Understanding Operations, Logistics and Supply Chain Management

Operations management is a key component of a business organization as it helps in administering the business practices in order to create the optimal level of effectiveness feasible in an organization (Heizer, 2020). Concerning such fact, operations management is focused on converting raw materials and other resources into finished goods and services as effective as possible to gain profit and growth efficiently (Heizer, 2020). On the other hand, logistics has an important role to play in a business organization to meet the bottom line expectations effectively (Heizer, 2020). Logistics is the overall process or method of management of how resources are gathered, stocked, and transported to the point of consumption or final destination (Heizer, 2020).

Besides, the concept of supply chain management signifies the active management of the supply chain to maximize customer value and create a sustainable competitive advantage positively (Gattorna and Ellis, 2020). In order to ensure organizational effectiveness, operations, logistics, and supply chain management has to be managed well and efficiently with strategic measures and practices that help improve business (Gattorna and Ellis, 2020). With reference to such fact, this essay will focus on the aspect of managing quality and new product development concerning operations management and logistics of Tesla Motors. Understanding the various concepts and theories of operations management regarding managing quality and new product development process of Tesla Motors will provide a substantial knowledge to help provide possible recommendations to improve business process effectively.

Tesla Motors is a US-based electric vehicle manufacturing company headquartered in California, US (Tesla Inc., 2020). The company is also involved in producing clean energy by offering solar energy based products such as solar panels, solar roof tiles, battery energy storage, and other energy-efficient products (Tesla Inc., 2020). The company is headed by Elon Musk, founded in the year 2003 in California, US (Tesla Inc., 2020). The prime aim of Tesla Motors is to accelerate the global transition to sustainable energy to ensure a safe and healthy environment (Tesla Inc., 2020). The company is emerging massively since its inception in 2003. As of 2019, the overall employee strength of Tesla Motors is 48,016 (Tesla Inc., 2020). The company has the leading positing in car manufacturing segment which has the trending sales volume of close to 4 million unites delivery across the world, followed by Renault, Nissan, Mitsubishi, Hyundai, and others.

The newly opened giant plant of Tesla Motors in China has effectively facilitated the company to manufacture a vehicle with least time and cost in order to maximize the production of the electric vehicles and improve business efficient (Tesla Inc., 2020). Quality is the key aspect that Tesla Motors is dedicated to (Tesla Inc., 2020). The management of quality and new product development process of the company is efficient enough to provide an in depth understanding of the factors involved within the process by looking and identifying the key issues faced by the managers and the overall company. Even though Tesla’s products and services are premium and loved by its customers; however, there are some possible issues that the company has faced which this essay will help identify and formulate effectual strategies to resolve.

Understanding and recognizing theories and concepts helps to know aspects better that create a connection between the topic and the idea effectively. Relating to such, in regard to managing quality concerning operations, logistics, and supply chain management, the concept of Total Quality Management (TQM) is an approach of management to manage the quality aspect of a firm (Sahoo and Yadav, 2017). According to a research study by Sahoo and Yadav, (2017), Total Quality Management is a management system or process for the organization that is customer-centric and which involves every employee in the process of continuous improvement (Sahoo and Yadav, 2017). Applying the concept of TQM on large scale manufacturing organizations is effective and ensures organizational effectiveness remarkable in managing quality and process to achieve customer value for the organization (Saleh and Sweis, 2017). In a research study by Saleh and Sweis, (2017), has indicated that the implementations of soft total quality management practices within the Jordanian manufacturing organizations must be executed in order to develop business effectiveness (Saleh and Sweis, 2017).

Total Quality Management can be defined as a management approach to gain long-term growth and success utilizing providing ultimate customer satisfaction. Within the process of total quality management, all the employees or staffs of the organization participates in the progression of improving products, services, processes, and culture in the workplace (Saleh and Sweis, 2017). Concerning such fact, Tesla Motors has applied the concept of total quality management within their organization that has helped them achieve the competitive advantage which makes them lead the competitive market (Saleh and Sweis, 2017). However, there are certain key issues of operations concerning managing quality faced by the operations manager of Tesla Motors. According to a study by Fritsch and Changoluisa, (2017), reveals that Tesla’s operations managers conduct regular quality reviews and implement strategies to improve the process of manufacturing effectively (Fritsch and Changoluisa, 2017).

In addition, concerning the key issues in operation management concerning quality with suppliers for their required automobile parts, Tesla Motors have considerably shifted the organization towards manufacturing more of its parts of vehicles rather than souring them from automobile parts manufacturers (Fritsch and Changoluisa, 2017). This indicates that the shift of Tesla motors towards building its manufacturing base of spare parts will increase the workload of operations managers, but it will help improve quality control and the overall quality of the product (Fritsch and Changoluisa, 2017). In comparison to other companies like Renault who depends on outside sources for auto parts that needs while assembling the finished products by the company (Fritsch and Changoluisa, 2017).

