Supply Chain Management in Tesla: Methods, Rules, Processes, and Role in Improving Competitiveness

This report discusses the principles and processes related to supply chain management in Tesla, including methods, rules, and processes. It also explores the role of supply chain and logistics in improving competitiveness and executing problems aligned with improving the strategy of supply chain.

REPORT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Supply Chain Methods, Rules and Processes in Tesla................................................................3
Role of Supply chain and logistics in improving competitiveness of Tesla................................5
Executing the problems which are aligned with the improving the strategy of supply chain and
analysing solutions which is supported on great training models................................................8
Analysing interrelation between different areas and supply chain of company considering its
significance in growth of the business.......................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
BIBLIOGRAPHY..........................................................................................................................17

INTRODUCTION
Supply chain management concepts refers to such process which handle the production
flow of product and services. This start from the delivering of raw material to the company and
eventually supplying the product and services to the customer. Logistics refers to the detail with
the help of which the organization acquire, transport and store their resources on the destination.
There are various advantages for the business to have supply chain managed as it will help in
fulfilling the demand of the customers and then also earn profits for their business (Badi and
Murtagh, 2019).
Tesla is an automotive company which is established in the Austin, Texas. The company
was founded in the year 2003, July 1 by Marc Tarpenning and Martin Eberhard. They design and
manufactures battery energy storage, electric vehicles, solar panels and various other things.
This report will discuss about the principles and processes which are related to supply
unit. Also, the function of supply chain and logistics in meeting the competitiveness of the Tesla.
This will provide information regarding the issues which are related to the development of
supply chain and its interrelationship with the different areas of Tesla.
MAIN BODY
Supply Chain Methods, Rules and Processes in Tesla
Method of supply chain management of Tesla
The chain management concepts refers to several processes which handle the
manufacture flowing of goods and service. This process starts by delivering of raw material to
the company and eventually supplying the product and services to the customer. Companies like
Tesla manage their network with the suppliers which is supported by supply chain as it moves
products of the company with the help of suppliers. This help Tesla to deliver its product to the
end consumers who are the target market of the company. It helps them to form relationship with
the consumers as this will fulfil the needs of those consumers. This is profitable for the company
as it increases the demand of Tesla's products in the market. It will eventually improve the sales
for the company which will result into higher amount of profit for the company (Bag and et.al.,
2020).
Supply chain helping the company to deliver its products to various areas in the world
which is supporting the working of the company. This is helping Tesla in making the strategies
which will help them to plan, forecast demand, procuring and expertise in logistics which

support the company to make its product available to various places which will be improving the
value of the company in the market. As if the supply chain management will lack in its working
it will eventually limit the availability of the product of Tesla. It is because the company will not
be able to meet the demand of its customer. The company mainly meet the needs of its customers
just because the supply chain is delivering the products on time to its destination which makes
product available (Basheer and et.al., 2019).
Processes in centralized chain management in Tesla
The supply chain managing process is required by the organization to grow in the market.
As it can not be done by one person, it needs support of various people. This will ensure that the
company is able to reach to huge market. This will eventually help the Tesla to implement the
process which will be in support to their functions (Caiado and et.al., 2021). The process
involved in supply chain is mentioned further:
1. Planning — In the planning process Tesla establish various strategies which will
improve the effectiveness in supply to long and short range of area. This is helping the
company in forming the design as well as network for the supply chain of the company,
as well as in predicting the demand of consumer demand (Cousins and et.al., 2019).
2. Procurement — In the procurement process Tesla will focus on the method with the
help of which they will purchase raw material, goods and components. This will help
them to decrease the cost of purchase for the company.
3. Production — This process considers manufacturing, assembling or converting the raw
materials into final goods or the good which is part of other product. The managers who
are providing the support to production as well as ensuring main material are present (de
Sousa Jabbour and et.al., 2020).
4. Distribution — The process of distribution is concerned with the flow of material with
the help of which they will be able to make the product available in global market. This
will ensure that the goods are flowing safely to the destination.
5. Customer Interface — This is one of the most important process as it helps the
customers of the business. In this the business try various strategies which helps them
during the interaction with the customers.

