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Table of Contents
1. EXECUTIVE SUMMARY …………………………………………………………..2
2. AN ANALYSIS OF THE SUSTAINABILITY PERFORMANCE OF ELECTRONIX
COMPANY SUPPLY CHAIN ………………………………………………………….2-4
2.1 ENVIRONMENTAL IMPACT …………………………………………...3
2.2 SOCIAL IMPACT…………………………………………………………4
2.3 ECONOMIC IMPACT…………………………………………………….4
3. BENCHMARKING OF ELECTRONIX COMPANY WITH TESLA………………5-7
3.1 PROCURMENT…………………………………………………………..5
3.2 PRODUCTION……………………………………………………………5
3.3 WAREHOUSING…………………………………………………………6
3.4 TRANSPORTATION AND LOGISTICS…………………………………6
3.5 PACKAGING………………………………………………………………7
4. RECOMMEDATION ON PRODUCT LIFE CYCLE MANGEMENT………………8-10
5. CONCLUSION…………………………………………………………………………10
6. REFERENCES…………………………………………………………………………..11
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1. EXECUTIVE SUMMARY:
The main aim of this report is to evaluate and analyze the sustainability performance of
Electronix electric car company’s supply chain management. By using the concept of the
triple bottom line, Electronix’s supply chain is studied and analyzed in environmental, social,
and economic impact assessed. The key highlights of the analysis focused on CO2 emission
and product life cycle management, which requires development from the company.
Benchmarking analysis is then conducted using Tesla as a benchmark and studying their
management and addressing the issues of the Electronix company. Finally, a recommendation
is made by using the product life cycle as a way for Electronix and its products by
recommending the best management of the product life cycle for the future development of
the company and take different steps in improving and updating with the situation in the
market in its social and environmental sustainability.
2. AN ANALYSIS OF THE SUSTAINABILITY PERFORMANCE OF ELECTRONIX
COMPANY SUPPLY CHAIN:
Triple bottom line analysis:
Triple bottom line is accounting framework of three components environmental, social,
economic impact on the companies and industry. This helps to analysis the company from all
over area and sustainability of the company in the market. Analysis of components for
Electronix company and its product is discussing as under:
Environmental Impact:
Electronix PLC company main focus is to provide high ended luxury electric cars in the
market with minimum environmental pollution. Company first product Electronix Pegasus 4S
is built around the same philosophy of sustainability and environmental consciousness with a
fully electric saloon car. With speed and range of400 mile range and 0-60 mph time of 2.8
seconds, innovative material is used to reduce carbon emission during production and
transport. By the use of the ‘Plastica’ which is 95% post-consumer plastic waste and coated
in a special gel coat which can easily be painted ordinarily. The interior trim is made from a
hemp material that can be used for a long time. Even in the seats of the cars, leather is not
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used and a special fiber called “Vegan” which is Ultraleather and Alcantara material made up
which support environment friendly for a long time and reusable easily. (Bradbury, H., 2003)
As mentioned in the figure. The weight of the vehicle is reduced by replacing the iron cast
with the aluminum and magnesium material and even reduce the fuel composition by a 10%
percentage. By using less-weight material with proper application and technique and using
more reusable products makes the product eco-friendly. The battery of the car with the “buy-
back option” plays a major part in environmental commitment. The product contains a large
100 KWh Lithium battery, after a long time of use of the battery, it can be used as household
or grid power storage easily and the company would pay 25000 pounds for the battery if it is
exchanged in the company.
The company has focused on using material eco-friendly and reduce carbon emissions but
due to the transport of material from different countries and assembling issues all the energy
saved or protected with the use of the material vanished. Inefficient management of the
supply chain and assembling process makes product value decrease and environmental
protection work also. With the current situation, it is becoming more difficult to protect the
environment and invest in the assembly line of the production with less pollution as more
delay than 2022 cannot be afforded by the company due to booking and payment by the
customers. The current situation is unpredictable and manging material import from different
countries is making more difficult for the company to manage it with the limited fund's ad
resources and achieve the target efficiently. (Murray, M., 2016.)
