unit needs to be built which adds many new variables, and each unit can be somewhat different.  The physical world seems to be where Tesla has had the problem and their great success has been in the virtual world of imagination and design.

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Owen Berkeley-Hill February 13, 2019
1 Person AGREES with this reply

I think this discussion might drift towards the apocryphal GM-Microsoft punchup: 

http://www.hcs.harvard.edu/pnw/microsoftjoke.htm

 

 

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John Shook February 06, 2019
8 People AGREE with this comment

Thanks for framing the question and sharing your considered thoughts, Jeff. Tesla is a fascinating story indeed and one that continues to unfold. A one hundred year disruption to the industry of industries (though Tesla is really at the forefront of only one part of a four-part disruption). 

Clearly Tesla has much it could learn from Toyota (and at one point was well-positioned to do so). What about the reverse question? What could Toyota learn from Tesla? Bold entrepreneurialism, I suppose. It’s unclear how the Musk brand of bold sailing would thrive/survive the Toyota steady-as-she-goes waters.  Or, as is usually the case, is some sort of best of both worlds possible? If so, in that industry, anyway, now is surely the time for it. 

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Bob Calico February 11, 2019

Curious years from now.  If this disruption would have been considered a success if Tesla eventually succumbs to the unforgiving world of debt and lack of profit.  And becomes the seed that enables companies like Toyota to learn from, exploit, and build yet another successful story.

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Brian Kelly February 15, 2019

John, thanks for sharing your perspective here. While many lean fanatics have been merciless in their criticisms of Musk they have tended to miss the significance of his achievements. An optimized roadster from 2008 would not have changed the world they way Model S, Model X and Model 3 are doing. Yet all the criticisms are valid and improvement is badly needed, as Tesla competitors surely see.

So, best of both worlds you say. Tell us more!

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Tom Lane February 15, 2019

I used a model of "possibility, probability,predictability" as a way to help the seeming clash between those "visionary" entrepreneurs and the "makers" of excellent  product.   The visionaries start with possibility and try to drive it into probability.  The makers strive for predictability and use probability to Kaizen toward that.   So they often don't speak the same language when you get a visionary talking to a maker. 

     But, if you get both to talk in terms of process/system as essential for anything, whether it is imagining the new, or perfecting the old, they can come together. 

     I saw Musk interviewed and his quote, "who knew making cars was hard" made me laugh out loud. 

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Jorge Wong February 15, 2019

"How could he know?" W.E. Deming

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Glenn Mercer February 16, 2019

I recently went on the Magical Mystery Tour that was in the news a bit (Dearborn, Takaoka, Lynk in China, Dresden, Leipzig, LEVC, Aston Martin...) and when at Toyota we asked "Well, what DO you admire about Tesla?" one consistent answer was an admiration for the minimal use of paper, rapid decision process, minimal bureaucracy.  Just as "everyone else" struggles to adapt lean to their factories, I will assert Toyota has never been able to adapt lean to their offices....

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Brent Wahba February 06, 2019
3 People AGREE with this comment

I am not a Tesla fanboy, but that problematic Model 3 was just ranked #1 on Consumer Reports’ owner satisfaction list, and Tesla is #4 (behind IBM, JP Morgan Chase, & Amazon) on the list of most entry level job applications.  Sure they swung big and had problems, but isn’t it also possible that they are running different experiments in pursuit of a different value equation?  I would think that if any car company could somehow learn to be both the coolest AND most efficient, it would have been Toyota (remember Scion?), but maybe there is some science behind why that isn’t the case yet.   

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Jeff Liker February 06, 2019
4 People AGREE with this reply

I agree as I said in the post.  It was a thought experiment.  What if they had such a wonderous product and they were also good at executing?  I have to think that at the least all the money they saved and the additional money they earned from getting out more vehicles to customers would have helped the company that seems always on the verge of a cash crisis.

