Adaptation of Supply Management towards an Electronic Culture - Case Study Example

Adaptation of Supply Management towards an Electronic Culture: The Case of an American Energy Company, Tesla Motors, Inc.

Introduction

Supply management relates to the oversight of materials, finances, and information from the supplier-to-manufacturer-to-wholesaler-to-retailer to the consumer. The management practice incorporates coordination and integration of the flows within, as well as among diverse companies. The ultimate objective of an effective supply chain management (SCM) is the decrease of the inventory with the assumption of the obtainability of the goods in agreement with the desires of the customers. In the modern context, business entities and corporations focus on adoption and implementation of appropriate mechanisms to enhance effectiveness and efficacy of the SC managements. The paper aims at evaluating and investigating the recent development plans by the organizations to adapt SCM towards the electronic culture in the digital era. This is through exploration and evaluation of the case of the American energy company, Tesla Motors.

Literature Review

There continues to be a great deal of mix-up concerning the conceptualization of SCM. In most cases, certain practitioners focus on utilizing the concept of SCM as a substitute for the logistics inclusive of the stakeholders. Nevertheless, SCM tends to require cross-functional assimilation of the key commercial procedures within the firm, as well as across the linkage of diverse firms comprising the SC (supply chain). The only challenge in this context is the determination of mechanisms to accomplish successful integration (Danciu, 2013). The most critical paradigm shift regarding the contemporary business administration is that distinct business entities and corporations no longer engage in competing solely on autonomous perspective but as elements of supply chains.

According to the researchers, business management continues to enter an era of globalized competition in which the eventual triumph depends on the ability and potentiality of the management to incorporate the organizational sophisticated web of the existing relationships. This generates the concept of the SCM, thus, an illustration of a system of businesses and relationships in the developing competitive situation. Evidently, SCM continues to enable the organizations to experience the opportunity in capturing the synergy of intra, as well as inter-company integration and management (Jia, Gao, Lamming, & Wilding, 2016).

From this perspective, SCM is valuable is dealing with the entire excellence among the business processes while representing the new model or mechanism in the management of the business entity in the midst of the emerging competition in the digital era. From a definitional perspective, supply chain management refers to the integration of the valuable business processes from the end user via the original suppliers aiming at offering products, services, and information towards adding or creating value for the consumers and other relevant stakeholders (Gunasekaran & Ngai, 2004).

Over recent years, researchers and business practitioners have focused on identifying diverse components of the supply chain to facilitate the maximization of the revenues or financial outputs for the organizations in the digital era. This relates to the digitalization of the supply chain management in agreement with the expectations of the consumers and other stakeholders. Firstly, it is essential to note that supply chains have focused on going digital, thus, adaptation to the electronic culture. It is valuable to demonstrate the fact that technology continues to drive the emerging wave or trend in productivity through digitalization of the critical financial and business elements. From this illustration, technological advancements have been essential in enabling the collaboration across the organization in the highly competitive industries.

Digitalization of the supply chain in the contemporary society enable the best-in-class organizations to achieve competitive advantage through leveraging the business networks, thus, the platform for the creation of the digital community. The digital community provides the opportunity for the partners to engage in the execution of the coordinated processes for effectiveness and efficiency in the satisfaction of the demands and expectations of the consumers in the market and industry of operation. Similarly, the digital community of partners facilitates organization of the SC and enhances the accessibility to information by the individuals pursuing the goals and targets of the company.

Currently, digital technology proves to cause disruptions regarding the traditional operations, thus, the desire for each business entity to go digital in enhancing flexibility and agility in the execution of the goals and targets in accordance with the desires and demands of the consumers. In this context, it is ideal to highlight the essence that the implications of the digital technology in the SCM are specifically great. It is impossible for the business entities to engage in unlocking the full potential of the digital technology without concentrating on reinventing the supply chain strategy.

From this illustration, it is valuable for the institutions to engage in adapting their supply chain management towards the digital or electronic culture in the contemporary context. Most corporations tend to understand the element of nature regarding these potential changes, thus, the desire to work towards introducing the digital technology to facilitate the realization of goals and targets at the end of each fiscal period. Nevertheless, adding the digital technology is not the solution. In the course of maximizing the outputs of the digital technology, business entities have the obligation to reinvent the supply chain strategy for effectiveness and efficiency in satisfying the desires and demands of the consumers.