Principles of supply chain management in Tesla
The rules of supply chain management helps the company in maintaining its supply chain
effectively as it will be beneficial for the company to apply those in the supply chain
management. The principles are discussed further in report:
1. Customer segments who are based on the needs of services for a distinct groups and
easily gets acquainted with the supply chain will help in serving with profitability (Feng
and et.al., 2018).
2. Logistics should be customized based on the requirement of the service and customer
segments which are profitable for the business.
3. Tesla should understand the signals from market and plan their demand accordingly over
the supply chain of the company. This will ensure the forecast will be consistent and
resources allocation will be optimized.
4. The products which are close to the customers should be identified and conversation over
the supply chain should depend on the same.
5. Supply sources should be strategically managed to ensure the total cost is reduced
regarding the owning of materials and services.
6. Developing a technology which will help the supply chain that is beneficial for the multi
levels forming of decision.
7. Adopts the performance measures which is related to channel spanning that help in
reaching the end user in effective and efficient manner.
These principles help organization like Tesla to achieve their objectives and maintain a
reputation which is necessary for the business. It will help them during the decision-making
regarding the delivery of the products. By implementing these principles companies will ensure
that they will be satisfying their customers (Heizer, 2020). This will help the company to
improve their profit as they will be selling more products by reaching to more people in the
organization. Tesla can ensure that their products are available for the customers.
Role of Supply chain and logistics in improving competitiveness of Tesla
Supply chain and logistics are one of the important aspects for the business as it helps
them to make the product available to the customers. This helps the company in ensuring that the
needs of customer will be fulfilled with the help of fast delivery to the places where the company

is dealing. Tesla is a multinational company which is getting various sort of benefits with the
help of applying the strategies which are useful for the business. It will help the company to
grow in the marketplace.
Engagement into real time supply chain planning
It is one of the most important for business to have real time engagement with their
supply chain management. As it helps Tesla in extracting the information regarding the situation
of the delivery. It helps in managing the business on international level. This is helping the
companies in communicating with those branches which are situation in globalized area. It is
helping them to have clear communication which will help the business to achieve its goals on
global basis. This helps the company to analyse the demand of the product in the market. As it
provide support in delivering product at the precise time to accurate place. But it is important
that the companies apply appropriate strategy to ensure that the business is managed accordingly.
It will also help the company to get acquainted with the new technology which is beneficial for
the business (JHuo, Gu and Wang, 2019).
Collaborative strategy of supply chain
While establishing such collaborative strategy of supply chain a business can ensure that
the business can have huge list of their suppliers, distributors and vendors. Also, it is important
for them to work closely as it will help the business to grow in the market. It is because if the
business are competing with each other they would unable to fulfil the requirements of their
customers. If departments of the Tesla are working in the collaborative manner it will ensure that
they will be supporting the work of other person. It will help them to build relationship with each
other and work in effective manner. This is important for the company to maintain its
relationship with their suppliers as it is important for them to establish relationship with the
customers. As both are important for a business to operate in the market. The effective supply
chain strategy will also consist of the interest of the stakeholders of the company to ensure that
they will be getting the work done with the help of others (Ivanov and Dolgui, 2020).
Innovative Supply Chain Automation

By adapting different innovative strategies company can ensure that the products will be
delivered effectively and efficiently. As it is important for the business to adapt various
techniques which gets related to the business. And will eventually support the profit and working
of the company. Tesla is adopting various technology which is ensuring that the products of the
company is delivered on time to their last resort. It will benefit the company during the reduction
in the cost. Tesla gets the benefit of delivering the product in faster manner as well as with care.
As it will attract the customers to the products of the company. There are various Artificial
intelligence which helps the Tesla in managing the demand of the customers as well as increase
the production quantity of the products (Jadhav, Orr and Malik, 2019).
Implementing agile process improvements
There are various aspects in the business which will help them to achieve the needs of
their customers on global basis. Also, the business is able to improve their profit which will
benefit them in the future. The impact of the agile process will help Tesla in modifying their
work for the easier working of the supply chain management. By adopting various processes
improvement will help the business to achieve efficiency. It is because they are able to manage
the time properly which gives them time to interact with the other people. There are various
small factors which takes place in the business and help them to coordinating with the others.
This also help the business to improve the cost incurred with the project. The conventional
thinking helps the businessman to achieve their goals in the business and satisfy the customer
who are connected with the working of the company (Kshetri, 2018).
Impact of cost drivers and business
It is most important for the company to analyse the cost they are incurring because it is
important to analyse the cost incurred before implementing the strategies. If the cost of drivers is
increasing in the Tesla it will not be beneficial for the company as they will not be incurring
profit in the organization. It will cause various financial problems to the company as their
expenses will increase. This cost drivers in the Tesla can be labour, material and various others.
As it will decrease the profit capacity of the business. If the business is able to manage its
expenses and increase their profit will be beneficial for the position of the business. It will help
the business in further expenses which are not planned (Yu and et.al., 2018).

