[note Senryu] #53: The Theme is "Contrarian Management" (261-265)
My heart is Gen Z! My body is a Showa-era person past sixty! I am a grandpa who is a Gen Z supporter!?
Well, this time I have turned Elon Musk's Tesla leap into a Senryu with the theme of contrarian management.
Toyota engineers, who once mocked EVs running on motors as toys compared to the internal combustion engines of gasoline cars, are now in an era where they must learn from Tesla.
In every era, innovators perform a "contrarian" move that shatters the common sense of vested interests. This time, I am challenging myself to write 5 Senryu on the theme of such "contrarian management" by Tesla.
The structure of subcontractors is important for Japan Inc.
It is an important industry where 5.5 million people work in the automotive industry alone, supporting 8.2% of the working population.
Toyota alone has 6,000 primary subcontractors and 38,500 secondary subcontractors; this many companies are hanging onto a subcontracting structure with Toyota at the top.
The number of parts in a gasoline car is about 30,000.
In contrast, a BEV (battery electric vehicle) has 10,000. To put it extremely, it means that only one-third of the subcontractors are needed to build a car.
They cannot easily abandon the subcontractors who have shared their joys and sorrows until now. Japan Inc. cannot move easily due to the innovator's dilemma. That is where Tesla attacked with contrarian management.
Giga casting, finally Toyota is chasing after it
Do you know about "Giga casting"?
The technology Toyota is learning from Tesla is a manufacturing method using a "huge die-cast machine that integrally molds the car body" called a "Giga Press".
If you have ever built a plastic model, I think it is easy to imagine; it is a huge machine that makes the car body in one piece, like parts of a plastic model.
There was a common belief that car body parts were made by welding over 100 sheet metal parts. Such technology had high barriers to entry, making it difficult for latecomer automakers to catch up.
Contrarian management that turns the opponent's strength into a weakness is the production method aimed at by the "die-cast machine." I would love to see the site where car bodies are popped out.
Long ago, they mocked it as such a toy
It seems there was an arrogance in Toyota's development department that they could build a BEV (battery electric vehicle) at any time.
There are high barriers to entry in the development of internal combustion engines, and Toyota's development team, who are at the forefront of that, and above all, the production floor has continued "Kaizen" every day, continuing to cut costs by one yen or one sen. I think they had the confidence that they would not lose to any manufacturer.
Although Toyota had a capital and business alliance with Tesla in 2010, the production floor was not enthusiastic, and it led to the dissolution of the relationship in 2017.
During that time, Elon Musk's Tesla learned from Toyota and developed into the Tesla of today by adopting a management policy that did the exact opposite of all of Toyota's strengths.
Making direct online sales the norm for automobiles
For a late-coming automaker, Elon Musk did not consider the idea of building from scratch the sales networks and dealerships that rival manufacturers had already spread out to sell Tesla's BEVs.
He chose the path of direct online sales without going through dealerships. And so, Tesla completely transitioned to direct sales without dealerships in 2019.
From now on, with the development of AI technology, we will likely enter an era where avatars and AI, which make it seem as if a person is answering customer questions on the other side of the screen in a virtual world, will fulfill the role of dealerships.
The dilemma for top manufacturers is that they cannot do what Tesla does, which is to destroy the vested interests known as dealerships.
Not building up, but a major innovation from scratch again
I (Geezer) once followed photos of Amazon warehouses, and what surprised me was that every time a large-scale warehouse was built, the image changed completely.
Tesla is the same, and it seems they take the approach of reviewing their production methods from zero every time they build a new factory; this could also be called a management style that does the opposite of the Toyota-style 'Kaizen,' which accumulates cost reductions of one yen or one sen from the moment a facility is completed.
GAFAM plus Tesla are driving out Japanese manufacturing, which had become complacent in the 80s thinking it had overtaken the US. They learned from Japan and have reversed the situation with a management style that does the opposite of Japanese methods. 'Tesla' may be the symbol of that.
The reason Akio Toyoda of Toyota, who has been at the forefront of 'Kaizen' and has continued to achieve wonderful results, gracefully handed over the presidency to Mr. Sato is likely because they have had to start countering this contrarian approach.
But please rest assured. What will also become necessary for Tesla from here on out is the accumulation of daily 'Kaizen' as a large company, as well as the creativity, ingenuity, and sense of belonging of each and every employee. Japan is not losing in terms of actual ability in that regard.
Japanese companies with strong foundations are not to be underestimated.
Good luck, Japanese companies!
Good luck, Gen Z!
Thank you for reading until the end.
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