Seminar Work

Topic: Identification of WST and SCM, LEAN

principles in Supply chain of Tesla
NEXUS

14.06.2020

Name: Patel Nikhil, Raj Rahul, Phadtare Sumit, Raghuwanshi Deepesh

Contents

Introduction .................................................................................................................2

1 The Building Blocks of Supply Chain Managment..............................................4

1.1 Wholeness System Thinking (WST), Wholeness System Analysis (WSA) ..4
1.2 Supply Chain Management Principles ...........................................................5
1.3 Lean Principles ...............................................................................................8

2 Tesla solutions on WST, SCM Principles, Lean Principle and Susta ..............10
2.1 WST & WSA in Tesla ..................................................................................10
2.2 Supply Chain principles in Tesla ................................................................11
2.3 Lean principles in Tesla ..............................................................................16
2.4 Sustainability in Tesla .................................................................................19

3 Conclusion .........................................................................................................21

References................................................................................................................22

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List of abbreviations and symbols

WST Wholeness System Thinking

WSA Wholeness System Analysis

EV Electric Vehicle

HVAC Heating Ventilation and Air Condition

HEPA High Efficiency Particulate Air

Introduction
The supply chain consists of all the activities and process associated with the flow
of goods and information from the raw material stage to the end consumer of the
product/service. The integration of activities and processes among the members of
the supply chain is frequently referred to as Supply Chain Management (Handfield
and Nichols, 2003). The field of Supply Chain Management (SCM) was born to
manage the flow of information, products and service across a network of
customers, enterprises and supply chain partners. (Russel and Taylor, 2009)

Tesla, Inc. (formerly Tesla Motors, Inc.), is an American electric vehicle and clean
energy company based in Palo Alto, California.[9] The company specializes in
electric vehicle manufacturing, battery energy storage from home to grid scale and,
through its acquisition of SolarCity, solar panel and solar roof tile manufacturing.

(wiki - Tesla, Inc. (2020, June 14)).

Tesla has a very compelling and unique vision. At the core of the Tesla brand is
innovation. They are pushing forward the possibility of what an electric car and
transportation look like in the future. This is both inspiring and engaging to the public.
Being one of the leading industries when it comes to giving solutions in terms of
products such as Electric vehicles (V), batteries and solar systems. Although these
are separate product categories. But in combination they offer maximum efficiency
- and that is the future that we want.

It takes complete ownership of the supply chain by carefully picking and choosing
between conventional manufacturing practices and custom designing others that
are unique to its own product, in addition to ensuring good chemistry with its
suppliers. In addition, the company’s philosophy has centralised on optimising the

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consumer experience and bringing to market a product that people really want.
None of this, however, is possible without an incredibly sophisticated supply chain
system that simultaneously reflects Tesla's values (Ruoshan Tao, 2014).

Objective of Term Paper:

This term paper is written to explain the importance of the vital elements of Supply
chain management in a detailed way, and outlines the research and analysis on the
Automotive industry, Tesla Inc. The key elements of wholeness system thinking,
supply chain management principles, and lean principles has been explained with
the help of theoretical knowledge and has been supported by the solution and the
implementation of them in Tesla Inc.

Structure of Term Paper:

The structure of the Term Paper is as mentioned below:

1. Wholeness System Thinking

2. Supply Chain Principles:

3. Lean Principles

4. Sustainability

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1 The Building Blocks of Supply Chian Management (WST,
SCM Principles and Lean Principles)

In the present situation, companies must align themselves with the exciting
innovations emerging in the world of machines. Some people call these advanced
manufacturing and distribution technologies.

Organizations which lies in Automotive industry contribute to manufacturing and

production excellence in various ways, which includes quality, cost, and delivery to
their original equipment manufacturers (OEM), supplier and subsystem customer
base. Keeping focus on outcomes, a competitive supply chain not only assures the
on-time delivery of component material, but also the execution of inbound supply to
ensure the shipment of quality finished goods at a competitive price while delivering
on-target margins for the manufacturers.

