I went to production heaven

I'm not making comments about the validity of the article, but I do want to point out that a quick google search of the author seems to imply that he is pretty much universally disliked.

It is very potshotish. Comparing production hell to a 75% increase in stock isn't really a fluid argument. They should stick to the manufacturing bits. Otherwise, enjoyed the read.

Might be more properly titled "Why this factory in China is 10x better than Tesla's" Factory. As folks have noted, not entirely off base, but not at all an article about the Volvo factory.

I speculate that not-in-my-backyard-ism is much less of an issue in China, because people living nearby do not get as much of a say in whether to allow it.

China hasn’t card very much about its environment, so minimal environmental reviews are required to setup a new factory.

This obviously can’t continue as china becomes more serious about environmental protection.

They do touch on it in the article. Permits/regulations added to NIMBYs and pre-existing ageing infrastructure conspire to slow things down.

Not to mention political point scoring over large job creation projects. With the rise of robot workers factories such as these might find themselves unwelcome in previously accommodating areas where their size, logistic needs and impact on the surrounding infrastructure were previously offset by job creation.

So at this sort of scale it's as much a question of logistics and impact to the surrounding area as it is one of pure engineering.

One thing is momentum. In the US (and Europe) we have established factories, practices, and systems. It's hard to change those, developing countries (which from an industrial perspective much of China still is) have an advantage in that they're getting to try out the latest concepts and have no reason not to. See Japan and Europe post WWII. Both regions were devastated by war, but had the economic ability (or support) to rebuild their industries. As a result they ended up decades ahead of the US in industrial capacity and/or quality, because the US through the 1970s (and later but that's when we started wising up) was stuck with pre-WWII industrial methods and models. Propped up by large bank accounts, easy loans, and large inventory (which hides process deficiencies like bottlenecks and rework). Once pressure was put on the US auto industry (1970s, by the Japanese and the oil crisis) they started changing or failing. They had no reason to adapt until then, and even with the clear demonstration of how to work better it still took many of them decades to figure it out.

You can see similar trends with respect to telecom infrastructure adoption in developing nations versus developed nations.

Another advantage China has is population. When you have well over a billion people, you can afford to throw them at the problem and try out numerous things. Failure becomes an option because they have both the people to try it, and the space to try it in.

Their government also has a willingness (unlike in the US, and not as common in Europe anymore) to step in and subsidize costs to encourage moving in a certain direction in order to grow their national economy. The US, in particular, doesn't do this or does it haphazardly due to the frequent changes in political leadership (we could never create and stick with a 10 year plan, for instance).

NIMBYism and politics is part of it.

I also suspect China, as a whole, is willing and able to move mountains (perhaps literally?) to win factories. Entire cities exist just to build "widgets" for the rest of the world.

I remember a similar article/editorial that made similar points about electronics production. China has both the engineering professionals and the factory line staff on-hand to spin up massive efforts in short time. The US simply doesn't have that many people in any one place like China does.

Flexibility of local governments and generally a 'growth before everythign else' mindset. Add to it an ENORMOUS workforce that is generally decently/well educated and socialized to accept a work culture that wouldn't work other places.

Add to that snowball effects...everything else is there. Everyone else is building there....it is physically closer to things, but land is still (relatively) cheap.

Compare the permitting process/cost + available land + available workforce + general cost of doing business + general government mindset + a well established supply chain to distribute products outward + a poorly tapped market for cars locally (local versions are truly terrible) + lack of political uncertainty in China as compared to Japan. Japan, Indonesia, the US, Ghana, etc. might better on a few of those metrics but the overall model makes China a minimum in terms of risk.

You add to that that as companies increasingly globalize they are developing significant competencies to build factories and do business in places further afield. First this was partnered outsourcing, because it bought a partnership that knows the local affordances and externalities. Now that they have the competency, they can do it anywhere because they have learned to do it anywhere[0] and look to run the minimization routine. Toyota is actually shrinking the size of plants so they can be more agile not just in models and output but in plant location...right now the math says china, later it might say Africa.

[0]https://dailykanban.com/2015/03/toyotas-tnga-tps-2-0/

Industry is massive and geographically nearby in China. If you need to source a different size bolt at scale, the factory for them may be 10-15 minute drive down the road. In the US, you may have to have them overnighted. The amount of raw resources quickly available is a huge competitive advantage in being able to pivot on manufacturing changes and keep lead times down

I have a suspicion - although no real evidence - that this is a management and class system effect. I've often asked myself why, in the UK, we have either small boutique car firms (e.g. TVR, various F1 teams) OR factories under foreign ownership running imported management processes, but all the big domestic car firms melted away. Some clues are in the final demise of MG Rover: https://www.theguardian.com/business/2011/may/08/mg-rover-di...

That's an extreme example of the problem, but I think it's endemic in the UK being so centered around the financial industry. While the middle class is centered around the cottage industry of rising property prices. The most ambitious people go into finance, not businesses where you actually have to make something or deal with employees. The factory, employees and culture surrounding that then just become tradeable tokens that will have their surplus value extracted and then discarded. Meanwhile it's hard to get ambitious, effective managers because people with that skill set are earning a lot more elsewhere in the economy.

A lot of what makes a good manufacturing process is, effectively, oral culture - passed on through apprenticeships and shadowing skilled technicians. Attempts to document it are surprisingly hard (this is why ISO9001 et al are unpopular). So in order to get a good factory startup you have to get experienced staff, which is easier in a cultural location that already has them.

