Hey @ElonMusk: Toyota Never Thought “Humans are Underrated”

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Over the past month, there's been so much in the news about Tesla. This column from Joann Muller, who covers the auto industry for Forbes, caught my eye again recently:

Musk Thinks Tesla Will School Toyota On Lean Manufacturing; Fixing Model 3 Launch Would Be A Start

It's not a direct quote (I don't think) from CEO Elon Musk that they will “school” Toyota on Lean manufacturing.

I'd suggest there's little evidence that Musk and Elon are even really trying Lean manufacturing as a strategy or a mindset. He's doing his own thing and will sink or swim accordingly.

If Elon thinks that “Lean” means automation, he'd be incorrect. There are no “lights out” factories that are “fully automated” in Japan, as some people seem to think. In my own visits to Japan, I've seen Toyota factories that are full of people. The Toyota plants, of course, have some robotics (in welding, painting, and for the conveyance of vehicles and some parts. But, it's said that Toyota plants are generally LESS automated than those of American automakers.

From the Muller article, published in February, Musk is quoted as saying:

“The competitive strength of Tesla long-term is not going to be the car; it's going to be the factory.”

Well, that factory currently seems to be quite the mess. It's a shame that Tesla couldn't combine a very innovative product with proven car-building technology from Toyota.

Sure, Tesla assembles battery packs and builds electric motors in the plant, but Tesla vehicles are built on assembly lines that don't have to be that radically different than the way Toyota does things.

Tesla could have used or built upon the management system that used to live (and thrive) under the same roof, when the Tesla factory used to be the NUMMI joint venture between Toyota and GM).

Did Toyota's #Lean Mindsets & Practices Really Leave the (Now) Tesla Building?

Right or wrong, Musk seems to want to do things his own way… figuring out a better way means the risk that different isn't necessarily better.

Musk also said:

“The car industry thinks they're really good at manufacturing and actually they are quite good at manufacturing. But they just don't realize just how much potential there is for improvement. It's way more than they think,” said Musk, calling the pace of today's auto factories slower than “grandma with a walker….Why shouldn't it at least be jogging speed?”

It's sort of sad that a company that is still struggling so much with what Musk calls “production hell” would talk trash about other automakers who have proven they can build products at scale. Elon's plant is the one that's slow and behind schedule, not meeting production goals.

In the Muller column, she quotes Jeff Liker, author of The Toyota Way and other books in the series as predicting that Musk's vision of an extremely automated factory was folly:

“If he were to install all the robotic equipment to implement his vision, it would be a disaster,” says Jeffrey Liker, the retired University of Michigan professor whose 2004 book, The Toyota Way, outlined the principles of lean manufacturing that have influenced an entire industry. Ultimately, however, Liker believes that disaster will be averted “because smart people around him will discover (his ideas) don't work.”

Back in February, Musk was still bragging about parts conveyance automation (which is a different dimension of automation than robots doing welding or assembly):

“The next constraint” toward full production, Musk said, is a sophisticated automated parts-conveyance system at Tesla's Fremont, Calif., assembly plant, formerly a joint venture between Toyota and General Motors, and a showcase for lean manufacturing techniques in its heyday. Musk called the conveyor system “probably the most sophisticated in the world,” adding that it “appears to be on track.”

Musk, as a smart person, eventually figured this out, as he admitted his mistake about automation:

As I tweeted in response, Toyota never thought humans are underrated. More on that later.

I've blogged about how Musk seemed to be repeating a GM mistake from the 1980s, as this article mentions (and they linked to my post):

Experts say Tesla has repeated car industry mistakes from the 1980s

Musk added, on automation:

“We had this crazy, complex network of conveyor belts,” Musk told CBS News. “And it was not working, so we got rid of that whole thing.”

So what happened between February and April? Was the conveyance “on track” or “not working?” Did it go from “on track” to “not working” at some point? Or was it never working?

If it wasn't working, or stopped working, at what point did Musk learn this? Was he being told by employees and leaders that things were fine? Was Musk not at “the gemba” (in the actual workplace) to observe this for himself? Of course, it's not necessary for a CEO to go confirm what he's being told about the status of “production hell,” not if it's an environment where people are free to speak up about problems.

