Understanding Operations and Logistics in Supply Chain Management - A Study on TESLA

This report explores the operations, logistics, and supply chain management of TESLA, analyzing issues and providing recommendations for improvement. Topics include supply chain theories, quality management, just-in-time method, and lean manufacturing.

Understanding
operations and
logistics

INTRODUCTION
Supply chain management and operations includes a broad area of the company and this
cover service industries and manufacturing both, involving the functions of the material and
sourcing management, operation planing, logistics, demand, order fulfillment and more. This all
is interconnected with each other.
This report will take TESLA company for the study and explain the operations, logistics
and supply chain management of the company and it will also critically analyze the issue of the
supply chain management and this will cover the two areas for the discussion and report will
choose to manage quality and JIT and learn to manufacture and provide appropriate solutions of
the operational management (Bisson, Han and Han., 2016) . This report will also provide
recommendations in the end of this report and explain how TESLA can solve chain management
issue in the company. This all will be covers in this report and properly explain in this report.
MAIN BODY
Review of relevant operations, logistics and supply chain management theories
Supply chain management is the proper process by which supply chain activities are
manged by the TESLA to have an advantage over the company competitors as well increase the
value of the companies customers. This is important for the company and this help company
operation to run properly so it is impotent for the company to have proper and better supply
chain management (Christopher., 2016). Logistics is also a part of the supply chain of the
TESLA company, which is commonly known as transportation, and they have to pay
transportation charges, and they add this value in their product, so they can overcome from
these losses. There are some issues in the supply chain management which are quality customers
services, costing , risk management, supplier relationship and many more.
Supply chain plays important role in the company. They provide row material to the
company and company use this row material to make finished product. Without proper supply
chain management company cannot run their operation the market because for the operation they
need resources and sorceress company can get from the suppliers. Company have to look for
the quality row material in the low price, so they can make profit, and they can also provide
company product in affordable prices . It helps company to grow, and they can also provide
satisfaction to their customers.

The supply chain management of the TESLA company is centralized on the demands
and needs of the consumers. It is all about providing right product and right quality with the
affordable amount (Copacino., 2019). This all need TESLA in the perfect time, so they can
satisfy their customers. It might be seemed simple but it is not that simple it looks like.
Customers preferences are different and company always have to adjust their chain
management according their needs. It is impotent for the TESLA company to provide
customers unique design and solutions make a different entirely. It is impotent for Tesla to
follow new trends and provide better cars to the customers with good quality.
It has been analyzed that Tesla has been engaged in managing their supply chain. They
are involved in making effective utilization of resources, in order to create sustainability. This
has also supported organization in increasing their operational efficiency and productivity. This
aspect has firm in achieving their goals and objectives. They are also making sure to make use of
effective machinery in order to reduce complexity in manufacturing process which is being faced
by firm.
Supply chain management theory
In this theory the main focus is to provide products and services in less time and with
effective utilization of resources.. CEO of this company have acknowledge about the supply
chain management problems which have let this company to the delays in the production ,
busted deadline and missed quotas. Pas production problem of this company have sent the stock
price tumbling . In order to the mitigate the damages. Company has decided to take out some
color option from their cars. TESLA company was hopping that this strategy will work but
unfortunately it noting to solve the distribution issue that put production in the turmoil in the first
place.
It has been analyzed that company which are successful managing their supply chain
process, earns large amount of profit. There are various steps that needs to be followed by Tesla
in order to manage their chain of supply. This can support them in growing and achieving their
goals and objectives. Management of supply chain helps in lowering cost and increasing large
amount of profit. It also makes the production process better.
A vertical supply chain integration is where the company’s business owns as
much of the each steps in the supply chain as possible. TESLA is company who still strangling
with the consistent supplier , but when they have product more than 10K parts there is an

excessive number of the moving parts. For the less complex product s, first is the fact that this
company , contrary to conventional wisdom about the low cost labor manufacturing locations,
recently they are producing their cars in the California. This flies in the face of what people sees
in the ford planing, which is new 1.6 billion USD factory in the Mexico country and this
companies plans are less than the 17 miles (27.36 km) from their headquarter in the Palo Alto,
this is the place where they can find the best technicians in the world and this is the place where
they can find most expensive real estate.
Tesla is innovating the practices of the product shipping digitally rather than the shipping
physically. Having the designed the vehicle from the up to the ground as a hybrid of the digital
technology and mechanical technology (Dalgic and et.al., 2015). This company is positioned to
perpetually sell new capability to their old and existing customers. This technology not only
include information features such as GPS, gauges or entertainment system but also added
physical features such as breaking and speed.
Critically analytic discussion with example and also apply the appropriate solution of the
operational management.
Managing quantity
It is important for the TESLA company to maintain their product quality and provide
their customers the best quality cars and with better facilities. Company should use TQM which
can help TESLA to maintain the quality of their product. TQM technique can have good effect
on the employees and companies development by having focus on the management of the quality
and improvement continuously TESLA can establish the cultural values which will help them
to create long term process for the both company and their customers. This technique totally
focus on the quality of the product and it helps to identify the skill's deficiency in the workers of
the company (Fernie and Sparks., 2018). Along with the necessary education, training and
development of the employees or monitoring to address those deficiencies. With the focus on
the group work. TQM technique leads to the creation of the cross functional terms and sharing
of the proper knowledge. This will also help to increase the communication between the
employees and without flow of the communication organization cannot be successful in their
business.
There are many benefits of this techniques which can help TESLA main quality of their
product. One of the principles of TQM is that creation of products and services is done right the

