Category

Manufacturing

Nov 12

Tesla’s Growing Pains

By Automotive, Autonomous, Connected, Electric, Shared Vehicles, Manufacturing One Comment

Tesla, the innovative company that continues to challenge the norms and practices of the traditional automotive industry is finding itself struggling with less glamorous issues that mainstream automakers have tackled and, to a great extent, perfected over more than a century: volume manufacturing.

Building a Supply Chain

According to a recent Bloomberg report, Tesla plans to increase sales by more than 50 percent this year to 35,000 units and accelerate annual production capacity to 100,000 units by the end of next year.

Back in August, during an earnings call, Tesla’s CEO Elon Musk discussed difficulties his company was having meeting market demand. Musk said suppliers are partly to blame because they are unable to fill Tesla’s orders: “some suppliers thought we wouldn’t be around, so they didn’t tool up for the production we actually experienced.”

Meeting Global Market Needs

While U.S. sales are responsible for about half of Tesla’s sales, its global business is healthy and growing, with strong sales in Norway (thanks to strong government incentives), followed by China. Japan, with the highest adoption of electric vehicles (EVs) and plug-in electric vehicles (PEVs), should also be a strong market for Tesla, although the company opened its sales operations in Tokyo’s swanky Aoyama district only in September.

Tesla’s challenge isn’t mere production capacity. Tesla’s factory in Fremont, California, which was previously a joint venture between General Motors and Toyota, has a capacity of over half a million units per year.

Sustained success in global auto markets requires major design changes such as right-hand driving for countries like Japan, or expanding the back seat legroom for cars sold in China where target customers employ chauffeurs. Furthermore, different markets have different preferences of options, trims and accessories.  Accommodating regional differences adds significant complexity to manufacturing lines and supply chains, and, if not managed diligently, may also result in larger inventories and excessive quality spills and warranty expenses.

Tesla’s Growing Pains

Transitioning from small production series based on preorders with very long lead time to volume manufacturing is going to challenge Tesla’s manufacturing and logistics operations.

Tesla’s current manufacturing model will not be able to scale to meet global demand, especially in Europe. Currently, cars are built and tested in Fremont, California, then are partially disassembled and shipped to Tilburg, in the Netherlands, where the cars are reassembled and shipped to their final destination.

Tesla will have to be more accurate in forecasting market demand, and work with key suppliers to build a resilient and lean global supplier network. But given the still small market for Tesla cars this may prove harder and more expensive than Musk would have liked.

As the market for EVs mature and grows so will the demand for greater variety of styles and sizes. Here, Tesla has the right platform strategy in place: Model X crossover, a utility van and cabriolet are expected to be based on the second generation platform shared with the Model S. The partnership with Toyota, another company with a solid platform design strategy and strong reuse culture, will also help.

 

Nov 05

California Gold Rush and Vehicle Platform Design Strategy

By Automotive, Manufacturing No Comments

Product companies employ platform-based design strategy to simplify design, reduce cost and accelerate time to market of new products. In the automotive industry, a platform represents a set of common design, engineering, and production systems that is used to build any number of distinct models, all based on the same underpinning but are visually entirely different.

Not a new concept, a platform based portfolio is practiced more aggressively and consistently as of late. In response to growth opportunities in global markets, automakers design and manufacture cars tailored to narrow markets and demographics while minimizing the effort and cost of designing and manufacturing parts for each market variant. Ford Motor and Volkswagen are two car manufacturers exercising this strategy most diligently. See a detailed, if incomplete, list of badged models and the platforms they are built upon.

I recently learned that design and manufacturing concepts emphasizing design commonality can be found dating back to the California Gold Rush period, long before Henry Ford introduced in 1913 standardization of parts and manufacturing process that formed the cornerstones of the assembly line.

John “Wheelbarrow Johnny” Studebaker made a small fortune making sturdy wheelbarrows for California gold miners. In 1852 he returned to his home in South Bend, Indiana, to join his brothers in the Studebaker Wagon Corporation that supplied wagons for the Union Army. According to the Seeley Stable Museum in San Diego, by 1868, the company had standardized many common wagon parts to accelerate production and keep prices down. Studebaker also created designs for regional customer needs, such as the “Concord Steel-Axle California Wagon” that was developed especially for the western trade.

By the turn of the century, the Studebaker Corporation entered the new era of ‘horseless carriages’, manufacturing gasoline powered cars and, for a short period, electric cars. Here, again, Studebaker did not follow the common approach of vertical integration and put Studebaker bodies on gasoline-powered chassis purchased from another company.

(Image source: Bar E Ranch)

Oct 13

Design Reuse: Reusing vs. Cloning and Owning

By Design Reuse, Manufacturing, PLM One Comment

Reusing vs. Cloning and Owning

As I am preparing for my presentation and panel discussion at the Product Innovation Congress in San Diego next week, I am speaking with colleagues and experts in all things PLM. I recently spoke with Charlie Krueger from BigLever on product line engineering (PLE) and how some organizations and individuals practice design reuse.

We often encounter instances in which the engineering team makes use of an existing design or an inventory part in a new product. They assign it a new part number and sometimes a new name, and move it to the new system’s bill of materials (BOM), and from that point onward the part start a product lifecycle of its own. Charlie terms this approach “cloning and owning.”

