OPERATIONS

MANAGEMENT OF

TESLA
 1.Fremont, California
WHERE ARE
Located in Fremont, California, the Tesla Factory, as it is known,
currently comprises 5.3 million sq ft of manufacturing and office
TESLA’S
space on 370 acres of land, but will almost double in size and create
thousands of new jobs in the coming years following the City of
FACTORIES Fremont’s approval of expansion plans.
Tesla purchased the facility in 2010 and extensively remodelled it,
BASED? adding skylights to provide workers with natural light and painting
the floors with white epoxy to create a clean work environment.
The first vehicle rolled off the production line in June 2012, the Mode
S — a seven-seat family saloon.
By the end of this year, Tesla plans to have 500,000 cars coming out
of the factory and to fully automate its manufacturing system to
make this happen, having already increased the production rate at
the Fremont factory by 400% since its launch.
 2.Shanghai, China
WHERE ARE
Tesla signed a cooperative agreement with the Shanghai municipal
government on 10 July 2018 to build a gigafactory in the biggest electric
TESLA’S
vehicle market in the world, China.
The factory currently produces the Tesla Model 3 and will also start to build
the Tesla Model Y, with deliveries of the latter expected from January 2021.
FACTORIES
The massive project reportedly received $5bn (£3.9bn) worth of investment.
The gigafactory Shanghai was temporarily shut down for about two weeks
BASED? on 29 January 2020 due to the COVID-19 pandemic affecting China at the
time. Production was restarted on 10 February.
Pre-pandemic production capacity at the Shanghai gigafactory was targeting
5,000 vehicles a week, with an annual capacity of more than 250,000 units
Production line capacity of Giga Shanghai is aimed at 5,000 cars per week,
and if achieved and sustained could result in an annual capacity of more
than 250,000 vehicles
In light of the ongoing trade war between the US and China, building a
factory in the Far East will help Musk avoid hefty tariffs on certain materials
required to produce electric vehicles.
 3. Reno, Nevada
WHERE ARE
Tesla broke ground for its Nevada-based factory in June 2014 but does not
yet have a completion date for what the company expects to be the largest
TESLA’S
building in the world by footprint at 5.8 million sq ft – the same as 101
American football fields.
Part of it is already operational, however, and serves to provide battery cells
FACTORIES
and packs critical to vehicle production. In mid-2018, battery production at
Gigafactory 1 achieved an annualised rate of about 20 GWh, making it the
BASED? highest-volume battery plant in the world.
To balance the rapid evolution of tech and the comparatively slow
construction of the gigafactory, the production line is being made as flexible
as possible to cope with changes in battery technology and architecture.
 4. Berlin Europe
WHERE ARE
Tesla boss Elon Musk announced on 12 November, 2019, that the firm had
chosen the German city of Berlin as the location for its European
TESLA’S
gigafactory.
Reports from the local environmental agency in January, 2020, suggest the
plant will begin operations in July 2021.
FACTORIES
The Berlin gigafactory is expected to produce batteries, battery packs and
seats, along with drivetrain assembly. It is also expected to be employed in
BASED? the final assembly of both Model 3 and Model Y EVs, along with other future
models.
Analysts have predicted it could boost Europe’s battery market to about
250bn euros by 2025.
FACILITY

LAYOUT

Facility layout is an arrangement of different aspects of manufacturing in an

appropriate manner as to achieve desired production results. Facility layout
considers available space, final product, safety of users and facility and convenience
of operations.
GENERAL

ASSEMBLY

GENERAL ASSEMBLY IS WHERE THE PAINTED BODY OF THE CAR COMES TO GET ALL THE FUN STUFF THAT

HUMANS ACTUALLY INTERACT WITH. THAT INCLUDES THE WIRING, CARPET, DASH, MONITOR, CENTER

CONSOLE, SEATS, AND THE LIKE. HUNDREDS OF PARTS AND SUB-ASSEMBLIES ARE BOLTED ONTO AND INTO

THE VEHICLES AS THEY MOVE DOWN A LINEAR PRODUCTION LINE THAT HAS BEEN SELECTIVELY AUTOMATED

TO ELIMINATE ERGONOMICALLY INCORRECT TASKS AND THE NEED TO LIFT HEAVY OR AWKWARD PARTS, OR

SIMPLY TO SPEED UP THE PROCESS.