Executing the problems which are aligned with the improving the strategy of supply chain and
analysing solutions which is supported on great training models
The Supply chain is wide network which may be helpful for an organization in order to
supply its products and services at a global level. It may play critical role in improving the flow
of good as and services which may be helpful for the business in order to improve their
productivity (Lambin and et.al., 2018). There may be certain issues which arises while managing
the supply chain and have a negative effect in the management of TESLA which may put
pressure on the organization to transform their existing policy towards facing these challenges.
By utilizing the supply management strategy and software of the organization effectively, the
organization may be able to decrease the negative outcomes of these barriers over company. The
different issues related top the supply chain of the organization are as follows:
Political
While taking initiative to build the above selected strategy of supply chain , management
could deal with the worst challenges as well as issue due to political factor, in regarding with
development and carrying out the strategies. This can be lead to reduction in the effectivity of
management in improving efficiency of supply chain operations (Li and et.al., 2020). It is reality
that political firmness in nations, access administration to handle supply chain and create the
strategies in appropriate manner. Political imbalance may lead to reducing business satisfaction
due to this issue people will not be able to get their needs in the marketplace of product or
service.
Social
Development of strategy may have negative effect due to the barriers and challenges that
are faced by the organization in order to manage its supply chain effectively. The changing
behaviour of the major stakeholders within supply chain will have the significant effect on the
performance of organization. It is essential for them to solve these issues appropriately by
considering and applying major aspects which play a significant role in organization success.
Weak information regarding customers needs and unavailability of crucial assets can reduce the
effectiviy of organization as such for improving the productiveness of supply chain.
Economic

The global market may have experienced an increase in the costs of the raw material,
labour and energy which may have the destructive impact on the profitability of organization.
Appropriate adjustments should be made by the organization in their current strategy in order to
enhance their overall performance (Rojo and et.al., 2018). It is necessary for TESLA to look
upon this issue, in order to reduce the complexities. Without identifying or having proper source
of information about economic position of firm is unable to create a plan of action and applying
within the context of supply chain will affect the way in which it may attempt and manage its
task.
Legal
Changes related to legislations and regulations of the supply chain management bear
upon process of strategies in the circumstance of similar term. Also, it could lead to a reduction
in the power of management to implement plan and obey with new regulations which would
drive their aid toward making speedy changes within existing plans and practices.
Technical
These issues are aligned with development strategy of supply chain is digital
modification. It is a process which drives the attention of supply chain handler for using
innovative technologies and consider possible changes in the practices of the organization (Xu
and et.al., 2020). Overall the process consumes lot of time and need some additional resources
which is difficult for organization to arrange in time. It will increase the work level pressure
upon the administration as they should develop plan and proceed with decision to implement
specific stock management software in order to enhance their overall productivity.
Ethical
The ethical issues are linked with arrangement of supply chain strategy and put force on
management to perform right practice like employee engagement in whole operations as well as
decision-making process, that is difficult in recent times (Saudi, Sinaga and Roespinoedji, 2018).
It may put pressure on the company to change their existing policy and improve their supply
chain process.
Environmental Sustainability
Environmental sustainability is the biggest concern of transformation which creates issue
for administration to form strategies and implementing the same after considering major
concerns of customers and government related with sustainable environment. Thus, this factor

affect the supply chain in form of creating the challenges to successful strategy which involves
the sustainable items like resources which puts positive impact to land, air as well as water.
Solutions
The best method for overcome to direct impact of this issue are team formation and group
discussing which would be helpful in solving the problem and provide benefits to organization in
order to enhance their productivity. Team formation is an appropriate technique as it provides
suitability for administration to form effective plan and policies in order to evolve an effective
strategy of supply chain which had been discussed above (Vargas, Mantilla and de Sousa
Jabbour, 2018). By applying such solution, TESLA can enhance its competitive advantage in
terms of improving performance level and productivity of the existing labour force of the
company. Also, It allows for team member to conduct the useful research to the purpose of
collecting information regard to consumer needs.
Moreover, another solution which management of TESLA should consider in order to
solve such issues is providing appropriate training. This may give access to them for training
employees and provide them opportunities for developing their mutual understanding about
stock management software which supports in managing supply chain appropriately. In recent
times, each organization accepts training sessions as it the key approach which support to
enhancing employee performance level as well as to create strong workforce which would be
helpful for fulfilling organizational objectives. Whereas, It will also help to increase and develop
new skills in employees which should be used by them to implement inventory management
software within the marketplace connected to supply chain (Tu, 2018).
Analysing interrelation between different areas and supply chain of company considering its
significance in growth of the business
Supply chain management and logistics are the critical aspect that are concerned by
business in regard with managing their operations in effective way. It plays major role in
lowering the cost of production that support business to raise profitability. By managing the
resources effectively, organization will have ability to improve product quality which would be
offered to customers (Xiao and et.al., 2019). Thus, with support of logistics and supply chain
management, TESLA would be able to increase their current financial position and alter effective
strategies to get the competitive advantage in industry as well. Both of the departments should