Concerning the tools of Total Quality Management, it includes varied types such as bar graphs, flow charts, control charts, and check sheets (Alfalah, 2017). All the tools are specifically designed and intended to provide adequate and effective results to make strategic decisions to improve business and quality improvements (Alfalah, 2017). As described on a study by (Alfalah, 2017), which states that by implementing total quality management tools, it helps the organization in developing creative thinking, problem-solving, and focusing towards continuous improvement in regard to performance and customer satisfaction (Alfalah, 2017). Considering such fact, these tools signifies methods and frameworks, which assist employees and managers to communicate better and effectively concerning formulating business issues and solutions to them (Alfalah, 2017). The key tool of total quality management is six sigma, and Plan; Do; Check; Act and Analyze (PDCA) as described in the European foundation for the model of quality management excellence (Alfalah, 2017).

Several organizations apply the approach of total quality management within their organization to improve and manage quality, for example, the healthcare organizations of Arnold Palmer (Akalin, Huang and Willems, 2016). Being a unique hospital that facilitates the healthcare of women and children with quality care and service, the organization has applied the practice of TQM within their health care setting to enhance their quality management effectively (Akalin, Huang and Willems, 2016). The organization has used the total quality management tools of benchmarking, juts-in-time, employee empowerment, continuous improvement, and Pareto charts to improve their quality aspects in catering timely and effective health service (Akalin, Huang and Willems, 2016). This indicates that the application of total quality management within an organization enables an organization to assess and identify the factors that hinder the progression and quality management in order to make specific changes to help improve the overall operations, logistics, and supply chain management effectively (Akalin, Huang and Willems, 2016). 

Six Sigma is another theory of operations management, which is considered effective in managing quality aspects of business organizations in enhancing the overall operations management. Relating to such fact, the theory of six sigma is an approach that specifically focuses on the quality aspect of an organization. According to a research study by (Raja Sreedharan and Raju, 2016), which discusses the theory of lean six sigma as an effectual total quality management tool and operations strategy that helps improve the quality functions of an organization (Raja Sreedharan and Raju, 2016). Concerning such fact, Tesla is been identified to use and apply the approach of lean six sigma to constantly improve the business processes efficiency and bring value to the manufactured products to gain customers satisfaction effectively (SixSigma.us, 2018). According to the statement made by the vice president of manufacturing at Tesla, Mr Gilbert Passin (2018) stated that the company is encouraged in continuous improvement within their processes and operations management in terms of efficiency (SixSigma.us, 2018).

This has been done by recruiting potential and skilled engineers to work on improving the process efficiency that brings ultimate value to their products such as electric and energy-efficient vehicles (SixSigma.us, 2018). It has been identified that the company uses robotics in order to have integration of accuracy and recurrence within the process; however, the actual intelligence to carry forwards the process is been done by the engineers who are responsible to manage the overall manufacturing operations (Tesla Inc., 2020). The application of six sigma is effective and efficient to reduce several factors of operations management that hinders the process in terms of time and money, making it more efficient to ensure organizational effectiveness (Raja Sreedharan and Raju, 2016). On the other hand, it has been identified that the company follows several set of guidelines that helps them ensure quality and effectiveness. It includes reducing the time of processing, improving the delivery time of products, reducing the probability of defects, every person and steps within the process adds value to the product, no downtime, no overproduction, and no unnecessary inventory to be kept (Tesla Inc., 2020). This indicates that the approach of lean six sigma is an effectual and efficient practice that considerably helps an organization to reach the organizational goals and objectives effectively.

Relating to the new product development process, the theory of the Kano model is an effective application towards the process of new product development of an organization. Concerning the aspect of total quality management, the Kano model is an efficient tool and theory to enhance the quality prospects of an organization in establishing a value to the manufactured products. According to a research study by Materla, Cudney and Antony, (2017), which defines Kano model as the theory of new product and service development which helps an organization to determine what are the feature and benefits a company wants to include within a product or service to improve customer satisfaction and value towards the products or services (Materla, Cudney and Antony, 2017). It has been understood that the development of new products consists of a process that includes specific knowledge and many functional areas to ensure product effectiveness and efficiency. Concerning such fact, Tesla Motors applies the same of the model of Kano while developing new products as it helps them ensuring quality and determining the needs and requirement of customers to facilitate customer satisfaction effectively (Tesla Inc., 2020). Applying the Kano model in the process of developing new products has provided significant assistance to the company in regard to determine adding which feature will attract customers and would create a possibility to increase customer satisfaction and improve business processes effectively (Materla, Cudney and Antony, 2017).

