If that's how you use it, then you also don't grasp it. The point of a process is that it supports you in hard times. (In easy times, any process will do.) In my view, the essence of Lean is patient incremental gain. Giving in to panic is throwing all its benefits away, and creating both immediate and long-term problems for yourself.

A good counterexample to your theory is Toyota itself. They created the hybrid category from scratch. They are still the market leader. They started by building one. They moved on to a small annual production volume. As they worked out the kinks, they sold more and more, eventually starting to sell in the US. As far as I can tell, at no point did they enter "hair-on-fire mode".

Tesla is basically a really big startup, and has nowhere near the cash reserve to take 6 years to bring the model 3 to market. It it basically get it out NOW, or fold. In 6 years Ford etc. etc. already has a model 3 equivalent for sale and knows how to manufacture. You can't play it so safe in an established market if you want to dive in.

"Getting it out now" means building a very reliable, high-volume production line. If you rush that, you get an unreliable production line, which unless you just ship garbage, will be a low-volume production line or a very expensive production line. Or both.

I understand why "hair-on-fire mode" feels right. One's internal feelings of urgency are matched by dramatic action. The chaos and excitement of red alert gives nobody time for contemplation and lets everyone ignore the uncomfortable feelings that might come from that. But people in that mode make terrible choices, drastically undervaluing the long term.

In software, it's especially easy for us. Our products are rarely life critical, people are used to them being flaky, and we can fix things later by shipping new versions. None of these is true about cars. People used to ship garbage anyhow, which is why the US car market in the 70s and 80s was plagued with problems. And why Toyota and others could make such inroads.

Tesla should absolutely be taking risks, especially product feature and marketing risks. But taking quality and productivity risks in hopes that they can somehow make it up later strikes me as a terrible idea.

1) An app is solid, has awesome QA... but the environment does not. You need to shake out some networking bugs / load bugs, etc.

2) The app is terrible. Every part of it is broke. needs a total rewrite.

To an end user both feel the same, but the expected curve to make it stable is VASTLY different.

In theory Tesla has been in the car business for at least a few years. It MAY be closer to 1. Maybe 2 or 3 vendors are 3 months behind schedule in delivering production machines. Which is bad, but not "we are totally screwed" bad.

On the other hand, it is insanely ambitious. It totally could be a #2 totally screwed bad.

Time will tell.

What's wrong with improving the process as you go, as Toyota almost certainly did?

It's sort of like saying, "Why can't you just clean this enormously messy code base up one bug at a time?" Sure, you can in theory. But it's a very rare project that does it. Even places that do total rewrites often eventually end up with as big a mess as they had before. Why? Because the real problem is the ideas, relationships, and habits that got them the messy code base in the first place. That is extremely hard to change.

> (Ironically, the Fremont plant is prominently featured in “The Machine…” as the locus of the ultimately failed GM-Toyota cooperation.)

> As I watched Tesla’s messy, hiccuping line, with workers dashing in to fix faulty parts in place, my mind travelled back to the Honda plant I had visited years ago in Marysville, Ohio. Clean, calm, everything moved smoothly. I was so shocked by the contrast that I imprudently voiced my concern. That didn’t go over well with my fellow Tesla owners. I was a killjoy, I was calling their choice into question.

So we have an actual first-hand description of the differences between Tesla's and Toyota/Honda's understanding of lean manufacturing. Even in the very same building in fact. And I'm pretty sure the author is describing the production of Model S or X, not the new Model 3. Since those cars have been in production for a while now, there's no way they wouldn't have implemented something like the lean manufacturing system unless they simply don't understand it.

It seems more likely to me their "goal" (pun intended for those readers of "The Goal") is the TPS but their particular supply chain may not currently allow for it.

Fundamentally my question on Tesla is now: if you're priced as a "we have a fundamentally better way of doing things that will disrupt the industry" company, but the core process in your business is still fundamentally inferior, will you have a long enough runway?

I used to be a bear on Tesla for grumpy "I don't like the decisions and design choices they make" reasons, but now the business itself seems a bit underdeveloped.

My theory is Musk knows the only way he'll be able to compete is attracting the best talent through stock incentives, and to do that he needs to jack up the stock price by pushing engineers way past what they are comfortable with.

An underreported stat is the increase in TSLA outstanding shares, which I think is Elon throwing stock incentives at his employees to make them go faster, as a TPS alternative (for now?)

https://ycharts.com/companies/TSLA/shares_outstanding

Tesla’s stock behavior is due to the ongoing game of “who blinks first” between TSLA shorts and TSLA short-squeezers. With $10 billion short position the company’s fundamentals are reduced to a side show.

It's primarily from equity grants. Even your article says Musk tacked on his stock option exercise as part of the secondary offering, which increased the dilution.

American carmakers didn't get it for decades. Even when they thought they did, they performed Lean rituals without real understanding. This was despite Toyota trying vigorously to teach them.

