Operations Management at Adidas 1

OPERATIONS AND SUPPLY CHAINS MANAGEMENT AT TESLA INC.

Student’s Name

Institutional Affiliation

Date
 Operations Management at Adidas 2

Table of Contents

Operations and Supply Chains Management at Tesla Inc...............................................................3

Introduction..................................................................................................................................3

Improvement of the Aspects of Operations and Supply Management.........................................4

Improving the Operations and Supply Chains (Triple Constraints).............................................6

Key Stages of Project Management.............................................................................................7

Planning the Project.....................................................................................................................9

Approaches in Measuring Project Outcomes.............................................................................10

Risks and Challenges Encountered............................................................................................10

Conclusion..................................................................................................................................11

References......................................................................................................................................13
 Operations Management at Adidas 3

Operations and Supply Chains Management at Tesla Inc.

Introduction
Tesla is one of the most talked-about and watched companies in the past decade.

According to Ahmad and Khan (2019, pp. 12-13), with their electric cars and solar roofs, Tesla is

transforming not only the automotive industry, but also energy generation. This article gives a

brief overview of their operations and supply chain management strategy to better understand

how they have come to be so successful through a combination of visionary innovation,

operational excellence, and vertical integration. It will highlight Tesla's Supply Chain

Management department with a focus on the company's main products: cars. In relation to the

overview, Tesla’s Supply Chain Management team manages all aspects of vehicle procurement

from design development to final delivery to customers (Todorovic et al., 2017, p. 2337). The

team is responsible for the development of production cells, which are the series of cars that are

produced in one line at one time. Hence, working closely with the Engineering Department and

Supply Chain, they organize production planning, allocate resources to cell production,

manufacture, and distribution. It is important to note that, Tesla’s Supply Chain Management

department is divided into the following departments: Automotive Demand Planning /

Forecasting (ADP), Vehicle Procurement / Acquisition (VPA), Vehicle Production Planning

(VPP), Vehicle Transport & Logistics (VTL), Inventory Control, Production Operations /

Logistics (P/L), and Vehicle Rework Operations / Warehousing (VRO). Moreover, Inventories /

Receiving Operations (IRO), Industrial Manufacturing Support & Operations (IMS/OPS),

Delivery & Service Operations (DSO) and Finance and Accounting Analysis, Support &

Management (FASM).

Therefore, the company performs business operations in the following categories:

production, procurement, distribution and financial management. Furthermore, Tesla's goal is to

 Operations Management at Adidas 4

keep the same level of operational excellence across all its manufacturing facilities, making it

easier for them to deliver better products, lower prices, and improve margins all while reducing

waste and increasing efficiency (Blanchard, 2021, pp. 15-23). Cross-functional teams are

essential to ensure this is achieved. One example is the Manufacturing Systems and Utilities

(M&U) team, which includes engineering, manufacturing, logistics, purchasing, quality

engineering and procurement. Their purpose is to provide systems solutions that maximize plant

efficiencies and optimize production resources by streamlining processes common to several

manufacturing facilities through standardization of data collection and centralization of decision-

making.

Improvement of the Aspects of Operations and Supply Management

Tesla is close to perfecting its assembly line and production scheduling with the

implementation of a new conveyor system. In addition, the company has plans to eliminate the

need for workers at the end of each assembly line by using robots. As a result, Tesla has reduced

production time from seven hours to three hours per vehicle. The new equipment will help Tesla

find more opportunities for automation and reduce its expenses per vehicle. Additionally, this

technology would greatly improve Tesla’s ability to increase its car production, which was an

industry-leading 100,000 units per year (Gawron, 2018, p. 3250). Moreover, it would also

improve Tesla’s bottom line by reducing production costs and its reliance on humans. However,

this improvement in production efficiency could create a number of problems. First, the

introduction of conveyor equipment caused some delays in Tesla’s assembly lines, as workers

had to convert from using pre-programmed equipment to using the new conveyor procedure

(Abdalrahman, 2021, p. 22). Second, the company would have to recoup any capital costs that it

has to invest in the replacement of its previous assembly line technology and equipment’s.
 Operations Management at Adidas 5

Additionally, companies are prone to various customer issues that can arise within the

supply chain. Tesla, however, is able to provide an attractive customer experience through the

early identification and fast rectification of these problems. In fact, Piper (2022, pp. 20-25) states

that Tesla is attempting to identify possible problems within its supply chain before they arise by

using a new technology called the “Critical to Quality” (CTQ) scanner. This device allows Tesla

to detect quality issues before its customers have even noticed them. It scans cars for defects in

paint color, seat belt buckles and door handles, among other things. As a result, if any issues are

detected in the car during production at Tesla’s factory, it can be fixed immediately before it goes

out for delivery to customers. Thus, Tesla is able to improve customer experience and ensure

customer satisfaction. Moreover, Tesla has simplified customer service by creating a separate

channel for it. For example, Tesla’s web site provides a spot where customers can view pictures

of the inside of their new vehicle and make changes if they are unhappy with the way it looks.