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Social Impact:
With the reduction in air pollution. the environment would become healthier and the impact
of global warning reduces by the reduction of the greenhouse effect on society. With the
fresher air, water and land society get mental and physical indirect benefit with innovative
products. The price paid on recharging the battery is very less than refilling the fuel in the
vehicle which would increase their saving and the maintenance cost of the product is very
less as the battery is resalable to the company or can use in-house or grid power.
Economic Impact:
The demand for petroleum will be reduced, which would bring the cost of the petroleum
product and fuel decrease and this fuel can be used at an affordable price in the company
where the requirement of fuel is high. The battery can be recharged by generating power
through solar panels and this would make the cost and maintenance reduce. With the less
emission in the environment requirement or need of cleaning the air reduce which decrease
the cost of the maintenances and help the economy to grow gradually. With reusable battery
provided by the company makes economic friendly for the customers and problem of the
waste maintains reduces. (Bradbury, H., 2003)
For now, it is difficult and very challenging for the company to launch the product by Q1
2022, as delay in the import of the material from different countries is seen and even the cost
of the materials are fluctuating and the problem of maintaining a workforce with proper
safety in the situation is difficult for the company. (Murray, M., 2016.)
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3. BENCHMARKING ELECTRONIX PLC COMPANY WITH TESLA:
Tesla is known for its innovation with excellent research and development departments and
its supplier relationship management. For an Automobile company, the requirement of the
raw material and assembly of the vehicles required around 300-400 parts for the production
of one car of one model. For an automobile company, managing the supplier efficiently is
important to continue the production and innovation at cost-effective rates. (Bradbury, H.,
2003)
Procurement:
Tesla:
Tesla belief in building the components in-house to have high vertical integration, which
would reduce the dependence on the suppliers and reach the economies of scale up to a
certain level. Due to the large quantity of production i.e. around 1000000 production of
Model S makes suppliers adjust with the location of the production and material cost. For the
Model S product, Tesla Change the location and shifted to Silicon Valley which is difficult
for transportation but supply agree to transport and help in the production of the cars with the
company. Tesla manages the supplier effectively by treating them as a partner in production
and produces a large quantity of the product and manage the cost of production effectively.
(M. E.2012).
Electronix:
As a start-up, it very difficult to procure and maintain the relation with the suppliers, as
suppliers are also new with the company, and time is required to make trust and respect in the
market. In the beginning, the company has to manage themselves as per the supplier and try
to make a good relationship with the supplier for future work. currently, vertical interaction in
the company is not possible, as required a large number of resources or in-house
procurement. (Hunt, T. ,2015)
Production:
Tesla:
Tesla has integrated automation in its manufacturing processes by giving some level of
human intervention (Thompson, 2018). This is helpful to ensure productivity and operational
efficiency within its production plant. With the help of vertical integration, Tesla
manufacture, gearboxes, electric motors lithium-ion battery packs, and many other
components for their various car models in their in-house production plant which leads to less
dependence on the supplier for the material and parts in the production. The Gigafactory 1
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covers 3.5 million sq. feet in size and with a production capacity of manufacturing batteries
for more than 500,000 cars per year (TESLA, INC., 2018).
Electronix:
At this stage, the company has to outsource the material from the supplier, as in-house
production and vertical integration require strong financial and human force support. During
this pandemic, it would be very difficult to manage the materials even from the outside
country due to various restriction on the countries and assembly of the products require huge
capital and space with machines and equipment. This would lead to large dependence on the
suppliers and difficulty to maintain relationships in long run with the suppliers.
Warehousing:
Tesla:
The strategy of success of Tesla is arranging Logistical nearness to suppliers, resources, and
markets which reduce the time and cost of the production of the parts. Apart from the Tesla
factory in Fremont, California, they also have manufacturing and assembly operations in
Lathrop, California, USA, and Tilburg, Netherlands.in Gigafactory 1 and 2, production of the
battery takes place which is the main part of the electric vehicles. (TESLA, INC., 2018).
