Tag: Elon Musk

Good OM Reading: The Algorithm– How Tesla Drives Innovation

Elon Musk calls it “the algorithm,” a distillation of lessons learned while relentlessly increasing production capacity at Tesla’s Nevada and Fremont factories.  And anyone can tap into the powerful management techniques behind Elon Musk’s success. At least that’s the thesis of a new book by former Tesla President Jon McNeill.
“The Algorithm” argues there are five steps that explain how Musk wants his teams at the electric-car company and rocket-maker SpaceX to operate.  “Much of the genius in Musk’s companies come from the legions of smart people empowered by the Algorithm,” McNeill writes. “They’re chasing stretch goals with free license to question everything and innovate boldly.”

 

The 5-Step Operational Algorithm is a structured approach to decision-making, innovation, and efficiency used at Tesla, SpaceX, and other Musk firms. It consists of these 5 sequential steps: 

  1. Question Every Requirement– Identify the origin of each requirement and challenge its necessity, regardless the rank of the person making the recommendation. The goal is to make requirements less “dumb” and ensure they serve the final objective.

  2. Delete Any Part or Process You Can– Remove unnecessary steps or components. Musk emphasizes that if you donot occasionally cut back at least 10%, you likely haven’t deleted enough. 

  3. Simplify and Optimize– Focus on improving only what remains after deletion. Avoid optimizing  processes that shouldn’t exist. 

  4. Accelerate Cycle Time– Speed up processes only after simplification and optimization, ensuring efficiency without reinforcing unnecessary steps. 

  5. Automate Last– Implement automation only after all prior steps are completed to avoid automating inefficiencies.

 

 

OM in the News: Building a Humanoid Robot

Armies of humanoid robots are poised to march into the world’s factories. But before they’re ready to turn a wrench, they must solve what Elon Musk calls “the hands problem.”

Creating the mechanical equivalent of the human hand is a challenge that has been stumping researchers for years, writes The Wall Street Journal (Oct. 27, 2025) . Replacing muscle and skin with motors and sensors is a critical step in making humanoids a versatile source of labor, potentially unlocking a global market that could reach $5 trillion by 2050.

The robotic hand of the future will need many sensors to emulate a human hand. Holding a pencil, for example, would require sensors along the sides of several fingers.

Tesla’s humanoid robot—called Optimus—is good at walking, but making hands that can match a human’s has been a far tougher job. “In order to have a useful generalized robot, you do need this,” Musk said. “You do need an incredible hand.”

Boston Dynamics has equipped its Atlas humanoids with hands that have only three fingers. They can form a palm that allows the robot to lift boxes or brace itself. One digit also can rotate to serve as a thumb, letting the robot grasp objects. The humanoid can pick up auto parts, pump a dumbbell and pluck a tissue from a box. But a robotic hand must make trade-offs between strength, dexterity, slenderness and ruggedness. Increasing one attribute can diminish another.

Industrial robots have relied on pincerlike hands for decades, and are still the most cost-effective form. MicroFactory (in San Francisco) produces a $5,000 robot that has two arms, one of which typically is equipped with a tool, the other with a 2-digit gripper that holds an object in place. That setup can perform most of the functions needed for electronics assembly, such as soldering, inserting screws or peeling off protective films.

The difficulties of re-creating the human hand lead to questions about why it is being done, given that the real thing already exists in humans.  The answer: the shortage of workers for factory and caregiving jobs is driving the need for alternatives.

Classroom discussion questions:

  1. There are almost a half-million open factory jobs in the U.S. Given the tight job market, will your students be willing to take them?
  2. Why are humanoid robots so sought after?

Good OM Reading: Power Play–Tesla, Elon Musk, and the Bet of the Century

Tesla has earned a prominent place in auto history under the genius of Elon Musk. While the rest of the auto industry sought to protect its internal-combustion business under the assumption few people would buy an alternative, Musk showed that stylish, fast and fun electric cars would prove popular.

Musk’s approach to many manufacturing issues was, and is, keeping the assembly line moving while line problems are being fixed. He’s not a fan of the Toyota method, where a worker can stop the line until the problem is solved. He’s about volume. That may be one reason why the quality of Teslas is so variable. Some owners report their car is perfect; some say they were sold a piece of junk.