Furthermore, it is crucial for the organizations to engage in reimaging supply chain as the digital supply network (DSN) with the ability and potentiality to unite skills, talent, finance, and information. Categorically, digital supply chain engages in the development of connection, intelligence, and rapid growth in comparison to the old-fashioned SCM. Thirdly, the organizations need to participate in the progress and integration of new synergies. This will provide the platform for the digital SCM to enable the organizations to relate more fully to the customers, thus, the opportunity to reach new markets. The tendency creates a quick building platform, which creates the chance for the business entities and corporations to scale new offerings. In the contemporary society, globalization has been essential in the creation and exploitation of the connected economy.

The environment provides an opportunity for the electronic or digital supply chains to act as avenues for the realization of innovation and success in agreement with the demands and expectations of the consumers. Adaptation of the supply chains to the electronic culture has been essential in facilitating the proactive evolution of the organizations ahead of the potential competition. This is through the provision of the opportunity for the integration of the comprehensive solutions with the ability and potentiality to offer entire support to the creation of value for the consumers.

Additionally, there continues to be a trend in the SCM in which the business corporations seek to engage in responding to the changes in the digital era, but with an eye on the existing fundamentals. It is valuable to demonstrate the fact that the ability to accept innovations and maximize the effects of synergy is a core competence for the future-oriented corporation. Various researchers believe that supply chains will continue to face diverse challenges. In the contemporary context, supply chain managers prove to be under huge or enormous pressure towards adapting to the electronic culture or turbulent economies, as well as labor issues and the essence of globalization. Digital technology is only capable of delivering positive results through effective and efficient implementation of the strategies and operations, which adhere to the best practice in the supply chain management. Evidently, even the smartest technology cannot compensate for the less-than-best practices in the highly competitive industries. Business corporations need to overcome the lack of understanding of the potential benefits with the expectation of high costs of implementation. Technological advancements are vital in the optimization of the supply chain within the shortest time possible.

Moreover, trends such as on-going globalization, intensity of competition, demands of security, environment protection, the desire for reliability, flexibility, cost-efficiency, and resource scarcity continue to pose challenges for the supply chain managers. This is critical for the SCM in enabling the organizations to achieve sustainability in the midst of the growing competition levels (Henry, Rado, & Scarlett, 2012). The SCM engages in taking on the additional strategic obligations to respond to the changes, thus, the platform to remain competitive in the modern context. Supply chain managers have the obligation to engage in the identification and understanding of the sustainability issues in the company and business environment.

These are the major aspects of the digitalization of the supply chain management while considering the three pillars of sustainability: social, economic, and environmental values. Adaptation of the supply chain management towards the electronic culture continues to be ideal in the realization of highly efficient supply chain operations (So, Parker, & Xu, 2012). Additionally, such adaptation mechanisms are valuable for the networking of the skills to create sustainability and efficiency in the realization of the organizational objectives and satisfaction of the desires or wants of the customers in the market and industry of operation.

Case Study: Tesla Motors, Inc.

Tesla Motors, Inc. is a California-based automobile and energy storage company, which did come into existence in 2003. During the year of its integration, a group of engineers sought to come together to prove that electric vehicle could be sexy, as well as efficient. Evidently, the corporation continues to make valuable headlines across the globe through integration of effective and efficient strategies to revolutionize the automobile industry through incorporation of the innovative electric automobiles. In 2012, the company focused on the delivery of Model S to the consumers.

Nevertheless, the anticipated demand was way below the actual procurements by the consumers, thus, the obligation of Tesla to seek mechanisms to overcome such issues. The automobile practitioner did begin to experience supply chain inadequacy issues with diverse implications on the ability and potentiality of the organization to address or satisfy the surging demand. Most of the suppliers could not full Tesla’s orders (Fleming, 2013). Other suppliers focused on addressing the issue through hurrying to increase production or manufacturing process and quantity.