Tesla believes in traditional sales strategy and so they have their stores without any
intermediaries of dealers and agents. They have their own Tesla flag-ship stores without any
intermediaries such as dealers or ad agents. Partnership with Toyota has helped the tesla by
reducing the cost by implementing just in time strategy for inbound inventory (Lambert,
F.,2018,).
Electronix:
Strong supply chain management and warehousing facilities are required to become
successful in this competitive and uncertain market. Due to the startup of the company,
investment in warehousing would require a huge amount whereas in automobile investment
in research and development would give you more benefits than an investment in another
department. Currently, outsourcing or partnership with the warehousing company would be
more beneficial for the company until the sales of the product in the market. Success would
be seen after the sale of the product through the initial pre-order of the company has given the
big start for the company production. Partnership with the other company would benefit the
company like tesla has partnership with Toyota and Panasonic for the materials.
Transportation and logistics:
Tesla:
Tesla Gigafactory has increased the capacity of the production and warehousing of the
products is available due to large space. Due to good relations and huge quantity order with
the suppliers, Tesla tries to make production plant of the company nearby its factory so that
time and cost of the transportation reduce and easy availability of the resources are possible.
With that parts which are easily available from nearby area, Tesla outsources them easily and
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focus on major parts in the in-house production like production of lithium battery which
reduces dependence on the supplier and the smooth production process is possible. The use of
the information system and partnership with its company helps to make and runs efficient
logistics of the products and the parts of the different vehicles in the company. (M. E. 2012).
Electronix:
Due to the USP of the company, final assembling of the products is to be done in the UK and
for that transportation of the parts from all over the world to the UK is to be done and then
assembling process setup and equipment would be required to finalize the products. In all this
process, the cost and time utilized would be more and which leads to the success of the
product in the competitive and pandemic situation becomes difficult for the company. The
company has to bear the cost and will not be able to play a cost-effective part in this
condition in the market.
Packaging:
Tesla:
Tesla company believes in delivering the product directly to the customer and does not go for
the dealership or partnership in the selling of the products to the customers. Personal
company interaction with the customer helps to know the true feedback and requirement to
the company and best after-sales services can be provided by the company to the customers.
The reusable of the batteries and other products makes the product more efficient and cost-
benefit to the customer and the company in the market with the environmental protection.
(Lambert, F.,2018,).
Electronix:
The company is providing reusable batteries i.e. batteries after a long time used can be used
in household or grid processes easily which would be a cost-benefit to the customer and even
the environment can be protected with these batteries. (Hunt, T. ,2015).The other option of
gaining 25000 pounds from the company on returning the batteries to the company is also
provided which makes the more reliable company in the market. Competition is increasing
and also uncertainty in this situation makes it difficult for the company to launch the product,
as the delay from 2020 to 2022 has seen. Delaying more time in the launch of the product
would make the more difficult for the success s the cost of the materials and another fixed
cost would go on increase in the company financial report. (Murray, M., 2016.)
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4. RECOMMENDATION THROUGH EFFICIENT PRODUCT LIFE CYCLE
MANAGEMENT:
For any company, managing its product life cycle is important to sustain in the market for the
long run and become a successful company in the market. Similarly, for Electronix company
also, managing its product Pegasus 4S is important as it is the first product in the market.
Currently, it is at the introduction level, as it is not launched in the market and it is still at the
level of production and development part. Managing the product life cycle from the
introduction makes the success of the product easy. Tesla is known for its efficient
management of the products with major investment in the research and development
department and continuous analysis of the market trends makes them more reliable. (Murray,
M., 2016.)
Figure: Study of product life cycle management case study of Tesla
Introduction: Pegasus 4S is in this stage where it is still in the development part and
production. changes can be made easier now with the change in the market trends and
competition. The company should analyze market trends continue, as currently, the pandemic
has changed the dynamic of the market and currently people investment in automobiles is less
due to medical and unemployment and restriction in the countries. Import of the parts are
affected badly due to this and delay in the parts and equipment makes it difficult for the
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company to assembling the process and launch the product on the pre decided date.
