Chinese Economics Thread

FairAndUnbiased

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The point is that this output is from a single machine which removes the need for hundreds of (external) suppliers.

Note that Toyota hasn't ordered any Gigapresses, whilst there are numerous Chinese companies that have.
And note how Toyota still isn't developing electric vehicles seriously. So Toyota is a really bad example to use.
Toyota has a way of doing things that revolutionized industry in general.
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. I trained on it, my manager trained on it, everyone trains on it in manufacturing. It is a proven method of maximizing production and minimizing cost. It is almost as revolutionary as the Ford method. Key words: 5S, Kaizen, Lean.

It doesn't matter what you build, Toyota method is general. When training new managers at my work, we use folding paper cranes as an example. We first let trainees do it the bad way (non-Toyota), then we teach how to divide the workflow the Toyota way, and prove that it's better. Relevant metrics include reducing inventory, reducing rework, reducing QC rejections and maximizing throughput. Of course, for Tesla, those don't matter because it gets government and investor funding, as well as a customer cult that ignores quality problems. For a company that actually wants to sell safe and operational cars, these matter.

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, and it is
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.

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It is
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. Expanding capacity by building new factories is wasteful compared to understanding Toyota style production.

Tesla's method of "burst production" is the opposite of the Toyota method. That is to say, it is actively bad.

Recently,
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in what they call, “burst builds,” which are temporary periods of lightning fast production to estimate how many units it is capable of building.

If you have not worked in manufacturing before, you won't understand why Toyota does things the way they do, why the Toyota method works, and why the Tesla method does not work if you don't have unlimited funding.
 

AndrewS

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Toyota has a way of doing things that revolutionized industry in general.
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. I trained on it, my manager trained on it, everyone trains on it in manufacturing. It is a proven method of maximizing production and minimizing cost. It is almost as revolutionary as the Ford method. Key words: 5S, Kaizen, Lean.

It doesn't matter what you build, Toyota method is general. When training new managers at my work, we use folding paper cranes as an example. We first let trainees do it the bad way (non-Toyota), then we teach how to divide the workflow the Toyota way, and prove that it's better. Relevant metrics include reducing inventory, reducing rework, reducing QC rejections and maximizing throughput. Of course, for Tesla, those don't matter because it gets government and investor funding, as well as a customer cult that ignores quality problems. For a company that actually wants to sell safe and operational cars, these matter.

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, and it is
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.

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It is
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. Expanding capacity by building new factories is wasteful compared to understanding Toyota style production.

Tesla's method of "burst production" is the opposite of the Toyota method. That is to say, it is actively bad.



If you have not worked in manufacturing before, you won't understand why Toyota does things the way they do, why the Toyota method works, and why the Tesla method does not work if you don't have unlimited funding.

I actually have worked in manufacturing before and am familiar with the Toyota Production System. I've actually been sent to a Lean Six Sigma Green Belt course as well.

From my perspective, Tesla have a better learning organisation and are better at Kaizen (eliminating waste) than Toyota.

For example, gigacastings have eliminated hundreds of parts and also reduced the number of robots by 70% for example. Ditto for hundreds (thousands) of MCUs, now relaxed with software.

Because of technological change (especially in terms of mechine learning, automation and IOT), what counts as the most efficient factory is now changing in a radical manner. (The Japanese are much more about incremental improvements rather than radical change)

The nature of the car is changing as well - to a connected smartphone with a battery and electric motors.

Therefore we don't know what is now the optimal factory setup for auto production. One of the major implications is that the cost of producing additional units will be low (towards zero marginal cost) due to all this automation.

But the only way to determine the optimal factory is by testing, which means "burst" production to identify the bottlenecks at each stage of the new production flow.

Edit

So going back to the original point where I stated Tesla was more vertically integrated than anyone except BYD. Tesla have eliminated the need for hundreds of external physical parts and hundreds of MCU chips.

In comparison, Toyota is still dependent on these parts from external suppliers.

Edit

Another example is that the most efficient automotive production line is no longer a line in the traditional sense. It is now hundreds of AGVs - each of which carries a vehicle through all the production steps.

And each AGV can theoretically move anywhere in the factory, rather than follow a fixed path.
 
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ansy1968

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Even at the height of Anti - Chinese sentiment didn't dent the enthusiasm among Filipinos, when you see beauty in front of you and within your budget then you're stupid not to buy it as you compare the Japanese equivalent. Premium price with spartan interior design, that's how monopoly operates.

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Jun 30, 2021 — Coolray continues to help Geely PH maintain number 9 ranking in PH ... charts as the number one subcompact crossover in the Philippines.
 

Petrolicious88

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Even at the height of Anti - Chinese sentiment didn't dent the enthusiasm among Filipinos, when you see beauty in front of you and within your budget then you're stupid not to buy it as you compare the Japanese equivalent. Premium price with spartan interior design, that's how monopoly operates.

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Jun 30, 2021 — Coolray continues to help Geely PH maintain number 9 ranking in PH ... charts as the number one subcompact crossover in the Philippines.
Wait. Only 190 units sold in May? Not many people buy cars in the PH?
 

FairAndUnbiased

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I actually have worked in manufacturing before and am familiar with the Toyota Production System. I've actually been sent to a Lean Six Sigma Green Belt course as well.

From my perspective, Tesla have a better learning organisation and are better at Kaizen (eliminating waste) than Toyota.

For example, gigacastings have eliminated hundreds of parts and also reduced the number of robots by 70% for example. Ditto for hundreds (thousands) of MCUs, now relaxed with software.

Because of technological change (especially in terms of mechine learning, automation and IOT), what counts as the most efficient factory is now changing in a radical manner. (The Japanese are much more about incremental improvements rather than radical change)

The nature of the car is changing as well - to a connected smartphone with a battery and electric motors.