Overall, this process is seamless as Tesla allows customers to customize their vehicle by

selecting interior colors, exterior colors and different options for things like heated seats. This

reduces the time that customer service takes at Tesla as issues are identified earlier on in

production and rectified before delivery of the product. Thus, Dyer and others (2022, p. 172)

argues that Tesla has countered the need for state funding through its vertical integration strategy

from manufacturing to retailing through establishing itself as an international brand.

Improving the Operations and Supply Chains (Triple Constraints)

I would like to develop a process that simulates an operation and manufacturing

environment to deliver a robust plan for the improvement of Tesla's operations and supply chain

management. The inputs will come from an interview with Tesla's location general manager,

review of company documents, tax records, trade journals, and external search engine research. I

am going to use this information in order to craft a report with recommendations for improving
 Operations Management at Adidas 6

production at Tesla Motor Company locations worldwide. In order for this process to be

successful the Triple Constraints must be considered. Each of the Constraints must be balanced

to meet the required goal. Each of the Constraints must be considered when scheduling and

making decisions.

The first constraints are time. Since this is an academic project, the timeline will be set by

me. I will complete this project within the year, but that may change if unexpected obstacles

arise. The [more likely] second constraint is budget. The funds for this research are available to

me; however, there is no guarantee that funds can be obtained for my research. I estimate $5,000-

$10,000 USD to complete this project and analyze results; however, there are no limitations on

what can be accomplished with this budget or if more funding will be necessary in the future.

The third constraint is quality. In order to have a simulation that is realistic, the manufacturing

process must be approximated accurately. This includes dimensions and data of machined parts,

tolerances of measuring tools, material properties, weights and volumes of materials (Jafari et al,

2021, p. 109471). The software development must also be accurate so that the simulating

software outputs are realistic. This will require significant time and possibly money if quality

cannot be guaranteed.

Moreover, this is a simulation project not just a review or simple report on operations and

supply chain management at Tesla motors company. The results from this simulation will

generate recommendations on how to improve Tesla's operations and supply chain management.

The recommendations will be a set of strategies to reduce lead times, increase the level of quality

in manufacturing, and to reduce costs (Suri, 2020, pp. 450-490). I am going to make suggestions

based on the established processes at Tesla. This constitutes a simulation process. The intention
 Operations Management at Adidas 7

of my process is for it to be self-sustaining and produce actionable results with minimal

modification.

Key Stages of Project Management

According to Thomas and Maine (2019, p. 657), the Tesla Inc. project management

process is a top-down approach that begins with planning. The company has a long list of

documents and manuals that define the steps to create the final product. The company goes

through five stages: prepare, plan, execute, review/close, and improve. The company can be a

microcosm of the five stages of project management in general.

Prepare: When Tesla Inc. plans to create a new product, they have to select members

from the engineering and manufacturing teams that will work on this particular product (Forbes

& Schaefer, 2017, pp. 404-409). This step is critical because not only the personnel is selected,

but also detailed plans and procedures for manufacturing the product are updated and revised

which helps in preventing delays in production.

Plan: When all team members are assigned to a project, detailed plans are created for

manufacturing the product. They have a network of computers that track production from start to

finish. Tesla Inc. is able to produce a new product in a few months’ time. Certain products are

subject to delays, but those are the product that have been delayed long enough to take effort that

causes delays in the first place.

Execute: After creating and planning a new product, Tesla Inc. has its team of engineers

and manufacturing workers in charge of production. They set up the production line to make the

new items quickly without any failures or misaligned components. The company is able to

produce better products by using these effective methods such as Lean Manufacturing. These
 Operations Management at Adidas 8

methods are now implemented worldwide in most of the companies which makes Tesla Inc.

similar to a microcosm of Project Management.

Review/Close: At Tesla Inc., the review stage of Project Management is very important.

Reviews are conducted by various departments such as Finance, Manufacturing, Engineering,

and Marketing to make sure the product is up to standard and worth the cost. The company has a

team that reviews each new item every day before it is released to the public. This step helps

prevent defects from reaching customers and makes sure that employees are doing their jobs

effectively.

