Understanding Operations, Logistics & Supply Chain Management in Tesla

This document provides an in-depth analysis of operations, logistics, and supply chain management in Tesla, focusing on the company's approach to managing quality and considering economic, environmental, and social factors. It explores the areas of operations, logistics, and supply chain management in Tesla for new products.

Understanding
Operations,
Logistics &
Supply Chain
Management

Table of Contents
Introduction..........................................................................................................................................3
Introduction to company – TESLA..................................................................................................3
Analyse all the areas of operations, logistics and supply chain management in Tesla for New
product.............................................................................................................................................4
Managing Quality............................................................................................................................5
Economic, Environmental and Social consideration approach of Tesla..........................................7
Recommendations............................................................................................................................7
CONCLUSION....................................................................................................................................8
REFERENCES.....................................................................................................................................9

Introduction
The operations, supply chain management are the major activities which are essential
functions for every single organisation. These are the functions which are helpful to management in
controlling and examining availability of material and the other services within business entity. The
operation management is the method under which management is accountable to transform the raw
material into finished goods by using designing and other processes in order to generate value to
manufactured product that may lead to have competitive edge within the marketplace and to render
profits to business. On the other side supply chain management is the procedure under which
movement takes place of material and goods, which are managed and controlled within a specific
process. Supply chain management involves planning, execution, control and a very effective
monitoring of all the related activities or distribution channels and they all these factors are meeting
customers’ demand. The logistics management is the procedure which undertakes assembling of
resources and required material so that to process that to make finished goods which is deliverable
to customers. All these are most essential tools of the company as they help them to manage
resources of company is efficient manner. (Agrawal, Singh and Murtaza, 2016)
Introduction to company – TESLA
TESLA is an American electric vehicle company which were founded in 2003 by Elon musk,
Marc Tarpernning, Martin Eberhard and Ian wright. In the current times Elon musk is the largest
shareholder of this company which is 21.7%. The company is having subsidiaries like Solarcity,
Tesla Grohmann automation, DeepScale and Hiber system. The managerial staffs of Tesla has
implemented effective instruments for appropriate management of logistics and supply chain as
well within the business.
Tesla is having vertical supply chain management for this they are having their operational plant in
California in which they are working to attain short term goals. Furthermore, they have started to
batteries in Nevada so as to meet demands of batteries in their cars. In order to control their
deliveries, Elon Musk has taken the ownership to choose integration sub-contractor system so as to
stay transparent about their supply chain. (Akakpo and et. al., 2019)
Tesla was facing mismanagement in their supply chain management, and to deal with this
problem the CEO Elon Musk is moving towards self-sufficiency and they are having mass
production in their factories so as to utilise all the input resources in an efficient manner.
The management of Tesla is utilising appropriate supply chain management along

with active expertise which are helping the company in continuous deliveries of their product on the
time along with superior quality. The main objective of Tesla is to establish smooth business
practices so as to apply strategically planning within business organisation. (Aoki and Katayama,
2017).
The management of Tesla is emphasised on managing so as to maintain quality of their
products and services in order to improvise overall processes. They are working in processes so this
assists them in enhancing safety parameters within their products and to enhance quality of their
products. In order to measure quality of their product, total quality management technique is used
by the business organisation.
Analyse all the areas of operations, logistics and supply chain management in Tesla for New
product.
One of the company in auto mobile sector is Tesla, they are emphasised on introducing new
and innovative product into market which is Tesla semi. It is a heavy duty truck. In the mid of 2020
Tesla is going to start its production as company has delayed its production. Company is willing to
manufacture 100000 electric trucks per year. Tesla is having partnership with another company
which is manufacturing trucks body for Tesla. The market is crucial as of current scenario for
introducing new product as the market is highly fluctuating in demands.
Operations Management: Tesla is emphasised on their overall development of their
mechanism for that they are using several operation management tools within their business.
Manager of Tesla is trying to optimise the usage of their procured resources so as to provide best
quality product to their customer and to enhance value of company.
The operational manager of Tesla is focused on numerous concepts and actions and areas of
operation management such as inventory management as in stock of glass, iron and tyres, supply
chain design as in transportation, storage of goods as in stock rooms, quality management,
conversion of raw material into finished goods as in cars and trucks, capacity planning and so forth
so as to manage and examine all areas of their new product which is Tesla semi. (Asgari and et. al.,
2016)
Manager of Tesla is adopting various practices as in operation management in order to
examine the operational area for this they are using total quality management technique, just in time
methodology, Kaizen and many forth. The inventory management and capacity planning, the
manager is having role to ensure that all the material is used with a minimum wastage and
throughout the process quality is maintained and its peak.
Logistic management: The manager of Tesla is focusing on areas of logistic management

