Production Rate (incl manufacturing waves)

[Trnsl8r]

I wonder what kind of supplier issues would cause bottlenecks like this? I definitely don't think Elon would slow production because of the chrome on the door handles or something trivial like that. It would have to be something more significant, right?
...

Hmm... Actually I could see him do exactly that. Flaking chrome on his beautiful door handles? No way that car is leaving the factory.

 

[jed-99aggie]

I wonder what kind of supplier issues would cause bottlenecks like this? I definitely don't think Elon would slow production because of the chrome on the door handles or something trivial like that. It would have to be something more significant, right? I don't think he would want bad press like this unless it was absolutely necessary. Could it be some of his major suppliers like Mercedes?

I wish we could talk to a worker on the assembly line that could shed a little light on the subject.

I recall an Elon interview a few weeks ago where he specifically spoke about the chrome trim over the doors. He said he was not willing to accept a multi-segmented assembly that would have the traditional seems, shorter individual segments allowing more room for error and still achieving a tighter "looking" fit. (This was the common approach proposed from transitional auto suppliers).

Instead Elon spoke of how Tesla collaborated with a smaller supplier who was willing to work with Tesla to provide a single piece as requested. It took more time with this supplier but Elon was impressed with the level of commitment and the resulting final product.

 

[Krugerrand]

I think Tesla supply chain could have had better planning if they had ordered parts months in advanced with preorders for anticipated volume, but that would increase inventory costs beyond the ideal and would impact cash flow.

That's not actually how much of the auto industry works, partly for the very reason you mention. You can't keep stacks and gobs of thousands of parts in inventory - just in case. But there are other reasons as well.

The auto industry runs mostly on what's called 'on time delivery'. Therefore it takes a lot of planning and strategy by all and one little mistake by one person can be disasterous and cost companies big bucks. It could be somebody in the office writing down a 1 instead of a 3. It could be a truck driver hauling material who gets into an accident. It could be someone on the line who creates too much scrap because they weren't paying attention because their spouse is in the hospital sick. There are literally infinite numbers of ways that 'on time delivery' can get messed up. In many respects, it's a miracle that it works as often as it does.

 

[ItsNotAboutTheMoney]

It also suggests that by putting in multiple shifts, they are dealing with potential bottlenecks. Glass half-full or half-empty?

Well, yes, it's fine as long as they can churn out 400 half-full glasses per week, but for any bottleneck reduces maximum output.

 

[Zzzz...]

My other key concern is the use of multiple shifts at some stages of assembly, which suggests a bottleneck.

Musk said that they hired second shift to utilize some capital-intensive equipment. Which make sense. But I wonder what is that? Definitely not assembly line. Stamping facility? The factory had production capacity of half a million cars a year. If most presses are intact, it should not be a problem. I do not think they have shortage of dies. Paint shop? Could be, but oven there is huge (they probably modified it so it only partly used at the moment, for energy saving reasons). On the other hand paint shop do include a lot of automation, paint robots use less paint and produce more consistent results in terms of quality. I doubt their injection molding qualify as capital intensive or having high level of automation.

My bet would be on body shop working 16 hours a day. It should be highly automated, and welding/body assembly robots are in fact expansive. And not many personal needed to run them.

 

[aviators99]

Well, yes, it's fine as long as they can churn out 400 half-full glasses per week, but for any bottleneck reduces maximum output.

Love this response

 

[Robert.Boston]

It doesn't take much to delay a product, especially when there are so many parts.

Suppose there's a circuit card that is absolutely required for the car to operate (in fact there are probably many). Now suppose a single electronic part on that board has a supply problem - out of hundreds on that single card. Now the supplier can't build the board, the board can't be delivered to Tesla, and Tesla can't build the car. That's all it takes.

For want of a nail...

 

[daripalli]

Yeah i think they should exceed 20k a year just to be concerned about quality. Or does it matter?

 

[Fedderman]

I'm production #4002. Two weeks ago my customer rep told me to expect delivery in Dec , but that was before the announcement about reduced volume targets for this year. Any guesses if Dec is still realistic?

 

[JRP3]

I'm guessing "no" but hopefully I'm wrong. They could potentially do it, just depends on how bad the delays really are.

 

[wycolo]

'Just In Time Delivery'

Initially this was to reduce build up of excess parts from Japan at high-volume US assembly plants. Multiple streams of parts flow were moderated at various points so plants received the parts just before needed. Hard to implement at Tesla's miniscule production rate. TM probably says "we'll take all you got- just put them over here". Storage space at Fremont not an issue (yet), I'm guessing.
--

 

[gg_got_a_tesla]

I'm production #4002. Two weeks ago my customer rep told me to expect delivery in Dec , but that was before the announcement about reduced volume targets for this year. Any guesses if Dec is still realistic?

It might be touch and go to be honest. All said and done, they may produce about 3,300 cars in all this year so, you'd be at the mercy of sig upgrades, moves to X, deferrals and cancellations in the sub-4002 range.

 

[timdorr]

Storage space at Fremont not an issue (yet), I'm guessing.

When I was there last year, they were using only the tiniest fraction of the space. I'm willing to bet they could make a solid 1000 cars and keep them stored before shipping. They're obviously not going to do that, but they certainly have the capability.

 

[pilotSteve]

A huge factor to JIT -- Tesla does not have to pay for the parts until they are actually delivered per their schedule. Remember, to a start up company CASH is LIFE!

'Just In Time Delivery'

Initially this was to reduce build up of excess parts from Japan at high-volume US assembly plants. Multiple streams of parts flow were moderated at various points so plants received the parts just before needed. Hard to implement at Tesla's miniscule production rate. TM probably says "we'll take all you got- just put them over here". Storage space at Fremont not an issue (yet), I'm guessing.
--

 

[joefee]

Has any one noticed an increase past 77 cars per week yet?

 

[DrDave]

Has any one noticed an increase past 77 cars per week yet?

I'm sure Tesla would be happy if they can hit that number 2 weeks in a row. I don't think the week-to-week consistency is there yet, so I'm going to say no to an increase this week.

 

[Krugerrand]

A huge factor to JIT -- Tesla does not have to pay for the parts until they are actually delivered per their schedule. Remember, to a start up company CASH is LIFE!

Exactly. There are many other reasons as well why they don't/can't.

 

[joefee]

Maybe we will get a "run rate" update as part of the secondary stock offering closing.

 

[slindell]

'Just In Time Delivery'

Initially this was to reduce build up of excess parts from Japan at high-volume US assembly plants. Multiple streams of parts flow were moderated at various points so plants received the parts just before needed. Hard to implement at Tesla's miniscule production rate. TM probably says "we'll take all you got- just put them over here". Storage space at Fremont not an issue (yet), I'm guessing.
--

There is more to JIT than storage space. If an design error is found in a large-storage item, you have to eat the cost of throwing all of the stored-parts away.

 

[Zzzz...]

we went through just such a crisis recently with a supplier that had a flood in their factory.

Anyone know where were floods recently? In what countries?

- - - Updated - - -

Ok, probably he was referring either to Mainland China or to flood in Philippines.