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Brent Wahba February 06, 2019
2 People AGREE with this reply

Thanks, Jeff – I understood the thought experiment.  But for discussion purposes, my related question was “is there some fundamental reason (leadership?  culture?  branding?) why combining cool (bold) and efficient (conservative) is even possible?”  I am at a loss to name brand-centric or big-bet organizations that have truly embraced lean.  I think this is an important topic as we try to make lean more successful. 

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Bob Emiliani February 06, 2019

Brent - For answers to your question, please see https://tinyurl.com/y6vz9kdx ;

Jeff Liker February 10, 2019
2 People AGREE with this reply

Amazon has had a variety of lean initiatives around the world which is one of the reasons they can have such speedy, reliable delivery.  I met some great lean guys working for Amazon in China and they were working on same day delivery. Apple computer made tremendous investments in developing internal manufacturing expertise which includes performance improvement and a top lean purchasing executive from Toyota is now a supply chain executive at Apple.  Their choice was to outsource manufacturing which has worked for them. But they manage it all effectively because of their deep understanding of manufacturing excellence.  Nike also has outsource manufacturing and they have made a huge investment in developing strong internal lean competency (former Toyota managers) who develop internal lean model plants and then teach lean through the supply chain.  Starbucks made a large investment in lean.  I am sure there are many others that are bold and lean.  Part of the problem is the definition of bold.  It may be hard finding great examples of bold and lean because so few bold companies that succeed in disrupting their market like Tesla. James Morgan and I argue in Design the Future that those companies are the very tip of the iceberg and the vast majority of companies are not so bold.  When you are first and bold and visionary and it works, rare event, you may not need a high level of operational excellence to succeed.  My lean friends in pharma who are used to 30-80% profit margins complain that their companies are not motivated to improve.

Clem February 15, 2019

Big-bet Organizations that have truly embraced Lean- Danaher.  Its all about the Danaher Business System which is rooted in TPS and what we call Lean today.  Look at their Free Cash Flow to Earnings Ratio.  Look at their Vlue deivered to stock holders.  look at their growth.  Look at how their ex-CEO has now been made CEO of GE.

Jeff Liker February 11, 2019
2 People AGREE with this reply

I read an interesting article today in Fortune that says the most serious competition Tesla will face will be from Detroit startup Rivian auto.  They will have an all-electric pick up truck and AWD SUV (off same platform) coming out soon. Range of 400 miles, 0-60 in three seconds, and tow up to 11,000 pounds.  The 36 year old CEO, RJ Scaringe, has much more of a Toyota personality than an Elon Musk personality--humble, somewhat introverted, detail oriented, patient.  They spent years under the radar working out every detail of manufacturing and the supply chain. John Shook is on the board of directors and was a major influence. With little fanfare they will hit the market with a killer product with a manufacturing and supply system that actually worked.  (BTW, in another article today it said the next big Tesla challenge is repairing vehicles in the field.  Now that they are up to that customers realize they cannot get parts or service for repair despite a Musk vision that the computer system detects your problem and has a repair crew arriving before the car even stops.)

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Anonymous February 06, 2019
5 People AGREE with this comment

I had a chance to visit the Tesla plant a few years back, when they were only building Model S and Model X. It was a private walkthrough with somebody I knew who worked there.

A few gemba observations:

1) One reason for the low productivity is that Tesla has a lot of manufacturing content that other assembly plants wouldn't do in house -- seats, battery packs, electric motors, etc. There was a lot of in-sourcing. There were many other reasons for low productivity.

2) They had no kanban system for parts

3) There were many ergonomic nightmares, it seemed -- a lot of work that looked harder than it needed to be and poor ergonomic bending, etc. for long periods of time

4) Lots of cars pulled off the end of the line marked for repairs. "Will not shift into gear" read one.

5) My personal guide said things like "Toyota is a dirty word" here and that Elon just didn't want to hear it. 

It's sad because I walked away thinking that Tesla could be more successful if they combined their revolutionary product with proven assembly and management methods.

