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Toyota vs Tesla – Supply Chain

This is a heavyweight title fight of automotive supply chains: Toyota vs Tesla. Tesla and Toyota are two of the leading automakers in the world, but they have very different approaches to supply chain management.

Toyota

Toyota is a traditional automaker with a long history of manufacturing cars. The company has a well-established supply chain that is based on the principles of Just-in-Time (JIT) production. This means that Toyota only produces the parts it needs, when it needs them, and in the quantities it needs. This helps Toyota to reduce inventory costs and improve efficiency.

Toyota’s supply chain is also highly vertically integrated. This means that the company produces many of its own parts, rather than relying on suppliers. This gives Toyota greater control over its supply chain and helps to ensure quality.

Tesla

Tesla is a newer automaker that is known for its innovative electric vehicles. The company has a more vertically integrated supply chain than Toyota, but it is not as mature. Tesla produces some of its own parts, but it also relies on a network of suppliers.

Tesla’s supply chain is also more complex than Toyota’s. This is because Tesla uses a variety of new technologies in its vehicles, such as battery packs and electric motors. These technologies require different parts and suppliers than traditional gasoline-powered vehicles.

The table below summarizes the key differences between the Tesla and Toyota supply chains:

CharacteristicTeslaToyota
Vertical integrationHighMedium
ComplexityHighLow
Just-in-Time (JIT) productionYesYes
Supplier networkGlobalGlobal
QualityHighHigh
CostHighLow

Advantages and disadvantages

The Tesla supply chain has some advantages and disadvantages.

  • Advantages:
    • Tesla has more control over its supply chain, which can help to ensure quality.
    • Tesla can be more responsive to changes in demand, as it does not have to rely on suppliers.
    • Tesla can use its vertical integration to reduce costs.
  • Disadvantages:
    • Tesla’s supply chain is more complex and can be more difficult to manage.
    • Tesla’s supply chain is more vulnerable to disruptions, as it relies on a smaller number of suppliers.

The Toyota supply chain also has some advantages and disadvantages.

  • Advantages:
    • Toyota’s supply chain is more mature and easier to manage.
    • Toyota has a larger supplier network, which can help to reduce risks.
    • Toyota’s supply chain is less expensive than Tesla’s.
  • Disadvantages:
    • Toyota has less control over its supply chain, which can make it more difficult to ensure quality.
    • Toyota is less responsive to changes in demand.

Automotive Supply Chain Quotes

  • “Always focus on the front windshield and not the rearview mirror.” ~Colin Powell
  • “When you are out observing on the gemba, do something to help them.  if you do, people will come to expect that you can help them and will look forward to seeing you again on the gemba.” ~Taiichi Ohno.
  • “Second place is just the first-place loser.” ~Dale Earnhardt
  • “I always have optimism, but I’m realistic. It was not with the expectation of great success that I started Tesla or SpaceX… It’s just that I thought they were important enough to do anyway.” ~Elon Musk.
  • “If you are going to do TPS (Toyota Production System) you must do it all the way.  You also need to change the way you think.  You need to change how you look at things.” ~Taiichi Ohno
  • “No one can measure the loss of business that may arise from a defective item that goes out to a customer.” ~W. Edwards Deming
  • “Constantly think about how you could be doing things better. Keep questioning yourself.” ~Elon Musk.

Toyota and Tesla Supply Chain Resources

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