To implement and make supply chain management more effective and efficient
organisation needs to adapt and following vital paraments in the structure of different
department of their management:

• Wholeness System Thinking and Wholeness System Analysis

• Supply Chain Management Principles

• Lean Principles

• Sustainability

1.1 Wholeness System Thinking

Wholeness System Thinking (WST) - The Wholeness System Thinking approach
identifies the new role of a system’s purpose, deriving the performance of the
selected system’s parts and interactions.

The purpose of the whole system is synthesised from the superior system
(representing the external environment) perspective through WS; it creates limits for
the performance of studied system parts and interactions; the purpose is analysed
by WA into the performance of the system’s parts and interactions.

The WST approach application in systems understanding and development consists

of three steps:

1. Identification of the studied and superior systems,

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2. WS of the studied system purpose in the superior system,

3. WA of the studied system purpose into the studied system parts and interactions.

Systems thinking consists of analysis and synthesis. Analysis focuses on structure.

It reveals how things work. Synthesis focuses on function which reveals why things
operate as they do. It does not mean that synthesis is more valuable than analysis.
It means that they are complementary. Analysis investigates the system; synthesis
looks outward to consider the systems environment. Both views assessing the
system’s understanding and development have the same importance.

1.2 Supply Chain Management Principles

Principle 1: Integration

There are two types of Integration which organization uses: Horizontal Integration
and Vertical Integration.

Horizontal integration refers to the expansion strategy adopted by the corporations

which involves acquisition of one company by another company where both the
companies are in the same business line and at same value chain supply level.

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Vertical integration refers to the expansion strategy adopted by the corporations
where one company acquire another company who is at the different level, usually
at the lower level of its value chain supply process. (See WallStreetMojo (2020))

Principle 2: Management of Process:

Management of Processes covers the aspects of the processes designed and exist
according to the Organization purpose and aligns with its supply chain management
(David Holman, Hochschule Hof (2020))

Value chain model includes the entire range of activities from the procurement of
raw material to the production, marketing, sales, and after-sales service. Analysing
the value chain and optimizing it helps achieve superior results. The value chain
includes two kinds of activities — primary activities and support activities.

Principle 3: Value Added Processes

There are two types of value-added process:

Production VA processes (PVA): This includes the transformation of physical and

nonphysical production resources into final product or service, which is customer
willing to pay for.

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Logistics VA processes (LVA): This includes optimal availability of physical and
nonphysical resources in the whole supply chain from withdrawing of raw material
to delivery to final customer.

Principle 4: Push and Pull Principle

Pull Supply Chain – Under pull supply chain, the process of manufacturing and
supplying is driven by actual customer demand. In this type of supply chain logistics,
inventory is acquired on a need-basis. Push Supply Chain – Under push supply
chain, the logistics are driven by long-term projections of customer demand. This
type of planning becomes valuable to companies as it helps plan them for events in
the future and be prepared (see Sharma, T. (1970, June 18)).

Principle 5: Bullwhip Effect:

The bullwhip effect is a supply chain phenomenon describing how small fluctuations
in demand at the retail level can cause progressively larger fluctuations in demand
at the wholesale, distributor, manufacturer and raw material supplier levels or vice
versa.

Principle 6: Decoupling point (Push-pull point)

"Push type" means Make to Stock in which the production is not based on actual
demand. "Pull type" means Make to Order in which the production is based on actual
demand. In supply chain management, it is important to carry out processes halfway
between push type and pull type or by a combination of push type and pull type.

Decoupling point or Push-pull point or order penetration point is the point where the
Push and the Pull strategy meets (see Imaoka, Z.)

1.3 Four Lean principles

1. Pull System:
A pull system is a lean manufacturing strategy which is used to reduce waste in the
production process. In this type of system, components used in the manufacturing
process are only replaced once they have been consumed so companies only make
enough products to meet customer demand. This means all of the company's
resources are used for producing goods that will immediately be sold and return a

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profit. A pull system works backwards, starting with the customer's order then using
visual signals to prompt action in each previous step in the process. The product is
pulled through the manufacturing process by the consumer's demand (see G. (n.d.)
2019)