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Jim Morgan February 07, 2019
4 People AGREE with this comment

Excellent piece Jeff - thanks for sharing.  I am also staggered by Tesla’s car per person ratio and launch debacles.  And have often wondered how much more Tesla might have accomplished had they embraced the opportunity to work with Toyota… But perhaps they felt the risk of loosing their entrepreneurial spirit was just too great.  In any case, Tesla has accomplished so much – it's truly incredible.   But I think their product, process and execution capability has only begun to be tested.  With the likes of Audi, Rivian, Mercedes, JLR and others getting into the mix it is going to be very interesting to see what happens next!

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Lou M February 07, 2019
5 People AGREE with this reply

Musk won’t listen because, his entire life, entrenched industry experts have told him “that’s impossible” and then he proved them wrong. He did it in banking, rocketry, energy storage, automotive, auto distribution, every industry or skill. 

 

“No one will trust sending money over the internet.”

 

”You can’t teach a rocket to land on its butt.”

 

etc.

 

I would not trade Musk’s tendency to flip industries on their head for a slightly quicker Model 3 buildout. The maverick attitude is mostly a strength and only very rarely a weakness.

 

Musk’s thing is that he has a 20 year history of doing the impossible. I don’t think it’s likely or fair that he was completely wrong about manufacturing, I think he was wrong about the timeline and degree of effort required to get to full automation. And to his credit, he has publicly admitted what he got wrong and he was willing to eat crow and change (somewhat!)

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Jeff Liker February 07, 2019

Good points.  I think overall the automotive industry of the future, as well as the world, will be a far better place because of this one visionary, Elon Musk.  Traveling fast through underground tunnels, solar energy on our roof tops, clear automobiles, colonizing mars, satelites that enable a high speed world wide web....  All great contributions.  I am not sure manufacturing and logistics will be one of the great contributions.  But it will be fun to watch over the next twenty years.

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Byron May February 15, 2019

I believe Lou's comment is the most accurate and pertinent.  Anyone else who can land two rockets sumultaneously should feel free to throw stones, but what Musk is doing with Tesla is even more important.  From day one Tesla was all about sustainable transport - not necessarilty cars.  Becuase what we all do now with cars running on fossil fuels has an endpoint, and is also helping us catch the house on fire. While some argue that rolling out the fire hoses more slowly (if at all) will be more profitable, concrete evidence of accomplishment suggests that Musk is doing more to look out for our great, great grandchildren, who we will never meet, than any other leader on the planet.  Why I admire him.  Even if he makes a few dumb mistakes and breaks a few glasses along the way.

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JG February 08, 2019

I attended a Kaizen once, at a large American Medical company.  I learned more researching  what a "Kaizen" was and Toyota's processes for improvement are than I did in the meeting stuffed full of people being arrogant blowhards trying to solve a problem that the company had already solved... but they didn't want to hear that.

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Jeff Liker February 10, 2019
1 Person AGREES with this reply

I have personally thought that the skill required to do an effective job running a kaizen event are very much underrated.  The difference between the skill levels of Toyota TPS experts and other top lean consultants and the average person in a company running an event can be night and day.

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brian kelly February 15, 2019

100% correct. For some reason it is common for people who know nothing about the process to feel they can run a Kaizen, based only on their confidence that they can run a meeting. The results are disastrous.

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Salvador Sanchez February 15, 2019

I agree, most people have not heard of a Jishuken or they think it's the same as a Kaizen event.  It's not rocket science but there is a difference.  I spent the better of the last 7 years going around the world helping people understand the difference by doing Jishukens with them so they can expereince them for themselves.  I would love to get back to NUMMI/Tesla and help them!  

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Mark Graban February 12, 2019

A "meeting stuffed full of people being arrogant blowhards trying to solve a problem that the company had already solved" doesn't like an effective Kaizen Event at all.

Does one botched surgery mean all surgery is bad?

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S Skinner February 08, 2019
1 Person AGREES with this comment

After reading this and other Tesla-Elon articles, it really is apparent the ole' cognitive dissonance struck again! I admire Elon's vision of his factory and car but when you let that emotion overtake the data, facts, and experience of how to manufacture that car efficiently (which includes respect for people) or at least seek to understand it, hard lessons ensue. I do hope he learns from these lessons quickly.