work in coordinating with several other departments to supply valuable inputs for enhancing
overall performance of company. This can be supportive for the organization to improve their
efficiency of several departments to get competitive advantage in industry. By executing the
requirements of all the departments, the organization may be able to form improved
communication and relations between individuals. This would help them to decrease conflicts
among them which arise between different department, and also it will increase the satisfaction
to grow as overall business (Belhadi and et.al., 2021).
The function of supply chain and logistic has the optimistic relationship with the human
resource department of company to effectively achieving the point of reference which will be
required for enhancing productivity of the company. By understanding the significant factors of
supply chain management, the HR department may prepare effective policies to divide the work
between the staff for building a positive working environment (Di Vaio and Varriale, 2020). This
might be helpful for the organization to introduce effective relationships between the individual
which increases their engagement to the organization goals and objectives. This would be
supportive for TESLA to position competitive advantage in its industry as well as decrease such
expense which are being caused due to inefficiency of force for managing logistics appropriately.
In similar way the coordination by them is significant for the company to form good relation
with their stakeholders in supply chain that must has the impact on growth of the organization.
By understanding their needs, the organization may be able to increase their overall satisfaction
and improve market share of the TESLA in the industry. The workforce would get ability to
manage the inventory suitably as well as increase success of the business.
The interrelationship of logistics and supply chain with marketing department should be
supportive for management to construe with vast requirements of the distribution sources. This
can be helpful for entity to analyse and select the appropriate channels that must be suitable for
the business (Lusiantoro and et.al., 2018). Thus, marketing department considers the information
render by the logistics department which work as in order to set up right strategies and policies
for increasing the brand image of TESLA in marketplace and alteration to the engagement of
customers towards the business operations. Similarly, it can be supportive to identify the
requirements of customers as well as providing them a better experience which will increase
their emotional state.

Such functions helps various departments for coordinate better for increasing sales of the
organization that may assist in successfully getting more customers in market. This process help
company for expanding into several marketplaces as well as increase the range of brand to
different countries. While improving existent sales, the management must be able to increase
competitive advantage in industry and achieve growth in the existent market which can be
beneficial for business to progress. It may be helpful in targeting the customers appropriately
with the help of better strategy (Pellegrino, Costantino and Tauro, 2019). The supply chain
management as well as logistics form better relationship with significant customer and dealer as
well in market. Although the requirements of customer is understood with managing the different
department effectively as it may be useful for entity to build consciousness about brand in
industry. This will reflect positive image which can be found among customers and help TESLA
to raise the overall productivity.
The procurement and purchasing function is interconnected with the logistic function
and supply chain of organization in terms of reducing the excess costs which arise due to
mismanagement of strategies. The benefit of this to business would be in favourable terms to
increase their present profitability by the help of managing the coordination effectively among
various departments. By managing the equilibrium between those functions, organization will be
able to decrease losses of organization and build various new opportunities for business as such
to improve their sustainability. With understanding supply and demand of precious resources of
company within marketplace, TESLA would get ability to improve procurement and purchasing
process of business, so they can decrease the faults that arises in performing the decisive tasks of
business (Qazi, A., and et.al., 2018). The several new techniques like target costing, supplier cost
construction analysis is helpful for business to manage its process of purchasing effectively.
Also, to improve overall productivity of the company and such process will be effective in terms
of enhancing the financial stability of business.
CONCLUSION
According to the above report it had been identified that company has gained profit by
using various supply chain ideas, process and principles for organizing their resources. It
provides the organization with different alternative to enhance the overall productivity and
managing different departments. TESLA has been capable of gaining competitive advantage in

industry by altering an appropriate logistics as well as supply chain strategy for increasing
profitability in the business. Those strategies are considered as beneficial for entity to increase
employee engagement and enhancing their performance to sustain in the market.
By the help of critical evaluating of important issues connected to the process of supply
chain, the entity had been capable of building efficient strategies and policies which allows
operating in a highly changing business surroundings. Whereas identifying such issues
considered important for the business to succeed in the existent working culture and raise their
overall productivity which would helpful to maintain a valuable image of the brand in business.
By evaluating the interrelation between supply chain or another areas, the company gets the
ability to manage different departments in most suitable manner that is beneficial for increasing
the areas of individual performance in the business.

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