Case Part A: Tesla’s Quality Challenge
When Tesla announced the release of its new Model 3 electric car, over 276,000 people from around the world put down $1,000 reservations for the car within three days. The innovative new car is a follow-up to the much more expensive Model S and Model X cars. Tesla, led by Elon Musk, the brilliant CEO of the company, now sells over 500,000 cars a year. The company will soon introduce the Cybertruck, another innovative product.
The fledgling Palo Alto, California, automaker has struggled with ramping up manufacturing when new vehicles are introduced. Consider the problems that Tesla had with the Model X sport utility vehicle when it was introduced. The company reported that there were many sourcing changes made late in the process of planning production. Tesla tends to make items, such as the middle seats in the Model X, in-house rather than outsourcing them, which is done by many car manufacturers.
The issues associated with the production of the cars are a complex combination of mechanical and computer software problems. Popular features of the cars include driving-assist autopilot functions, auto-parallel parking, and auto-braking. The cars even have an auto-summons feature that lets a driver park and retrieve their car with no one inside. Many post-production issues have been addressed through software updates downloaded to customers over wireless connections. Other mechanical problems are more difficult to resolve.
Owners have complained that the Model X falcon-wing doors will not open. When owners have problems like this, Tesla typically schedules a time to pick up the car for repair and leaves a loaner for use by the customer.
Another recent issue was a latch on the third-row seat that could come undone during a collision. Tesla decided to recall 2,700 Model X cars to replace the latches with a new design. This recall totally overloaded Tesla’s service outlets with waits of more than two weeks to make the repair. Some customers were offered rental cars due to the long wait.
So far, customers expect the “white-glove” treatment that Tesla currently offers, but a big concern is what Tesla will do when there are millions of vehicles on the road. Mr. Musk’s Tesla cars have many loyal customers, even though problems have been encountered. But moving from hundreds of thousands of vehicles to millions may be difficult, unless some major service improvements are made.
Questions Part A
1.Consumer Reports, the service that reports unbiased testing and ratings on cars (together with about everything else we buy), recommends avoiding new cars in their first year of production, especially those loaded with new technology. What can Tesla do to refute this recommendation?
2.How should Tesla “manage” the delivery of a new vehicle, like the upcoming Cybertruck, during the initial production rampup? Think about this relative to where cars should be delivered geographically and how the service process should be designed.
3.Should Tesla deliver the Cybertrucks to customers on a first-come, first-served basis (i.e., in the order of when deposits were placed)?
4.What other suggestions would you have for Tesla relative to ensuring the quality of its new Cybertruck?
Questions Part B
6.Set up and range control charts for the current process. Assume the operators will take samples of 10 washers at a time.
7.Plot the data on your control charts. Does the current process appear to be in control?
Chapter 11 Question 8
Which type of inventory system would you use in the following situations?
a.Supplying your kitchen with fresh food
b.Obtaining a daily newspaper
c.Buying gas for your car