Therefore we don't know what is now the optimal factory setup for auto production. One of the major implications is that the cost of producing additional units will be low (towards zero marginal cost) due to all this automation.

But the only way to determine the optimal factory is by testing, which means "burst" production to identify the bottlenecks at each stage of the new production flow.

Edit

So going back to the original point where I stated Tesla was more vertically integrated than anyone except BYD. Tesla have eliminated the need for hundreds of external physical parts and hundreds of MCU chips.

In comparison, Toyota is still dependent on these parts from external suppliers.

Edit

Another example is that the most efficient automotive production line is no longer a line in the traditional sense. It is now hundreds of AGVs - each of which carries a vehicle through all the production steps.

And each AGV can theoretically move anywhere in the factory, rather than follow a fixed path.
OK, good, we can speak the same language. One part of Kaizen is also evening the workflow and reducing reworks/rejects. The slowest step of the workflow that is the bottleneck and reworks/rejects actively deduct from value.

First you said that Toyota uses 70 parts in their chassis plate. Actually, the basis for Tesla's "replacing 70+ suppliers with 1 casting" saying is their own car.
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That is a design flaw.
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Each of them looks to me like they can be stamped or forged in simple processes with high cycle time.

Gigacastings indeed replace many smaller supplier parts.
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There's a reason why nobody is doing it, and it's not because they haven't heard of a bronze age technology.

Here is a photo taken from a helpful netizen of the reject pile at Tesla Fremont.
7zwgu5y7olo61.jpg

Here is a news photo of the reject pile at Berlin.
tesla-s-mega-castings-are-not-working-well-for-giga-gruenheide-over-60-of-rejects-194841_1.jpg


So we have established that reject/rework rate is very high for Tesla cars, thus increasing cost and lowering value.

OK, as for the castings themselves, they represent a several minute cycle time and single point of failure, vs a stamping machine that is much cheaper and has a several second minute cycle time. That evens out the workflow by reducing the length of the longest single process.
 

AndrewS

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OK, good, we can speak the same language. One part of Kaizen is also evening the workflow and reducing reworks/rejects. The slowest step of the workflow that is the bottleneck and reworks/rejects actively deduct from value.

First you said that Toyota uses 70 parts in their chassis plate. Actually, the basis for Tesla's "replacing 70+ suppliers with 1 casting" saying is their own car.
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That is a design flaw.
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Each of them looks to me like they can be stamped or forged in simple processes with high cycle time.

Gigacastings indeed replace many smaller supplier parts.
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There's a reason why nobody is doing it, and it's not because they haven't heard of a bronze age technology.

Here is a photo taken from a helpful netizen of the reject pile at Tesla Fremont.
7zwgu5y7olo61.jpg

Here is a news photo of the reject pile at Berlin.
tesla-s-mega-castings-are-not-working-well-for-giga-gruenheide-over-60-of-rejects-194841_1.jpg


So we have established that reject/rework rate is very high for Tesla cars, thus increasing cost and lowering value.

OK, as for the castings themselves, they represent a several minute cycle time and single point of failure, vs a stamping machine that is much cheaper and has a several second minute cycle time. That evens out the workflow by reducing the length of the longest single process.

The high reject rate only applies to the castings at Berlin and Fremont, not at Tesla Shanghai.

They'll figure out a solution to it, which may just turn out to be a bigger gigapress.

After all, the gigacasting process for the Model 3 at Tesla Shanghai already works, and Shanghai makes most of Tesla's cars.

Also, VW previously announced they would use gigacastings.

And your response still doesn't address my original assertion that Tesla is the most vertically integrated automaker apart from BYD. The gigacastings at Berlin and Fremont may have a high reject rate, but that doesn't change the fact that they make Tesla more vertically integrated.
 

FairAndUnbiased

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The high reject rate only applies to the castings at Berlin and Fremont, not at Tesla Shanghai.

They'll figure out a solution to it, which may just turn out to be a bigger gigapress.

After all, the gigacasting process for the Model 3 at Tesla Shanghai already works, and Shanghai makes most of Tesla's cars.

Also, VW previously announced they would use gigacastings.

And your response still doesn't address my original assertion that Tesla is the most vertically integrated automaker apart from BYD. The gigacastings at Berlin and Fremont may have a high reject rate, but that doesn't change the fact that they make Tesla more vertically integrated.
It is hard to compare ICE car vertical integration with EV vertical integration.

Let's say fuel injection, engine and transmission is the core IP of a ICE car company. The function of the fuel injection is to insert energy bearing material into the engine to produce power. The function of the transmission is to mechanically move power from engine to wheel. Toyota, Ford, etc. all build their own fuel injector, engine and transmission.

Comparative functional parts for an EV is battery, power management board and motors. Tesla builds their own power management board, but not the battery or motors. is it really more vertically integrated with a few more self built mechanical parts?
 

AndrewS

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It is hard to compare ICE car vertical integration with EV vertical integration.

Let's say fuel injection, engine and transmission is the core IP of a ICE car company. The function of the fuel injection is to insert energy bearing material into the engine to produce power. The function of the transmission is to mechanically move power from engine to wheel. Toyota, Ford, etc. all build their own fuel injector, engine and transmission.

Comparative functional parts for an EV is battery, power management board and motors. Tesla builds their own power management board, but not the battery or motors. is it really more vertically integrated with a few more self built mechanical parts?

That is just one element.

Then you have the Tesla body construction via gigacastings and the software replacing hundreds (or thousands) of MCU electronics.

And electronics overall accounts for 40% of the car cost.

Hence my conclusion that Tesla is the most vertically integrated automaker apart from BYD.
 
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