2. One Piece-Flow:
One-piece flow, sometimes called continuous flow or single-piece flow, is a
production method used instead of traditional mass production. In mass production,
materials move through the manufacturing process in batches which can be highly
inefficient. In one-piece flow, a product is completed before the next one is started
typically used in Lean organizations and will help businesses achieve Just-in-Time
production. Here the parts are moved through the facility with little or no waiting time
and parts are moved though operations efficiently. In mass production, it takes time
to switch tasks or move products as a group. One-piece flow is generally more
efficient, limits the amount of work in process, and prevents bottlenecks. The
concept of one-piece flow is to only process and produce what the customer wants,
effectively working to reduce the risk of excess production.
Thus, one piece-flow is all about reducing Work in Progress(WIP) to the point where
everything is either waiting to be started, in progress, or complete. That’s why it’s
also called “single piece flow” and “continuous flow”, as everything is constantly
progressing and only one item is in any given queue at a time (see Knepprath, M.,
Khalandar, Middelkoop, K., Mikesell, K., Pullock, D., & Newbold, R. (2018).

3. Takt Time
Takt time is the maximum amount of time in which a product needs to be produced
in order to satisfy customer demand. he term comes from the German word "takt,"
which means "pulse." Set by customer demand, takt creates the pulse or rhythm
across all processes in a business to ensure continuous flow and utilization of
capacities. Implementing takt time also helps to reduce over-production and thus,
stabilizes the system and prevents inventory build-ups (see Aggarwal, P. (2020,
April 17).

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 4. Zero Defect
Zero defects theory ensures that there is no waste existing in a project. Waste refers
to all unproductive processes, tools, employees and so on. Anything that is
unproductive and does not add value to a project should be eliminated, called the
process of elimination of waste. Eliminating waste creates a process of improvement
and correspondingly lowers costs. Common with the zero defects theory is the
concept of “doing it right the first time” to avoid costly and time-consuming fixes later
in the project management process (see Simplilearn. (2019, June 28).

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2 Solutions by Tesla with WST, SCM Principles, Lean
Principles and Sustainibility

2.1 Wholeness System Thinking at Tesla

Fig. 1

The Wholeness System Thinking approach in Tesla can be analysed with respect
to the three aspects which are Elements, Interconnection and Purpose.

Tesla first aimed at producing High quality environment friendly electric cars and as
of today there are still no equivalent to that value proposition from any traditional
manufacturer. The Tesla’s battery life also stands out which is a key point for Tesla.
In addition to the autopilot feature, Super charger network, ultra-fast acceleration
are all other extremely important factors. So, the technology they use is innovative
when it comes to automotive industry.

In order to assure a safe mindset for the customers about running out of charge and
thus getting lost during a long drive, Tesla came up with the charging stations
exclusively for their customers. This answered the question of customers which they
ask themselves before buying an electric vehicle. This also increased their business
value by driving the market to buy more electric vehicles.

The dealers wouldn’t get much benefits from selling them, as tesla being low volume
in the beginning, a dealer would have to start selling Tesla along with other brands

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which are non-electric. So, it will be difficult for the dealer to convince the customer
by telling them benefits of tesla to undermine another brands model in their
inventory. Secondly, electric cars require less services compared to traditional cars
and dealers won’t get much profit from the services. Tesla gives its customers an
over the air update facility as well. These reasons encouraged tesla not to go with
a traditional dealership method.

Today, modern utilities and grid operators are utilizing battery technology like never.
So, the next step for tapping the potential of energy storage was putting together
thousands of batteries to form an energy network that utilities can use to deliver
immediate value for the electric system. Tesla now bundles Powerwall and
Powerpack batteries into a single portfolio, this is also called aggregation, to make
the grid cleaner and more efficient.

From the analysis, Tesla has adopted Wholeness SYSTHESIS successfully. They
are manufacturing BEV, and other Solar product and know how to sustain in E-
mobility. They are also Successful in understanding the Customer Needs and the
Market. But they are still struggling with Wholeness ANALYSIS. TESLA knows WHY
they are doing the right things, but they don’t know HOW to do things right

2.2 Supply Chain Principles in Tesla

Principle 1: Vertical Integration in Tesla

As a vertically integrated manufacturer, Tesla has had to research and develop

components in multiple technology domains, including batteries, motors, sensors,
artificial intelligence, and glass (see wiki- Tesla Inc.)

