Tesla acquiring trucking capacity to complete deliveries by December 31

An article in the TechCrunch site titled “Tesla acquires trucking companies to squeeze in more deliveries before Dec. 31” describes the federal electric vehicle tax credit of $7,500 that winds down by Dec 31st, and is available only to customers who take delivery of their vehicle by year end. With production expected to rampup to 7,000 vehicles per week, delivery has been a bottleneck. The article claims that Tesla has purchased some smaller trucking companies and reserved capacity to complete deliveries. How should the company ensure that delivery capacity is synchronized with production rate and customer delivery schedules ? Since production volumes of 7,000 each week will require production of 50 cars per hour across all shifts and days, how should the supply chain be managed to eliminate surprises in delivery or manufacturing ? Given earlier reports of supplier payment delays by Tesla, can suppliers be expected to cooperate to deliver the desired volumes by year end while enabling Tesla to maintain profitability ?

About aviyer2010

Professor
This entry was posted in Capacity, car, consumer, Cost, delivery, emb2020, logistics, manufacturer, Tesla and tagged , , , , , . Bookmark the permalink.

One Response to Tesla acquiring trucking capacity to complete deliveries by December 31

  1. Sean Michael says:

    Looking at Little’s Law, we see that it will take Tesla approx. 6 days to process the inventory given 7,000 vehicles at a rate of 50 car per hour (1200 per day). So, to align the 6-day process with the production rate and delivery schedule, Tesla should cycle its inventory in sync with the delivery process to prevent bottlenecks. On the supply side, I would suggest that Tesla decouples its inventory in order to create a buffer in the production process. Decoupling on the manufacturing side will cushion Tesla’s inventory and help prevent potential issues due to the varying speeds of each portion of the manufacturing process. Tesla should not have any issues maintaining its profitability; suppliers would expect the seasonal delays.

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