Answer Discussion Questions using the case study as a reference only (200 wrds per answer)

Case Application #3 Goals and Controls Topic: Role of goals in controlling, control process, efficiency and effectiveness Tesla. Elon Musk. You've probably heard of both. Tesla was founded in 2003 by a group of engineers who wanted to prove that buyers didn't need to compromise looks and performance to drive elec- tric-that electric cars could be "better, quicker, and more fun to drive than gasoline cars."60 Musk was not part of that original group but led the com- pany's Series A investment (the name typically giv- en to a company's first round of venture capital fi- 497 nancing) and joined Tesla's board of directors as chairman. He soon took an active role in the com- pany and oversaw the design of Tesla's first car, the Roadster, which was launched in 2008. Next came the Model S, introduced in 2012 as the world's first premium all-electric sedan. The next product line expansion was the Model X in 2015, a sport utility vehicle, which achieved a 5-star safety rating from the National Highway Safety Adminis- tration. The Model 3 was introduced in 2016 andtration. The Model 3 was introduced in 2016 and production began in 2017. From the beginning, Musk has maintained that Tesla's long-term strate- gic goal was to create affordable mass-market elec- tric vehicles. And the Model 3 was intended to be that product. It represents Tesla's first attempt at manufacturing a mass-market car. ] The company is, thus, at a critical juncture in its history ... a make-or-break moment. And things aren't looking so good right now. How hard can it be to make a car? The company's long-term production goal was to increase production to 500,000 vehicles a year by 2018. Tesla's vehicles are produced at its Giga Fac- tory in Fremont, California, as are most of its vehi- cles' components. Inside the factory, 1,068 robots weld, glue, or rivet parts together for the Model 3 sedans. 625 In April 2018, Tesla produced only 2,270 Model 3s, a far cry from the 5,000 cars a week that was its original goal for the end of 2017. So far, as of April 2018, only a total of 8,810 Model 3s have been delivered to customers since the beginning of the year. And there are 500,000 customers whothe year. And there are 500,000 customers who have backorders on the car. During the first and second quarters of 2018, the company had to halt production to update some of its manufacturing lines. Musk himself says that the Model 3 is mired in what he calls \"production hell.\"63LEI A critical bot- tleneck? The production of batteries, which are made at its battery factory in Nevada.64LEI It takes seven hours to product a battery pack. That's an eternity in an industry where production lines need to run continuously or risk burning through tons of cash. Musk sat down with workers and en- gineers, who had been discussing solutions for months, and worked to slash production time to 70 minutes. How? By completely reordering the ow of battery assembly. So what's going on with the company's production processes? The company says that these down- times are \"planned\" in that it gives company em- ployees time to improve the automation and me thodically tackle bottlenecks in order to increase . Cl . . production rates.65L Tesla employs its own ver51on of the Japanese principle of \"kaizen\" or \"continu ous improvementsomething it calls 'continual disapproval' of its processes as it looks for ways to So what's going on with the company's production processes? The company says that these down- times are \"planned" in that it gives company em- ployees time to improve the automation and me- thodically tackle bottlenecks in order to increase . El production rates.65L Tesla employs its own version of the Japanese principle of \"kaizen\" or \"continu- ous improvementsomething it calls 'continual disapproval' of its processes as it looks for ways to \"(g be more efficient and effective. However, al- though such adjustments and temporary shut- downs are nothing new in the automotive industry, Tesla is fighting to make a name for itself and pro duction mishaps like this don't help that situation at all. One industry expert says that although Tesla may be a \"pioneer in technology and a trailblazer in the electric vehicle market,\" those strategic capa bilities and core competencies don't necessarily translate to knowledge of the manufacturing D . . . process.67L Scaling up production has its own unique set of challenges, as Tesla and Musk are discovering. In addition to the production chal- lenges, there's a financial roadblock. The company is burning through cash as it works through its production struggles. Other nancial measures production struggles. Other financial measures- including net working capital, market value of company stock, credit rating, and free cash flow- are also deteriorating. 8 Another challenge for Tesla is that two top key executives have "stepped away from" the company as it works to boost pro- duction of the Model 3.69 One of those executives, according to a company spokesperson, is taking six weeks off to recharge and spend time with his fam- ily. The other executive has joined self-driving car company Waymo. Epilogue: Tesla employees at the Fremont production facility met the 5,000 cars a week production goal the last week of June 2018 ... the final week of the second quarter. However, analysts now say that the true test is whether Tesla can maintain that aggressive rate with- out sacrificing quality. 70 0Exhibit 15-2 The Control Process Is standard Do Compare being attained? nothing actual performance with standard ls variance acceptable? Measure Standard actual performance Identify cause 01 variation ls standard acceptable? Revise Correct standard performance Specic goals ARE the performance standards