The internal factor of strong control on production processes is based on vertical

integration, as well as the centralization and hierarchy in Tesla’s organizational
structure. For example, the company manufactures automobiles and many of their
components. This factor is a strength that minimizes issues linked to the
involvement of third parties. The plant has a high level of integration compared with
other modern car assembly plants, with most processes taking place within the
Tesla Factory. This includes most of the stamping and machining, painting, and

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some coding. Tesla also produces many of its seats at its own seat factory a few
miles south of the main factory. Design engineers also work at the factory itself,
rather than a separate facility (see wiki- Tesla_Factory).

Tesla's vertical integration has allowed the company to out-compete its competitors
and continue to out-compete in the future. For example, instead of relying on the
third-party electric vehicle chargers that began to ramp up. Tesla built its own super
charging Network along with the super charging network. Tesla has also vertically
integrated the manufacturing process to the maximum extent, Tesla Produces the
computer chips for its autonomous network has driven the development of battery
production and will soon develop its own battery. This has moved its E- production
in-house, produces its own electric motors manufactures, its own in-car HVAC and
HEPA filter and has even been in serious discussion of getting into the lithium mining
business. This allows not only for higher profit margins but more importantly faster
Innovation with Tesla's body investor. Tesla's body has some incredible battery
breakthroughs, these breakthroughs have all been patented and will secure Tesla's
competitive advantage that is years ahead of the legacy automakers if Tesla had
taken the route of relying on suppliers like Panasonic.

Vertical integration grants Tesla more control over more details of its manufacturing
process and allows Tesla to respond much faster to potential improvements and at
a lower cost.

Principle 2: Managment of Processes in Tesla

Inbound logistics: Tesla has many warehouses located in the United States
(one in Taiwan), most of which are leased facilities. The principal manufacturing
facility of Tesla which is owned by the company is located at Fremont, California,
United States. This facility is used for warehousing as well as manufacturing. The
approximate size of this facility is 5.5 million square feet apart from the other
warehouses which the company uses for storage as well as delivery. The company
has also leased several other facilities and warehouses in other corners of the world
including North America, Asia, and Europe.

Operations: Tesla has expanded its operations as well as manufacturing,

sales, and supply chain network globally. Its European headquarters are located at

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Amsterdam in Netherlands, Europe. Tesla also has a manufacturing facility at
Tilburg, where its operations include final assembly testing and quality control for
Model S and Model X delivered to the European Union.

Tesla’s Gigafactory 1 is located outside of Reno, Nevada. The company uses the
battery packs manufactured at Giga factory 1 in its vehicles and energy storage
products. It also manufacturers model 3 drive units at Gigafactory 1. Gigafactory 2
is a 1.2 million square foot facility in Buffalo, New York. Giga factory 3 is in Shanghai,
China. Tesla also has administrative offices in other corners of the world including
North America, Europe, and Asia.

Outbound logistics: Gigafactory one outside of Reno, Nevada is a leading

manufacturing facility in Tesla’s manufacturing network. The Fremont, California
facility of Tesla Motors contains several manufacturing operations including final
vehicle assembly and end of line testing. Operation in Tilburg includes a parts
distribution house for the company’s European service centres. The company has
several warehouses in the United States, many of which are leased facilities where
the company stores or ships parts and completed vehicles from. Production has
begun at Gigafactory 3 in Shanghai, China as well from where Tesla ships
completed Model 3 cars to its Chinese customers.

Marketing and sales: Tesla uses marketing & sales channels which include:

a. Tesla Online Stores;

b. Retail & Service store

c. Social media

Products and services: The products and services portfolio of Tesla include
the following products. Currently, these products are Model S, Model 3, Model X,
Model Y, Cyber truck and Roadster as well as energy products. The Cybertruck is
a newly released truck model from the house of Tesla which looks a lot like a Sci-Fi
vehicle. The company offers after-sales service through its large network of retail
stores and service stations located in various corners of the world.

Support activities: Primary activities in Porter’s value chain are linked to

support activities. The support activities improve the effectiveness or efficiency of
the primary activities.

