Lean: To Boldly Go Where No One Has Gone Before

Lean: To Boldly Go Where No One Has Gone Before

Elon Musk, the daring innovator and entrepreneur, aims for Tesla to surpass Toyota as the leader in lean manufacturing. He has laid out a vision for an automated, highly productive factory with outputs far exceeding those of competitors.

Multiple critics question his ambitions and highlight the numerous challenges Tesla has yet to overcome, including getting its Model 3 production line up to speed.

This post is based on the Forbes article, Musk Thinks Tesla Will School Toyota On Lean Manufacturing; Fixing Model 3 Launch Would Be A Start, by J. Muller, February 16, 2018. Image source: Shutterstock / Nick Starichenko.

Discussion Questions

1. Elon Musk believes that Tesla can build a million vehicles per year in a single factory. Is he referring to design capacity or effective capacity? Explain.

Guidance: Actually, it is not clear whether Musk is referring to the maximum output rate (design capacity) or what can be built after allowances have been taken into account (effective capacity). This is a good opportunity to discuss the differences between the two definitions of capacity.

2. Critics warn Musk against the financial risks of building such capacity. Express their concerns in terms of efficiency and utilization.

Guidance Continue reading