When Tesla set out to build its factory in California for the widely anticipated Model 3, the company set out to rethink car manufacturing. The CEO, Elon Musk, loudly claimed that existing car plants were “tortoises”; Tesla, he said, would build a nearly fully automated facility on the cutting edge of the growing trend that was coming to be known as “Industry 4.0”.
To many supply chain veterans, this sounded a lot like Silicon Valley talk of disruption that they had heard in other industries. Innovations are always welcome, but the excess of the rhetoric gave the impression that Musk felt that there was a lack of competence in car manufacturing, and he was coming to solve the problem.
When Tesla was beset by a long, public series of production delays, safety, and quality issues, it became clear that Musk had to change course. The company hired workers and scaled back its technology and automation ambitions. By the time the Model 3 was supplying reliable volumes to a waiting market, the factory very much resembled those of its peers.
For many supply chain managers, the story of the Model 3 is a cautionary tale of automation. The selection and implementation of digital technologies should stem from clear business drivers, meshing with a business strategy, an understanding of the benefits, and a clear implementation plan. Tesla had tried to implement automation and technology for its own sake, rather than from an identified need or benefit. Industry 4.0 is not a principle to be obeyed, it is a tool in service of a strategy.