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Principle 3: Value Added in Tesla

Production value Added (PVA) in Tesla

Tesla has set a unique example when it comes to implementing production value
added process in the company. After the analysis, it has been found that tesla has
done the following steps in order to bring more production value:

• Decreasing the versatility of Vehicle colour

• Most of the manufacturing processes are in-house

• Automatic Robotic transfer of parts

• High Level of Integration (Speeds things up)

• Minimizes distances among intermediary processes in its manufacturing

operations

Logistics Value Added (LVA) at Tesla:

Below mentioned is the logistics value added which Tesla has implemented:

• Shipping more by train rather than trucks

• Logistics and nearness to markets, resources and suppliers

• high productivity of the company’s manufacturing plants in the U.S

Principle 4: Pull and Push Priciple in Tesla

Pull in Vehicle Production at Tesla:

Tesla is using pull in production and the vehicle is produced by made to order with
a two to three-month wait time for delivery, although individual vehicles only take
between three and five days to complete the assembly process. The assembly line
moves at a speed of 5 cm/s. Tesla prefers delivery by train rather than by truck, as
costs and damages are less.

Push in Business Strategy at Tesla:

Requires society to make substantial changes in infrastructure: charging grid, repair

and service sector, used vehicles and parts and recycling. Recycling: each model
contains more than 1600 pounds of new “e-waste” for the world’s recycling systems.

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New lithium for their batteries puts pressure on global lithium mining (In contrast,
traditional auto parts are about 80% re-usable, and recyclable).

(see Galal, A. (2018, May 02)

Principle 5: Bullwhip effect at Tesla:

As Tesla focusses on the strategy of cutting off the Distributer from the supply chain,
this not only helps the organization to shorten the length of the chain but also
eventually minimizes the distortion of customer information, be it Product order or
understanding customer demand down the line. However, the reality is not exactly
how it should be in the ideal scenario. The main factor which affects the bullwhip in
Tesla’s supply chain is due to miscalculation of demand forecast and affecting not
meeting demand, delivering past deadlines.

By October of 2017, only 220 of the promised vehicles were delivered, strikingly
contrast to the 400,000 consumers that paid to pre order the car nearly 2 years prior.
And by first quarter of 2020 only 76,266 were delivered. The reason for the
inadequate supply to the customer was due to supply delay, overpromising the
customer. Tesla rushed into production before taking the proper time to set up a
reliable distribution infrastructure. They rushed to overpromise the people without
any proper planning with Panasonic regarding the demand of the batteries, cells
and how much they can supply. However, Tesla can minimize the effect at the
supplier end by fostering supply chain communication and collaboration. Better
alignment around supply chain issues both within the company and among
suppliers, distributors, manufacturing. Lastly, to reduce the sizes of orders and
constantly offering good product.

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Principle 6: Decoupling Point in Tesla

Tesla supply chain is technically a hybrid between these two strategies. Tesla
Incorporated uses a push & pull promotional strategy. They push to create customer
demand through constantly developing new products and offering these products in
stores; and pull customers towards these products through advertising and
promotion deals. This provides company with strong algorithms to predict the
customer demand in determining the decoupling point. In case of the competitive
markets of car manufacturers, customer demand prediction and brand loyalty are of
high importance. This helps company to manage optimum inventory levels through
adjusted demand forecast. This is done by:

1. Checking status of new product life cycle

2. Status update of new product

3. Monitoring current sales levels

The key factors influencing company’s success of streamlined supply chain are key
outsourcing of the manufacturing and assembly line along with strong data analysis
of consumer demand trends through its stores and galleries.

2.3 LEAN Priinciples in Tesla

1. Pull Principle at Tesla: As already mentioned above in SCM principles, Tesla

operates on Make to order when it comes to Vehicles and push when comes to
Solar products. There are two well-known strategies in supply chains: “push” and
“pull”. If innovation is created where the existing social and commercial networks
want, such networks will pull the innovation into existence. The biggest threat to

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Tesla is the ability of established makers to build EVs with remarkable precision.
New models from Porsche and Audi are also likely to outpace Tesla when it comes
to autonomous driving features and cloud connectivity. In addition to that, Tesla is
facing delays in due to the extreme production ramp. Many of Tesla’s customers
order customized vehicles and the factory produces each car in the order it was
purchased. Some Tesla workers say that the company’s attempts to aggressively
ramp up production are actively hurting them, leading to serious injuries and medical
issues. Working on a build-to-order basis, which means bottlenecks in parts supply
could be a big headache (see wiki Tesla_Factory (2020)).

