5 page paper

Tesla has not put in place enough outlets and warehouses for its products meaning products need to arrive and get delivered. Delivery is made after orders have been placed which has been a model that has brought about challenges to the delivery logistics. For instance, when the Model 3 was delivered to Mexico for the first time, the model was launched at its Mexico City-Masaryk store which is not big enough for holding cars before the consumers can pick them up. In Europe as earlier noted, upon reaching the Zeebrugge port, the cars were to be picked up at the Tilburg facility which cannot hold enough cars that meet the demand (Randall & Halford, 2019). Since this company operates on a “Make to Order” business process, each Model 3 is custom-made. As a result, Tesla must deliver the exact car to the precise service center. If the service center does not have the capacity to meet the demand, a bottleneck will occur in the delivery process, until the customer comes to pick up the vehicle. Due to the limited capacity, the company is forced to utilize the model where deliveries are made when orders have been placed introducing challenges to the logistics management. They are managed depending on the external information being received.

On the other hand, as reiterated above, Tesla has been focusing on cutting down delivery costs hence has not been outsourcing enough truck capacity for its Model 3. If the truck capacity is outsourced based on the consumer orders and reservations, the company will be forced to incur a high cost of delivery which will impact the much needed profitability for growth. Tesla is expanding and strategizing on how to grow rapidly so as to meet the global demand for electric vehicles in the next few demands. Its growth is primarily based on its model of prioritizing profitability. This means that logistics management is goal-oriented where the cheaper approaches and methodologies are seen as effective on the part of the organization (Randall & Halford, 2019). However, it is worth noting that the model is bringing about numerous challenges in relation to meeting consumer demands and satisfaction.

Suggestions for Improvement

There are a number of measures and strategies that can be undertaken so as to effectively deliver car models in a timely manner. First, it is imperative that it expands its production line so that it can meet the ever-rising demand for cheaper electric cars. The best way of doing so entails establishing a few more production facilities in other regions such as Europe and Asia. The facilities should be strategic and in close proximity to the identified markets. Europe is seeing growth in demand for electric vehicles hence it should be a major priority. Even in the US, it can establish more facilities as a means of expanding the production line. This will call for a huge investment in setting up the facilities.

Additionally, Tesla needs to invest in establishing a supply chain especially across the US. Companies such as Amazon have realized success as a result of having a robust supply chain that is made up of an interconnected network of warehouses that are close to the identified markets. Tesla should also invest in establishing a network of warehouses across the country and internationally as a means of enabling a robust supply chain. It will get rid of the model where deliveries are made after orders have been placed. This calls for a major investment but can be done in phases hence Tesla does not need to invest a fortune at a go. The network will ensure that deliveries can be in much shorter times hence realize a high customer satisfaction level.

Further, when it comes to contract and partnerships with suppliers, it is imperative that the company reconsiders the nature of the terms of the contract. As earlier noted, there are deliveries that have been made with cracked and scratched windows which means that the damages occurred when on transit. It is the duty of the supplier to ensure that the car models do not suffer any damages as it is Tesla that is on the receiving end. More so, the company can outsource suppliers that offer better terms in terms of costs and delivery schedules in its objectives for lowering costs and enabling better services to its customers. In the long-run, the company can focus on creating its own trucking capacity in order to cut down the overall costs. Also, in doing so, it will attain easier management of inventory as it will not rely on input from other external actors. Finally, the company needs to upgrade its inventory management system so as to keep track of car models on transit and estimate the exact time the models will be delivered to the consumers. It has occasionally given consumers misleading information relating to delivery. This should not go on when there is an inventory management system that tracks all the models on transit hence provide the consumers with credible and reliable information regarding deliveries.

References

Boudette, N. E. (2018, November 18). What Tesla’s ‘Delivery Logistics Hell’ Is Like for Model 3 Buyers. Retrieved from The New York Times: https://www.nytimes.com/2018/11/15/business/tesla-model-3-buyers.html

Randall, T., & Halford, D. (2019, April 13). Tesla Model 3 Tracker . Retrieved from Bloomberg: https://www.bloomberg.com/graphics/2018-tesla-tracker/