Will Tesla Motors build their own PLM system?

History of CAD and PLM development knows examples of home grown systems. 20-25 years ago, the idea to build their own CAD and PDM system was considered as an absolutely normal option. Since that time, many things changed. In my view, the last decade clearly demonstrated PDM/PLM trend towards using more OOTB (out-of-the-box) and ready to use solutions. I’m not sure what was a success rate (if somebody owns statistics, please share), but I can confirm a clear intent of manufacturing companies towards usage of packaged software provided by CAD/PLM vendors.

However, the business dynamics and requirements are changing very fast these days. Therefore, I wasn’t very surprised when I learn about how Tesla Motors (probably one of the most hyping and progressive car company in the world these days) is building their custom IT solutions. Navigate to TechCrunch article – Being A CIO At Tesla Motors, A Startup That Builds Cars And Its Own IT. The short writeup is speaking about how Tesla Motors is focusing on building a unique set of IT systems. Specifically it was related to building their own, Tesla-tailored ERP solutions. According to the article Tesla is focusing how to build an environment compliant to Tesla’s speed, agility and e-commerce demand. Here is an interesting passage:

The speed and agility Tesla needed in an ERP environment could not be found in the market, Vijayan said. SAP’s ERP tech was clearly not working for other car manufacturers… In four months, Vijayan and his team of more than 250 built the ERP system, which serves as the foundation of the electric carmaker’s operations. Now every department is using the same system without the need for making custom connectors, so different systems can work together. The company also built a world-class e-commerce system that is designed to help people buy cars as seamlessly as possible.

Tesla needed to build its own IT and its own e-commerce system due to the fundamental difference in its business model. For decades, auto manufacturers have sold their cars through local dealers, a fixture of every town in America. But Tesla sells its cars directly to customers. All the materials, the processes and the features need an operation that is uniquely designed so Tesla can sell its cars online.

Such high level of difference with standard ERP behavior made me think about potential of Tesla to go and build a complete customized PLM system tailored to needs of Tesla designers and supply chain. TechCrunch article says nothing about PLM and other design systems. The public references related to Tesla and PLM confirmed what I knew back in 2010 Tesla made a strategic decision to move towards Dassault System Catia V5 and Enovia V6 solutions. The original Dassault System press release is here. The only video about PLM and Tesla online I found is highlighting Tesla use of Dassault System tools. Watch this short movie. You will clearly see CATIA and ENOVIA V6 Design Central and Engineering Central with BOM management options.

What is my conclusion? I have no clear answer on the question placed in the title of this post. The IT innovation in manufacturing companies is getting interesting these days. The dynamic of business, pace of changes and specific customer requirements will require IT managers to innovate beyond the level of OOTB tools. Thinking about PLM space, customer focused configuration options combined with complexity of supply chain can be very challenging these days. These days Tesla is practically building a single model car – Model S. However, with new car model (model X) is coming soon, I can see the level of complexity growing as well as the needs for specific unique PLM system. It would be very interesting to see the change in the future. Just my thoughts…

Best, Oleg