Wednesday, September 4, 2013

Will Tesla Alone Double Global Demand For Its Battery Cells?

     I chose this article because it touched on the uncertainty issue we mentioned in class last week. Tesla is putting a strain on their batter suppliers due to greatly outpacing their demand. In turn, it's affecting their production and other auto industry makers as well. This is an interesting case because of the great difference between projections and reality. Some of Tesla's suppliers planned based on a forecast of 3,000 Model Ses being produced over the lifetime of the vehicle. In reality, Tesla is producing 3,000 Model Ses in roughly three weeks. This kind of disparity touches on the poor forecasting and the variability of the relationships Tesla has with its suppliers.

     Poor forecasting is a huge issue when it comes to planning. I'm not really sure how some people could believe that Tesla would only produce 3,000 Model Ses total, given the earlier stated statistics. This speaks to the variability Tesla has allowed into its supply chain. If Tesla has an explicitly stated demand for their customers, maybe they wouldn't be in this tough situation. However, due to the almost "on demand" nature of their business, this is necessary. What I would like to know is how Tesla and its suppliers can collaborate/communicate more effectively to deal with growth vastly outpacing outpacing forecasts?


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