Improve: At Tesla Inc., they have several methods to ensure improvement in their

processes of making a new product. The company has continuous improvement meetings to

make sure that any defects or problems in their manufacturing process are fixed. If a new process

is created and an employee thinks it will improve the manufacturing of a product, Tesla Inc.

encourages him to share his idea and support him in his improvement. According to Kang and

others (2022, p. 30), The company also uses Lean Manufacturing methods to make sure they are

creating products efficiently and effectively.

Therefore, Tesla Inc. has a successful process that can be applied to any other company.

By using the model, companies can have more efficient and effective procedures such as

minimizing wastes and achieving total quality management.

Planning the Project

Stakeholder Management: This is used to manage all of the people who are directly

involved in a project. This tool consists of name address and phone number of each stakeholder

which will be used after Project Management has been completed. The company keeps a file of
 Operations Management at Adidas 9

all the stakeholders that are involved in a project and makes sure they have been properly

informed at each step in the project.

Risk Management: This is used to avoid risks during the planning, execution and review

phases of a project. A risk is any uncertainty or chance that can affect the success of a project.

There are four main aspects to risk management: assessing, controlling, monitoring and

responding to risks.

Work Breakdown Structure (WBS) – This tool will make it easier for Project Managers to

organize all tasks of a project in order for them to make sure the project is getting done on time.

Gantt Chart - These are the project management tools that record the events and tasks for

a project. The time will be adjusted for the expected duration of a project, but overall, these tools

are very important in planning a project (Mizuno, 2020, pp. 287- 290). The Gantt chart is very

similar with WBS, but it also includes dates and other information that are not in the WBS such

as risks, progress made on each task during a project or due dates for every activity.

Approaches in Measuring Project Outcomes

Requirements/Risks - This is a tool that helps specify the input and output areas of a

project. It allows one to identify the project requirements and evaluate risk associated with each

area. It also calculates timelines for each activity in order to determine the time needed from start

date to finish date for the project.

Presentation Software - This allows one to organize the goals and objectives for a

particular project in order for one to be able to describe them in an organized manner so that they

can be communicated effectively all around. The software can allow one to add details of various

aspects of the project such as each phase, due date, budgets, etc.
 Operations Management at Adidas 10

Decision Support Systems – This is used to make sure all information has been collected

and analyzed properly in order for one to identify the exact problems or risks that may be present

in a project. It also allows one to make decisions in order to improve or modify certain factors of

a project such as budgets, schedules or resources required.

Change Management Tools - This is another tool which is used during a project. The

tools include Communication plan which will detail how people will communicate with each

other on a daily basis and during different stages of a project. In addition, the Communication

plan will also detail how team members will communicate with management. The software is

also helpful in determining risks that may be present during a project which can be avoided by

changing certain activities and procedures.

Risks and Challenges Encountered

The major obstacles will be getting everything done within the specified time frame, and

being able to manage all of the activities that need to happen in order to complete the project.

Another challenge I may face is being misunderstood by others on what I am trying to

accomplish. This could lead to difficulties in communicating with my team members and

management regarding important tasks that need to be completed. Moreover, I may not be able to

communicate effectively with my stakeholders since they may not understand exactly what I am

trying to do. Thus, I may end up doing what I think is needed for the project, but it could be very

different than what my stakeholders need. In addition, the risks arising from these challenges will

include information that may not be accurate, insufficient budget, not being able to meet the

deadlines and not delivering the right product on time. Notably, the risks will affect my project

and thus, I need to make sure that they are assessed properly. In summary, the challenges and
 Operations Management at Adidas 11

risks of implementing the project plan will be the main obstacles that I need to overcome in order

for me to successfully implement this project.

Conclusion
Overall, the tools that I have identified and found to be useful in order for me to plan my

project are the task estimating tools, WBS and Gantt chart. These will allow me to complete my

project on time in a more efficient manner because they will allow me to plan my project more

accurately. Furthermore, these tools also help in measuring the progress of a project as well as

make sure everyone is on task at all times. In addition, they also allow one to easily identify

potential risks involved with a certain activity in order for one to come up with ways of

preventing or minimizing those risks. Moreover, the operations and supply chain management at

Tesla Inc. can benefit greatly from incorporating these tools into a project. In order to be able to

deliver the necessary amount of information, these tools will help in seamlessly communicating

throughout the whole organization. Thus, I have been able to effectively implement my project

plan without having too many problems along the way. I believe that I have been able to

effectively implement my project plan because I have used effective tools such as Gantt chart in

order for me to keep track of all my tasks as well as measure progress on my desired outcome. In

addition, organizing tasks into different phases and different projects will allow for more

efficient planning and thus, a higher likelihood of success.