as this is the most important function through which products are supplied to customers in a
sequential and efficient manner. Inventory planning and their management is the major areas of
logistic management along with this the logistic management is focused to manage transportation,
customer services and logistic packaging which is the aspect through which goods or product are
delivered to customers. (Christopher, 2016)
Tesla is using environmental packaging material so as to pack their cars or trucks as in the
transportation. They are up keeping their stocks in warehouses until the product is not ordered by
customer for sale purpose. The manager is focused to take effective decision regarding size,
location and other aspect so as to design the warehouse in such a manner that it is convenient for the
business and customer as well. In the process of logistic management the decision of warehouse
plays a vital role and helps to store products in considerable manner.
Supply chain management: The manager of Tesla is focused on management of
supply chain management along with operation and logistics management. Supply chain
management includes product designing which is decision about size and design, purchasing of raw
material which is for the purpose to make finished goods for sale purpose, inventory management
which is to managing raw material and finished goods stock, demand forecasting which is to
forecast demand for product in the marketplace and lastly customer and supplier relationship which
is to have good and friendly relationship with clients and customers.
Managing Quality
TQM is a continuous process which is examining and inspecting the processes and help the
business to eliminate errors and reduce amount of wastages. This process is adopted within various
functions such as in production, supply chain management and many more areas. TQM is adopted
to enhance quality of the final product and to introduce continuous improvement in production
process. TQM is a tool which is used by businesses so as to ensure that all the employees are
focused to enhance working culture within business organisation, business processes, system and
their management so as to attain business goals and to achieve business sustainability. (Govindan
and Bouzon, 2018)
TQM is having various theories which is helping the businesses and guiding them in the
process of adopting of TQM practices. These theories includes Crosby’s Theory,Joseph Juran’s,
Deming’s theory and many more Some of the theories are explained as under:
Joseph Juran’s Theory: This theory states that the resultant output is known as Trilogy under
which plans for quality improvement and their control takes place. When the quality is required to
improve in an effective manner then proper actions are required to be taken in a considerable

manner. If the operation manager of Tesla has used these theories in an effective manner then this
will improve the overall quality of business which will give them high productiveness and
profitability. (Guo and et. al., 2017)
In order to improvise the quality, Juran has undertaken ten steps which are menetioned as
below.
In the first step, needs are analysed and then examination of awareness for opportunities are
performed. In the second stage, goals are determined and their improvements are adapted so as to
attain business goals. In the fourth stage, training is provided. In the fifth step, project is started. In
the sixth stage, monitoring takes place of the initiated project. Under seventh stage, performance is
recorded and report is created in ninth stage. At last in tenth stage feedback is taken and required
changes are introduced.
Ishikawa’s Theory: This theory was propounded by Dr. Kaoru Ishikawa, the theory was
propounded as in favour of companies in order to make them capable of handling their quality
within their products. If the operation manager of Tesla is considering the tools and techniques of
this theory then this will render tremendous benefits to the performance of the company and to their
customer and their perception towards company. This theory helps the business in analysing needs
of customers and accordingly deal with those needs. On the other side this is having several
negative benefits to the business so mangers are concerned about its utilization.
Ishikawa introduced seven tools as per threats and opportunities which a company
may have so as to provide improvements in their quality and business processes. Pareto analysis is
helpful for the business so as to recognise big issues within business and other problems which are
faced by the business during their processes. The other tool is cause and effect under which root
cause is taken out and then its effect is analysed. Next tool is stratification, this is emphasised on
analysis that the way in which resources and information are collected. Check sheets are a tool
which is the record in which the repetition of a particular issue is recorded. Histogram is a bar chart
in which variations are recorded. Scatter chart is a tool which is emphasised on maintaining relation
between several factors. The last tool of this theory is process control chart which is used to
determine variations on which company is required to focus. (Kovács and Kot, 2016)
Deming’s theory: This theory helps the business in recognising system knowledge which is
existed in the business which means PLAN DO CHECK ACT. This considers that total cost is equal
to output of work and the quality thereon. The theory deals with four major aspects which is
appreciation, variations, knowledge and information, understanding of the theory and psychology
experience. This gives negative impacts on business processes as this theory is not focusing on
overall importance. This is very essential for Tesla so as to have proper knowledge in their

