Tesla's Seven Strategic Decision Areas for Optimal Production

This article discusses Tesla's operation management and their seven strategic decision areas for optimal production. These areas include goods and service design, quality management, location strategy, layout design and strategy, supply chain management, job design and human resources, and inventory management. The article highlights the company's focus on quality, efficient supply chain management, and attracting and retaining competent employees.

In Tesla Inc. the team of operation management perform their organisational objectives in seven
different strategic plans in order to ensure optimal production in every areas of the energy saving
and automotive business. The operation managers in the company need to maintain effective
practices for organisational effectiveness and high productivity. The overall success of this plan
would help in the global expansion of Tesla. Moreover, like in any other companies, the
effectiveness of management helps in higher productivity. However, the company needs to strive for
improving its operational competencies against its potential competitors like the Volkswagen, Ford
Motor etc. It is also to mention that on the basis of its seven strategic decision areas, the company
makes use of planning, decision making and controlling for increasing its productivity and decreasing
its costs. These seven strategic areas are:
a) Goods and service design- In this area, the managers need to focus on the quality, cost and
resources. In order to ensure this, the company continuously make innovation on different
parts of solar panels, automotive and batteries. With the same, it also innovate its supply
chain system and product.
b) Quality management- Tesla aims at satisfying its customers’ expectations. It keeps a
thorough check on the quality improvement and regularly researchers on the energy and
transportation solutions. Also, the operation managers conduct quality review as well and
implements necessary enhancement to the processes of manufacturing. Moreover, for
solving the quality related issues, Elon Musk have shifted the company towards the
manufacturing its own vehicles’ parts in more amount rather than sourcing them from the
other manufacturers (Thompson 2018).
c) Location strategy- The team of operation management in this area, lays emphasis on the
nearness to the market, suppliers and resources. The managers uses their global reach in
terms of their resources. The 4Ps also involves the company owned galleries and different
stores present in the good locations for increasing the sales and productivity of the
personnel as well as to get an access to the target market more easily.
d) Layout design and strategy- In this area, the managers focus on attaining optimal flow of
information and resources. The layout in Tesla is designed for increasing the capacity use of
the facilities, particularly the buildings that are used for manufacturing the electrical
vehicles.
e) Supply chain management- The main strategy of the management team is efficient and
effective supply chain management. The company has global supply chain that aims towards
supporting the manufacturing process.
f) Job design and Human resources- this area is focused on ensuring that there is hardworking
and effective employees within the company. Tesla fulfils it by having a compensation
scheme for attracting and motivating more competent candidates and workers.
g) Inventory management- This area is focused on the inventory decisions, support and cost for
the production. The company lays much emphasis on the inventory decision based on the
principles of operation management. Managers are trained to ensure that the higher quality
materials are used for making the end-products of the company.

References:
Andrew Thompson (2018), “Tesla, Inc.’s operation management: 10 decisions, productivity”
Available from: http://www.panmore.com/tesla-motors-inc-operation-management-10-decision-
areas-productivity [accessed 23 January 2019]