(A similar story is told of the spread of the use of Feynman diagrams in physics - I’ve read that their spread was far slower than you’d expect given their utility: For whatever reason it wasn’t enough to be told that they were an incredibly useful tool by people you trusted - it was only when non users actually worked together on problems with Feynman diagram users, or were taught by Feynman diagram users directly that their use actually spread. Both of these transfer methods required physical proximity which restricted the use of Feynman diagrams to a small number of labs for a surprisingly long time.)

There's a This American Life episode (centered around what is now Tesla's plant) that covers this well: https://www.thisamericanlife.org/radio-archives/episode/561/...

“Spreading the Tools of Theory: Feynman Diagrams in the USA, Japan, and the Soviet Union” by David Kaiser, Kenji Ito and Karl Hall

http://web.mit.edu/dikaiser/www/Kaiser.SpreadingTools.pdf

must have been the original source research.

edit: Also, there’s a book (by one of the authors of that paper): “Drawing Theories Apart: The Dispersion Of Feynman Diagrams In Postwar Physics” https://www.amazon.co.uk/dp/B002Y5W2X2

<blockquote>

... Thus, when [Freeman] Dyson arrived at the Institute for Advanced Study in September 1948, Feynman diagrams in hand, he immediately joined ten fellow ‘postdocs’ in theoretical physics, the largest cohort yet.

[J. Robert Oppenheimer had reorganized the Institute to emphasize post-doc training for physicists; he was quoted as saying that "the best way to send information is to wrap it up in a person."]

In fact, the new building that had been planned to hold offices for the newly expanded ranks had not been completed on time, so all of the postdocs wound up sharing desks in one large room for the first 6 weeks of their stay – an architectural arrangement perfectly suited for the sharing of tacit knowledge.

They huddled around large tables swapping ideas, pressing Dyson to explain the details of how to use Feynman diagrams. He delivered several sets of long lectures to the group, supplemented by constant, informal conversations.

By the winter of 1948–49, Dyson had organized them into several groups, each working on distinct diagrammatic calculations. One pair, Kenneth Watson and Joseph Lepore, worked with Dyson to calculate high-order terms in a certain model of nuclear forces, while another duo, Norman Kroll and Robert Karplus, took up Dyson’s lead to undertake similarly complex diagrammatic calculations in QED.

So effective were Dyson’s tutorials that Wolfgang Pauli wrote to another of the young Institute theorists that May, asking what Dyson and the rest of the ‘Feynman-school’ were working on.

</blockquote>

(Extra paragraphing added.)

This reminds me of a certain other industry cargo culting a certain other methodology, but I cannot put my finger on it ...

Okay so our products are cheap and simple. But our yearly totals of 50,000 to 100,000 units is comparable to the what Tesla is hoping to get out the door. Tesla's numbers for previous models weren't nearly that high. Gonna be hard to just in time that.

Personal feeling. What an automaker is doing by outsourcing parts to suppliers and then making them manage inventory is. a) they as someone mentioned, keep the inventory management away from the production line. And importantly allowing suppliers to apply higher levels of scale then you could other wise. Important because likely many of Tesla's suppliers production machinery has vastly more capacity then Tesla needs. Telsa and other automakers are thus 'renting' time on those machines.

Frankly I think Tesla is ramping to this scale for the first time, it's bound to be a mess.

Tesla wants to ramp up production as their primary goal right now; if their supply chain is preventing them from doing so then they've funamentally failed.

> I really find it hard to believe they don't understand the TPS.

I agree, but that makes this more confusing and (at least potentially) more damning for Tesla. It's not that hard a concept; if you're running a manufacturing company but you screw up your supply chain badly then...I dunno. Maybe you're bad at running a manufacturing company? Supply chains are really important when you're doing something like making cars. And people having been advocating TPS since before I was even born.

So...it's a conundrum.

Even a couple of years back when Toyota passed GM as highest volume maker of vehicles, the execs at Toyota said there was a moment where they took their eye off clean processes and Toyota quality suffered a bit. Some of that I suspect had to do with the timing of the retirement of a generation of very experienced people in Toyota. I think they've since been on a corrective course.

I think it makes sense to consider the state of the art for reliable production lines. But NIH syndrome will have its way.

Elon's software background, plus SpaceX which is fundamentally a very different kind of manufacturing, probably works against him here. Software startups essentially hate process (for often-good reasons) and view process as mostly a thing you put into place out of necessity after you've successfully navigated the growth phase. The stories from their production floor are the single most worrying thing that's come out about Tesla - bad vendor quality control, overengineering a la the Model X, all those other things are comparatively simple to grasp, learn from, and overcome. Why wasn't "learn how to mass-manufacture reliably" a much earlier goal?

Just because a system took 27 years to develop doesn't mean it takes 27 years to learn.

Seems like blind replication isn't the answer alone ( http://www.tandfonline.com/doi/abs/10.1080/00207540701223493... ), which is unsurprising, but Tesla's sales targets and their current production line process as-reported seem at odds.

This stuff is very well-studied and making basic errors seems like a problem of hubris coming from a software industry that's in a much less mature state.