Combination of currency manipulation, minimal ip enforcement, and lack of regulations and worker rights led American companies to start building factories in China, until they hit a critical mass.

Short answer: Foxconn. And it's a Taiwanese company.

The difference in resources and capacity are so vast, businesses like Apple have depended on these differences to make their huge profits.

Steve Jobs has advocated US jobs and US factories and has said he would do everything he could, but the truth is, even Apple is/was too dependent on Foxconn, and there would be no Apple as we know it otherwise.

1. '"You can't find that many in America to hire," Jobs told the president, according to his biographer, Walter Isaacson. "If you could educate these engineers, we could move more manufacturing plants here."' [1]

2. When Apple needed to change the glass on their iPhones last minute, Foxconn obliged. The flexibility, speed, and sheer scale of their assembly operations are unmatched. [2]

3. Foxconn leverages Chinese work ethics and culture to its maximum. The world marveled at 2008 drummers in perfect sync at the Chinese Olympic opening of 2008 [3]. Now just imagine them building phones.

It also doesn't help that costs are lower.

So Apple wouldn't exist without Foxconn, and Foxconn wouldn't exist without China.

Now Foxconn is outgrowing China, and is building factories elsewhere. But Foxconn city isn't going anywhere anytime soon, and arguable, whatever they do elsewhere will never match what they've build in China, nor will they ever cease to be dependent on its output.

When Apple fails, you know the scale of the problem.

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[1] http://money.cnn.com/2012/10/17/technology/apple-china-jobs/...

[2] http://www.nytimes.com/2012/01/22/business/apple-america-and...

[3] https://www.theguardian.com/sport/2008/aug/09/olympics2008.o...

China has lots of factories, are always building them, and have a lot of expertise around the practice.

Expertise means that the architects and construction guys have done it before. The regulators get it.

When I was in the business of building out and managing on-premise data centers, our team could get a project off the ground in a few days. We knew the vendors, the contractors, etc. Now? It would be tougher.

Wow interesting read that the Toyota factory is the opposite. I think some adjustments where made targeting property cost in Japan are much higher but overall the property cost compared to total factory investment cost are low. But also the Chinese factory is producing higher margin cars compared to low revenue cars from Toyota.

That isn't really new... If you look at Machine tools, Europe generally has the strongest base because their history with them goes way way back (think...first cannons). There are manufacturers in the US (e.g., Haas, Gleason) but they are smaller market and either highly specialized or known for being good enough and less expensive (Haas).

ABB is technically a Swedish-Swiss multinational corporation, and was formed by merging two 100-year-old companies in 1988.

ABB is part Swiss, part Swedish. As far as I know, the robots come from the Swedish part.

...and not the former 'workshop of the world', i.e. the UK.

There was a historical difference in manufacturing and how that gets invested in. In the UK, with the all important stock market, the culture was to take the profits and invest them in the city. Meanwhile, in Germany, if, for example you were 'BMW', then the thinking was different - let's invest in the company and make even more cars and even more profit.

What remained of British machine tool manufacturing was utterly crippled and gone for good when Margaret Thatcher arrived on the scene. The UK then gave up on manufacturing anything except weapon systems, if you were 'smart' then you would speculate on property rather than invest in a manufacturing company.

The cultural problem in the UK was short-termism, a focus on the share price and the profits for the quarter, not the next decade.

The robots came later, after the UK lost manufacturing (okay, not all of it, but manufacturing used to be what the UK was about). If you are already making die-casting machines then it is kind of logical to make a robot arm to get the part out of the die, so the German/Swiss/Scandinavian machine tool companies were able to move into that space.

As mentioned, when Thatcher came along it was game over, it was also impossible to sell European presses etc. into the UK market. So I am pleased to see these vast and wonderful machines being fully appreciated and used in China.

That was surprising to me to learn too, since I would have expected a more manual human-operated line to be able to retool faster.

The biggest reason to switch to robots in manufacturing is quality control, followed by retooling speed, followed (distantly) by line speed. If you have any humans in your process, you only go as fast as they can.

As some who works in manufacturing, the more your volume goes up, the more you value repeatability. One error in a hundred isn't an issue when you manufacture ten, but when you manufacture a million it is a huge headache.

Huh? Congrats on your sense of humor.

Eh...I'm not sure that's it. I read this much more as 'Volvo is trying to rethink what they are trying to accomplish and why with a factory' as compared to Tesla who is 'struggling to push sustaining innovation of an outdated factory model that they don't really understand'.

I had a hard time parsing the title for some reason, thinking it was about golang.

Some people go to car-production hell. I went to car-production heaven.

"In 2010, Consumer Reports estimated that an average 1993 Lexus LS400 had as many trips to the dealer / failures as a brand new Mercedes S class."

You mean the sedan has overall the same sum of issues after 7 years as a brand new after e.g. one year?

If you struggle with build quality with a $68,000 luxury car (the Tesla S) and then continue to struggle with build quality with a $35,000 luxury car (the Tesla 3), how does it make the least bit of sense to focus on increasing volume?

Electric cars being simpler to manufacture makes it more of a red flag that Tesla is struggling with build quality. It indicates that build quality is the harder-won competitive advantage, rather than the ability to design electric cars, the PR boost of having a "visionary founder", or being able to tap Silicon Valley for cash.

If that's the case, it's probably easier for Toyota to design, build, and sell electric cars as well as Tesla than for like Tesla to manufacture cars as well as Toyota.

Few more years and 'made in China' will be synonymous with top quality and best engineering. Same thing happened to Japan after WWII