(Bradbury, H., 2003)
Growth: Product has achieved growth up to a certain level before the launch because of the
pre-order of the product and received 70000 pounds in the advance for the product booking
which has helped the company in cash management of the company. Due to this, the chance
of the success of the product is high and once it is launched, demand for the product would
increase with the increase in the demand of finance for the production and delivery in the
countries. For this, strong financial support should be determined at an early stage would
make the use of the time effectively at the demand period. (Murray, M., 2016.)
Maturity: Achieving this level required the time and continuous demand of the product in
the market. At this level, continuous innovation and research and development are required to
maintain the position in the market. The major investment of the company should be lay on
the R&D department than in investing in warehousing and logistics which can be outsourced
or partnership can be done easily. (Hunt, T. ,2015)
Decline: At this stage, demand for the product is no more, with continuous product
development in hybrid, fuel-based, pure, and other innovative products and development
company can avoid this stage in the life cycle.
Battery life cycle:
www.researchgate.net%2Ffigure%2FAutomotive-lithium-ion-battery-value-chain_
The above figure gives the life cycle of the lithium batteries used in the electric cars were at
the initial stage, cobalt production and production of the raw materials or acquiring of the raw
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material is done. Tesla in his Gigafactory has a battery production plant that manufactures
560000 batteries in the year and which they used in their different electric vehicles. Cobalt is
the main material in the production of batteries with the major percentage in the production.
After that, cell component manufacturing takes place and raw components are manufactures
or outsourced. Then cell manufacturing process takes place by combining different
components in the production cycle. With that battery pack is also manufactured which is the
last stage of the production of the batteries after that the batteries can be used in electric cars.
Batteries are assembled in the cars and the cars are ready to use for the customers in the
market. After the long use of the batteries, at the end of the life of the batteries, it is sent for
the recycling process so that it can be reprocessed and reused in the production.
5.CONCLUSION:
By analyzing the company’s sustainability through the triple bottom line, key problems are
analyzed are CO2 emissions from transport and delay in the production due to covid issues
and import of parts and assembling process in the UK was highlighted. By analyzing and
studying the Tesla company's sustainable supply chain management helps in addressing the
issues and different ways and approaches in tackling the problems effectively. By analyzing
and recommending the solution for the problem of the product life cycle for the company is
important as it is a start-up and is an essential period if this problem is not handling
effectively then it would create the problem in the success of the company in the future.
Overall, an improvement in Electronix company management and its product management
would with continuous sustainability performance lead only to the protection of the
environment but will also provide the company the standards and the success which company
is looking forward to in this competitive environment and pandemic situation with continuous
increase in their product line and development. (Hunt, T. ,2015)
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6.REFERENCES:
About Tesla. (n.d.). Retrieved from www.tesla.com: https://www.tesla.com/about
Tesla Will Have a Tough Time Ramping up Production. Here's Why. Retrieved from
Industry Week: https://www.industryweek.com/continuous-improvement/tesla-will-have-
tough-time-ramping-production-heres-whyBoylan, C. (2016, May 27).
A Brief History of Tesla Cars In One Simple Infographic. Retrieved from Clean Technical:
https://cleantechnica.com/2016/05/27/brief-history-tesla-cars-one-simple-infographic/Carter,
C. R., & Rogers, D. S. (2008). A framework of sustainable supply chain management:
moving toward new theory.
Bradbury, H., 2003. Sustaining Inner And Outer Worlds: A Whole-Systems Approach To
Developing Sustainable Business Practices In Management. Journal of Management
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Murray, M., 2016. An Expert's Guide to Lean Supply Chain Management. [online] The
Balance.
Hunt, T. (2015, June 2). Is There Enough Lithium to Maintain the Growth of the Lithium-Ion
Battery Market? Retrieved from green tech media:
https://www.greentechmedia.com/articles/read/is-there-enough-lithium-to-maintain-the-
growth-of-the-lithium-ion-battery-m#gs.Lkmlb4EtK
Lambert, F. (2018, September 22).Tesla launches ‘door -to-door service’ called ‘Tesla
Direct’ to help with Model 3 delivery during rush week . Retrieved from electrek:
https://electrek.co/2018/09/22/tesla-direct-door-to-door-service-model-3-delivery-rush-
week/Mangram.
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