Just imagine sitting in your house or job and suddenly a 9.0 magnitude strikes. This what happen to Japan back in 2011 and it ruined people’s lives leaving destruction in the country. One industry that was hit the hardest was the automotive industry. There are a couple a major motor companies that come from Japan. Nissan Motor Company Ltd was one that was hit the hardest. The following case study will concentration on the managing operations of Nissan and how the focus was on limited parts of Nissan’s operation management and creating the product line. I will survey how Nissan Motor Company Ltd undertakes the use of tools, through their functions, and competitive advantage in operation management, as well as looking into operations and manufacturing activities. The second half will focus on the theories and techniques involved with the operation management.
The Nissan Motors LTD is in the car assembling business, delivering different models of vehicles. Research by Heizer (2017), this means that operation management focuses on producing and managing products and services for customer use. Research by Schmidt & Simchi-Levi (2013), Nissan successfully ran operations management to generate value for their customers by refining and limiting their product line and overhauling their brand and manufacturing process. Research by Schmidt & Simchi-Levi (2013), the three areas that generate value for its customers are; risk management, simpler production control and supply chain management. Research by Schmidt & Simchi-Levi (2013), the supply chain management is decentralized. This meant it was able to meet the demands of the customer, as an example GPS. The production control supervisors are capable of effectively manage their production. The risk management was put in place in response to the 2011 Earthquake.
Nissan accomplishes an upper hand in competitive advantage because it utilizes operation management that is absorbed and adaptability throughout Nissan. After the 2011 disaster, Nissan made the decision to decreased product offering. They choose to make it simpler and in competition with its rivals who kept up higher amounts and a more extensive blend of stock. Research by Schmidt & Simchi-Levi (2013), Operational management believed this was a not only a driving aspect in the simplification of their entire business model but also resulted in a measurable sales increase. Nissan adopted a build-to-stock strategy. This strategy will protect Nissan’s money in warehousing vehicles that are not ready to be sold. This will allow Nissan to keep a focus on what the customers want.
The service and manufacturing operations at Nissan have some similar qualities and some that are different. The major difference between the two is that without the solid service operations, there would be no manufacturing. The service management is the follow up after the initial purchase offering some power to the purchase.
Theories and Techniques
The critical path method (CPM) and the program evaluation and review technique (PERT) are two project management techniques that are used to plan out and track project objectives. These two techniques are to develop a plan of action then set them into motion from the beginning of the project to it is complete. Both techniques have some similarities and some differences. PERT is a project management implement procedure to schedule, organize, and coordinate tasks with a project. Research by Schmidt ; Simchi-Levi (2013), the CPM on the other hand is a step by step project management technique used for the planning process that defines critical tasks with the objective of preventing time-frame bottlenecks and other production problems. The types of projects that Nissan would favor PERT over CPM would be the time it takes to do the activities. Research by Schmidt ; Simchi-Levi (2013), with the PERT technique it delivers three time estimates for each activity, while CPM supplies only one-time factor per activity. If Nissan choose the CPM type projects over the PERT techniques it would be used for activities. The amount of time is not essential in production. This means Nissan might prefer to use the CPM technique when responding to concerns that customers may have.
Research by Schmidt ; Simchi-Levi (2013), the seven steps make up the forecasting system are as followed:
Step one: Determine the use of the forecast – Nissan would have to choose if they are going to take the essential steps to produce the forecast model.
Step Two: Select the items to be forecasted – They begin with their largest proceeds.
Step Three: Determine the time horizon of the forecast – At this step Nissan will have to develop and maximum advantage if it should run simultaneously with their fiscal year.
Step Four: Select the forecasting model (extrapolation, regression, or hybrid) – The best option for Nissan would be the extrapolation model based on historical trends.
Step Five: Gather the data needed to make the forecast – Nissan would gather financial information. While sales managers will need to arrange for historical sales information and financial statements.
Step Six: Make the forecast – after Nissan has reviewed the reports and had time to speak with those involved. The forecast can be gathered.
Step Seven: Validate and implement results – They will need to make sure that the model, assumptions, and data are valid. Check for error and measures are useful. The forecasts are used to alter manufacturing and sales plans.
As of 2018, Nissans top selling product was the Nissan Rogue. Knowing this, Nissan should collect data and explore. Research by Schmidt ; Simchi-Levi (2013), the usage of the foresting system for their best selling product, the Rogue will allow the administration to offer better client benefit and enhance reaction to request in light of the fact that there will be supply chain visibility. Research by Heizer (2017), the following are the major categories of the supply risk chain for Nissan case study and the association that the risk in reduction tactics have on the car manufacturer;
1.) Theft, Vandalism and Terrorism- guaranteeing that insurance is up to date; security measures including RFID and GPS broadening and protection with patents
2.) Distribution- checking actual contracts and penalties, cautious selection
3.) Supplier Failure to Deliver- preplanning, many suppliers, contracts with drawbacks, subcontractors on retainers
4.) Economic- Battle exchange rate risk, purchasing contracts and address price fluctuations.
5.) Natural Catastrophes-applying a level 1 and 2 supplier and have them assigned to different locations.
6.) Outsourcing- saves money for Nissan but Nissan can lose control
7.) Supplier Quality Failure- Less quality of supplies for Nissan. They should be mindful when selecting a supplier and they should have multiple contracts with suppliers.
Nissan could mitigate exposure to supply chain disruptions caused by natural disasters by working together with local and national suppliers in Japan. They should some type of business plan in place that would prevent this type of rebranding after a natural disaster.
Taking everything into account, Nissan could decrease the effect of the 2011 quake by having crisis plan with recuperation plan in place. The Nissan case study demonstrates how significant operation management is to a company/business.