SUPPLY CHAIN MANACEMENT OF TESLA

VIETNAM NATIONAL ƯNIVERSITY HO CHI MINH CITY ƯNIVERSITY OF ECONOMICS AND LAW -^^|ffl|^^— GROƯP OJECT UEL SUPPLY CHAIN MANACEMENT OF TESLA Group member: NGƯYỀN VĂN TRƯỜNG TRƯƠNG QUANG LONG HƯỲNH KIM NGÂN PHẠM LÊ HOÀNG KHÁNH PHẠM THỊ NGỌC VY K184081046 K184081113 K184081116 K184081106 K184081136 HO CHI MINH CITY, 5st May 2021 TABLE OF CONTENT Introduction Problem statement Esla, Inc is an American electric vehicle and clean energy company based in Palo Alto, California Tesla's current products include electric cars, battery energy storage from home to grid scale, solar panels and solar roof tiles, as well as other related products and services Tesla is ranked as the world's best-selling plug-in and battery electric passenger car manufacturer, with a market share of 16% of the plug-in segment (which includes hybrids) and 23% of the battery electric (purely electric) segment 2020 sales (Wikipedia) The success and growth of tesla have amazed the whole world There are many factors that lead Tesla to become the massive electric vehicle field, and its supply chain is one of them This paper would decode what's special about Tesla's supply chain which contributed to its spectacular success today Research question As stated above, the research question is how Tesla creates and manages its supply chain, how the company overcomes or prevents similar supply chain issues and still be a top player in their field Objectives The objective supply chain strategy of this report including islogistic tostrategy analyze Tesla fit, supply chain logistic analysis management, including analyzing supply the chain highlights network, the direction supply chain of sustainable operations, development and for integration Tesla supply At the by using same SWOT time, analysis also transport and giving íìeld some recommendations for Tesla tosupply be achain sustainable global leader inthe theit electrical Theoretical Basis Supply Chain management (SCM) Supply Chain management is the management of the flow of goods and serviies and iniludes ạll PIQiesses _ thát translorm „raw_- materials into Jinal _produits_.Jt „inyolves the aitive streamlining ofa Dusmess s supply-side aCflvmes to maXimize iustomer ValUe an' gaĩn a iompetitive advantage in the marketplaie (Supply Chain Management (SCM): What You Need to Know ,2021) Supply Chain network Typiially involved in long-term deiisions related to the number, type, loiation and iapaiity of faiilities (for example, produition plants and distribution ientres); the flow of raw material, intermediate and finished produits throughout a supply ihain; and a set of suppliers to seleit These deiisions are integrated beiause they impait upon eaih other Thtwor'sẩ®alpislecidian-eir^kerse(dete■rmismíceb(ast iatrcfiecan'!lỊnventosyiblelcfiupply> ihain demand Ultimately, an effeitive SCNet ireates effiiieniies, meets or exieeds iustomer demand, and provides the lowest iosts via an effiiient network (Supply Chain Management (SCM): What You Need to Know ,2021) Vertical integration Vertiial integration is a strategy whereby a iompany owns or iontrols its suppliers, distributors, or retail loiations to iontrol its value or supply ihain Vertiial integration benefits iompanies by allowing them to iontrol proiesses, reduie iosts and improve effiiieniies (Vertiial Integration ,2021) Just-in-time The just-in-time (JIT) inventory system is a management strategy that aligns raw-material orders from suppliers direitly with produition sihedules Companies employ this inventory strategy to inirease effiiieniy and deirease waste by reieiving goods only as they need them for the produition proiess, whiih reduies inventory iosts This method requires produiers to foreiast demand aiiurately ( What Is Just in Time? ,2020) Match Capacity Strategy The matih iapaiity strategy (traiking strategy) is the middle way between the Lead and Lag Strategies As opposed to signifiiantly boosting iapaiity aiiording to antiiipated or aitual inireases in demand, the Matih Strategy foiuses on little, iniremental adjustments to iapaiity ionditions in the market Although matcf demand strategỵ (trackỉngcapacity strategy) requires much more effort and is difficult to achieve, it is far more riskaverse than other capacity planning alternatives (Match Capacity Strategy ,2021) determined by shifting Lead Capacity Stratecy A lead capacity strategy (lead demand strategy) is a proactive approach which adds or subtracts capacity in expectation of future market demand Lead strategy is an aggressive strategỹ wiểfrtheeobae cii^digmproking tcosts?rAiftergèvcả^tyâoeasỂ^ ilecestsarei-y/ie^ne^n high inventory levels, however it can imply higher cycle stock costs Manufacturers like this strategy as it minimizes risk (Lead Capacity Strategy ,2021) Ansoff 's matrix The Ansoff Matrix, also called the Product/Market Expansion Grid, is a tool used by firms to analyze and plan their strategies for growth The matrix shows four strategies which are market penetration, product development, market development, diversiíìcation that can be used to help a firm grow and also analyzes the risk associated with each strategy ( Ansoff Matrix Overview, Strategies and Practical Examples ,2021) Z orterrs Hvễíorces Framework is a method for analysing competition of a business It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack thereoí) of an industry in terms of its proíitability An "unattractive" industry is one in which the effect of these five forces reduces overall proíitability The most unattractive industry would be one approaching "pure competition", in which available proíĩts for all firms are driven to normal profit levels ( Wikipedia ,2021) Chap 1: Company Overview About Tesla Tesla was íounded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric - that electric vehicles can be better, quicker and more fun to drive than gasoline cars Today, Tesla builds not only all-electric vehicles but also iníìnitely scalable clean energy generation and storage products Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better Launched in 2008, the Roadste r unveiled Tesla’s cutting-edge battery technology and electric powertrain From there, Tesla designed the world’s first ever premium all-electric sedan from the ground up - Model s - which has become the best car in its class in every category Combining safety, performance, and efficiency, Model s has reset the world’s expectations for the car of the 21st century with the longest range of any electric vehicle, over-the-air software updates that make it better over time, and a record 0-60 mph acceleration time of 2.28 seconds as measured by Motor Trend In 2015, Tesla expanded its product line with Model X, the safest, quickest and most capable sport utility vehicle in history that holds 5-star safety ratings across every category from the National Highway Traffic Safety Administration Completing CEO Elon Musk ”s ‘Secret Master Plan,” in 2016, Tesla introduced Model 3, a lfiiwêílriaetỉiehi«fb-ẳtotaffls i:ỉ^ii^1fric'laMfii^^^iclf‘iJvd^'g‘1n.