2.One Piece Flow at Tesla: Tesla has fully automated paint shop. Once the final
coat of paint is polished, the car moves to the final assembly area. Here, it
transforms from a shell of sculpted, painted aluminum to the premium sedan you've
been waiting for. The movable pieces of the car (the doors and trunk lid) are
removed and delivered to separate assembly stations for further work. At a door
assembly station, for example, wiring is fed between the outer panel and the inner
frame, the handles are attached, and the premium leather pieces are fastened.
Other assembly stations work on the dashboard, trunk lining, and other pieces. The
parts deepest within the main frame of the car are attached. Next, the interior sub-
assemblies are installed: carpet, headliner, console, dashboard, seats, and the
steering wheel. Airbags are installed in key locations to protect occupants in the
event of an impact from any direction. The doors, once appointed, are reattached
and adjusted for fit. With far fewer moving parts than an internal combustion engine,
the motor, transaxle, inverter, and rear suspension system will be contained within
one sub-assembly that can be bolted into the Model S in one step. The liquid-cooled
battery pack, with quick release fluid connections will be installed in a matter of
seconds. The battery pack provides the final structural element to the body. With
this engineering feat, you'll be able to quickly swap an empty battery for a full one,
should the need arise on long road trips (see Passin, G. (2010, November 23).

3. Takt Time at Tesla

Each of the four vehicles it has released so far (Tesla has started production for a
fifth, the Model Y SUV, but has not yet delivered it to customers), has suffered from
production delays, culminating in the troubled rollout of the Model 3 sedan in 2017

17
and early 2018. Despite Tesla's well-documented manufacturing issues, there have
been signs that the electric-car maker is improving on some of its weak spots. Last
year, the company went from breaking ground on a factory in Shanghai to delivering
cars built there in under 12 months. And Tesla started making the Model Y in
January, months ahead of schedule.
If the Fremont factory is running three shifts, 11 cars are produced every hour.
This is equivalent to a cycle time or takt time of 5.5 minutes. This would be a tragic
cycle time. Most car lines aim for run times between 1 and 2 minutes per station.
One obvious reason is that the company is not running 3 shifts but perhaps 2 or
even 1. A possible explanation is that there aren’t sufficient battery deliveries for
continuous production. When you study production lines, generally they either work
at a decent clip or they don’t work at all. They are not designed to be dialed down
to be as slow as 5 min for every 10 feet of car. It’s much more likely that the line is
idle for long periods of time. Perhaps even 2/3 of the time. This measure of
performance is so important that it drives the depreciation and capitalization
schedule for tooling and the very lifeblood of the company: capital expenditures. An
underutilized factory is a giant hole in a financial statement and destroys value as
much as inventory does. Every manufacturer strives for maximum utilization and is
sunk if it does not achieve a minimum threshold (see Smith, D. (2017, October 09)).

According to the research, the current Model S/X line is limited to about 50% of
capacity or about 25 cars/working hours. This is equivalent to a takt time of 2.4
min/station. This is certainly much better than the estimated 5.5 and within a range
of reasonableness (see Asymco-admin, A. (2017, October 10).

4. Zero Defects at Tesla: Tesla’s loyal customers do not complain much about their
prized possession. But blogs and web user groups reveal an increasing number of
issues, many having to do with quality control of interior fit and finish. Consumer
Reports, that in 2015 gave the Model S the highest-ever score, breaking the
Consumer Reports Ratings system, reported recently that after 20 months and over
15,000 miles, the test car has had more than its fair share of problems. Eventually,
Consumer Reports downgraded the Model S To ‘Below Average’ reliability.
Tesla appears to be struggling with fundamental quality control issues and
manufacturing tolerances that aren’t as tight as consumers expect from luxury cars.

