Operations Management at Tesla: Strategic Decisions for High Productivity

Operations Management at Tesla, Tesla is an American electric vehicle and clean energy company. It was founded 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. Tesla addresses its objectives in a number of strategic decisions for optimal productivity in all areas of the automotive and maintain best practices to ensure streamlining, operational effectiveness and high productivity in the organization. Tesla’s global expansion plans depend on the success of these practices in optimizing productivity and overall performance. Some of Tesla’s strategic decisions are the following:

Design of Goods and Services

in this strategic decision area, operations managers focus on how the organization’s products influence costs, quality objectives and resources. It is notable that the company focuses on electric vehicles. In order to ensure productivity in manufacturing advanced electric vehicles, the company continuously innovates its products and supply chain systems.

Quality Management

Satisfying customers’ quality expectations is the main objective in this strategic decision area of operations management. Tesla Inc. addresses this strategic objective through regular quality checks, quality improvement initiatives, and research on the automotive/transportation and energy solutions market. In addition, the company continues to enhance its products and processes to satisfy high standards for quality and productivity. For example, Tesla’s operations managers regularly conduct quality reviews of, and implement enhancements to manufacturing processes. Moreover, in response to quality issues with suppliers of automobile parts, Elon Musk shifted the company toward manufacturing more of its own vehicle parts instead of sourcing from parts manufacturers. This shift increases managerial workload, but improves quality control and overall product quality.

Process and Capacity Design

This operations management decision area focuses on business processes, along with related investments, resources, and standards. Tesla, Inc. integrates automation for this concern. For example, the company automates manufacturing processes combined with human intervention. This condition helps Tesla achieve high productivity through operational efficiency in the automotive and energy solutions business.

Supply Chain Management

In this strategic decision area, operations managers focus on adequate supply and an effective and efficient supply chain. Tesla has a global supply chain aimed at supporting its manufacturing processes. For example, high productivity of the company’s manufacturing plants in the U.S. benefits from timely shipment of materials from overseas. Job

Design and Human Resources

Adequacy of effective human resources is the objective in this strategic decision area of operations management. Tesla, Inc. satisfies this objective through a competitive compensation strategy to attract effective and competent workers. This approach is especially important in the market, where many companies compete for high quality human resources.

1.Operations’ five performance objectives

Discuss any five of the performance objectives at Tesla.

2.New product development 

Without any new development, products and services can become obsolete, increasing the likelihood that customers may switch to competitor’s products. New product development can be categorized in three categories as seen in B207A course material. Discuss these three categories in relation to Tesla. Question

3: Porters five forces

One useful way of analyzing the nature of competition in an industry has been suggested by Porter’s ‘five forces model ‘of competition. Analyze Tesla’s five forces model.

4. Outsourcing

What is outsourcing? Discuss the advantages and disadvantages of outsourcing to Tesla in relation to the following statement: “In response to quality issues with suppliers of automobile parts, Elon Musk shifted the company toward manufacturing more of its own vehicle parts instead of sourcing from parts manufacturers.”