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Rick Westenfeld February 08, 2019

To your statement, "I felt (and still do) that automotive manufacturing was a lot more complex than coding software."

I work in an industry where a massive software effort is exerted to issue a small piece of plastic. the entire process is fraught with risk.  As a manufacturing manager, I've observed that developers see the world as deterministic - IF/THEN and WHILE/DO.  In this world, A + B always equals C.  My world is probabilistic.  Most of the tme A + B equals C, but because often I haven't identified all of the Key Input Variables, occassionally it equals D.  My experience is that these two worlds collide more often than they collaborate.

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Jeff Liker February 10, 2019

I should not claim great expertise in software development.  I do recall we worked as consultants to large company that made software and hardware that were supposed to work together but the groups did not collaborate effectively and chaos ensued. I am sure there are many cases fraught with risk if the quality of collaboration and coding is not high.

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Jason Yip February 15, 2019

That sounds less like a "software vs hardware" problem than a "groups not working well together" problem.

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Jorge Wong February 15, 2019

Making and Fixing Complex Modern Cars -HARDWARE and SOFTWARE HAVE TO WORK TOGETHER https://www.youtube.com/watch?v=U3PuVCUqeHQ

John Shook February 11, 2019
2 People AGREE with this reply

Not to forget that a car is chock-full of complex software code. Whatever complexities exist in software development are also fully present in automobile development. 

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Tracey Richardson February 11, 2019

I wonder how serious the folks are buying the $500K priced tickets to his Mars trip, buying is one thing, getting on the "spaceship" to depart is another. :).   His next - I will do this in "3 yrs project" and get the cost down to $100K. 

But back to Tesla, it is certain that its been a conversation for many for quite a while now leaving many of us to ask a lot of questions ,scratch our heads and be intrigued all at the same time.  

I will say I have friends currently still there that worked with me at Toyota several years back.  I do know they are relentlessly trying to continue to develop people without the need of calling it TPS in an environment that doesn't want labeled, but some of the thinking is grounded in many things we all know.  If we think of Gen3 TPS (Thinking People System) then they are trying for small celebrations   I admire them for continuing to think about people and "never give up which was a message Sakichi Toyoda taught.  As well as the 3C's in the Toyota Way 2001 - Creativity, Challenge and Courage (S. Toyoda) which fits with Tesla very well minus the thought on costs.  I hope they find a way to a better business model - the "efficient" Tesla-type thinkers of the world makes the whole industry better as a whole for the customer now and tomorrow.  Thanks for post Jeff, Tracey

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Owen Berkeley-Hill February 13, 2019

When Peter Senge wrote his best seller in 1990, The Fifth Discipline, he did not cite Toyota as a seminal example of a Learning Organisation he was promoting. Perhaps if had done so, the discussions about Tesla v/s Toyota, entrepreneurial v/s "steady as you go" that are occurring here might have a different flavour. Forget the mechanics of TPS, how many organisations can actually be considered Learning Organisations and measure up to Toyota's, "We make people before we make cars"?  How many see kaizen as not just an improvement methodology but as a way of encouraging their people to learn and grow?  How many have everyone tackling between 10-20 improvements every year? And by everyone, I include those nice people with titles beginning with “Chief”.  And this is regarded as “steady as you go”?  Innovative or what?

I teach Lean Management as an elective to MBA students in India and have been doing so for the past eight years. I've been doing so in a country where the "informal/unorganised" sector accounts for around 90% of the working population. And yet this is arguably the world’s largest MBA market, where they teach the often-destructive American management model rather than looking at some of the “unorganised” practices which help put food on the table for the very poor.  Over here they have an expression, jugaad, which many embarrassed academics have bowdlerised into frugal engineering.  Don’t get me wrong: there is both good and destructive or dangerous jugaad, but please watch this YouTube video and then ask whether the way we educate our future leaders neds to change and change drastically: https://youtu.be/yQGaoj9Iwro   Do we really need the dog-eat-dog competitiveness or the need to “maximise shareholder value” taught in the vast majority of the world’s b-schools?  Can we learn from the street vendors and their need for “collaborative competition” because individually they cannot afford to buy a card reader?

