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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

Index


Scrum For Hardware Confirmed

 

I began researching to see if there was any merit to the hypothesis that they were using Scrum. That's when I came across a key note presentation by Joe Justice, the President of Hardware for Scrum Inc., entitled, "Scrum: Disrupting the Automotive Industry"

 

Seeking Alpha 2 web

(source: youtube.com)

 

This is when I discovered that Scrum was being used successfully for hardware, and not just software. It also had a specific name. It was called Extreme Manufacturing. I highly recommend watching the entire video.

 

To my surprise, the presentation cited Tesla, starting at the 30:00 min mark of the video, to describe how Tesla's factory is, in fact, a "build server" that can produce iterations of a vehicle with each product development sprint. We saw this with the Model 3 getting improved suspension, wind noise, and back seats from the earliest versions.

 

Out of my general research on Scrum for Hardware, I learned that Tesla is in fact a pioneer of this application.

 

Applying Extreme Manufacturing to Tesla

 

So how does knowing that Tesla uses Extreme Manufacturing explain the contradictory behavior I introduced at the beginning of this article? Well, a basic Scrum workflow starts with a wish list. In the case of the model 3 design, the wish list included 25% profit margins at a specific performance level and battery range. The product development team is given the freedom to figure this out without being told specifically how to achieve it as mentioned in the video.

 

"requirements for innovation: specify why and for who but not how...

 

...this lets the build server attempt breakthrough methods and radical innovation, as they are not constrained by how to build but clearly measured on the compliance and the goals of the output."

 

(source: Joe Justice)

 

This led to a task backlog that included a $150/KWh battery pack, centralized touch control interface and extremely high integrated circuit density to reduce component costs, and a 400HP motor to achieve performance, along with all the sub tasks to achieve those goals.

 

Seeking Alpha 3 web

(source: InsideEvs)

 

Ok, so this explains the technological proficiency, but what about the production ramp? If we apply the same Scrum workflow to the factory, we have a wish list that specifies a specific volumetric production density and output speed. That's pretty much it.


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