{"id":420,"date":"2018-02-27T13:09:26","date_gmt":"2018-02-27T18:09:26","guid":{"rendered":"http:\/\/blog.richmond.edu\/mgmt340-05\/?p=420"},"modified":"2018-02-27T13:09:26","modified_gmt":"2018-02-27T18:09:26","slug":"teslas-supply-chain-problems-and-potential-solutions","status":"publish","type":"post","link":"https:\/\/blog.richmond.edu\/mgmt340-05\/2018\/02\/27\/teslas-supply-chain-problems-and-potential-solutions\/","title":{"rendered":"Tesla’s Supply Chain Problems and Potential Solutions"},"content":{"rendered":"

Tesla\u2019s Supply Chain Issues<\/strong><\/p>\n

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One company right now that is increasing in popularity is Tesla. Their main claim-to-fame is their high-end, electric car feature and their newest improvements on self-driving cars. That being said, they have had many problems with their supply chain, potentially plaguing future success.<\/p>\n

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Personally, they are one of my favorite car companies and certainly my favorite of all the US car brands. They are a huge factor to the growing popularity of electronic cars. Electronic cars are the future, because they save a lot on gas and are eco-friendly. However, Tesla is still growing. Comparatively to other American car companies such as GM or Ford, they are still small. Therefore, they struggle with the necessary funding it requires to have adapting supply chains to meet demand. Unfortunately, they have missed many deadlines they promised they would meet. They report that they will have a certain amount of units (cars) done by certain dates and have fallen short a number of times. Furthermore, they are doing things like making their own batteries. They may be saving on the necessary tools it requires to make batteries, but is hurting them in the long-run.<\/p>\n

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According to the article attached at the bottom, Tesla\u2019s supply chain is still in the developmental stage. One would hope that a company as prominent as Tesla would be passed the developmental stage of supply chain processes. It is still a long way from being able to produce at the level it requires to be as rapidly growing as they are.<\/p>\n

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Another reason for these problems can be because of the fact that they are buying many of their supplies from one single source. According to the article, Tesla made a statement which says, ” \u2018While we obtain components from multiple sources whenever possible, similar to other automobile manufacturers, many of the components used in our vehicles are purchased by us from a single source,\u2019 the statement reads. \u2018To date, we have not qualified alternative sources for most of the single sourced components used in our vehicles and we generally do not maintain long-term agreements with our suppliers. While we believe that we may be able to establish alternate supply relationships and can obtain or engineer replacement components for our single source components, we may be unable to do so in the short term or at all at prices or costs that are favorable to us.\u2019” One clear problem seems to be that they often have short-term agreements with suppliers. If they can find a way to make long-term agreements, they can be able to establish continuity and consistency within their supply chain. As they grow, they can adjust with their suppliers accordingly. Also, the supplies required to develop these luxury cars are far too expensive for them.<\/p>\n

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Lastly, we must come back to their funding problem. According to the article, they are still not making profits. This is not a detrimental problem, as we can see many companies are not profitable in their growing years. For example, Amazon was not turning a profit until recently, after its conception in 1994. However, many investors are having a hard time pulling the trigger to help Tesla improve their supply chain, due to the scary fact that they are not yet a profitable company. Funding is their main problem because they will need a lot of it to be able to get the supplies for the production of the new Model 3, which is extremely costly. They will then need to sell a very high amount of those to pay back their suppliers, and, in turn, keep healthy relationships with those suppliers. Investors should hear them out; and listen to what they plan to do more efficiently within their supply chain processes to reduce costs and manage these constraints. Obviously, it is a risky investment for anyone considering Tesla, but every good financier knows that high risk can yield very high returns.<\/p>\n

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https:\/\/www.supplychaindive.com\/news\/case-study-how-tesla-changed-the-auto-industry\/517251\/<\/a><\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

Tesla\u2019s Supply Chain Issues \u00a0 One company right now that is increasing in popularity is Tesla. Their main claim-to-fame is<\/p>\n","protected":false},"author":3727,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","footnotes":""},"categories":[71878],"tags":[],"class_list":["post-420","post","type-post","status-publish","format-standard","hentry","category-manging-constraints-implementing-lean-systems-jit"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/posts\/420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/users\/3727"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/comments?post=420"}],"version-history":[{"count":0,"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/posts\/420\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/media?parent=420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/categories?post=420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.richmond.edu\/mgmt340-05\/wp-json\/wp\/v2\/tags?post=420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}