Which approach, Toyota’s or Tesla’s recognises the corrosive effect of entropy on every system, and the need for an intelligent and engaged workforce to keep things humming along beautifully?

End of rant! :-)



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Zhao Wenbo February 13, 2019

I don't think tesla will be more profitable than Toyota for at least 20 years

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Brent Wahba February 13, 2019
2 People AGREE with this comment

I think this conversation could use a little levity (or maybe it's a premonition?):

Tesla’s Autopilot Saves The Day Avoiding Crash With Swerving Toyota

https://www.carscoops.com/2019/02/tesla-model-3s-autopilot-saves-day-avoiding-crash-swerving-toyota/

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Tracey Richardson February 15, 2019

But aren't Easter Eggs cool-  grin ;) ---is that a new feature others will evolve to. ha!

More fun----https://www.businessinsider.com/tesla-secret-easter-eggs-revealed-2018-3

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Marty Anderson February 15, 2019

Very interesting article and discussion.  Long ago I worked with Jim, Dan, and a little later John on the Future of the Automobile Program and other global explorations.

For several decades I was privileged to be hosted around the world by Toyota and Honda as they expanded their global operations. I was with them as they built supply and after-sales operations on all continents.

Applied those automotive lessons-learned to years of global gemba walking global ecosystems of electronics, mobile communication, food, water, waste, housing, healthcare, energy, etc.

Walked and worked in thousands of facilities including an amazing real world history lesson in the USSR just a few months after the Berlin wall came down.

Spent 10 years traveling the "edge of electricity" watching how 3 billion of the poorest people on Earth got access to mobile communication.

For 30 years in both commercial and appled educational roles have have been guiding senior executives on gemba walks of their own global networks for two purposes: turnarounds and entrepreneurial innovations.

Done some amazing gemba mapping like the rollout of robotic laparoscopic surgery in Mongolia for the Lancet Commission on Global Surgery.

So what?

With wonderful colleagues we have traveled the global "Great Circle" gemba of the Tesla ecosystem.

From raw material through manufacturing, sales, service, and the emerging scrap and recycling steps in the "circular economy" chain.

Verdict?  Tesla is not even in the same universe as Toyota or Honda on any step in the "circular economy."

My polite version of this can be found here. https://www.forbes.com/sites/babson/2018/01/27/tesla-cars-are-great-their-ecosystem-strategy-not-so-much/#2b5f4d2c129e ;

The reality is much worse.  Tesla has not stabilized much of anything in physical parts or code.

Each car contains up to 1600 lbs of e-waste that is currently almost impossible to disassemble.  Right now incinerating is the only viable option, although there are emerging e-waste recycling innovations coming outside Tesla.

Their utility scale batteries are similarly kluged and will add recyclng load to the environment.

Tesla service is non-existent compared to any established car company.

If you visit the lithium mines of the world, you find that they are in vulnerable watersheds, and lithium mining at scale is far from benign.  If Tesla-style EV's reach about 10%-15% of the fleet, the lithium supply industry will liklely have to start hard-rock mining which is quite damaging and very un-Lean.

Tesla may survive as a car company, but their big Gemba is far from an environmental boon.

The entire Toyota Prius circle-economy gemba is light years smarter and much more sustainable environmentally, economically, socially, and even spiritually.

Next-gen Lean would learn a lot by traveling the emerging EV global ecosystem from mine to recycling/waste.

And then Next-Gen-Lean could do the world a major service by applying the lessons learned in the history of Lean - to the disturbing realities of big-money, big-politics "push" innovation like Tesla's.

 

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Tom Lane February 15, 2019

I don't think we will have much success in world wide "lean" until we shift these mindsets.

From a control mind to a support mind

From results only to process

From functional to systemic

From failure driven to prevention

From blaming to observing without blame

From personal gain to group success

From telling to listening

From only top down to bottom-up top down

From hero worship to gemba value

From "knowing" to "seeing"

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