Christopher Tang
Tesla’s production of Model 3 hits a snag. I am a fan of Elon Musk – the visionary who created Tesla and SpaceX. At the same time, I worry about his lack of understanding of Operations Management. As a case in point, let us consider a story reported in Wall Street Journal.[1] Musk asked why the Tesla’s assembly line had stopped. One of the senior engineering managers explained that it was due to a safety measure. Musk fired this manager, but Tesla claimed that this manager was fired for other reasons.
Regardless of the reason(s) to fire this manager, his explanation to Musk reminded me of the 1952 classic “I Love Lucy” episode in which Lucy was the “bottleneck” who could not keep with the candies rolling off the conveyor belt. When running a factory, many bosses often want to see things moving and workers working at all times because they tend to believe that idle machines and workers are wasteful! The boss is always right, no?
Actually, there are two good reasons for not keeping the machines and workers busy at all times. First, in our MBA Operations Management (OM) core course, we discuss the classic novel “The Goal”[2] to illustrate that most assembly lines are “imbalanced” so that some process steps are slower than others. When an assembly line is imbalanced, the output rate of the line is dictated by the processing rate of the bottleneck (usually the slowest stage in the assembly process). Therefore, it is optimal to get every step to operate according to the processing rate of the bottleneck. In doing so, it is natural to see some non-bottleneck stages will be idle some of the time. If the boss insists to keep every stage busy at all times, then many work in process inventory will be piling up in front of Lucy!
Second, in our OM course, we discuss the classic Toyota Production System that it is a good practice to “stop the line” whenever there is a problem (processing time delay, quality issue, irregular parts, etc.). In doing so, the “problem” will be exposed and the organization can learn and find ways to address the underlying causes to solve the problem right away. The Toyota Production System is a proven process, and it was actually implemented at the Toyota-GM NUMMI plant before it is now known as the Telsa’s factory in Fremont, California. Perhaps certain OM lessons can help Tesla’s production back on track!
[1] Higgens, T., Mickle, T, and Winkler, R. “Musk vs. Musk,” Wall Street Journal, September 1, 2018.
[2] Goldratt, E., and Cox, J. The Goal. North River Press, 1984.
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