Operations and Supply Chain Management

Undergraduate
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Management
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The concept of supply chain management (SCM) was developed during late 1950’s but in the last 20 years actual proliferation of the concept being done by academicians and scholars (Nakano, 2009). Lambert (2006), Kim (2006) and Frohlich and Westbrook (2001) pointed out that…

Introduction

In order to develop functional background for further discussion, business activities of TESLA Motor will be briefed in the next section.
Tesla Motors, Inc is renowned automobile company that specializes in manufacturing electric vehicles (EV) and plug-in hybrid electric vehicles (PHEV) (Moran, 2013; International Energy Agency, 2013). The company was founded in the year 2003 and it is being headquartered at California, USA. Product portfolio of the company includes emission free electric vehicles, roadsters backed by electric mobility, electric power trains and cars run by solar electric technology (Teslamotors, 2014). In the last 5 years, Tesla Motors, Inc has established 31 stores across the world and more than 2,300 units Roadsters (Model S and Model X) of the company are being purchased by customers (Teslamotors, 2014). Moran (2013) identified integrated supply chain metrics as key success driver for Tesla Motors, Inc. In such context, information flow within the supply chain of the company can be described in the following manner.
It is evident from the above diagram, Tesla uses more centralized and self sufficient facility management techniques in order to avoid complexities regarding complexity of supply chain management regarding automobile manufacturing. Car parts are being purchased from Daimler and Toyota but most of the unique procurement needs are being met through internal facility management of Tesla Motors, Inc (Kelty, 2013). For example, infotainment system of Model S is being developed within the factories of Tesla. In order to avoid mark-ups and decrease operational costs, Tesla only outsources commodity items to suppliers such as power system, car parts, wheel, tire tubes and others (Hall, 2013). However, power distribution and high power electricity are being sourced from suppliers located in USA and Japan. ...
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