Will Tesla Be Able To Continuously Improve Like Toyota?

Tesla

JUN 19 2018 BY EVANNEX 23

CAN TESLA IMPLEMENT ‘KAIZEN’ LIKE TOYOTA?

Tesla’s vision includes not only reinventing the automobile, but reinventing automobile manufacturing as well. As Elon Musk explained in an earnings call in February, “The competitive strength of Tesla long-term is not going to be the car: It’s going to be the factory. The Model T wasn’t the product. It was the River Rouge [Ford’s innovative auto factory]. The factory is going to be the product that has the long-term sustained competitive advantage.”

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*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: A look at Tesla’s factory in Fremont, CA (Instagram: steadidrew)

Musk envisions the world’s most automated manufacturing plants, where robots will produce cars (and battery cells and solar panels) with little human intervention, at unprecedented speed. Whereas current auto assembly lines move at the speed of “Grandma with a walker,” someday Tesla’s Gigafactories will be cranking out battery cells as fast as “bullets from a machine gun.”

However, some manufacturing gurus think Musk and company are on the wrong track. Jeffrey Liker is an expert on “lean manufacturing,” and the author of eleven books, including the best-selling The Toyota Way. His newest book, Designing the Future: How Ford, Toyota, and Other World Class Organizations Use Lean Product Development to Drive Innovation and Transform their Business, written with James Morgan, is expected to be published this fall.

In an article adapted from the new book, published in The Lean Post, Liker acknowledges that Tesla has been “a major disruptive force” in the auto industry, but argues that Tesla’s execution has been “far from auto industry standards – late delivery with poor quality.”

“While Tesla is disrupting this industry in many revolutionary ways it is looking for competitive advantage in what has been to date its Achilles Heel,” Liker writes. “The company has struggled to manufacture their stunningly-designed (though not designed for manufacturability) vehicles with a high degree of quality.”

Above: Tesla’s factory in Fremont, formerly known as NUMMI, was once owned by both Toyota and GM (Image: Autoblog)

John Shook, an 11-year Toyota veteran who is now Executive Chairman of the Lean Enterprise Institute, says Musk is indulging in revisionist history when he invokes the example of Ford’s River Rouge plant. “Henry Ford figured out much of this (the principles of flow) just a little over a century ago. But, that was a simple case, where achieving high-speed production (very much as Elon now seeks) was relatively straightforward. The products were all simple and, more importantly, they were all the same. As soon as complexity was added (in the form of types of products and options as well as more complex technology like electronics), Henry’s simple system broke down…Half a century later, Toyota came along and figured out the next essential part of the equation, how to achieve the speed, but also the built-in quality, with the complexity of mixed-model production.”

According to Liker, Tesla sees manufacturing as a technical engineering problem, and the solution is automation, automation, and more automation.  Liker sees Tesla as a “top-down, command and control organization” (Elon and his colleagues might disagree with that description), and notes that such rigid organizational structures “work efficiently in a stable environment, low on uncertainty. When things are static and processes are stable, the most efficient form of organization is mechanistic. On the other hand, when there is a good deal of uncertainty because of rapidly changing technology, lots of unexpected problems, and a turbulent environment, then an organic form of organization is far more effective.”

Ironically, Tesla’s Fremont factory was bought from Toyota, and was formerly an icon of the company’s vaunted Toyota Production System (TPS). In Tesla’s early days, Toyota was a partner, and the two companies worked together on several levels.  However, according to Liker, “So much of Tesla’s vision of manufacturing is completely contrary to TPS: Spend large amounts of capital to automate everything possible. Rely on hiring many engineers to make it work rather than carefully developing talent from within. Repair in quality rather than designing and building in quality. Aim for an ultrafast assembly line instead of building to the rate of customer demand.”

