. CHAPTER 15 Controlling Work and Organizational Processes 497 Tesla's board of directors as chairman. He soon took an active looks for ways to be more efficient and effective."66 However, role in the company and oversaw the design of Tesla's first although such adjustments and temporary shutdowns are noth- car, the Roadster, which was launched in 2008. Next came the ing new in the automotive industry, Tesla is fighting to make Model S, introduced in 2012 as the world's first premium all a name for itself and production mishaps like this don't help electric sedan. The next product line expansion was the Model that situation at all. One industry expert says that although X in 2015, a sport utility vehicle, which achieved a 5-star safety Tesla may be a "pioneer in technology and a trailblazer in rating from the National Highway Safety Administration. The the electric vehicle market," those strategic capabilities and Model 3 was introduced in 2016 and production began in core competencies don't necessarily translate to knowledge 2017. From the beginning, Musk has maintained that Tesla's of the manufacturing process.67 Scaling up production has its long-term strategic goal was to create affordable mass-market own unique set of challenges, as Tesla and Musk are discov- electric vehicles. And the ering. In addition to the produc- Model 3 was intended to tion challenges, there's a financial be that product. It rep- How hard can it be to roadblock. The company is burning resents Tesla's first at- make a car? through cash as it works through its tempt at manufacturing production struggles. Other finan- a mass-market car. The cial measuresincluding net work- company is, thus, at a critical juncture in its history... a make ing capital, market value of company stock, credit rating, and or-break moment. And things aren't looking so good right now. free cash floware also deteriorating.68 Another challenge for The company's long-term production goal was to increase Tesla is that two top key executives have "stepped away from" production to 500,000 vehicles a year by 2018. Tesla's vehicles the company as it works to boost production of the Model 3.69 are produced at its Giga Factory in Fremont, California, as One of those executives, according to a company spokesper- are most of its vehicles' components. Inside the factory, 1,068 son, is taking six weeks off to recharge and spend time with robots weld, glue, or rivet parts together for the Model 3 se his family. The other executive has joined self-driving car dans.2 In April 2018, Tesla produced only 2,270 Model 3s, a company Waymo. far cry from the 5,000 cars a week that was its original goal for Epilogue: Tesla employees at the Fremont production facility the end of 2017. So far, as of April 2018, only a total of 8,810 met the 5,000 cars a week production goal the last week of Model 3s have been delivered to customers since the begin June 2018... the final week of the second quarter. However, ning of the year. And there are 500,000 customers who have analysts now say that the true test is whether Tesla can main- backorders on the car. During the first and second quarters of tain that aggressive rate without sacrificing quality." 2018, the company had to halt production to update some of its manufacturing lines. Musk himself says that the Model 3 is mired in what he calls "production hell"63 A critical bottle- Discussion Questions neck? The production of batteries, which are made at its battery 15-23 What type (or types of controlfeedforward, concurrent, or factory in Nevada. It takes seven hours to product a battery feedback-do you think would be helpful in this situation? pack. That's an eternity in an industry where production lines Explain your choice. need to run continuously or risk burning through tons of cash. 15-24 Using Exhibit 15-2, discuss if and how this production night- Musk sat down with workers and engineers, who had been dis- mare could have been prevented. cussing solutions for months, and worked to slash production 15-25 Could Tesla's controls have been more effective? How? What time to 70 minutes. How? By completely reordering the flow about its goals? How? of battery assembly. 15-26 In the text's first chapter, we introduced the concept of effi- So what's going on with the company's production pro- ciency and effectiveness and how it's important to managers. cesses? The company says that these downtimes are planned" Here in this story in the last chapter, we see how efficiency and effectiveness continue to be important to managers. in that it gives company employees time to improve the au- Explain how tomation and methodically tackle bottlenecks in order to in- 15-27 Write an executive summary explaining what role informa- crease production rates.65 Tesla employs its own version of the tion controls and financial controls could have played in this Japanese principle of "kaizen" or "continuous improvement- situation. What other controls do you think might have been something it calls "continual disapproval of its processes as it