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Wednesday, 15 August 2018 19:46

Tesla Disrupting the Automotive Industry With Extreme Manufacturing

Written by Pale Blue Dot Research, Seeking Alpha




So how do you catch a 100-year lead? It appears that Tesla is using a development system known as Scrum. A concept co-founded by Jeff Sutherland and J.J. Sutherland specifically designed to accomplish "twice the work in half the time". When agile development teams use Scrum for hardware it is referred to as Extreme Manufacturing, according to its developer Joe Justice.


Clues That Led To The Scrum Hypothesis

Scrum is the most popular project management methodology, with 68% of agile software development teams using Scrum. I won't go into the specifics of how Scrum operates as this is not the focus of the article, but I will explain a bit about its characteristics and benefits. If you'd like more of a deep dive into it, you can learn more here.


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In analyzing the outcomes of Tesla's production ramp progress, I recognized a few things that appeared similar to the characteristics of a Scrum project management methodology. I saw these as clues that would ultimately lead to my hypothesis. Clues included weekly production sprints that result in burst rates that are later sustained after several weeks. Other curiosities were the way Musk spoke about productizing the factory on the Q4 earnings call as well as having it move through iterations back in 2016.


""Our internal code name for the factory, the machine that builds the machine, is the alien dreadnought," Musk said on the call. "[When] our factory looks like an alien dreadnought, then we know it's probably right."


Musk said with Model 3 production, the factory will be at "alien dreadnought 0.5" in terms of advancements made to the production line. "And then it will take us another year or so, I don't know, summer 2018, to actually get to alien dreadnought version 1," Musk said."


(source: Business Insider)


There were also several media headlines that also provided clues. A Verge article titled, "Tesla keeps changing the way it builds its model 3". What kind of companies keep tinkering with the actual production method? There was also the NY Times article, "Can Elon Musk and Tesla Reinvent the way cars are made?" The common narrative was that there was only one way to build cars, but it appeared that Tesla was purposely ignoring it.

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