operations manager so that quality of their products can be checked in an effective manner and
productiveness may have a positive impact. (Oettmeier and Hofmann, 2016)
Economic, Environmental and Social consideration approach of Tesla
Economic Factor: These factors include those economic factors or conditions which are
taken by Tesla in their working. This factor is having several approaches which may affect the
business such as inflation rate, interest rate. These are those factors which may affect Tesla in
attaining their business goals within stipulated time limit. These factors are having specific role for
the economy and for the business as well. When Tesla is focused on expansion, these are the factors
which is having significant role in their decision making. As if exchange rates are low then this may
affect the decision making of Tesla as they are planning to expand their business in that country.
Environmental Factor: Tesla is adopting numerous environmental elements in their
business such as weather, fluctuation in climate, environmental laws, waste recycling and many
more. As Tesla is engaged in manufacturing of electric cars so they are having their cars which may
deal with all type of weather. Furthermore they are using packing material which is recyclable and
doesn’t harm the environment. Along with this Tesla is a dedicated company which is following all
the rules of environment acts, this is giving them additional edge within the marketplace due to
which the company is having high society support. (Schönsleben, 2016)
Social Factor: In the terms of social factors Tesla is adopting various elements in their
business organisation which may give benefits to the business and the company. As these factors
includes culture, attitude of society and their preferences over the market demand which helps the
business in taking decision about their new product. As in scenario of Tesla the company has come
up with their new product which is trucks after seeing the market demand for goods transportation.
Further these factors includes living standard so to cop up with this factor Tesla has made their cars
laced with latest technology and highly efficient. These elements help the society to grow up as this
enable the company to hire skilled employees which will benefit the company in their goal
achievement and enhancing overall performance. On the other hand when rewards are provided to
the employee for their good deeds then this will boost their morale due to which socially the
company may stand at a better position.
Recommendations
As from the above analysis this can be suggested to Tesla that the operation manager is required to
examine the quality of each and every area within the business process. The activities such as sales,
purchase, logistics, operations, supply chain, marketing, finance and R&D is required to analyse on
a timely manner so as to improve overall performance of the business. It can be said that each and

every department within the company is emphasised on enhancing quality of their manufactured
cars and trucks. All the departments of the company is focused on increasing the quality so manager
is required to put their focus on continual improvement in their product so as to deliver quality
product to the customer. On the other hand, operation manager is required to used those operational
tools in an effective manner so as to gain highest quality and high productive processes in their
organisation (Van Goor and et. al., 2019). Along with this Tesla is recommended to focus on
political, technological factors so as to make their business efficient to the macro environmental
factors.
CONCLUSION
From the above discussion, it can be deduced that the manager of Tesla is highly
focused on logistics, operation and supply chain management in their business. They have launched
their new product in the marketplace which is Tesla semi which is highly innovative and emerged
with demands of customers. On the other hand the manager is focusing on improving quality of
their products so that the customer can stay up to date with technology. When the quality is superior
then it is easy for the business to position the product and for the customer it is easy to adapt that
product. So with the help of improving quality, the company is able to attract more numbers of
customers so as to gain business sustainability. Along with this the companies are required to stay
connected to social, economic and environmental factors so as to provide advantages to the
business. (Watson, 2018)

REFERENCES
Books and journals
Agrawal, S., Singh, R.K. and Murtaza, Q., 2016. Outsourcing decisions in reverse logistics:
Sustainable balanced scorecard and graph theoretic approach. Resources, Conservation and
Recycling, 108, pp.41-53.
Akakpo and et. al.,2019. Foresight, organization policies and management strategies in electric
vehicle technology advances at Tesla. In Futures Thinking and Organizational Policy (pp.
57-69). Palgrave Macmillan, Cham.
Aoki, R. and Katayama, H., 2017, July. Heijunka Operation Management of Agri-Products
Manufacturing by Yield Improvement and Cropping Policy. In International Conference on
Management Science and Engineering Management (pp. 1407-1416). Springer, Cham.
Asgari and et. al.., 2016. Supply chain management 1982–2015: a review. IMA Journal of
Management Mathematics. 27(3). pp.353-379.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Govindan, K. and Bouzon, M., 2018. From a literature review to a multi-perspective framework for
reverse logistics barriers and drivers. Journal of cleaner production, 187, pp.318-337.
Guo and et. al.,2017. A review on supply chain contracts in reverse logistics: Supply chain
structures and channel leaderships. Journal of Cleaner Production, 144, pp.387-402.
Kovács, G. and Kot, S., 2016. New logistics and production trends as the effect of global economy
changes. Polish Journal of Management Studies, 14.
Oettmeier, K. and Hofmann, E., 2016. Impact of additive manufacturing technology adoption on
supply chain management processes and components. Journal of Manufacturing
Technology Management.
Schönsleben, P., 2016. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Van Goor and et. al., 2019. European distribution and supply chain logistics. Routledge.
Watson, G.H., 2018. Theory and Practice of Profound Knowledge: An Inquiry Into Quality and
Strategy Management.