Efficiency is one of those things helped manufacturing for centuries to find a better solutions and manufacture better products. It can be a complex process, but by learning how to improve existing processes manufacturing company can discover step by step how to achieve their goals.
Some of historical examples of manufacturing efficiency can be a good lesson to learn about future improvements. Earlier today, I was reading about Ford Model-T innovation. Forbes business stories archives provide some great examples about Model-T innovation. My favorite part of the article is Building A Motorcar For The Great Multitude.
“I will build a motorcar for the great multitude,” he proclaimed. Such a notion was revolutionary. Until then the automobile had been a status symbol painstakingly manufactured by craftsmen. But Ford set out to make the car a commodity. “Just like one pin is like another pin when it comes from the pin factory, or one match is like another match when it comes from the match factory,” he said. This was but the first of several counterintuitive moves that Ford made throughout his unpredictable career. Prickly, brilliant, willfully eccentric, he relied more on instinct than business plans. As the eminent economist John Kenneth Galbraith later said: “If there is any certainty as to what a businessman is, he is assuredly the things Ford was not.”
The key element of this story was to invent things in the intersection of existing processes and things. Car was a known thing when Henry Ford started to build Model-T. Automatic conveyor was also known thing. He combined them together and multiplied with efficiency and standardization. The result was brilliant. At the peak of its success Ford Model-T had 60% market share of all cars on the road.
“The idea came in a general way from the overhead trolley that the Chicago packers use in dressing beef,” Ford said. At the stockyards, butchers removed certain cuts as each carcass passed by, until nothing was left. Ford reversed the process. His use of the moving assembly line was complicated by the fact that parts, often made on sub-assembly lines, had to feed smoothly into the process. Timing was crucial: a clog along a smaller line would slow work farther along. The first moving line was tested with assembly of the flywheel magneto, showing a saving of six minutes, fifty seconds over the old method. As similar lines were implemented throughout Highland Park, the assembly time for a Model T chassis dropped from twelve hours, thirty minutes to five hours, fifty minutes.
In 1921, the Model T Ford held 60 percent of the new-car market. Plants around the world turned out flivvers as though they were subway tokens, and Henry Ford’s only problem, as he often stated it, was figuring out how to make enough of them. As a concession to diversification, he purchased the Lincoln Motor Car Company in 1921. Company plans seemed to be in place for a long, predictable future and Ford was free to embark on a great new project: the design and construction of the world’s largest and most efficient automobile factory at River Rouge, near Detroit. Arrayed over 2,000 acres, it would include 90 miles of railroad track and enough space for 75,000 employees to produce finished cars from raw material in the span of just forty-one hours. River Rouge had its own power plant, iron forges, and fabricating facilities.
Hundred years of innovation, global market and product development, extensive supply chain and future optimization is future challenges of manufacturing companies. Some of them are remaining the same. Efficiency is still one of the biggest challenges.
Tesla is a company that has a vision to become a future “Model-T” in automobile manufacturing. As company moved to produce its Model 3, one of the biggest questions on the table is efficiency of manufacturing and assembly.
One of the fascinating examples I captured last week was Tesla Model 3 manufacturing under the tent (The Prepared newsletter shared it last Monday).
Good overview of the situation in the following article: Tesla is building Model 3s in a tent. Elon Musk says it’s ‘pretty sweet’; expert calls it ‘insanity’.
Elon Musk has six days to make good on his pledge that Tesla Inc. will be pumping out 5,000 Model 3 sedans a week by the end of the month. If he succeeds, it may be thanks to the curious structure outside the company’s factory. It’s a tent the size of two football fields that Musk calls “pretty sweet” and that manufacturing experts deride as, basically, nuts.
Inside the tent in Fremont, Calif., is an assembly line Musk hastily pulled together for the Model 3. That’s the electric car that is supposed to vault Tesla from niche player for the wealthy to high-volume automaker, bringing a more affordable electric vehicle to the masses.
You can call it nuts, but you can also call it an example of efficiency. Who knows what Tesla will learn under that tent assembling Model 3 under the stress.
Speaking about efficiency in car manufacturing, we cannot overlook an example of Local Motors (LM), which claims to be an absolutely unique in terms of design, planning and manufacturing of vehicles and transportation. The core element of LM is built on top of networking and communities.
The following slide can give you an idea of core principles of community building developed by Local Motors.
So, how is it all can be connected to PLM systems? Manufacturing are facing so many problems these days. Unfortunately, PLM systems aren’t much help these days. Don’t get me wrong – PLM systems are helping to control data and document processes. As much as this is a very important function, it is missing some very important elements in my view – networks and intelligence. In the world of global manufacturing these are examples of the greatest efficiency. Connecting people and companies across the globe proven to be key to success in many industries theses days. Building intelligence on top of the networks is another example of future efficiency.
What is my conclusion? Network was a source of achieving efficiency in the past. Ford Model-T conveyor was a network used by Ford factory to build a car. Manufacturing companies left single factory buildings. What was true for Model-T production is a history. One of the top manufacturing and PLM challenges is cross functional coordination between members of cross product stakeholder network. So, here is the thing – network is the key to achieve the efficiency and existing PLM paradigm is lack of network still selling single version of truth and data / process control. Tesla was pioneering manufacturing process efficiency meantime found themselves innovating under the tent. Local Motors is using the power of connected communities to innovate and build cars using network of micro-factories. It must a be a future PLM system capable to connect multiple players for greater efficiency. Just my thoughts…
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Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased.
Image credit – Gapingvoid article