Tesla Operations and Supply Chain Management Case Study

Introduction Understanding Operations, Logistics, And Supply Chain Management Assignment

Supply chain along with logistics as well as operation management is considered to be an important branch of any business management study. From a very long time all these three branches of business management are playing a major role in shaping the present and future working of any manufacturing in addition service sector industries. So, it can be clear from this discussion that the main topic selected for this research report is related to Supply chain along with logistics and operation management.

In general, the term supply chain can be defined as the administration of the movement of product and amenities comprising the overall technique that modify the unfinished products into end items among business as well as sites (Burgess, 2006). Also, logistics management is considered to be an important part of supply chain technique which helps in planning, implementing as well as controlling the effectual movement as well as stock of items in addition to administrations (Burgess, 2006). However, operation management can be defined as the arena of administration that is associated with planning as well as monitoring the techniques of manufacturing as well as replanning the business functioning in the manufacturing of item and administrations (Zadeh, 2012).

So, it is evident that one of the main reasons behind conducting this study is to shed light on the topic of operation, logistics and supply chain management of Tesla using various theories related to the concepts, in addition to that have to identify the issues in two of the selected segments for which proper recommendations will also be provided so as to deal with those issues.

The company that has been selected to do the research is one of the automobile companies named as Tesla. Tesla is usually identified as a USA based MNC whose main office is located in Austin Texas. The company founded by Elon Mask July 1, 2003. Tesla is one of the world's most important organizations and stays the world's most significant automaker with a market capitalization of more than US$840 billion. In 2021, the organization had the most overall deals of battery electric vehicles and module electric vehicles, catching 21% of the battery-electric (simply electric) market and 14% of the module market. Tesla company is also known for its swift supply chain and operation management which helps the company in ranking top among all other automobile giants.

But as the given study is focussed on to identify the issues related to operation, logistic and supply chain management the two theories which has been selected to be applied is stakeholder and institutional hypothesis. Also, two important areas that has been selected is related to Managing people in operation and supply chain JIT and LEAN. The potential areas for improvement that has been selected based on the issues identified are time management, delegation, organization, communication and engagement.

Review of relevant operation, Logistics, and supply chain management

Tesla has been operating as a lean JIT operation since the company's founding. However, they have been in a state of chaos and uncertainty, contributing to increased stress and anxiety levels among the management team. Tesla's current management strategy is based on the belief that there is a massive market for low-priced cars (Cooke, 2020). The company must develop a scalable, cost-efficient business model to support this market and be competitive. Tesla will then need to create the best products and manage people to support them with customer demands. In order to meet the production demands of the future, Tesla must develop a comprehensive product strategy and establish a lean management system.

Figure 1: Stakeholders Theory

Also Tesla will considered the approach of the ‘Stakeholder Theory’ following which the concept of the capitalism can be interconnected with the relationships among its business, suppliers, customers, investors, employees, and the communities who are considered as making stake in the organisation. In order to support this strategy, Tesla will need to manage the people who support it. This includes those working in manufacturing, sales, and management. Managing the human resources and supply chain management at Tesla will be a vital part of Tesla's success in the future (Cooke, 2020). In addition, because of Tesla's history of rapid growth, management will need to develop a comprehensive, formalized strategy to ensure that the company remains strong and lean and can support its growth into the future.

Process:

The process starts with identifying the critical success factors for the chosen operation and supply chain management. The company will also need to develop an operations plan based on the chosen operation and supply chain management (Cooke, 2020). Next, they will develop a plan for each department of Operations: Product, Logistics, and Finance. This will involve the development of a strategic plan for the chosen operation and supply chain management.

Figure 2: Institutional Theory

Tesla has been running a ‘Make and Break’ approach to inventory management. This approach has caused Tesla to be unable to respond quickly to customer demand, especially during the early growth phases (Cooke, 2020). As a result, Tesla will likely need to develop a more formalized approach to supply chain management. Also the process will be supported following the approach of the ‘Institutional Theory’. As per the concept of this theory the tendency of the concerned firm will lead the conformity with its predominant norms, societal influences and the traditions. In both the external and the internal environments, such approach will lead the homogeneity among the practices and the structure of Tesla.

Tesla's supply chain management model will require a combination of a more formalized approach to supply chain management (with a leaner approach) and the development of supply chain processes tailored to the unique nature of Tesla's production and supply system. Additionally, Tesla will need to have a strong relationship with its suppliers and find suppliers that can handle large-scale orders and meet Tesla's unique manufacturing requirements (Wang et al. 2021).

Critical discussion with relevant examples:

Toyota manufactures a range of products. They have identified success factors and have developed an operations plan. This plan has identified the three departments of operations. In practice, there is a certain amount of confusion among the management team and the workers regarding their understanding of the plan. This has led to confusion and a state of uncertainty. When executing the operations plan, there is a constant conflict between supply, demand, and production. This is affecting both the workers and the management team. There is also inconsistency between what is communicated to the workers and what is reported to the management team. This is why the operations plan needs to be reviewed to understand better what is happening in the workplace. In addition, the operations plan must be developed so the management team can effectively execute the plan. Finally, the operations plan must be understood and applied correctly. This will allow the company to act effectively and efficiently to run its business (Romero-Hernández et al. 2021).