In 2016, Musk promised that a self-driving car, a Tesla semi truck and a new, possibly jet-powered roadster were imminent. None are remotely close to production. Since Tesla was founded in 2003, it has undergone a truly hellish 15 years, beset by rivals, pressured by investors, hobbled by whistleblowers, but lauded by its loyal supporters. Musk himself would often prove Tesla’s worst enemy.

Building the Teslas proved much harder than Musk expected, resulting in a” would-he or-wouldn’t-he” drama in 2018 to reach a weekly production level of 5,000 Model 3 cars—the volume needed to make the company sustainable. Problem after problem resulted in money-eating delays that left the Tesla and its employees badly shaken. Musk, often sleeping in the Fremont, California, factory, had dubbed it “Manufacturing Hell.”

Wall Street Journal reporter Tim Higgins had a front-row seat for the drama: the pileups, wrestling for control, meltdowns, and the success. His new book, Power Play, is an exciting tale that deals with a myriad of OM issues. You and your operations management students will find much worth discussing in class after reading Higgins’ book.

OM in the News: Tesla’s Model 3 “Production Hell”

When Elon Musk talks about the future of factory automation at Tesla, he envisions new breeds of robots and smart machines compressed in dense factories with little room for human operators, guided by self-learning software. “But so far, the manufacturing of Tesla’s new all-electric compact sedan, the Model 3, at its Fremont, Calif., factory is moving at a more earthbound pace,” reports The Los Angeles Times (Oct. 20, 2017).

Tesla was anticipating a production rate of 20,000 Model 3s a month by the end of December. Over 3 months through September, though, Tesla had produced only 260 — about 3 cars a day. That’s well behind a normal auto-industry production pace of 1 car per minute. The company blamed unnamed manufacturing “bottlenecks,” and promised a quick fix. But the assembly line remained incomplete by early September with some body parts normally installed by robots being employee-assembled by hand.

The “production hell” that Musk acknowledged raises questions about whether the Silicon Valley model he has followed — beta testing with early adopters and launching updates via software — can be adapted for Tesla’s first mass-market product. “Automobile manufacturing is very hard,” said an OM prof at UCLA. “It’s amazing that Tesla has been able to build cars at all.” He meant it as a compliment.

Tesla took the Model S from design to full production faster than traditional manufacturers would consider. Tesla’s breakthrough over-the-air technology made software fixes a snap. Code to fix battery issues, add self-drive features, or simply tweak the music system can be downloaded via the car’s Wi-Fi system. Still, many owners complained that there were more quality problems than they expected in a $90,000 car. In July, Tesla turned the first 30 Model 3s over to paying customers — all Tesla employees. Some of those first 30 cars were returned to Tesla with battery problems.

Classroom discussion questions:

  1. How does Tesla’s approach differ from traditional automakers?
  2. Are such delays to be expected?

 

Video Tip: Tesla and a Factory Full of Robots

teslaElon Musk recently made the cover of Fortune (Dec.9, 2013) as its 2013 Business Person of the Year for his famous creation of both Tesla and Space X.  The article recalls that just a few years back, the best most people could say about electric cars was that they would be great for sustainability, but for the foreseeable future they’d be horribly limited by range and wouldn’t be very appealing to drive. Battery technology was simply too expensive and too heavy for it to be otherwise. The key breakthrough was to switch to lithium-ion battery technology, an expensive technology used not in cars, but in computers and phones.  Musk believed that if you could combine large enough numbers of lithium-ion cells into a single battery, you could provide not only adequate range for a car but also power capable of turning the humble electric car into an object of desire.

Musk wasn’t the first person to have that insight. His genius was to take that core idea to its logical conclusion and integrate it into a broader picture of how a series of such cars could be manufactured and marketed for ever-shrinking costs, in a sequence that would eventually bring Tesla to the mass market. A full seven years ago, he posted an article titled “The Secret Tesla Motors Master Plan,” which outlined the basics: three generations of cars, first the super high-end sports car, then a sporty 4-door family car, then a mass market car. And underpinning it all, the conviction that the cars wouldn’t just work, but be lusted after.

He had no certainty that the company would succeed. But he was convinced that (a) the laws of physics meant that electric power could deliver a profoundly better automobile, (b) there was a path to possible success via three generations of cars, and (c) the goal was essential if humanity was to have a shot at a sustainable-energy future. This  5 minute video of the Tesla S production is one your students will enjoy as it shows the power of robotics in manufacturing.