Anyway, it's good to see that Musk might be learning from some of these admitted mistakes related to an overabundant love for robotics and automation. I mean, he could have learned that lesson from Toyota if he had asked during that timeframe when Toyota was an investor in Tesla.

They might have tried teaching him Toyota Way Principle #8:

“Use only reliable, thoroughly-tested technology that serves your people and process.”

Toyota tends to automate just the work that can be done better by robots or more safety by robots. Robots can't help improve the process. Robots and automation should support the people, not completely replace them. At Toyota, “Respect for People” is a core mindset. Is that the case at Tesla?

Toyota, Respect for People (or “Humanity”) and Lean

Musk doesn't have to completely reinvent the car assembly wheel in the process of reinventing the car.

More thoughts on Tesla to come on future blog posts, looking (again) at safety, writing “motivational” memos to workers, and the CEO sleeping in the factory…

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent book is the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus. His latest book has been released as an "in-progress" book, titled Measures of Success.

7 Comments
  1. Mark Graban says

    The comments on the Ars Technica piece are interesting.

    At some point, Elon must apply massive discounts to just about any expert advice. “Hey you can’t make cars this way” probably sounds a lot like “hey you can’t land a rocket” or “EVs are underpowered, unattractive compliance cars that nobody could ever lust for”. How does one separate negative expert advice that’s actually true from old-guard scared-of-change expert advice that’s just overcautious?

    and

    I work in bay area tech, and have for more than two decades. This kind of arrogance is extremely common here. A lot of people (tech leaders mostly) seem to think we can use some silicon valley mojo and somehow the normal problems won’t be our problems. And on some level sometimes that can work, especially if people have extremely clever ideas that haven’t been thought of before.

    and

    Nearly everything is done the way it’s done for a reason.

    Sometimes that reason ends up being kind of stupid, but usually people who are almost as smart as you have looked at the problem and come to the current conclusion. Completely writing off their thoughts, studies, and conclusions is profoundly foolish.

    Musk isn’t a dumb guy. He seems to be stuck in some cognitive biases, including “I’m smart, so I can figure this out better than anybody who came before me in this industry.”

  2. Mark Graban says

    Musk HAS hired some production executives from the auto industry, including Peter Hochholdinger from Audi. According to LinkedIn, he’s still there at Tesla.

    From 2016: Tesla Hires Audi Veteran to Head Vehicle Production

  3. Andy Wagner says

    Most of Musk’s confident statements about how great his factory was going to be occurred before he ever had any experience mass producing anything–ie before “production hell”.

    In my experience, “production hell” is what we call a normal day in most factories. ;-)

    1. Mark Graban says

      Musk seems to think “production hell” is inevitable…

      Interesting Jeff Liker quote:

      “”There is no reason for production hell if you have an experienced management team and experienced workers and a well-designed process and you do good planning,” said Liker. “Production startup at Toyota takes a lot of work but it goes very smoothly….Within one week they are up to full volume on a brand new vehicle.”

  4. Mark Graban says

    LinkedIn discussion can be found here:

    Mike Geiger wrote:

    “I keep wondering why Musk/Tesla took on the additional risk of trying to “reinvent” the manufacturing process. They had plenty of innovation, and associated risk, in the product. Doubling down on risk appears to have bitten Musk/Tesla in the backside.”

    Great question.

  5. Mark Graban says

    From TechCrunch:

    Tesla earnings show record revenues with record losses

    “Our automation strategy is key to this and we are as committed to it as ever.”

    However, Musk has previously said that Tesla over-relied on automation for the production of Model 3 cars. That’s something he still stands by, saying Tesla mistakenly added “too much automation too quickly” early in the process.

    Musk and Ahuja added:

    In those select areas where we have had challenges ramping fully automated processes, such as portions of the battery module line, part of the material flow system, and two steps of general assembly, we have temporarily dialed back automation and introduced certain semi-automated or manual processes while we work to eventually have full automation take back over.

  6. Mark Graban says

    The mindset of BMW (Read More):

    “To fully automate the assembly process is not our goal, because the human being with its unique properties is unbeatably flexible.”

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