OM in the News: Tesla’s Lean Problems

A recent report in Industry Week (Sept. 12, 2018) suggests that Tesla, like a lot of facilities, has trouble being lean.  Here are a few observations from industry experts who visited the Fremont manufacturing plant.

From a Lean Enterprise Institute advisor: “High, leaning stacks of cardboard boxes and other items make it difficult to see. There was stuff piled up on the floor, and the stuff was dirty. There were fork lifts—I haven’t seen these in an assembly floor in a long time. Most of the AGVs  were empty. The aisles were narrow and crowded, and some of the stuff, piled up, was leaning into the aisle. Rear doors are on the Model 3 body going down the main assembly line, while the front doors aren’t.  In most of the plants I’ve been in, all four doors are off while it’s going through the main interior assembly so the workers can get better access, and the doors don’t get damaged.”

From the CEO of the Center for Automotive Research: “The low production numbers, with the number of workers and the size of the facility, indicates inefficiencies where the manufacturing team is doing a lot of manual work instead of optimizing the production process. The fact that the entire outdoor area—a collection of tents—is set up for rework says they’re having fundamental issues with quality.”

From a manufacturing technology consultant: “They first focused very much on high levels of robotics and automation, only to realize how difficult it was, and now they’re scaling back. So they wasted time ramping up and going back so they could get to the levels of automation that they thought they could. It’s very likely that someone with real, deep manufacturing experience could have realized it early enough.”

Classroom discussion questions:

1. Why do you think Tesla is facing such production problems?
2. There have also been reports of multiple paint room fires and a higher than average number of safety incidents. How can OM help resolve such issues?