^'a^;l'setlifi"-iwí?iìh7rsSoangnf!ỉ[rtoTsisa owners at least $200,000 over a million miles based on fuel costs alone In 2019, Tesla unveiled Model Y, a mid-size suv, with seating for up to seven, and Cybertruck, which will have better utility than a traditional truck and more performance than a sports car Tesla vehicles are produced at its factory in Fremont, California, and Gigafactory Shanghai To achieve our goal of having the safest factories in the world, Tesla is taking a proactive approach to safety, requiring production employees to participate in a multi-day training program before ever setting foot on the factory floor From there, Tesla continues to provide on-the-job training and track performance daily so that improvements can be made quickly The result is that Tesla’s safety rate continues to improve while production ramps To create an entire sustainable energy ecosystem, Tesla also manufactures a unique set of energy solutions, Powerwall, Powerpack and Solar Roof, enabling homeowners, businesses, and utilities to manage renewable energy generation, storage, and consumption Supporting Tesla’s automotive and energy products is Gigafactory - a facility designed to signiíìcantly reduce battery cell costs By bringing cell production in-house, Tesla manufactures batteries at the volumes required to meet production goals, while creating thousands of jobs Nmakẽ ipríHitìHtiííilỉgessrbiỉganMĩaHtT-abteutkỊ^mia-eiằmBistóa^pếablể, s s | s ‘uwsmằ■tJly iỊìcaỉt n!i n the advent of clean transport and clean energy production Electric cars, batteries, and renewable energy generation and storage already exist independently, but when combined, they become even more powerful - that’s the future of Tesla Chap 2: Analyzing the supply Chain strategy includỉng stratggy fit 1.1 Stratecy Fit and current Global Stratecy Tesla's new approach builds on its core competencies while still being attentive to both the external and internal climate With the Model appealing to the consumer market, Tesla is hoping to break into the mainstream, and rising environmental issues, government funding for renewable transportation, and rising oil prices will all help it (Lynch, 2015) 1.2 Tesla Strategic Analysis Tesla’s Intensive Strategies (Ansoff's matrix) Market Penetration (Primary Strategy): Tesla, Inc.'s new key intensive growth approach is market expansion By increasing advertising revenues in existing markets, this intense approach allows for business expansion For example, the company intends to roll out and sell more of its electric vehicles in the United States by aggressive promotions The company maximizes its prìts from the sectors in which it aĩready works in this manner This aggressive expansion campaign ties in with Tesla's overall strategy of gaining a strategic edge by expanded market share The company's sales prìts can be increased by vigorous campaigns, according to a corporate goal focused on this intense approach Product Development (Secondary Strategy): Tesla Inc.'s secondary intensive growth approach is product production The corporation expands through this intense approach by designing innovative goods that produce new revenue This approach is implemented by the corporation ,by : designing innovativet eoods with emerging technology that haye a rlow envưonmentar impact The group, Ior ’ẹxamp’lẹ, SỔĨĨS soĩar ^ne^ ana createa the Te^h! Roadster, the world's first fully electric sports car By concentrating on exclusive high-tech vehicles and associated goods that lure target buyers, this intense approach supports Tesla Inc.'s differentiation genẹric competitive strategy In this regard, one of the strategic goals of this aggressive growth policy is to ensure signiíicant investments in research and dẹvelopment (R&D) Market Development: Business expansion is a tertiary intensive growth technique used by Tesla, Inc This policy entails expanding into new countries in order to increase revenue and expand the global industry For example, by opening new offices and facilities around the globe, the organization steadily extends its market presence The business currently sells in just a few nations, but further international growth is planned in the future Tesla's mission and vision statements, which emphasize market leadership in the automobile industry and anpr•gyQhlhWO[ẹn farbIandpeffltẹtìon^drDtb^kẹ1isỊdUĩẹrìẹSfẹufẹntiat| i^artẹgẹllIẹ^itCliaỊCproaxrẹhẹlỉoìve market growth by making innovative goods that draw buyers Ẩ strategic goal of tsp Tesla Inc.'smarket growth intensive approach is to expand the company's global m business by forming partnerships with other businesses that make it easier to penetrate new markets Diversiíication: Diversiíìcation is used by Tesla, but only as a minor part of its intensive growth plan This intense approach aids the company's growth by alloWing it to start new businesses The company, for example, wants to develop new battery products for a range of non-automotive uses However, the company's íìnancial result is cuirently unaffected by this aggressive expansion policy To expand its automotive and energy solutions businesses, Tesla focuses much of its resources on market penetration and product growth To maximize the ghnngiesst>fatuc^ strWegyhiseSateslR&ĩowthnapngahAe)ểnncrơwhouỊ