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SMT007-Feb2022

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82 SMT007 MAGAZINE I FEBRUARY 2022 Case Study: Tesla's Success Amid Crises Despite a global shortage of critical compo- nents needed for car manufacturing, Tesla's electric car deliveries have increased by 87%. How did they achieve this unprecedented surge in production? rough a mix of vertical integration and ingenuity. Elon Musk decided to utilize in-house equip- ment and in-house soware engineers. By not outsourcing the manufacturing of their PCBs, soware writing, and other stages of the creative and assembly processes, Tesla has retained control over its production. One report by Rebecca Elliot of the Wall Street Journal states that leaning on "in-house soware engineering experts" allowed Tesla to "keep production lines running" and "quickly rewrit[e] the soware necessary to integrate alternative chips into its vehicles 1 ." Deciding to keep production in-house has helped Tesla deliver over 936,000 vehicles in 2021, while the rest of the auto industry has been waiting for outsourced chips that are slow to arrive. What can we learn from Tesla's success amid the chip shortage? 1. Use the resources available to you. Rather than seeing the shortage as some- thing unavoidable or unbeatable, Elon Musk chose to look at what was available instead of what wasn't. Other companies can do the same. Whether rewriting soware with on-staff engi- neers or reworking printed boards to retain and reuse much-needed components (rather than letting them go to waste), there are many resources available when we think outside of the box. 2. Keep as much of your process in-house as possible. By producing in-house, like Tesla, you will not have to wait your turn as an offshore fac- tory decides if you are a priority, endure ridic- ulous lead times, or pay the inflated rates pres- ent in today's market. Tesla bypassed a lot of the problems facing many in the automotive industry by having an in-house engineering and assembly model, and so can many other forward-thinking companies. Reduce Costs With In-House Production, Out-of-the-box Thinking The Mannifest Feature Column by Emmalee Gagnon, MANNCORP Figure 1: Number of deliveries provides by Tesla in 2020 and 2021. 1

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