Tesla’sSupply Chain
Contents01030204CURRENT STRATEGYCURRENT SUPPLY CHAIN STRUCTUREANALYSIS OF PROBLEMSSUPPLY CHAIN DRIVERS05RECOMMENDED SOLUTIONS
Contents01CURRENT STRATEGYCURRENT SUPPLY CHAIN STRUCTUREANALYSIS OF PROBLEMSSUPPLY CHAIN DRIVERSRECOMMENDED SOLUTIONS
01020304Competitive StrategyLuxury electric vehicles with the latest smart technologies and innovationsMiddle class consumers who are willing to pay a premiumConcerned about the environment, sustainability, and has interest and belief that EVs are the way of the futureConsumer base is primarily in the US, but there is a growing presence in both Europe and AsiaCustomer BackgroundProductCustomer ProfileLocationTo accelerate the world's transition to sustainable energy
ResponsiveEfficient Supply Chain Strategy●Introduction of lower priced alternative products●Multiple price cuts in price-sensitive markets●Online sales only and does not partner any retailers or dealerships●Construction of larger scale manufacturing and R&D sites (Gigafactories) on multiple continents●Aims to provide quick response, high service level and delivery to customers●Products are sold at a premium●Allows for detailed customisation of products●Modular parts shared across different product lines
Contents02CURRENT STRATEGYCURRENT SUPPLY CHAIN STRUCTUREANALYSIS OF PROBLEMSSUPPLY CHAIN DRIVERSRECOMMENDED SOLUTIONS
Supply ChainFeaturesDeep Vertical IntegrationNo partnerships with retailers/dealershipsRobust centralised information systemPlan to reduce reliance on suppliers and build most parts on siteEliminates middlemen to lower costs and exert greater control over supply chainInformation is readily shared across all Tesla-owned supply chain componentsSupply Chain Structure
Tesla’s Network DesignSuppliersFactoriesDC/WarehousesCustomersTesla-OwnedProduct FlowRecyclingPlantInformation FlowStorage at Distributor with Pickup/Carrier/Last Mile DeliveryCustomer Flow
Contents03CURRENT STRATEGYCURRENT SUPPLY CHAIN STRUCTUREANALYSIS OF PROBLEMSSUPPLY CHAIN DRIVERSRECOMMENDED SOLUTIONS
1. Tesla’s Facilities01Fremont,California02Giga Nevada03Giga New York04Giga Berlin05Giga Shanghai5 Factories On 3ContinentsGiga BerlinGiga Shanghai
Existing factoriesNew factory either in Texas or Oklahoma to serve eastern half of North AmericaNew factory in AsiaPlans to have a factory on every continent so that ●Cars can reach consumers faster ●Each facility could focus on meeting the legal criteria for fewer territories
● Produces batteries● Designed with a functional focus ●Large-scale factory to achieve economies of scale to minimize cost●Uses innovative manufacturing, reduction of waste, optimization of co-located processes ●Enables Tesla to make its vehicles more affordableGiga NevadaFocuses on Efficiency
Inventory turnover ratio ~ 6.1Relatively lowInventory to current assets ratio ~ 15%Relatively highHigher inventory needed for retail-based business model Retail-based business model less efficient in clearing st...
