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Numerous companies are facing soaring demand for their products and need to implement certain changes in order to meet it. One of the typical examples is the automobile industry, as multiple companies which had long been betting on electric vehicles finally got a chance to prove their efficiency as a business. The demand has skyrocketed, and local producers are rapidly searching for new models which can allow them to ship substantial amounts of their goods and car components to regions where they do not currently have plants. Tesla and multiple Chinese electric vehicle manufacturers represent an excellent example of companies facing such a challenge.
Tesla has plants only in the US, a few European countries, and in Shanghai. It is clearly not enough given the rising popularity of the new type of vehicles. The company cannot afford to waste time on inefficient shipment routes. In a couple of years, numerous electric car producers will emerge all around the globe, and it will become much more challenging for an American company to penetrate some markets. Thus, shipping its vehicles and parts to Latin America, Eastern Europe, Asian countries, and cities across China is becoming central to the company’s future success. The Transportation Model described in “Business Analytics: Data Analysis & Decision Making” alongside other optimization models provide the best solutions. The tools which are illustrated by Albright and Winston (2016) can help any local car dealer, distributor, or car service to establish an efficient network that ensures consistent shipment of Tesla vehicles and car parts to a particular country. Cooperation with local businesses specializing in electric cars should become one of Tesla’s major objectives.
The company relies greatly on the timely shipment of its batteries, as they are a major component in its vehicles and, at the same time, represent the company’s competitive edge. Moreover, unlike cars with a combustion engine, electric vehicles rely greatly on infrastructure, which includes proper roads, charging stations, and care services. Therefore, Tesla’s management should focus on Transportation Model as the main tool of addressing all the numerous logistic issues that will arise if they want to replicate their success in the US and Norway.
References
Albright, S. C., & Winston, W. L. (2016). Business analytics: Data analysis & decision making (6th ed.). Cengage Learning.
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