 Agile Manufacturing In Real Life

THIS FLEXIBILITY AND AGILE DESIGN METHODOLOGY IS COMMON

TO HEAR ABOUT IN JUST ABOUT ANY COMPANY WITH AN IT
DEPARTMENT, BUT TO SEE IT PLAYING OUT AND ACTUALLY,
MOSTLY WORKING IN A MANUFACTURING PLANT IS UNHEARD OF
OUTSIDE OF TESLA. AGAIN, PEOPLE TALK ABOUT WHAT THEY CALL
IN THE INDUSTRY “EXTREME MANUFACTURING,” BUT COMING
FROM NEARLY TWO DECADES IN TRADITIONAL MANUFACTURING
WITH 5 YEARS IN APPLIED IT, ACTUALLY SEEING IT FUNCTIONING
IN THE REAL WORLD WAS IMPRESSIVE.
TESLA BUSINESS MODEL CANVAS
4. Key Activities of Tesla

R&D
R&D helped Tesla attain its milestones by providing breakthrough technologies and innovational designs
that were in association with the engine design of Tesla vehicles.
Design
Tesla’s innovative design helped to produce reliable electric plug-in cars made affordable for all.
Modern design that includes lightweight body, durable and long-lasting battery life
Designs range from small, to classy, to luxurious classes – there is a vehicle type for every customer segment
at different price points.
Innovational Leap
Tesla continues to work around the building blocks of Tesla vehicles to better improve and sufficiently
design vehicles that are built with eco-friendly materials, ensure future sustainability and invoke reliability of
its line of manufacturers.
Software Development
One of the most crucial movements for Tesla was its dedication towards the vital software programs that
helped shaped the electric vehicle industry to what it is today.
Tesla does not follow the long development software product lifecycles that many automotive specialists
follow; instead, Tesla worked around these hurdles to create diverse software programs that improved the
sufficiency of each of their model make series.
Tesla’s inventory basically consists of the following components:
1. Raw materials
2. Work in progress
3. Finished goods
4. Service parts

Finished goods is the largest component among all the inventories. Basically, finished goods is made up of the
following items:
1. Vehicles in transit to fulfill customer orders
2. New vehicles available for immediate sale at retail and service centers
3. Used Tesla vehicles
4. Energy storage products
The rest of the inventory components are pretty much self-explanatory. The service part is actually part of the
finished goods and Tesla has a separate section for this part of the inventory.
Tesla writes down inventory for any excess or obsolete inventories or when the company believes that the net
realizable value of inventories is less than the carrying value. The impact of the inventory write-down will be in
the cost of revenues as stated in its financial reports.
I would pay particular attention to the “Finished Goods” inventory since it’s the largest component, accounting
for more than half of the total inventory and is closely related to sales revenue.
Certification
TESLA has implemented and certified the following
management systems:

Quality in accordance with DIN EN ISO 9001

Environmental in accordance with DIN EN ISO
14001
Health and Safety at Work in accordance with
ČSN ISO 45001
 Throughout the years, supply chain management
has grown to be a significant element of any
business to increase and maintain its
competitiveness and customer satisfaction. For
companies today, it is critical to be committed to
EVALUATION
the efficiency of the supply chain operation, as
well to develop and implement strategies for
OF TESLA'S improving efficiency and quality. An efficient and
optimized supply chain management plan can
make a world of a difference in any business,
SUPPLY CHAIN especially in the automobile industry. This is
especially true for Tesla Inc., an American
MANAGEMENT automotive company based in California, who
lacks the necessary relationship with its narrow
supplier base. As a result, Tesla would greatly
benefit from a more efficient supply chain to meet
production demands and yield expected profits.
Network Design
Typically, when selecting suppliers, third-party logistics (3PL) firms, distribution centers,
and retail stores, considerations are given to cost, location, quality and value, however,
Tesla has done business a little different without full success. While skipping traditional
manufacturing steps, Tesla designs, manufactures, sells and services their cars through
a vertically integrated supply chain. Tesla’s specialized supply chain focuses on
reconfiguring their Fremont Factory to integrate high levels of robotics automation into
various manufacturing processes. Tesla’s intense usage of automated robotics and
integrated supply chain is the major source value creation for Tesla. The vertically
integrated automation system allows for Tesla to incorporate the smaller and generally
outsourced subsystems into their own manufacturing process to allow for quicker
turnaround and shorter product improvement cycles. More importantly, it allows for
manufacturing flexibility, process control and increased supply chain coordination.
Meanwhile, Tesla’s outbound logistic include warehousing and distribution of their
vehicles after manufacturing and assembly operations.
1) Its accelerating the take-up of electric vehicles
Tesla's sales records have shown the potential for a thriving electric vehicle market. The iconic
Tesla Model S reached 10,030 sales in the first quarter of 2015, a year-on-year increase of
55%.
This new company record shows the popular potential for electric vehicles and the success
has been mirrored around the world in 2014 with 320,000 new electric vehicles registered
worldwide.
2) It doubled the capacity of the Powerwall
Tesla's Powerwall battery pack was hailed as a breakthrough for home renewable energy. The
battery was priced at $4,000 for the base model and aims to store energy for the home from
solar panels.
Even better was the announcement by Musk that Tesla would be doubling the power capacity
of the standard Powerwall at no extra cost. The battery's capacity would be doubled from
2.2kw to 5kw, claimed to be enough to power the entire house, unless the household are
using energy draining air conditioners.
The larger Powerpack system is expected to be deployed in Ireland as early as next as part of
a pilot scheme.
Thank you

Aditya vikram singh

MBA sem 2
sec A