Liker believes that what Elon Musk is missing is the point that has made Toyota so successful.  “Toyota’s living system approach is exactly what has been missing from Musk’s mechanistic view and needs to be at the center of his vision, not as an occasional response to a crisis. Toyota is a learning organization with a long memory. In 1979, Toyota launched the Lexus LS400 with the most advanced automation in the company at its Tahara, Japan, plant, including robots in assembly doing jobs normally done by people. Sales were below expectations and the plant was underutilized. Toyota’s reflection was that the high capital costs were fixed and could not be adjusted to match demand…Since the Tahara experience, Toyota reduced automation rather than accelerated it.”

Above: Kaizen is one of the underlying principles for TPS, the Toyota Production System (Image: Lean Journey)

Liker relates an interesting story about Mitsuru Kawaii, who rose through the ranks at Toyota to become an Executive Vice President and board member. Kawaii has spent most of his career in automated factories, and is steeped in the TPS principles of flow, built-in quality, standard and stable operations, making problems visible, and kaizen (continuous improvement).  He learned these principles in a mostly manual operation, then found he could continue to apply them as the plant became highly automated.

Kawaii has been using manual “super-skill lines” to teach team members the basics of TPS, which they then apply to automated lines. He created a low-volume engine line with no automation and little electricity, staffed by elderly Toyota retirees. Despite using a minimum of electricity and a minimum of physical exertion, the operators were able to build a sophisticated Lexus engine out of heavy parts.

The point of this exercise was not to revert to manual production, but rather to develop workers with a deep understanding of how the line worked. “If there is a defect at the end or something breaks down [in an automated line], you will be disassembling with your hands and replacing the parts,” Kawaii explained. “If you cannot do this, you cannot [be called] a high-skilled person.” Ideas from the manual super-skill line are brought to the automated line, with the goal of creating simple, intelligent automation.

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“The tools required to run a great factory aren’t merely math and engineering, but psychology and sociology,” says John Shook. Elon and team will figure out the technical side, but they also need to master the more complex social side. “The social side is difficult in its own right – add the technical complexity of orchestrating the operational execution and timing involved in gathering and assembling thousands of parts that arrive at exactly the right place at the right time in perfect (down to the minute) precision for thousands of humans to choreograph themselves to the precise (down to the second) rhythm and you’ve got a social-technical challenge of epic proportions.”

Above: Tesla’s top execs on the Gigafactory roof (Flickr: Steve Jurvetson)

“Automated factories will not run themselves,” Liker concludes. “They will require even more maintenance and quick response to problems than manual systems, and this will have to be done by people…even in a world of a lot of technology, those who kaizen [continuously improve] the automation, as being taught by Mr. Kawaii, will have a competitive advantage.  People will not be run out of town by smart robots anytime in my lifetime.”

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Written by: Charles Morris; Source: The Lean Post

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.

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23 Comments on "Will Tesla Be Able To Continuously Improve Like Toyota?"

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jim stack

FACT Check. TOYauto has been stuck on NiMH batteries for way to long. They had over heat problems in their hybrid controllers that causes them to shut down.
Tesla made the RAV4 Electric so TOYauto could meet their zero emission COMPLIANCE numbers.
TOYauto hasn’t wanted to leave their hybrids and go plugin hybrid or full electric.

So FACT CHECK Tesla is way ahead and even runs their GigaFactory on Renewables with no Fossil fuels and they improve everyday and even have over the air software updates so their cars continue to lead the World.

Dave100e

Whats that got to do with manufacturing efficiency?

Derek

“even runs their GigaFactory on Renewables with no Fossil fuels”
False.

Prsnep

They build affordable, reliable, fuel efficient hybrids. Why are you concerned what the battery consists of?

Bul_gar

Up to May 2010, NUMMI built an average of 6000 vehicles a week, or nearly eight million cars and trucks since opening in 1984. In 1997, NUMMI produced 357,809 cars and trucks, peaking at 428,633 units in 2006.