Obviously, that’s not what we mean when advocate design reuse.

In a recent blog on design reuse I discussed the importance of reuse not only for the more obvious and better understood reasons such as accelerating time to market and reducing inventory costs but, more significantly, for the ability to reuse design, manufacturing and service knowledge associated with these physical objects.

If commonly used and shared parts and subsystems carry separate identities, then the ability to share lifecycle information across products and with suppliers is highly diminished, especially when products are in different phases of their lifecycle. In fact, the value of knowledge sharing can be greater when it’s done out of sync with lifecycle phase. Imagine, for example, the value of knowing the manufacturing ramp up experience of a subsystem and the engineering change orders (ECOs) that have been implemented to correct them before a new design is frozen. In an organization that practices “cloning and owning”, it’s highly likely that this kind of knowledge is common knowledge and is available outside that product line.

An effective design reuse strategy must be built upon a centralized repository of reusable objects. Each object—a part, a design, a best practice—should be associated with its lifecycle experience: quality reports, ECOs, supplier incoming inspections, reliability, warranty claims, and all other representations of organizational knowledge that is conducive and critical to making better design, manufacturing and service related decisions.

  • Organizations should strive to institute a centralized product management strategy that consolidates and exploits PLM and PDM data, ERP systems, and, in all likelihood, a myriad of informal and unstructured emails and spreadsheets.
  • To maximize the value of design reuse, information must be shared across product lines independent of the lifecycle phase of each product. In particular, incorporate late-stage knowledge such as service and warranty information in design decisions of new products.
  • Effective reuse would benefit from the ability to decompose system architectures differently. In addition to structuring product information using traditional engineering and manufacturing BOMs, encapsulating and organizing information by feature families and configurations, such as in the methodology behind PLE, is highly effective, especially in complex product architectures.
Sep 16

Stratasys Acquires GrabCAD

By Manufacturing, Mergers & Acquisitions No Comments

Stratasys Acquires GrabCAD: Analysis and Implications

3D printer company Stratasys announced today of definite plans to acquire Cambridge, Mass.-based GrabCAD. GrabCAD is known for spearheading efforts to create an “open engineering” environment that allows engineers to share 3D CAD models. Terms of the transaction were not disclosed, but the price is estimated to be about $100 million. This is the latest in a string of acquisitions by Stratasys. Previous notable additions include MakerBot last year for $403 million and Solid Concepts earlier this year for $295 million. GrabCAD co-founder and CEO Hardi Meybaum will continue to head GrabCAD within the Stratasys group operations.

Since its launch in 2010, GrabCAD has amassed a user base of 1.5 million mechanical designers and a database of 520,000 3D CAD models, ranging from novelty items and toys to guns to complex models of gearboxes and 5-axis CNC machines. However, revenues of the venture-backed company did not track this trajectory. Read More

Aug 08

Can PLM Software Benefit a Small Company?

By Manufacturing No Comments

In my market research in PLM, PDM and related fields, and my consulting work with engineering organizations, including those that we refer to as SMBs: small- to mid-size businesses, I frequently find that they tend to think about PLM as a tool ideally suited for large organizations with sizable engineering teams designing complex highly engineered products.

Looking at the profile and size of engineering companies using PDM software, especially those showcased by mainstream PDM and PLM vendors, one might easily reach the conclusion that these systems are, indeed, designed with the “big guys” in mind. This perception may be reinforced by PLM and ERP vendors that have announced products designed for the SMB market and abandoned them a few years later, when rosy revenue expectations weren’t achieved. Remember, for example, PTC’s ProductPoint and SAP’s Business By Design?

Small engineering teams have come to think of PLM software as unnecessarily complex and limiting operational flexibility, not to mention the high cost of the software, IT overhead, and the pain of keeping the software up to date.

In part, this perception is underscored by enterprise software vendors that use the same approach to design products and licensing terms for large companies and SMBs; they think of SMBs as though they were just like large enterprises, only smaller. Reminds me of the medieval paintings showing babies as miniature adults.

SMBs and small engineering teams tend to cultivate a culture of informal, open and flexible workplace.  They frown upon the Byzantine organizational structure of some very large traditional product companies and the inflexibility imposed by formal PDM tools they use. Instead, SMBs exploit small team size, flexible and nimble culture, and the skills and capabilities of individual engineers to manage product development using a minimal set of data management tools.

However, despite the stodgy and bureaucratic culture—or perception thereof—of some traditional product companies, many of them are undoubtedly successful; and they use PLM tools effectively to conceptualize, design and manufacture innovative and profitable products.

So is it conceivable that some of the practices employed by large enterprises could benefits SMB? That adopting some aspects of product data management discipline might help SMB be more efficient and resilient?

I am going to explore this topic in a new blog series Is PLM Software Only for Big Guys? In which I will discuss processes and best practices employed by large product design and engineering organizations, and how they use PDM to make better product related decisions. In particular, I am going to discuss those practices that I believe smaller organizations should consider adopting.

The first blog post Check-in, Check-out, Check-in…Why bother? I know where my CAD Files Are! lists some of topics I am working on. Please comment and suggest additional CAD file management and product development topics you think small and medium-size engineering organizations should consider.