 Operations Management at Adidas 12

References
Abdalrahman, M. and Brice, A., 2021. New era of automation in Scania’s manufacturing

systems. https://lup.lub.lu.se/luur/download?

func=downloadFile&recordOId=9053201&fileOId=9053226

Ahmad, S. and Khan, M., 2019. Tesla: Disruptor or Sustaining Innovator. Journal of Case

Research, 10(1). https://xim.edu.in/jcr/cases/Case02-June2019.pdf

 Operations Management at Adidas 13

Blanchard, D., 2021. Supply chain management best practices. John Wiley & Sons.

https://books.google.nl/books?

hl=en&lr=&id=KBYtEAAAQBAJ&oi=fnd&pg=PP1&dq=Furthermore,+Tesla

%27s+goal+is+to+keep+the+same+level+of+operational+excellence+across+all+its+ma

nufacturing+facilities,

+making+it+easier+for+them+to+deliver+better+products,&ots=eDVpFSfOoq&sig=RR

2ocuIpAQj2rMD1ZSMij6oJ-wo&redir_esc=y#v=onepage&q&f=false

Dyer, J.H., Godfrey, P., Jensen, R. and Bryce, D., 2021. Strategic management. John Wiley &

Sons. https://books.google.nl/books?

hl=en&lr=&id=mNw9EAAAQBAJ&oi=fnd&pg=PR3&dq=Tesla+has+countered+the+n

eed+for+state+funding+through+its+vertical+integration+strategy+from+manufacturing

+to+retailing+through+establishing+itself+as+an+international+brand&ots=tTg-

89IfRm&sig=2R1ZlIT22TJyrksgyc_tirboMbI&redir_esc=y#v=onepage&q&f=false

Forbes, H. and Schaefer, D., 2017. Social product development: the democratization of design,

manufacture and innovation. Procedia Cirp, 60, pp.404-409.

https://www.sciencedirect.com/science/article/pii/S2212827117301257

Gawron, J.H., Keoleian, G.A., De Kleine, R.D., Wallington, T.J. and Kim, H.C., 2018. Life cycle

assessment of connected and automated vehicles: sensing and computing subsystem and

vehicle level effects. Environmental science & technology, 52(5), pp.3249-3256.

https://pubs.acs.org/doi/abs/10.1021/acs.est.7b04576

Jafari, D., Vaneker, T.H. and Gibson, I., 2021. Wire and arc additive manufacturing:

Opportunities and challenges to control the quality and accuracy of manufactured parts.
 Operations Management at Adidas 14

Materials & Design, 202, p.109471.

https://www.sciencedirect.com/science/article/pii/S0264127521000241

Kang, C.K.T., Lin, C.Y. and Ho, Y.H., 2022. Key Factors to Increasing Free Cash Flow for

Manufacturers Utilizing Lean Production: An AHP-DEMATEL Approach. Information

Management and Business Review, 14(2 (I)), pp.28-45.

https://ojs.amhinternational.com/index.php/imbr/article/view/3335

Mizuno, S., 2020. Management for quality improvement: The seven new QC tools. Productivity

press. https://www.taylorfrancis.com/books/mono/10.4324/9781003070450/management-

quality-improvement-sigeru-mizuno

Piper, D., 2022. Financing the supply chain. Australia's Paydirt, 1(302), pp.20-25.

https://search.informit.org/doi/abs/10.3316/informit.325400542489522

Suri, R., 2020. Quick response manufacturing: a companywide approach to reducing lead times.

Productivity press.

https://www.taylorfrancis.com/books/mono/10.4324/9780367804909/quick-response-

manufacturing-rajan-suri

Thomas, V.J. and Maine, E., 2019. Market entry strategies for electric vehicle start-ups in the

automotive industry–Lessons from Tesla Motors. Journal of Cleaner Production, 235,

pp.653-663. https://www.sciencedirect.com/science/article/abs/pii/S0959652619322498

Todorovic, M., Simic, M. and Kumar, A., 2017. Managing transition to electrical and

autonomous vehicles. Procedia computer science, 112, pp.2335-2344.

https://www.sciencedirect.com/science/article/pii/S187705091731596X
Operations Management at Adidas 15