Nix

FYI — Tesla got building permits approved back in Aug. 2017 to nearly double the size compared to NUMMI. They have already completed some phases, and are well underway on other phases.

https://www.eastbaytimes.com/2017/08/10/tesla-factory-launches-expansion-that-could-double-its-size/

Kbm3

You must be unaware that Tesla is much more vertically integrated which renders your entire point moot.

SJC

It is a bit too chaotic for continuous improvement.

Ed

There has been so much said about issues with the Tesla production lines, but I believe that the original intent was to be disruptive and not a follower. After all, that’s what sets the cars apart. They aren’t another Camry.

Indeed it is sometimes a fine line between the needs to disrupt and the lessons learned in the past. I suspect that if you look at the production lines in detail, you will find that 90% is a classical line.

But the title, “Will Tesla continuously improve” is quite comical. To a degree, constant improvement is one of Tesla’s downfalls, the vehicles change on a constant basis. The new Tesla tent is another example of “doing things different” in an effort of constant improvement.

On the other hand, “constant improvement” on behalf of Toyota seems to come one year at a time.

xm

for Toyota, it seems like 1 decade at a time.

Will

And still the number 1 auto company in the world

EVShopper

“They aren’t another Camry.”

That’s too bad. The Camry sells 100’s of thousands per year, and keeps getting better. And is affordable and reliable transportation.

Will

Wow, a good piece, more like a critical hit in Tesla from their pravada

Will

Is Glasnost happening at Evannex. It’s wait and see

krona2k

Toyota really aren’t as good as they think they are. They may claim to continually improve but they can be very slow to do this. The other side of this is that they are cautious and very thorough when adopting new software or processes. However at the moment for any given wire in the vehicle they can only tell which option caused that wire to be there through human knowledge. They need to speed up their kaizen.

Pushmi-Pullyu
There is no doubt that Toyota’s approach to auto engineering produces superior quality. But there is very much doubt that Toyota’s approach is the right one for producing rapid change. Toyota is still stuck on the very obviously unworkable idea of fuel cell cars, and despite its early lead with the Prius, it is lagging far behind on PHEV tech, let alone BEV tech. I think most people following the story of Tesla would agree that the young auto maker does need to work on consistency and quality. But the question is whether the problems there are actually a significant problem, or whether they are minor ones blown all out of proportion by reporters desperate for a “story”, fed cherry-picked anecdotal evidence and skewed statistics by all the people and organizations who so desperately want the EV revolution to grind to a halt, and want Tesla to fail. In a perfect world, Tesla could significantly improve the consistency of its build quality while ramping up production at a rapid rate. But in the real world, constant change makes consistent quality pretty much impossible. Furthermore, any company has limited resources. Should Tesla spend its resources improving quality at the expense of… Read more »
dan

How are they lagging in PHEVs? They sold twice the number of the next leading phev in the US in 2018. 12k Prius Prime vs 6k Volts. In fact, they have sold more cars than anybody else but the Tesla Model 3. That is not failure.

Will

It’s all about efficiency with PHEV and future ev from Toyota then performance.

dan

More people value price and safety than performance or efficiency.

EVShopper

You started well, then went off the rails into tin foil hat territory.

EVShopper

“Will Tesla Be Able To Continuously Improve Like Toyota? “
Let’s hope so.

Bunny

Though I think Tesla has a lot of room to improve their manufacturing techniques, at least give them credit that when it comes to recalls, historically
They are only at 941 out of 1,000 built have been recalled. That’s actually a pretty good stat industry wise.

Kan

Toyota? Cheap plastics, millimetric carpets that raise off the floor in a breeze, panel cover retainers breaking off during recall work, rudimentary mechanical slip AWD. Should I go on. We owned a brand new top of the line Sienna for six months, it was the worst experience ever. Customer-pawn dealership mentality, all repairs took a whole day, oil changes for hours, all the while surrounded by 20 octogenarians in the waiting room strategically situated in the middle of the showroom. Tragic, really.

OK, OK, the Land Cruiser and Prius are made in Japan, that is a different story.