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What happened when Elon Musk failed to send a car in time to his client?



Musk called this problem "Hell of logistics delivery". You can do this to avoid this fate.

November
16, 2018

8 minutes to read

Opinions expressed by associates Entrepreneur They are personal.


The successful delivery of finished products Customers are usually Achilles' heels for every company B2B about B2C. Whether you build pipelines, drive successful coffee brands, or make electric cars, load management will never be your strongest function, neither yours, nor someone who has high growth jobs.

That's why they are not partners, neither the board of directors nor analysts nor consumers want to hear that the fate of your business depends on which logistics you have to make these deliveries.

Let's do it flash back until Sunday, September 16th: that day Elon Musk, Company director Tesla Motorshe replied personally to a blind client who complained about the delay in delivering his new car. Musk wrote that his company was stuck in a "delivery logistics hell".

This is the appointment of Elon Musk, of course, the tweet has become a national news item. After all, Tesla is a high-tech company with a proud leader such as Musk, who often uses hyperbole and makes extravagant statements in public forums.

However, in the current context of the logistics market, musk tweets are not far from the truth. Problems with the delivery of Tesla cars are part of a significant problem affecting the job today: finding drivers and equipment necessary for moving goods.

At the macro level, supply chains in the United States suffer from a period of high demand and few supplies. As he reported Journal of Commerce, Gartner analysts predicted that supplies will be limited to 2018 and 2019.

Increasing this problem for Tesla is the fact that the delivery of finished vehicles is a special market, with a relatively small number of messengers who can move these cars to the market and deliver them into the hands of consumers. It is therefore difficult to find these special trucks, in addition to the limited number of drivers that can handle them.

Drivers must have a separate certificate to make this type of shipments and have a DOT license. Finding people who want to do this job has been a problem for a long time. As widely reported, the lack of drivers was a serious problem, especially last year, which led to a reduction in the capacity of all.

And that Twitter buyer is waiting for Tesla? Probably he knew firsthand about the continuation of delays affecting the "intermodal" logistics channel, including the train. As described by the Intermodal Association of North America, we are currently experiencing the highest season of traffic-carrying cargo. However, given that goods that are stuck in trains is commonplace this time of year, as suppliers move goods to sellers for the last quarter.

When it comes to Misha and Tesla, the company recently increased the production of the model 3, something that was very much expected, and hundreds of customers are waiting for the delivery of a car they booked a few months ago or even a year earlier. Increasing volume has a significant impact on the company's procurement chain. Higher production means a larger scope and a larger delivery process, leaving managers in unknown territories with which they usually do not participate.

What happened in Tesla … and on Valmart

A few months ago, Tesla announced that the "production hell" that Musk was talking about was over and finally achieved its long-awaited goal of producing 5,000 cars a week.

However, this increase in production level only aggravated delivery problems. For young people, high growth companies such as Tesla, thinking and supply chain management are often among the least successful strategic decisions.

For B2C companies in general, both marketing and sales Always They are coming first, since the increase in profits is necessary to create momentum, favoring the public interest and attracting investors. Logistics is usually not a priority function in any company, and the acquisition of this knowledge is internally viewed as an expense rather than an investment with significant returns.

For this reason, the delivery capacity problem has fallen on several small and medium-sized factories, especially in the retail sector, where larger chains such as Valmart imposes new rules on the supply chain of their manufacturers.

"Over time and complete" is the last regulation that impose Valmart to request that shipments, in the form of delivery of supplies, arrive during the warranted delivery window and that the load contains all agreed products. With heavy penalties for incomplete or delayed shipments, manufacturers look for ways to carefully monitor their incoming and outgoing loads.

A very common solution is to use the third as a logistics provider (3PL for its acronym in English). 3PL provides a wide range of services that enable customers to deliver a better service, deliver their deliveries on time and at agreed rates, making the supply chain process more transparent.

The 3PL industry grew rapidly, while some large companies became public and with significant increase in activity in the markets of the sector. In addition to providing a solution to interact with the various modes of transport necessary for the delivery of finished products, 3PL can help to avoid property shortages, providing visibility at stock levels, providing business intelligence with key performance indicators that are critical to the initiative, making companies faster and more flexible in relative to the changing market conditions.

The challenges facing Mus are somewhat similar to those of every entrepreneur who experiences hyper growth and high demand for their products. Here are some tips you can apply to your company to prepare them for higher loads:

Understand the challenges that come with increasing scope

Increasing the scope of what you produce has a significant impact on the supply chain. Higher production means a larger volume and a higher processing load. You may find yourself in an unknown territory and you are not used to driving.

Know the logistics or join the dominant company

Logistics is usually not a high-level function in any company, and the acquisition of experience is internally often seen as an expense, rather than as an investment with significant returns.

Find a partner who can identify ways to optimize and carefully monitor the output load

You will most likely have to face large penalties for late or incomplete shipments, so you should always look for optimization methods and carefully monitor incoming and outgoing loads.

Save time and money with a partner who works with all the necessary modes of transport

3PL can provide you with a wide range of services that enable you to provide better service, timely delivery of deliveries at well-negotiated prices, personalized reports and greater transparency in the supply chain.


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