Compared with Tesla, it is known for its strong management team, and many workers are involved in the company's operations. The workers are very active and willing to help out when asked. The management team is willing to listen and communicate with the workers. The company's culture is known as team-oriented and very focused on work. Tesla is also a meritocratic organization where workers are evaluated on a job-by-job basis (Wang et al. 2021). In general, Tesla's operations area to understand. However, there are several areas in which Tesla's operations are problematic. First, Tesla has several people who are challenging to manage. Many management team members need to understand how Tesla's system is supposed to be run, and they expect their workers to do things the same way they did when they were young. Many workers have experienced this type of confusion when working for the first time (Valentin, 2019). They can be tough to work with and do not understand that they are being held to a higher standard because of their experience. Second, the management team needs to support workers needing help learning and developing. Several workers feel that they are being judged on the success of their job instead of being given the ability to understand and improve. This lack of support from management leads to much confusion in the workplace.

Finally, the culture of the company is causing significant problems. Workers need to understand how things work, and they need to be more concerned about the company than they are with their interests. One of the workers, in particular, needs to be more focused on his job and less concerned about things going on in his personal life. This discussion has given us a good understanding of Tesla's operations. In order to ensure that their operations are effective, it is essential that the management team can understand how things are supposed to run. This can be easily accomplished if the workers understand the system (Romero-Hernández et al. 2021). The management team must also understand the importance of working with the workers. This is so that the workers can have a higher level of support. They should also communicate more with the workers (Bredenfeld et al. 2020). Finally, the management team must understand that workers are held to a higher standard because they have more experience. This is a crucial element of the operations plan and must be considered when setting expectations for the workers.

Solutions of Operations Management:

A successful operations plan will combine the chosen operation and supply chain management operations into a single practical plane (Lugtu, 2019). The plan needs to cover key elements such as:

• Understanding and implementing the operations plan
• Implementation of the operations plan and ensuring effectiveness.
• Development of a strategy for supply chain management (Romero-Hernández et al. 2021).

An operations management system must be implemented to create a single operations plan. This system must create a central database from which all relevant company information can be retrieved. This includes manufacturing records, financial records, and quality records (Bredenfeld et al. 2020). This is a critical element of any operations management strategy. Tesla must implement a management system that can be used for all three departments of operations:

Time management:

If an effective operations management system is not in place, it can lead to time loss in areas such as manufacturing and logistics. A management system can help ensure effective and efficient production. It can also ensure that all work goes smoothly and that problems do not hinder the processes.

In addition, an operations management system will be able to support workers who are new to the company. This will help them familiarize themselves with the system, which will help them adjust and develop. In Tesla's operations, workers must understand how things work and participate in the process. They should also be involved in every decision and action that happens in the company.

Delegation:

A high level of communication is essential to running the company effectively and efficiently. The workers and management team must communicate and provide regular feedback. Workers must also be able to make decisions independently. This must occur in manufacturing, purchasing, research, and development (Wang et al. 2021).

Communication

Communication is key to managing any business. A management system will help with communication and can be easily accessible to the management team and the workers. This is particularly true for companies that must communicate with many different teams (such as in Tesla's operations) because effective communication can help ensure that the right action is taken at the right time.

Leadership:

Effective leadership is necessary for running a business in any area. It will be necessary for Tesla to implement and use an operations management strategy that will ensure effective communication, planning, and implementation. This will be important to the company's success and to its ability to respond to customer demands in the future. Tesla, like other companies, has been a leader in many different aspects of business. This has been helpful to them in the past. In the future, they will need to do more than just lead in its operations. They will also need to focus on their logistics and supply chain management strategy. This must be developed to keep up with the growth of the company and to ensure that the company can fulfil customer demand.

Conclusion and Recommendations

The operation and supply chain management plan is key to the success of the chosen company. This plan will outline how the operations and supply chain management will be carried out. It is crucial that this plan is established and that the management team is made aware of its existence (Lugtu, 2019). By being aware of the plan, the management team can ensure that it is appropriately implemented and in place for all the different parts of the company. The operation and supply chain management system must be established and implemented effectively. This will allow the company to effectively and efficiently execute the chosen operation and supply chain management. This will result in a greater understanding of the selected operation and supply chain management and allow the company to act effectively and efficiently manage its operations. By clearly understanding the chosen operation and supply chain management, the management team will be able to develop a robust plan to support it. In order to create this plan, the operations management system must be implemented. This system will have a central database where all the necessary information regarding the company and the chosen operation and supply chain management can be retrieved. The plan will therefore be in a central place that can be accessed easily by all relevant parts of the company.

References:

• Bredenfeld, L., Cherubim, M., Kellermann, A.C., Lehmann, C., Malberg, S., Rafn, J., Kwon, Y. and Choi, S., 2020. Tesla Moving Forward. ???????, 38(1), pp.47-70.
• Cooke, P., 2020. Gigafactory logistics in space and time: Tesla’s fourth gigafactory and its rivals. Sustainability, 12(5), p.2044.
• Li, Y., Lin, J. and Xu, S., 2021, September. Analysis of Tesla’s Business Model: A Comparison with Toyota. In 2021 International Conference on Financial Management and Economic Transition (FMET 2021) (pp. 30-39). Atlantis Press.
• Lugtu Jr, R.C., 2019. Tesla: Testing a Business Model at its (R) Evolutionary Best (Doctoral dissertation, DE LA SALLE UNIVERSITY-MANILA).
• Romero-Hernández, O., Romero-Hernández, S. and Shivaani, M.V., 2021. A Supply Chain Selection Method for Early-Stage Companies Based on an Adapted Quality Function Deployment Optimization Approach. Operations and Supply Chain Management: An International Journal, 14(2), pp.133-147.
• Valentin, M., 2019. The Tesla Way: The disruptive strategies and models of Teslism. Kogan Page Publishers.
• Wang, Y., Qin, S. and Zhang, C., 2021. Tesla’s Supply Chain Vulnerabilities in the Chinese EV Market. Frontiers, 2(4).