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Tesla cars received praises for its many software-control features and the ability to
fix software defects and provide upgrades via automatic remote software updates.
But mechanical problem and manufacturing defects, such as the brake issue that
resulted in a voluntary recall of 53,000 cars earlier this year, exposed adhesive on
roof liners, out-of-alignment trunk latches, or sunroof leaks still require a visit to the
repair shop (see Barkai, J. (2017, June)).

2.4 Sustainibility:

It is an ability of a company or supply chain to wise-balance its economic, social and

environmental performance.
Environment Dimension: Reducing the use of fossil fuels for transportation &
electricity generation decreases the risk of cardiovascular disease, respiratory
disease and stroke in both developed and undeveloped countries. High-performing
metals are mined for manufacturing: To keep its electric cars lightweight, Tesla uses
high-performing metals including lithium which are hard to find and even harder to
excavate. Batteries are difficult to recycle: Tesla’s lithium battery packs are big,
which makes them difficult and expensive to recycle. Tesla, however, is currently
recycling all returned battery packs and has promised ultra-long-life, million-mile
batteries (see S. (2019)).

Social Dimension: Tesla Inc. has a philosophy of corporate social responsibility,

which focuses on the essence of the company and its goods. The company's electric
vehicles, for example, are commonly regarded as a solution to the detrimental
impacts of cars using internal combustion engines. Corporate citizenship is essential
for the business in this respect. This condition facilitates the company’s achievement
of its corporate responsibilities. Tesla employee benefits offer decent coverage and
give employees financial and professional stability (see Greenspan, R. (2018, June
26)).

Economic Dimension: Education and Training: Tesla officially announced the

Tesla START program, a 12-week training program aimed at providing students with

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the technical skills they need to join the ranks of the electric car manufacturer.
Employment and Wages: Tesla’s operations supported over 51,000 jobs in
California. Tesla directly employed 20,189 workers while another 31,424 were
ultimately supported by Tesla’s local supply chain purchases and its employees’
consumer activity. Thus, for every Tesla employee, another 1.5 jobs were supported
in California (see Lambert, F. (2018, May 15).

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3 Conclusion

To conclude, the Tesla has successfully adopted and implemented the Wholeness
Synthesis in their organisation. However, the company is still struggling with the
complete implementation of Wholeness Analysis. They are more focussed on the
cost reduction within the manufacturing plant and which has led them to face a
bigger problem with the delay in customer delivery of vehicles and quality. It can be
said that TESLA are doing the right things, but not doing the things right.

Tesla has also used the supply chain principles wisely within their organisation,
however few points still needs to be addressed and implemented in more precise
manner, which includes improvements in optimizing the bullwhip effect and the Push
pull point and also including the left-over processes which are still not inside the
vertical integration umbrella.

After carefully analysing the processes of Tesla, it can be said that the organisation
needs to work a lot on the improvement of Takt time to be ahead in the Automotive
world. Another recommendation is on the consideration of Zero-defect in order to
maintain the quoted luxurious quality to satisfy the customer and to stand a step
ahead of the other Automotive giants in the world.

At the core of the Tesla brand is innovation. Learning lessons from these principles
can help Tesla incorporate any business that wants to make an impact on the world.

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References:

Websites:

1. Tesla, Inc. (2020, June 14). Retrieved June 14, 2020, from
https://en.wikipedia.org/wiki/Tesla,_Inc.
2. TAO, Ruoshan. Tesla Supply Chain - Custom-build World Class Supply
Chain. TradeGecko [online]. 4 September 2014. [Accessed 11 June 2020].
from: https://www.tradegecko.com/blog/supply-chain-management/tesla-
custom-built-supply-chain
3. Horizontal vs Vertical Integration - WallStreetMojo. (n.d.). Retrieved June
14, 2020, from https://www.wallstreetmojo.com/horizontal-vs-vertical-
integration/
4. Sharma, T. (1970, June 18). What is Push and Pull Strategy in Supply
Chain Management? Retrieved June 14, 2020, from
https://www.blockchain-council.org/blockchain/what-is-push-and-pull-
strategy-in-supply-chain-management/
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