Analysis of Information System Strategy at Tesla Motors

This report provides a comprehensive analysis of the information system (IS) strategy employed by Tesla Motors. It begins with a company profile, highlighting Tesla's innovative approach and technological advancements. The report then delves into the role of IS in various aspects of Tesla's operations, including data management, decision-making, organizational operations, supply chain enhancement, and inventory management. It examines how Tesla utilizes IS tools like CATIA, ICEM shape design, and ENOVIA V6 for data management, and its unique decision-making process based on Aristotle's principles. The report further explores Tesla's automation in manufacturing, its custom-built supply chain system, and its adoption of a just-in-time inventory model. An analysis of the findings reveals both the advantages and challenges associated with Tesla's reliance on IS, such as the need for upgraded data management tools due to increased production and the risks associated with over-automation and potential cyber-attacks. The report concludes with recommendations for improvement, emphasizing the need for contingency plans and enhanced cybersecurity measures to maintain Tesla's competitive edge. References are provided for further research and information.

Running Head: INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Name of the Student
Name of the University
Author Note

1INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Executive Summary:
The world is adopting IS system to achieve competitive advantage in their respective
industries. One of the organisation that has been successful in achieving competitive
advantage with assistance from IS is the Tesla Motors and the devised report has attempted at
evaluating the role of former. It has been evaluated that although, the IS has offered
competitive advantage to the deemed organisation, there have been circumstances where the
over-dependency of the organisation has offered setbacks. Evaluation the systems and the
success ratio of IS in the organisations potential solutions has been offered that can prevent
any further setback to the organisation.

2INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Table of Contents
Introduction:...............................................................................................................................3
Company’s Profile:....................................................................................................................3
Role of IS:..................................................................................................................................4
Data management:..................................................................................................................4
Decision-Making:...................................................................................................................5
Organisational Operations:.....................................................................................................5
Supply Chain enhancement:...................................................................................................6
Inventory management:..........................................................................................................6
Analysis:.....................................................................................................................................7
Conclusion:................................................................................................................................9
Recommendation:................................................................................................................10
References:...............................................................................................................................12

3INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Introduction:
Information systems (IS) since its introduction has revolutionised many sectors from
military to education to space missions. One of the sectors that have been greatly benefitted
from the introduction of the IS is the commercial industry that offers goods or services. The
reason for the above mentioned fact has its base upon the automation and the benefits it offers
to the organisations. Automation saves time, effort, capital and other organisational resources
invested in the delivering organisational products (Rüßmann et al. 2015). Hence, it becomes
mandatory to evaluate the fact on how does IS system in an organisation offers competitive
advantage. The deemed objective of the paper has been achieved by evaluating the most
innovative and technology dependent organisation, Tesla Motors Inc. The paper will
measure the role of IS and technology in the Tesla Motors Inc., and how it offers the subject
competitive advantage over other car makers. The findings will further be evaluated to
determine the challenges associated (if any). If any challenges are determined in the
evaluation than the paper will be concluded with possible solutions to those challenges. The
paper will also attempt at offering recommendations that may enhance the level of
competitive advantage that the subject enjoys.
Company’s Profile in the industry:
The subject of the report is Tesla Motors Inc., one of the most prominent leaders in
the energy car making industry. The American giant established in the year 2003, is known
for the innovative practices that it adopts towards the organisational operations. Tesla
believes in disruptive technologies over the existing business models (Rimmer 2014). The
business researchers and scholars have recently uncovered the long-term strategic plan of the
organisation after the launch of Tesla Model 3. The deemed organisation was strengthening

4INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
its capital resources and enhancing its quality in the automobile technology to earn a
competitive advantage in the car industry.
The stronghold position that Tesla is enjoying in the vehicle industry is due to its
innovative approach and the technological advancement. IS has played the most significant
role in the success that the organisation is enjoying, from electric batteries to cars based on
electric propulsion and challenging the major car makers. Elon Musk, the CEO of the Tesla
Inc. for the technological advancements is dependent on the organisational employees and the
assistance from the sister organisations of Tesla (SpaceX and SolarCity) (Coglianese and
Lehr 2016). The section following offers an elaborate description of the role of IS in Tesla
Inc.’s competitive advancement.
Role of IS and technology in competitive business environment of Tesla:
IS gathers, stores and spread data on organisational operations and environment to
assist in analysis, control, visualisation and coordination (Nugawela 2013). However, the
most important role played by the IS in an organisational environment are storage and
processing of data, assistance in decision-making and sustaining smooth operations of the
organisational processes and in the process provides competitive advantage. Tesla has always
preferred disruptive policies and technologies to ensure sustainability of the organisation
which involves a vital role play of IS (Stringham, Miller and Clark 2015). The deemed
section will provide insight into the role of IS in different aspects of Tesla Motors Inc.
Data management:
Informational resources are the most significant organisational resources when taking
consideration of long-term sustainability and future of the organisation. Hence, protecting
and preserving the data should be one of the primary focus of the organisations. Tesla
understanding the need for data preservation have devised plans for management of the

5INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
organisational data. The subject of the paper achieves the deemed objective by equipping the
most suitable IS system in accordance with the job description. Just-in-time system to
manage the inventory and computerised data recording of the employee's details and their
productivity rate. The subject equips tools like CATIA for 3D modelling of the cars ICEM
shape design offers its assistance in the surface designing (Sanquist 2016). ENOVIA
V6(Version 6) is used to manage the collaborative data of the employees and the teams they
are associated with (Adeppa 2014). Other technological tools and systems are also equipped
with different data management processes. Hence, it can be stated that other organisations
who are willing to learn the data management process should take an insight of the Tesla’s
data management.
Decision-Making:
According to (Mejia 2017) the decisions making process of the subject of the paper is
based upon the principle offered by the great scholar, Aristotle. Based upon the principle, the
decisions makers at Tesla Motors take six steps before making a decision. The first step is to
ask a question of what is the requirement followed by gathering evidence to support the
outcomes of the first step. The evidence is gathered from the data management system
(DMS), customer relationship management (CRM) and other such relevant tools (Coglianese
and Lehr 2016). In the third step, based upon the evidence axioms are developed which are
drawn to the conclusion in the fourth step before attempting at dissing the derived conclusion
in the fifth step by use of probability tools and prototypes. In the final step, it is measured that
if, by any means, the decision can not invalidate the conclusion is accurate. The discussion
above shows that from data collection to probability development and verification, at each
step Tesla equips the use of technology to make a decision that is at the highest probability of
being right.

6INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Organisational Operations:
Organisational operations of the Tesla motors are entirely dependent on the
Information system (Model 2017). National Geographic Channel took an insight of the
operations inside the megafactory of the subject at Fremont, CA and it is evident from that
the subject uses the IS to its full potentiality. Tesla’s megafactory is home to the world’s
largest 3D printing press that they equip to design the body of the cars. Over 200 robots
capable of multi-tasking are used to automate the manufacturing process. The production
schedule of the employees at the factory is even computerised to maintain an in and off the
record along with the productivity rate. However, to maintain the environmental
sustainability the subject uses cycles to move within the factory, which is the only non-IS
operation inside the organisation.
Supply Chain enhancement:
Supply chain plays one of the most vital roles in the operations of an organisation, and
hence, it is mandatory to manage the same with appropriate care and in time. Information
systems are of great assistance in the deemed process and hence the subject of the paper
instead of buying a core system from the supply chain system giants such as Bosch and
Johnson Controls, they developed their own system (Zhu and He 2017). The decision was
taken as the subject has both the hardware and software capability to design their own
system. Additionally, they could not just buy a supply chain system as that of other
organisation because of the geographical distance between them and traditional suppliers
(Tsay 2014). Designing a supply-chain system that is specially designed for Tesla has proved
to be of great competitive advantage and it is proved by the fact that the suppliers have
started building their plants nearby of Tesla gigafactory (Teslacountry.com 2017).

7INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Inventory management:
Inventory plays a significant role in the manufacturing operations of an organisation.
In the automobile industry, the parts of the vehicle need to be oriented appropriately and
sufficient to avoid any undesired interruption in the manufacturing process, however, risks
are also associated with storing too many car components. To avoid, such circumstances and
maintain a balanced inventory Tesla has adopted just-in-time inventory model
(Forums.tesla.com 2018). An automated system maintains the requirement and supply of the
parts and car components. Adopting the deemed technology omits the hassle involved in the
inventory management and even improves the productivity of the organisation. In case of
Tesla, it prevents the extra human effort put in inventory management and uses that time in
productive activities (Perlman 2013).
Analysis of the findings:
The section above has cited the role of IS within the Tesla Motors Inc. in the deemed
section; attempts have been made to analysis of the facts that have been mentioned in the
above section. Based upon the analysis, the recommendations will be made for improvement
or enhancement in the Tesla’s organisational IS.
Data management of the Tesla Motors is one of the most and hence, they have cited
special focus to the deemed section. They have equipped necessary IS tools to be of
assistance in the managing the data. However, the deemed organisation has entered its phase
three, and now they have expanded their production by 100% (that is from 50,000 units to
500,000 units per year) (Wolfram and Lutsey 2016). Hence, the size of the data resource of
the deemed organisation has also increased which demands upgradation of the data
management tools. The organisation has already hit a setback by pushing back the deadline
date of the Model 3 by over a month (Tesla.com 2017). The reason stated for the same by the
CEO, Elon Musk of Tesla Motors is “We had to rewrite all of the software, from scratch. We

8INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
managed to write 20 to 30 man-years of software in 4 weeks.” (Gene 2017). The deemed
scenario cites the need for change that Tesla needs in their IS as tools for organisational
expansion.
It has been determined that the deemed organisation is dependent on the technology
for the production. It is evident from the fact that almost all of the organisational operations
are operated through automation. A video from the National Geographic Channel that
inspects the working of the Tesla Megafactory at Fremont suggests that the automation at
times pose a threat to the assigned deadline (Model 2017). The posed threats were due to the
failure of the automated robot systems. In the deemed scenario of the welding robot was not
accurate and it deviated from its designated path by approximately 5mm. The deviation was
very small, but it could have ruined the accuracy that the deemed organisation offers. The
time that was consumed in reprograming the robotic arms even threatened the deadline for
the delivery date. If Tesla motors had a contingency plan for such situations, the case would
have been different. Additionally, the death of the driver that was driving Tesla car using the
autopilot mode has also raised questions over the excessive dependence of the subject on the
IS (Yampolskiy and Spellchecker 2016). The computerised production schedule of the
organisation is of great assistance. However, it can pose a threat to the organisational
operations in case of cyber-attacks. Such scenarios have been evident in the past, first when
hackers hacked the Tesla Model S and second instant was when the deemed organisations’
cloud was hacked (Solon 2016). Hence, from the above-made discussion, it can be stated that
IS are hugely beneficial for the organisations. However, they also bring challenges for the
organisation.
The supply chain management of the deemed organisation has been appreciated
globally. The deemed organisation has developed their system for the management of the
supply chain and which is successful to an extent. However, after the announcement of the

9INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Tesla Model 3, the organisation's supply chain management has been troubled spot. Debord
(2017) of the Business Insider claims that the organisation’s decision to mass produce the
Model 3 is the reason for the deemed challenge. The organisations’ devised supply chain
management software is citing incapability in managing such a large paced and mass data
transaction. The system was devised to manage data and transaction of the inventory size of
limited numbers (Model S was only produced 50,000 units per year while Model 3 has plans
of 500,000 units). Additionally, a sudden surge in the requirements of the Tesla Motors has
also made it difficult for the suppliers to meet the demand. The primary issue has been
determined in the battery module assembling; it happened because one of the sub-contractor
backed off from the deal (Debord 2017). The deemed scenario leads the organisation to
rework on multiple operations from the scratch which was one of the reasons associated with
the delay in the delivery of the Model 3.
The Strategic Information System of the deemed organisation is well established and
is offering the organisation a competitive advantage in the vehicle industry. However, as
analysed in the above-discussed paragraph at times the organisation has suffered because of
its over-dependence on the information system. It is also visible from the discussion made
above that if the appropriate measures are not taken than the organisation may suffer in the
long run which may prove to a loophole in the competitive advantage of the organisation.
Hence, it can be stated that the IS system of the organisation has offered it competitive
advantage in the market. However, it has also shared some failure instances with the
organisation. The author after, reviewing and analysing the role of IS in the Tesla motors and
the problems that are associated with the same has offered potential recommendations that
may prove of great help in sustaining the competitive advantage that the organisation enjoys.

10INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Conclusion:
In conclusion, it can be stated that Tesla Motor’s information system is one of the
globally appreciated factors of the organisation. The reason behind the above-stated statement
lays on the vital role that the IS plays in the organisation. The subject systems offer its
assistance from the organisational operations to the data management. Additionally, the
system also enables the decision-makers of the organisation in making the decisions that are
vital for the organisation. The IS is also benefiting the supply chain management and the
inventory of the organisation. The reason for such a massive success of the IS of the Tesla
Motors is because the deemed organisation believes in disruptive technology and has
designed most of the system according to the organisational environment rather than just
buying it from tech giants. However, apart from such a strong IS system, the organisation had
faced some setbacks in the past which, if repeated can affect the competitive advantage that
the organisation enjoys. Hence, it is mandatory for the organisation to take immediate actions
and devise a contingency plan to tackle such situations if the need arises. The section
following can be of assistance in devising of the deemed contingency plan.
Recommendation:
Analysing the IS system of the Tesla Motors has revealed that the organisation is
enjoying competitive advantage in the electric car industry because of its innovative approach
and mass adoption of the IS. However, to attain competitive advantage from the non-green
energy cars the deemed organisation needs to enhance the organisational IS to next level. The
recommended solutions may assist the organisation to achieve the deemed objectives.
First, the organisation should increase its data storage capacity and determine
appropriate methods to keep it safe, to prevent the hacking instances that the organisation
already had faced. It can be achieved by equipping P2P (peer to peer) level of security, where
the cyber-attackers will have to cross multiple levels to hack the data. The organisation

11INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
should also develop systems to have multiple backups of the data to prevent any loss of data.
Another possible threat that has been analysed in the organisation is the failure of the
automated systems. In the deemed scenario, the organisation should have a contingency plan
which can be of great assistance. The contingency plan may involve, backup robots or
manual labouring of the skilled employee in the field where the system failed.
The supply-chain management of the Tesla Motors has also offered challenges to the
organisations. Hence, the organisations can increase their inventory size to keep additional
components to be used in dire situations, or they can have a backup contractor to fulfil the
demand. It is also mandatory to manage the inventory properly as the organisation has
increased its production rate (from 50,000 units per year to 500,000 units per year. Hence, the
IS system should be enhanced to handle such a mass surge, as the need for the organisations
goods are increasing, the company will expand itself too. Hence, it is advisable that the
organisation be ready for the change.

12INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
References:
Adeppa, A., 2014. Shivkumar biradar. 3D Modeling and virtual manufacturing of a machine
component using Catia V5 and Mastercam. History, 9(20), pp.6-13.
Coglianese, C. and Lehr, D., 2016. Regulating by robot: administrative decision making in
the machine-learning era. Geo. LJ, 105, p.1147.
Debord, M. 2017. Why Tesla's Model 3 production problems are troubling. [online] Business
Insider. Available at: https://www.businessinsider.in/Why-Teslas-Model-3-production-
problems-are-troubling/articleshow/61469723.cms [Accessed 17 Mar. 2018].
Forums.tesla.com. 2018. "Just in time" inventory | Tesla. [online] Available at:
https://forums.tesla.com/forum/forums/just-time-inventory [Accessed 12 Mar. 2018].
Gene 2017. Tesla updates Model 3 reservation holders with new delivery dates. [online]
TESLARATI.com. Available at: https://www.teslarati.com/tesla-model-3-estimated-delivery-
date/ [Accessed 14 Mar. 2018].
Mejia, Z. 2017. Elon Musk and Reed Hastings both used this mental strategy to grow their
billion-dollar businesses. [online] CNBC. Available at:
https://www.cnbc.com/2017/07/05/tesla-elon-musk-and-netflix-reed-hastings-use-this-
mental-strategy.html [Accessed 12 Mar. 2018].
Model, T. 2017. National geographic megafactories - Tesla. [online] YouTube. Available at:
https://www.youtube.com/watch?v=KA18tusTgE4 [Accessed 12 Mar. 2018].
Nugawela, S., 2013. Data warehousing model for integrating fragmented electronic health
records from disparate and heterogeneous clinical data stores (Doctoral dissertation,
Queensland University of Technology).

13INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Perlman, K. 2013. Forbes Welcome. [online] Forbes.com. Available at:
https://www.forbes.com/sites/johnkotter/2013/11/22/innovation-its-not-the-idea-its-what-
you-do-with-it/#44fe13c71458 [Accessed 12 Mar. 2018].
Rimmer, M., 2014. Tesla Motors: Intellectual property, open innovation, and the carbon
crisis.
Rüßmann, M., Lorenz, M., Gerbert, P., Waldner, M., Justus, J., Engel, P. and Harnisch, M.,
2015. Industry 4.0: The future of productivity and growth in manufacturing
industries. Boston Consulting Group, 9.
Sanquist, N., 2016. The transformation of CRE technology with the digital
workplace. Corporate Real Estate Journal, 5(3), pp.261-275.
Solon, O. 2016. Team of hackers take remote control of Tesla Model S from 12 miles away.
[online] the Guardian. Available at:
https://www.theguardian.com/technology/2016/sep/20/tesla-model-s-chinese-hack-remote-
control-brakes [Accessed 17 Mar. 2018].
Stringham, E.P., Miller, J.K. and Clark, J.R., 2015. Overcoming barriers to entry in an
established industry: Tesla Motors. California Management Review, 57(4), pp.85-103.
Tesla.com. 2017. Estimating Your Delivery Date. [online] Available at:
https://www.tesla.com/support/estimating-your-delivery-date [Accessed 14 Mar. 2018].
Teslacountry.com. 2017. PAKRI Smart Industrial City. [online] Available at:
http://teslacountry.com/ [Accessed 12 Mar. 2018].
Tsay, A.A., 2014. Designing and controlling the outsourced supply chain. Foundations and
Trends® in Technology, Information and Operations Management, 7(1–2), pp.1-160.

14INFORMATION SYSTEM STRATEGY OF TESLA MOTORS
Wolfram, P. and Lutsey, N., 2016. Electric vehicles: Literature review of technology costs
and carbon emissions. The International Council on Clean Transportation: Washington, DC,
USA, pp.1-23.
Yampolskiy, R.V. and Spellchecker, M.S., 2016. Artificial Intelligence Safety and
Cybersecurity: a Timeline of AI Failures. arXiv preprint arXiv:1610.07997.
Zhu, W. and He, Y., 2017. Green product design in supply chains under
competition. European Journal of Operational Research, 258(1), pp.165-180.