The Tesla Incorporation’s Supply Chain Analysis

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Table of Contents

Introduction
Discussion
Conclusion

Introduction

Tesla Incorporation is an automotive and Energy Company based in the USA. The company operates worldwide and has been thriving due to its robust supply chain management and warehousing. Tesla designs and manufactures solar panels and electric vehicles such as Tesla Roadstar, Model X, Cybertruck, Model Y, and Tesla Semi. Tesla Model Y is the latest and most purchased product. Tesla leverages technology in its supply chain, warehousing, and inventory management. The company receives its raw materials directly from the mines and has signed long-lasting agreements to obtain them at a lower price. Tesla’s key suppliers of raw materials are Ganfeng Lithium in China to supply lithium, Mozambique for nickel, and the Democratic Republic of Congo for cobalt.

Discussion

Tesla streamlines its operations using artificial intelligence, machine learning, and robotics to automate its production process. The introduction of robots in manufacturing increased precision and accuracy in producing goods. The industrial revolution in the company’s production sector is motivated by its robust research and development department, which constantly researches trends in production. As a result of continuous research, Tesla constantly changes its machines and techniques to include 3D printing, additive manufacturing, and big data, which makes production not only fast but also efficient. The company uses technology to revolutionize the production process.

Warehousing is an essential process in industries involving the storage of a physical inventory as it awaits distribution or sales. Tesla has invested heavily in warehousing facilities to ensure that the products are stored effectively before selling them. Tesla operates in four facilities worldwide, including three in the USA and one in China. The respective factories are annexed to a modern warehouse where all the products are stored under the required environmental conditions. The company has over 2,500 acres of land dedicated to modern warehouses for adequate storage. The company further entered into agreements with the Oaks logistics center near the Fremont factory to lease three warehouses. It is paramount to note that as a company’s production expands, the warehousing facilities must also be extended to increase its capacity. Tesla has leased about 1.3 million square feet of the warehouse, underscoring the importance of modern warehousing as production increases.

The company has an efficient inventory management system to ensure that all the products are recorded for accountability. Unlike the traditional ways of putting products into batches, the company uses a serialized system where each product is assigned a unique identification number which makes it special. Further, the inventory system uses the First in, First out (FIFO) system to ensure that the products that arrive fast in the warehouse are the ones that leave first for distribution. On the other hand, the products that arrive last at the warehouse are the last to leave. The inventory management system is advantageous because it ensures that products do not get spoiled due to overstaying at the warehouse.

Conclusion

Further, serialization makes it easy for the management to account for the effects and have the ability to warn the customer in case there is a shortage. Tesla has a custom-built inventory and supply chain management tool that uses intelligent systems for accuracy and efficiency.

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The Tesla Incorporation’s Supply Chain Analysis

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