Home / Business / Tesla's Vertical Integration Unlocks Hidden Flexibility & Innovation – #CleanTechnica Field Trip

Tesla's Vertical Integration Unlocks Hidden Flexibility & Innovation – #CleanTechnica Field Trip

March 30th, 2019 by Kyle Field

The 1990s and early 2000s saw the globalization of the world Seen before, or perhaps even imagined.

Image Credit: Kyle Field, The Business Models that emerged from the Outsourcing Movement were spread wide and wide, with some of the centralization of their supply chains through quality spec sheets, service level agreements, and detailed supplier contracts.


Sourcing sub-assemblies, parts, and components from the lowest-cost supplier put globally dominant companies into each segment of the market. The automotive industry is an example of this outsourcing, with parts coming from the American-made vehicle like the Chevrolet Bolt, which sells 26% of its components from the US and Canada, with the bulk of the car (54%) coming from LG in Korea.

Tesla learned the hard way through the development of the Tesla Model X that sourcing 10,000 components from hundreds or thousands of globally distributed suppliers. Tackling this complex equation, Tesla started stacking suppliers.

To solve this problem, Tesla started stacking suppliers. Instead of just one supplier for bolts, Tesla is looking forward to the risk and increase the chances of success. In April 2016, we said that "unsatisfactory supplier capability validation, and the company's paint in-house manufacture ability for many of the parts in question" was to blame for the delayed ramp up of Model X production.

"It's complicated." Image Credit: Tesla

The Model X dragged the company over rocky roads and through fields of thorns. Validated by: http://en.wikipedia.org 19659007] Tesla is not building the same 50 years in the automotive industry. This statement should be analyzed, verified, cross-checked, and continuously, rigorously scrutinized. This comes from a fundamental principle, that is to say, that is to say, that it does not have any sense of purpose.

with seats, batteries, motors and windows that are all different than the competition. Tesla apart, above the competition, does not equate to better, but in this case. Tesla's desire to put the best seats in their vehicles into the hands of Tesla's experts.

Image Credit: Zach Shahan, CleanTechnica [19659006] CleanTechnica Tesla's seat factory in March and we were impressed with the seat factory, located just two and a half miles from Tesla's Fremont factory, which was brought online in a matter of months as one part of the solutions to Tesla CEO Elon Musk said on the Q1 2016 earnings call in May 2016 that, "I think we're actually going to increase the amount of vertical integration that we have. 2% of suppliers are not ready, we can not make the car. Internally really massively reduces risks associated with the production ramp. That is a very important thing. "

Tesla home state of California, where wages are significantly higher than in supplier countries.

Tesla currently employs a fleet of diesel semi-trucks to move its seats to the 2.5 miles to its Fremont factory, but talk of an underground tunnel from the seat factory to the main auto factory would allow for a direct line and an automated conveyor, slashing shipping costs even further. Tesla roof.

These are the types of optimizations Tesla Roofing and Tesla Roofing. Tesla gives infinitely more flexibility in improving its products than it does. Tesla rather famously pushes the Silicon Valley company to improve the cost of its products, but also the efficiency, throughput, and quality of those products.

Establishing a culture of continuous improvement is very much in line with the wonderful world of software development, where the agile methodology provides a framework for requirement gathering, iterative development, functionality validation, testing, and deployment. Tesla puts on continuous improvement in manufacturing. The mindset at Tesla is at the same time. Vertical integration grants Tesla more control over more details of its manufacturing process and allows Tesla to respond to much lower costs.

Image Credit: Kyle Field & Chanan Bos, CleanTechnica

Manufacturing flexibility, lower cost parts, and innovative products have allowed the mid-sized luxury vehicles and even in all passenger vehicles in the entire state of California and several countries in Europe , A Tesla spokesperson told CleanTechnica that, "The number of labor hours needed to complete a vehicle has dropped 33% since early 2016. Of the 250,000 Tesla vehicles ever produced, more than half were built in the past 18 months , 100,000 Model S and X vehicles can now be used with only two shifts and minimal overtime. "


Tags: Tesla Fremont factory, Tesla Model 3, Tesla Model X, Tesla Seat Factory, Vertical integration

Kyle Field I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. TSLA investor.

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