Tag: Tesla Motors

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.

 

 

Video Tip: Inside Tesla’s Robotic Factory

teslaIf you want to show an example of all the high tech manufacturing tools discussed in Chapter 7, here is the perfect video for your class.  In it, Wired Magazine (July 16, 2013) provides a tour of the 5 million-square-foot Tesla Motors factory in Fremont, California to see how CEO Elon Musk is rethinking how cars are built.  Tesla Motors has kicked off production of the gorgeous Model S into overdrive, cranking out some 400 cars a week on one of the world’s most advanced automotive production lines. My wife and I are so impressed that we are scheduled to take the car for a test drive this weekend

A major automaker in Detroit or Japan can churn out 400 cars a day, and in fact the Tesla Motors plant had a capacity of 6,000 cars a week when Toyota and General Motors ran this factory in the 1980s and 1990s. But Tesla’s numbers are impressive when you consider the Silicon Valley automaker started less than a decade ago with a few engineers and mechanics shoving piecemeal components into a rolling chassis made by Lotus.

Tesla got the factory for a song from Toyota in 2010, spent about a year or so setting up tooling and started producing the Model S sedan in mid-2012. The automaker brings in raw materials by the truckload, including the massive rolls of aluminum we see in the 5 minute video that are bent, pressed, and formed to create the car. Those lightweight components are assembled by swarm of 160 red robots.

The bare body is shipped off for prepping and paint before joining the assembly line under the power of autonomous robots. The shell is ushered through the line as Tesla’s 3,000 workers work alongside their robotic counterparts to install the battery, motor, interior, and miles of cabling and components that help create the electric sports sedan.