first time. This means that products ship with fewer defects, which reduce product recalls, future
customer support overhead and product fixes. It will help TESLA to satisfy their customers
because their customers will get high quality product in less price and it will help them to grow
in the market (Grant, Trautrims and Wong., 2017). High quality product which meet the
customers demands result in the high customer's satisfaction . This will lead them to the high
shares in the market, and they can also gain competitive advantages in the market. TQM will
help TESLA as a result of the less defects in their products , they will save cost in the support
of the customers and replacement of their products and product fixed. The cost saving flow to the
bottom lines which will create higher revenue for the TESLA company. This technique will
develop and natural core values around the continues improvement and quality management in
the TESLA products. TQM mindset helps to prove all the aspects of the company, from hiring
to the internal process to the product development.
Just in time method & lean manufacturing
Just in time technique is an inventory strategy where the row materials are only receive
and order as they needed for the process of the production (Heizer, Render and Munson., 2017).
This method can help TESLA leaders to have full control on their inventory, and they can
overcome from the loss from the row material. Main aim of this method is to save the cost on
the overhead inventory expenses. This will help company to forecast the product demand for the
services and goods by using this just in time technique.
The just in time approach can be used by Tesla so that they can engaged in delivering the
products, goods and services on timely basis. This can support firm in creating the opportunities
for them. It will also support them in growing and objectives that needs to be achieved by them.
It will also help them in reaching out the position which they have thought of. It can also support
them in creating goodwill in market. When products goods and services are being deliver on
timely basis then this can help them in reaching heights.
There are many advantages of this method and one of them is inventory management.
TESLA can use this Technique to mange the inventory. Inventory management system is that
funds can be tied up in the cost of the inventory and it can use of any other operation in the
TESLA workplace . For example – TESLA can use this cost to develop their product, or they
can also use saving cost to provide training and development programs for the employees, so
they can improve their skills, and they can help TESLA to achieve their business objectives

(Prajogo, Oke and Olhager., 2016). Less waste and lower inventory cost result in the increment
of the companies revenue and their profit, and they can take competitive advantage in the market
and show their presence in the market.
There are some disadvantage from this method which can effect the TESLA. One of the
major disadvantage of this method is that it does not work in the every company. TESLA must
concede the potential variable in their process of manufacturing such as- inclement weather
delaying receipt of inventory materials, labor strikes or supply shortages-- TESLA have to
decide before implementing this method in their workplace because they can have a
disadvantage of this method.
Lean manufacture
Lean manufacturing is the process to minimize the waste from the manufacturing process
and most of the companies use this method because this help them to make better and quality
product for the customers in affordable price (Schönsleben., 2018). TESLA can use this process
to take competitive advantage, and they can help company to increase their growth in the car
manufacturing company. TESLA should implement this strategy because they are one of the
famous car manufacturing company, and they are having higher reputation in the market. They
use this to increase their growth better. This can help company to minimize the waste within the
production facility. This process will use all the resources of the company there will no waste
left for the company, and they can provide develop their cars and provide better quality cars in
less price range so middle cl;ass people also can afford TESLA company cars.
Tesla can build relationship with customers by using lean manufacturing. This
infrastructure means only dealing with the several elements such as supplies, building,
equipment and lobar to fulfill the near term inventory demands (Swink and et.al., 2017). They
can offer the low price product to the customers, and they can gain customers loyalty and it will
encourage them to invite their friends and family to buy cars from the TESAL company.
A lean infrastructure means only dealing with the same elements such as – supplies,
building, equipment, tools and labor to fulfill near term inventory demand . This lean
manufacturing does not waste any space within the TESLA operations and enable the facility to
come closer as this can be more effective productions of the cars.

RECOMMENDATIONS:
From the above study it can be said that supply chain and operation management plays an
important role. For making a business successful, it is important for them to implement several
approaches relevant to the operation management and supply chain. It can be suggested to the
company that should focus on customer and suppliers relationship management by providing
them excellent services' ad products. By implementing other theories of supply chain like
material logistic management, supply chain roadmap, it can manage inventory, flow of goods
and services and work in process inventory (Wang and et.al., 2016). It can also be suggested to
this company that it should make an effective use of six sigma approach which is called the best
approach for managing quality. By implementing this approach within its workplace, it can
eliminate defects and errors in manufacturing process and improve the quality of services and
products. It will help it out in increasing its sales by attracting wider range of customers. By
analysing inbound and outbound logistic and managing a balance between demand and supply of
logistic management, it can increase profits and reduce cost.
CONCLUSION
As per the report has taken TESLA company for the study and explained the operations,
logistics and supply chain management of the company and it has been also critically analyzed
the issue of the supply chain management and this has been cover the two areas for the
discussion and report has been chosen to manage quality TQM, JIT and learn to manufacture
and provide appropriate solutions of the operational management . This report has been also
provided recommendations in the end of this report and explain how TESLA can solve chain
management issue in the company. This all has been covered in this report and properly explain
in this report.
REFERENCES
Books and journal
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Dalgic, Y. and et.al., 2015. Advanced logistics planning for offshore wind farm operation and
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Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Grant, D. B., Trautrims, A. and Wong, C. Y., 2017. Sustainable logistics and supply chain
management: principles and practices for sustainable operations and management.
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Heizer, J., Render, B. and Munson, C., 2017. Operations management. Sustainability and Supply
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Schönsleben, P., 2018. Integral logistics management: operations and supply chain management
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Online
What Tesla Tells Us About the Data-Driven Supply Chain. 2019. [online]. Available through :
<https://www.manufacturing.net/supply-chain/news/13249670/what-tesla-tells-us-about-the-
datadriven-supply-chain>.
Tesla And The 21st Century Supply Chain. 2016. [online]. Available through :
<https://www.forbes.com/sites/kevinomarah/2016/04/07/tesla-and-the-21st-century-supply-
chain/#2fcfc4592584>.