Contrarily, certain group of suppliers found it challenging to meet the growing or surging demand. According to Elon Musk, the company CEO, certain suppliers did not believe on the prospects of Tesla being around, thus, their failure to tool up for the surging production levels. Tesla is one of the organizations experiencing supply chain challenges, thus, making it common for the organizations to deal with the problem among the fast growth manufacturing companies (Zackschewski, 2006).

In spite of these elements, supply chain management proves to be a big deal for the Tesla Motors concerning the longevity and responsibility of the corporation towards addressing the expectations of the customers. Similarly, failed supply chain inhibits the company or business entity from generating the desired financial outputs. In the midst of all these, Tesla Motors has focused on integrating diverse strategies and strides in preparation for the potential challenges in the digital era. In the digital era, Tesla Motors has focused on the construction or development of the supply chain in its image. The organization has been able to use this effective and lean SCM to scheme, check, and create automobiles faster in comparison to every auto company in the history of humanity.

The company engages in the utilization and application of the similar energy and energy to the procurement, as well as SCM. To a certain extent, the procurement at Tesla Motors works no differently in comparison to any other corporation in the industry. Nevertheless, the company proves to be on a fast pathway to innovate and contest on the global stage in the connected economy. The objective of the company is to remain competitive in spite of being the negligible auto builder in the global (Kannegiesser, Günther, & Gylfason, 2014). This is through looking at or evaluating commodities from diverse perspectives. The SCM in Tesla Motors aims at adopting workable strategies and ways to benefit the corporation from the similar scale of production or manufacturing as other automotive operators within the industry.

Additionally, the company has been able to exploit its valuable conglomeration with Daimler and Toyota via benefiting regarding the rudimentary car part acquisitions. However, there prove to be other unique procurement needs for the corporation. One of such elements is the Model S infotainment structure, which the corporation did design in pursuit of competitive advantage. Tesla Motors has been able to evaluate the traditional tiered structure in the industry, thus, assessment of the structures, which make sense to the company. Additionally, the company engages in the identification of any potential area to adopt a different setup. The company has been able to adopt and incorporate the microchip technology and infotainment structure to design and build its system because of the availability of the hardware and software manufacturing competence.

The adaption has particularly been essential in enabling Tesla to engage in exploitation of the lesser level for the products in the absence of the desire or obligation to reinvent the wheel and avoidance of the significant mark-ups. The approach is also valuable in enabling the company to pursue cost-efficient approaches while focusing on the unique efforts regarding the designed components. Similarly, Tesla Motors engages in integration with the contractors outside the conventional auto supply universe.

Tesla Motors Inc. is main car company engaged in designing, testing, and building its cars in the context of California. This enables the company to enjoy one critical advantage over the competitors. The company proves to be very close to its biggest market, as well as the development of the quality products and services. From this perspective, it is possible for the company to engage in the execution of practices such as driving, designing, and implementing technology in the supply chain management for effectiveness and efficiency in the market and industry of operation.

The SCM of the company incorporates collaboration with other automobile makers to keep the costs low for the procurement of diverse components in manufacturing the products and services in agreement with the demands of the stakeholders. The adaptation enables Tesla Motors to have a supplier base, which is faster and agile in comparison to most automotive companies. Tesla Motors engage in completing the ownership of the supply chain through picking and choosing between conventional manufacturing practices. This is also valuable in customizing the SCM to incorporate unique products, thus, valuable chemistry with the supplier.

Conclusion

The research paper sought to explore the recent development plans by the organizations to adapt supply chain management towards the electronic culture in the digital era. This is through exploration and evaluation of the case of the American energy company, Tesla Motors. According to the finding of the study, it is valuable for the company s to consider the transformation of their SCM in the course of adhering to the growing challenges and modifications in the contemporary society. Tesla Motors has been able to customize its SCM through the integration of the infotainment system, thus, effectiveness and efficiency in the satisfaction of the desires and needs of the consumers. Evidently, integration of the supply chain in the digital era demands reinvention of the SCM, thus, the tendency to facilitate adaptation to the electronic culture for the supply management like in the context of Tesla Motors, Inc.