Tesla Supply Chain Analysis

=External Supply chain process

Working with suppliers

Tesla has around 350 suppliers providing them 3,500 car parts from all over the globe. Consequently, they make sure that they work with the best suppliers. To retain the quality and reputation of the brand.

Presently, they are following multiple sourcing strategies for the procurement of the majority of the automobile parts.

Sourcing strategy

Tesla has decided to use multiple strategies due to following reasons:

The cost of indirect decreases because due to a large number of suppliers.Moreover, the majority of the providers is dealing with fewer parts which help Tesla in competitive bidding.Furthermore, Tesla has started expanding in various international markets. Hence, multiple

Furthermore, Tesla also has opened a factory in Tilburg, Netherlands to catalyse our expansion plans. Tilburg being near to the Rotterdam port and further located in the heart of Europe was the main reason behind choosing it as a preferred destination. The role of this plant is to import vehicles and make sure that the supply meets the demand. Other than that, it also handles operations for the Europe and other neighbouring countries. ("Tesla Factory | Tesla Motors")

Type of warehousing We at Tesla use Breakbulk warehousing for our operations. Breakbulk is defined as the kind of warehousing where firstly you receive goods in a single shipment. Secondly, you break the bundle into the small lot, lastly transport them to their respective region's centres.

If we take an example of tesla's Tilburg facility in the Netherlands, Tesla gets our inventory from California, which is sent in bulk that gives us the benefit of consolidation. Then the bulk is being divided and is allocated to Germany, Belgium, France and other European countries. Consequently, sending them to their respective distribution centres. Future

As the company’s forum claims, on an average it takes around two months in the American market and three months in the European market (Podlo). As per the market survey, customers are willing to wait on an average around 3-4 months. Provided that they have the option to track the car's progress.

In case of rush orders

In case, the demand fluctuates suddenly we adjust the supply by transporting our excess inventory or take some inventory from other distribution centres where sales are comparatively less. Tesla faces a rush order situation mostly in around festival time.

To decrease the lead time, transportation costs and the excess inventory company have decided to invest in efficient and cost effective warehouses.

Interaction with the final customers

As a company, it's crucial to interact with the final customers because we sell directly to the final customer. By this, Tesla makes sure that our final customer gets a memorable experience and has access to all the services which a luxury car should offer.

Once you have registered yourself in my Tesla, it provides you numerous features like Customizing your car, tracking your car lead time, finding the nearest charging stations,