An analysis of Tesla’s use of Total Quality Management and The Balanced Scorecard.

Analysis of Tesla’s Use of Total Quality Management and the Balanced Scorecard Student Name Institution Professor Name Course Date Table of Contents TOC \o "1-3" \h \z \u Analysis of Tesla’s Use of Total Quality Management and the Balanced Scorecard PAGEREF _Toc161254766 \h 3Total Quality Management PAGEREF _Toc161254767 \h 3Leadership Commitment to Quality PAGEREF _Toc161254768 \h 3Continuous Process Improvement PAGEREF _Toc161254769 \h 4Customer Satisfaction PAGEREF _Toc161254770 \h 4Implementing a Cost of Quality Report (COQR) PAGEREF _Toc161254771 \h 5Identification and Classification of Quality Costs PAGEREF _Toc161254772 \h 5Cost-Benefit Analysis of Quality Improvement Initiatives PAGEREF _Toc161254773 \h 6Barriers to COQR Adoption at Tesla and Solutions PAGEREF _Toc161254774 \h 6Balanced Scorecard PAGEREF _Toc161254775 \h 6Customer Perspective PAGEREF _Toc161254776 \h 7Internal Business Perspective PAGEREF _Toc161254777 \h 8Integration and Cause-and-Effect PAGEREF _Toc161254778 \h 9References PAGEREF _Toc161254779 \h 11 Analysis of Tesla’s Use of Total Quality Management and the Balanced Scorecard This report analyzes Tesla’s performance issues and provides solutions by applying Total Quality Management (TQM) principles and the Balanced Scorecard approach. Tesla faces quality problems that negatively impact customer satisfaction, as evidenced by recent recalls, reliability issues, and build quality problems (Isidore, 2023). This report identifies critical TQM principles that Tesla needs to improve and recommends implementing a Cost of Quality Reporting (COQR) system to address these issues. It also evaluates how Tesla can apply the Balanced Scorecard to support its competitive strategy in emerging markets. Total Quality Management Total Quality Management (TQM) involves all employees in continuous improvement to enhance product and service quality. To thrive in operations, it prioritizes customer happiness, staff engagement, and process improvement (Anvari et al., 2011). TQM promotes a quality-conscious culture whereby everyone strives to provide exceptional customer value. Leadership Commitment to Quality Tesla’s latest recall, owing to quality concerns, shows top leadership’s lack of quality commitment. According to Khan (2021), the lack of specific quality targets and the inability to prioritize quality improvement projects imply that Tesla’s quality management needs to be improved. Tesla acknowledges past quality control lapses like inconsistent panel gaps and paint issues. CEO Elon Musk admits that the criticism was accurate and vows to improve during the production ramps of new models (Isidore, 2021). The company is working to identify and address quality problems more quickly by increasing inspection capabilities (Wang & Chen, 2012). However, maintaining the balance between automation and human oversight is critical to delivering consistent quality across Tesla’s vehicle lineup. Continuous Process Improvement At every level of management, TQM stresses the significance of constant improvement. Experts believe in preventing management mistakes, which is the foundation of continuous improvement (Sharma, 2016). The guiding idea of this approach is to always strive for more significant results by improving all elements. In cases where errors cannot be corrected, identifying them in time can help stop them from being transferred down the value chain (Sonobe & Otsuka, 2014). To implement continuous improvement, project managers must halt production until the errors can be fixed. Tesla installed a battery safety device and gave it out for free to customers in 2013 after reports of fires. However, there are still a lot of parts of the electric vehicle that may need some improvement (Young, 2013). Recharging a Tesla’s battery at the supercharger, the company’s twist on the traditional “gas station,” takes 30 minutes (Bitca, 2023). This time is excessively lengthy for a customer to wait for the vehicle to charge. Also, the battery capacity needs to be better than what buyers hope for (Young, 2013). There has been some speculation over whether or not the current trend of 8% yearly advances in battery capacity will persist into the future. Customer Satisfaction Tesla aims to deliver customer satisfaction by producing high-quality, innovative products at competitive prices. With its cutting-edge design and impressive performance, the Model S has garnered significant attention and acclaim (Krebs, 2016). However, the company has faced criticism over component quality issues, raising concerns about its consistently meeting customer expectations. In today’s social media landscape, a company’s connection and engagement with its customers significantly shape perceptions of quality (Johnson, 2022). Tesla competes against formidable rivals like Ford and Toyota, long-established automakers with substantial market influence (Bitca, 2023). While Tesla’s open patents for vehicle batteries and Superchargers and its efforts to forge partnerships for hybrid product offerings demonstrate a commitment to customer satisfaction, the company must prioritize active listening and robust feedback channels, too. Implementing a Cost of Quality Report (COQR) Due to quality control concerns, Tesla has been plagued by missing suspension parts, irregular spacing, and poor materials. According to Rob Stumpf, Tesla uses advanced automated inspection technologies to improve quality management and address these issues. This technology involves employing a Quality Inspection Engineer to build in-house automated vision technologies for thorough inspections (Stumpf, 2023). The Fremont plant is adopting an Automatic Inspection System using robots. Tesla values human skills in production and recognizes the hazards of over-reliance on technology. Identification and Classification of Quality Costs Tesla should implement a Cost of Quality Reporting (COQR) system to categorize quality costs into four main areas: prevention costs, appraisal costs, internal failure costs, and external failure costs. This classification will enable Tesla to pinpoint areas for improvement and drive targeted quality initiatives (Garcia-Ortega et al., 2021). Prevention costs encompass proactive measures to minimize defects and non-conformances (Sower et al., 2007). Problems with internal failure costs involve the defects and problems found in the product before the user can observe them. The costs associated with this will be the repair guarantees, the expensive rework, the scrapped materials, and the repaired appliances causing the process and component issues (Sower et al., 2007). The external failure costs are generated due to features uncovered after the product’s delivery to its final customer (Garcia-Ortega et al., 2021). For Tesla, these costs consist of dealing with customer complaints, arranging product recalls, guaranteeing repair expenditures, and its brand reputation. Cost-Benefit Analysis of Quality Improvement Initiatives By utilizing COQRs, Tesla can perform cost-benefit analyses on quality improvement initiatives. As an illustration, implementing sophisticated battery manufacturing technologies to diminish defects will entail initial expenditures but result in sustained cost savings through the avoidance of warranty claims and recalls (Thompson et al., 2015). Tesla will enhance profitability and customer contentment while prioritizing investments that yield the highest return on investment by quantifying quality improvement project costs and benefits (Thompson et al., 2015). By utilizing COQRs, Tesla can perform cost-benefit analyses on quality improvement initiatives. Barriers to COQR Adoption at Tesla and Solutions COQR may disrupt employee-accustomed routines and systems, making change resistance difficult. Employees may oppose new methods due to job instability or more data gathering and analysis for COQR adoption (Arifalo, 2...