Analysis of Tesla Motors' Supply Chain Management Strategies

This report provides an analysis of Tesla Motors' supply chain management. It begins with an overview of Tesla, its products, and its commitment to sustainable practices. The report delves into key aspects of Tesla's supply chain, including its adoption of just-in-time inventory management, risk management strategies, and supply chain synchronization through its supplier portal. The report also highlights Tesla's agility and responsiveness in adapting to customer feedback. It examines the company's approach to supply chain risks, such as delivery delays, and emphasizes the importance of effective supplier relationships. The report concludes with recommendations for improving Tesla's supply chain management, including a focus on sustainability, CSR activities, and the implementation of ERP software. The analysis is supported by references to relevant academic and industry sources.

STRATEGIC SUPPLY
CHAIN MANAGEMENT
Tesla Motors

About Tesla Motors and its Supply
Chain
 A leading Automotive Manufacturer headquartered
in California, United States.
 Foundation Year: 2003
 Products: Electric cars, Power-pack batteries, Tesla
Powerwall, solar roof tiles and solar panels (Tesla,
2018).
 It has adopted effective supply chain processes like:
 Production System
 Inventory management
 Online distribution

Supply Chain Sustainability
 Supply chain sustainability is an important aspect
that influences company’s supply chain in context
of risk, environmental and wastage costs.
 It addresses social, environmental and legal sides
of supply chain (Jacobs, and Chase, 2013).
 Tesla Motors implements sustainable practices by
providing electric cars and use of renewable
energy.
 Just-in-Time: It reduces the wastage of raw
materials.

Supply Chain Risk Management
 Process to implement effective strategies to
manage different risks along the supply chain.
 Tesla faces different supply chain risks: Delay in
delivery, maintenance of long-term agreement
with suppliers (Korus, 2016).
 Tesla adopts below processes to handle supply
chain risks:
 Innovation and Efficiency in Supply Chain
Management
 Effective Relationship Management with
Suppliers
 Transparency in Supply Chain

Supply Chain
Synchronization
 Supply chain synchronization starts with
describing the roles and responsibilities
of suppliers and other related partners.
 Tesla Motors develops supply chain
synchronization through “The Tesla
Supplier Portal”.
 It enables different partners to share the
information about supplies (Nykvist, and
Nilsson, 2015).
 Policy of roles and responsibilities

Supply Chain Agility and
Responsiveness
 Agility refers to the capacity of a company to
produce and deliver great quality products
with shorter deadlines.
 Responsiveness is the ability of firm’s supply
chain to fulfill the changing needs of
customers.
 The supply chain of Tesla Motors is very much
responsive and agile (Muysinaliyev, &
Aktamov, 2014).
 It makes the changes in its products as per the
feedback and complaints of customers.

Recommendations
 Tesla Motors should use effective supply
chain strategies to improve its supply
chain management.
 Focus on people, environment and other
related factors.
 Focus on the sustainability.
 Investment on CSR activities
 Implementation of ERP software in its
process.

References
 Tesla. (2018) Model 3, Available from https://www.tesla.com/model3.
[Accessed on 31 May 2018].
 Muysinaliyev, A. & Aktamov, S., 2014. Supply chain management
concepts: literature review, Journal of Business and Management.
 Nykvist, B. and Nilsson, M. 2015, Rapidly falling costs of battery packs
for electric vehicles. Nature Climate Change, 5(4), pp.329-332.
 Jacobs, R. and Chase, R., 2013, Operations and supply chain
management, McGraw-Hill Higher Education.
 Klug, F. (2017). Analysing the interaction of supply chain
synchronisation and material flow stability. International Journal of
Logistics Research and Applications, 20(2), 181-199.
 Korus, S., 2016,
Tesla’s Production Efficiency: The Next Moving Assembly Line, Available
from https://ark-invest.com/research/tesla-production-efficiency.
[Accessed on 31 May 2018].