useful? . CHAPTER 15 Controlling Work and Organizational Processes 497 Tesla's board of directors as chairman. He soon took an active looks for ways to be more efficient and effective."66 However, role in the company and oversaw the design of Tesla's first although such adjustments and temporary shutdowns are noth- car, the Roadster, which was launched in 2008. Next came the ing new in the automotive industry, Tesla is fighting to make Model S, introduced in 2012 as the world's first premium all a name for itself and production mishaps like this don't help electric sedan. The next product line expansion was the Model that situation at all. One industry expert says that although X in 2015, a sport utility vehicle, which achieved a 5-star safety Tesla may be a "pioneer in technology and a trailblazer in rating from the National Highway Safety Administration. The the electric vehicle market," those strategic capabilities and Model 3 was introduced in 2016 and production began in core competencies don't necessarily translate to knowledge 2017. From the beginning, Musk has maintained that Tesla's of the manufacturing process.67 Scaling up production has its long-term strategic goal was to create affordable mass-market own unique set of challenges, as Tesla and Musk are discov- electric vehicles. And the ering. In addition to the produc- Model 3 was intended to tion challenges, there's a financial be that product. It rep- How hard can it be to roadblock. The company is burning resents Tesla's first at- make a car? through cash as it works through its tempt at manufacturing production struggles. Other finan- a mass-market car. The cial measuresincluding net work- company is, thus, at a critical juncture in its history... a make ing capital, market value of company stock, credit rating, and or-break moment. And things aren't looking so good right now. free cash floware also deteriorating.68 Another challenge for The company's long-term production goal was to increase Tesla is that two top key executives have "stepped away from" production to 500,000 vehicles a year by 2018. Tesla's vehicles the company as it works to boost production of the Model 3.69 are produced at its Giga Factory in Fremont, California, as One of those executives, according to a company spokesper- are most of its vehicles' components. Inside the factory, 1,068 son, is taking six weeks off to recharge and spend time with robots weld, glue, or rivet parts together for the Model 3 se his family. The other executive has joined self-driving car dans.2 In April 2018, Tesla produced only 2,270 Model 3s, a company Waymo. far cry from the 5,000 cars a week that was its original goal for Epilogue: Tesla employees at the Fremont production facility the end of 2017. So far, as of April 2018, only a total of 8,810 met the 5,000 cars a week production goal the last week of Model 3s have been delivered to customers since the begin June 2018... the final week of the second quarter. However, ning of the year. And there are 500,000 customers who have analysts now say that the true test is whether Tesla can main- backorders on the car. During the first and second quarters of tain that aggressive rate without sacrificing quality." 2018, the company had to halt production to update some of its manufacturing lines. Musk himself says that the Model 3 is mired in what he calls "production hell"63 A critical bottle- Discussion Questions neck? The production of batteries, which are made at its battery 15-23 What type (or types of controlfeedforward, concurrent, or factory in Nevada. It takes seven hours to product a battery feedback-do you think would be helpful in this situation? pack. That's an eternity in an industry where production lines Explain your choice. need to run continuously or risk burning through tons of cash. 15-24 Using Exhibit 15-2, discuss if and how this production night- Musk sat down with workers and engineers, who had been dis- mare could have been prevented. cussing solutions for months, and worked to slash production 15-25 Could Tesla's controls have been more effective? How? What time to 70 minutes. How? By completely reordering the flow about its goals? How? of battery assembly. 15-26 In the text's first chapter, we introduced the concept of effi- So what's going on with the company's production pro- ciency and effectiveness and how it's important to managers. cesses? The company says that these downtimes are planned" Here in this story in the last chapter, we see how efficiency and effectiveness continue to be important to managers. in that it gives company employees time to improve the au- Explain how tomation and methodically tackle bottlenecks in order to in- 15-27 Write an executive summary explaining what role informa- crease production rates.65 Tesla employs its own version of the tion controls and financial controls could have played in this Japanese principle of "kaizen" or "continuous improvement- situation. What other controls do you think might have been something it calls "continual disapproval of its processes as it useful