Primarily, the Kano model comprises of five categories which are on a set of x-axis and y-axis that determines the requirements to be mapped while identifying the customer satisfaction level (Materla, Cudney and Antony, 2017). It includes, performance, basic, excitement, indifferent, and reverses which helps the company determines the level of satisfaction of the customer concerning the new product or service (Materla, Cudney and Antony, 2017). Relating such fact, other companies like the healthcare organizations and few automobile companies like Renault uses the model of Kano to determine which feature they would include as per the assessment of customers’ needs and requirements which adds them value and customer satisfaction to improve business growth and prosper success effectively (Materla, Cudney and Antony, 2017). Thus, the theory of Kano model is an effective and efficient approach towards making enhancements in new product and services development process to achieve customer satisfaction and business goals proficiently (Materla, Cudney and Antony, 2017).

To explain the concept of the Triple bottom line that comprises the factors of the economic, environmental and social approach of the organization, it will provide a substantial understanding of the factors involved in it. According to a research study by Shou et al., (2019), which defined the concept of the triple bottom line as a framework of accounting that focuses on three factors such as social, environmental, and financial to evaluate the organization's performance towards achieving business goals and objectives with an intention to create value to the business effectively (Shou et al., 2019). The study reveals that with effective sustainable supply chain management practices it benefits the organizations for gaining environmental and social performance effectively. However, that same practice does not bring any benefits by the economic or financial performance as per the study is concerned (Shou et al., 2019).

Concerning such fact, Tesla Motors has significantly determined the framework of the triple bottom line to evaluate the performance of their social, environmental, and economic factors to determine the effectiveness and proceed accordingly to improve business value effectively (Tesla Inc., 2020). As per the impact report of Tesla Motors 2019, it indicates that the company has invested hugely in environmental factors by creating a product based out of sustainable energy with efficient and effective technologies has helped the company to gain massive benefits out of it (Tesla Inc., 2020). Besides, the strategic partnerships with community-based organizations and offering funds to social causes has determined to evaluate the performance of the company regarding gaining social esteem within the locations they operate the business (Tesla Inc., 2020). Also, the enormous profit of the company by selling a massive amount of electric vehicle across the globe has benefited the company in terms of economic gains which is another factor of the triple bottom line (Tesla Inc., 2020).

Recommendation towards improving helps business understand the loopholes and act accordingly to progress processes effectively. Regarding such fact, it has been identified that Tesla Motors is performing effectively and efficiently by using the vital theories and concept of operation and total quality management. The utilization of total quality management tools concerning six sigma, benchmarking, and continuous improvement signifies that the company is efficient towards understanding it’s important and benefits of using them in the business processes. Managing quality and new product development process of Tesla Motors is efficient enough that they use the entire effective total quality management concept and its tools to ensure organizational effectiveness at every vertical of quality management and new product development process.

This is to conclude that managing quality and new product development process of an organization are a crucial factor of concern as this two helps augment quality effectiveness and in improving customer satisfaction of products effectively. Tesla Motors is an effective company that uses all the efficient concepts of quality management and new product development that helps them achieve business goals and adding value to its products significantly.

Reference List for Understanding Operations, Logistics and Supply Chain Management

Akalin, G., Huang, Z. and Willems, J., 2016. Is Supply Chain Management Replacing Operations Management in the Business Core Curriculum?. Operations and Supply Chain Management: An International Journal, pp.119-130.

Alfalah, T., 2017. Total Quality Management Tools: Are they Necessary for Improving Service Quality and Customer Satisfaction?. International Review of Management and Marketing, 7(3), pp.121-125.

Fritsch, M. and Changoluisa, J., 2017. New business formation and the productivity of manufacturing incumbents: Effects and mechanisms. Journal of Business Venturing, 32(3), pp.237-259.

Gattorna, J. and Ellis, D., 2020. Transforming Supply Chains: Realign Your Business to Better Serve Customers In A Disruptive World. 2nd ed. Pearson UK, pp.125-128.

Heizer, J., 2020. Operations Management: Sustainability And Supply Chain Management. Upper Saddle River: Pearson, pp.112-125.

Materla, T., Cudney, E. and Antony, J., 2017. The application of the Kano model in the healthcare industry: a systematic literature review. Total Quality Management & Business Excellence, 30(5-6), pp.660-681.

Sahoo, S. and Yadav, S., 2017. Entrepreneurial orientation of SMEs, total quality management and firm performance. Journal of Manufacturing Technology Management, 28(7), pp.892-912.

Saleh, R. and Sweis, R., 2017. The relationships between soft/hard total quality management practices and operational performance in Jordanian manufacturing organisations. International Journal of Management Concepts and Philosophy, 10(4), p.345.

Shou, Y., Shao, J., Lai, K., Kang, M. and Park, Y., 2019. The impact of sustainability and operations orientations on sustainable supply management and the triple bottom line. Journal of Cleaner Production, 240, p.118280.

SixSigma.us, 2018. Tesla Is Lean Six Sigma At Its Finest. [online] SixSigma.us. Available at: <https://www.6sigma.us/kaizen/tesla-is-lean-six-sigma-at-its-finest/>

Tesla Inc., 2020. 2019 Impact Report. [online] Tesla.com. Available at: <https://www.tesla.com/impact-report/2019>

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