10 Profound Manufacturing Lessons from Elon Musk’s Latest Memo

10 Profound Manufacturing Lessons from Elon Musk’s Latest Memo

From the outside, it's hard to understand what's going on at Tesla.

Sending cars into outer-space, tackling autonomous driving, and redefining 100 years of American auto manufacturing in roughly a decade are among the highlights. In the shadow of media spotlight, are the production bottlenecks, unmatchable consumer demand, head fakes, and assembly halts.

From the outside, it’s hard to understand what’s going on at Tesla. 

Amidst building rocket ships and pondering whether AI is likely to destroy humans, CEO Elon Musk recently took over direct control of Tesla’s troubled Model 3 Production. An aggressive email shows the acute nature of Elon’s expectations. Rude, brilliant, or standoffish: few question Musk’s intelligence nor his ability to make the impossible a casual achievement. Here’s what he had to say.

Leaked Memo: 10 Brilliant Pieces of Manufacturing Advice from Tesla CEO

(1) Always Start With The Good

First, congratulations are in order! We have now completed our third full week of producing over 2000 Model 3 vehicles. The first week was 2020, the second was 2070 and we just completed 2250 last week, along with 2000 Model S/X vehicles.

(2) Challenge, Demand, But Always Offer Help

Please note that all areas of Tesla and our suppliers will be required to demonstrate a Model 3 capacity of ~6000/week by building 850 sets of car parts in 24 hours no later than June 30th.

Any Tesla department or supplier that is unable to do this will need to have a very good explanation why not, along with a plan for fixing the problem and present that to me directly.

If anyone needs help achieving this, please let me know as soon as possible. We are going to find a way or make a way to get there.

(3) Production only Moves as Fast as the Least Lucky

The reason that the burst-build target rate is 6000 and not 5000 per week in June is that we cannot have a number with no margin for error across thousands of internally and externally produced parts and processes, amplified by a complex global logistics chain.

Actual production will move as fast as the least lucky and least well-executed part of the entire Tesla production/supply chain system.

(4) Don’t Be 10% Better, Be 10x Better, Seriously.

Most of the design tolerances of the Model 3 are already better than any other car in the world. Soon, they will all be better.

This is not enough. We will keep going until the Model 3 build precision is a factor of ten better than any other car in the world. I am not kidding.

(5) Encourage Customers to Bring Out the Measuring Tape

Our car needs to be designed and built with such accuracy and precision that, if an owner measures dimensions, panel gaps and flushness, and their measurements don’t match the Model 3 specs, it just means that their measuring tape is wrong.

Some parts suppliers will be unwilling or unable to achieve this level of precision. I understand that this will be considered an unreasonable request by some. That’s ok, there are lots of other car companies with much lower standards. They just can’t work with Tesla.

(6) If Molehills Turn to Mountains, Follow the Money Train

“I have been disappointed to discover how many contractor companies are interwoven throughout Tesla. Often, it is like a Russian nesting doll of contractor, subcontractor, sub-subcontractor, etc. before you finally find someone doing actual work."

This means a lot of middle-managers adding cost but not doing anything obviously useful. Also, many contracts are essentially open time & materials, not fixed price and duration, which creates an incentive to turn molehills into mountains, as they never want to end the money train.”

(7) If You Can’t Explain it to A Five Year Old, You Don’t Understand it Well Enough

Don’t use acronyms or nonsense words for objects, software or processes at Tesla. In general, anything that requires an explanation inhibits communication. We don’t want people to have to memorize a glossary just to function at Tesla.”

(8) It Must Be Ok For People To Talk Directly And Just Make The Right Thing Happen

“A major source of issues is poor communication between depts. The way to solve this is allow free flow of information between all levels.

If, in order to get something done between depts, an individual contributor has to talk to their manager, who talks to a director, who talks to a VP, who talks to another VP, who talks to a director, who talks to a manager, who talks to someone doing the actual work, then super dumb things will happen. It must be ok for people to talk directly and just make the right thing happen…

Communication should travel via the shortest path necessary to get the job done, not through the “chain of command”. Any manager who attempts to enforce chain of command communication will soon find themselves working elsewhere.”

(9) It Is Not Rude To Leave, It Is Rude To Make Someone Stay And Waste Their Time

“Excessive meetings are the blight of big companies and almost always get worse over time. Please get of all large meetings, unless you’re certain they are providing value to the whole audience, in which case keep them very short.

Also get rid of frequent meetings, unless you are dealing with an extremely urgent matter. Meeting frequency should drop rapidly once the urgent matter is resolved. Walk out of a meeting or drop off a call as soon as it is obvious you aren’t adding value. It is not rude to leave, it is rude to make someone stay and waste their time.”

(10) Hold Contractors to the Same Standards of Your Employees

"There is a very wide range of contractor performance, from excellent to worse than a drunken sloth.

All contracting companies should consider the coming week to be a final opportunity to demonstrate excellence. Any that fail to meet the Tesla standard of excellence will have their contracts ended on Monday."

All Good Press, Is Good Press

Most shudder at the thought of internal memos being leaked to the press, Musk embraces the microphone. He understands leadership and communication. His memo finding its way into the hands of the media is probably not something he’s upset about. Musk provides a case-in-point for struggles relatable at every level of manufacturing. 

Brash or Brilliant? Leave a Comment

What pieces of advice did you find most relatable? Is there a specific situation you’ve encountered that could have been avoided by following the Musk method? Leave a comment and let us know what you think!

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