Nissan's Company's Overview
Nissan Motor Limited is an international vehicle producing Company situated in Japan. According to the car manufacturing corporation ranking in 2013, it is among the best automobile organizations. Nissan is ranked after Toyota, Hyundai Motor Limited, General Motors, and Volkswagen group. It was created in 1930 and has seen under different changes since it manufactured its first car, the DAT. Moreover, it has merged with other car manufacturers to improve their quality and reach global markets. It has expanded its operations across the world as it produces in more than seventeen countries and its vehicles and spare parts are sold to more than 160 nations. The success has been pioneered by innovative technology and vast human capital because it has employed over one million workers. The company has been producing various products to meet the demands of different customers and maintain global shares.
- Generating Value - Nissan Case Study Analysis
Nissan Company utilizes different operations to generate value to the customers when providing its products. One of these methods is the decentralization of the supply chain which gives room for central control and foreign markets. The expanded operations allow the company to continue its manufacturing in different countries when disasters such as earthquake or tsunami happen in the mother country. Fiscal fluctuations in one country do not affect the operations of the company and the constituency creates value to clients who find reliable at all times. Flexibility is the current operation function that generates customer value for Nissan (Heizer & Render, 2014). The product line is simple because it adopts a build-to-stock method for few selected model they produce and a build-to-order approach for other brands. The application of these strategies has helped the company not streamline its operations and also boost sales Nissan (Heizer & Render, 2014). The approaches also helped the company to stand the natural crisis and analyze risks associated with their operations. The management developed risk control function to deal with natural disasters, for instance, each department is empowered to adopt preventive measures that reduce hazards without corporate coordination. It maintains a balance between service processes and production by employing by reducing the cost of production to minimize instability of foreign currency. This was achieved by localizing car manufacturing in America to reduce overreliance on Japan made products exports. If they did not do this their operation would be affected by financial and natural calamities emergencies (Heizer & Render, 2014)
Nissan Company maintains a competitive advantage over its rivals by implementing a strategy that is different. It adopts the "build-to-stock" approach within every car model they manufacturer and "build-to-order" approach for the rest of the stock. Some customers have different tastes and preferences and Nissan meets their demands by producing what they order. The strategies simply the process and increase their market share. Another strategy is risk management planning, effective management of projects and fast implementation of prevention measures. The management is consistent in establishing a team that analyzes and report the occurrence of risks. The projects are coordinated effectively in supply chain management and this makes it outdo the competitors. The coordination reduces over budget and past deadline projects that absorb company resources meant for innovation.
Planning for risk is another factor that Nissan implement to maintain a competitive advantage. For instance, in the case study, the organization established a committee which analyzed earthquake and tsunami occurrence in the future. However, the amount scheduled for these crises is undervalued since they do not occur frequently. Risk planning management is very significant because the company continues to thrive and make profits when rivals are facing losses as a result of the disaster. For instance, several Japanese car companies suffered greatly during the 2011 earthquake but continued with its normal operations because it was prepared. The company produced in foreign countries and maintained daily communication with the plant in Japan to ensure convenience production (NISSAN Motor Co., 2017). Diversification of operations by not only operates in different continents and employs people from all over the world, unlike other corporations that depend on Japanese human resource. The diversification offers a competitive advantage because it provides efficient pricing from suppliers and shipping centers.
Comparison of Service and Manufacturing Operations
The main objective of operations management is to organize business practices in an efficient manner to obtain the most possible return. The process involves the conversion of raw materials and labor into finished products. Therefore, whether it is a hotel or a manufacturing company, the objective is to improve expertise, customer loyalty, and a conducive working environment. There exists a variance between the administration of services and manufacturing. When administering a service corporation such as spas or hotels, the objective is to offer exceptional service that will make the customer happy. On the other hand, when administering manufacturing cooperation, the objective is to produce products through constant oversight of human capital, resources, and other allocations. Although there are differences between manufacturing and service operations many companies possess the two of them. Nissan focuses on customer service to create the value of the products. The producing department delivers value by creating efficient, reliable and durable cars. The customers are happy with Nissan manufacturing operations because the vehicles endure long with low maintenance cost. Likewise, the service operations allow for value creation through the provision of effective procuring and delivery process. The service team ensures that sales are done in time and that cars are delivered within the set deadline. Moreover, the team makes constant follow-ups to confirm that customers are satisfied with the cars.
Critical Path Method vs. Program Evaluation Review Technique
Operations management is made up of several processes and project management is significant. Program Evaluation Review Technique (PERT) and Critical Path Method (CPM) are two major techniques in projects management that Nissan Motors applies. Although the methods are similar, their difference is that PERT evaluates three diverse time approximations for each activity while CPM evaluates one-time factor. The techniques use six steps in the evaluation process. They include the following:
- Project definition and preparation of work schedule.
- Establish a connection between the processes and decide how they will follow each other.
- Demonstrate the system linking all involved undertakings.
- Allocate cost and time that each activity is estimated to take.
- Compute the critical path through the demonstrated system. Calculate both the longest and shortest time path.
Use the system to plan, monitor, and control activities throughout the project. The two methods manage projects successfully but, PERT is used to emphases on non-repetitive functions of production. Conversely, CPM is used on repetitive tasks and it is activated oriented while PERT is occasion oriented. PERT would be the best in serving Nissan's needs when managing risks in projects. On the other hand, CPM may be utilized in routine tasks and operations planning.
Prediction plays a significant in making companies competitive because it foresees future sales and activities. When forecasting, the company may use different models based on the targeted information.
The following are seven steps used before a forecasting model is developed;
1.) What is the purpose of the forecast and who is requesting it?
- Nissan Automobile Company requested the forecast to demonstrate the production of various cars that meet different customer preferences.
2.) Choosing what products will be predicted
-The company would choose particular models to predict their future events.
3.) Determine a timeline
4.) Time spent on manufacturing different models may take months or years. The company forecast to determine customer demands and the availability of the preferred vehicles.
5.) Choose the prediction model that meets the company's needs.
- Models are either quantitative or qualitative or quantitative hence there is a need to select the one that would work best. Nissan should adopt a quantitative model which utilizes past statistics and data to predict the future.
6.) Data gathering
- Choose the data and statistics to use in the prediction. The process of data collection depends on the needs of the organization.
7.) Create the forecast
8.) Verify and execute
When Nissan implements a forecast on the top-selling model to project the resource needed and customer buying patterns.
Supply Chain Risks
In most cases, companies are forced to source resources outside because they cannot produce all the raw materials needed. The outside sourcing is associated with several risks and it is the role of supply chain management to ensure that all resources and supplies are always available to prevent production's interruptions.
The following are the major risks that occur in supply chain management:
The category demonstrate how Nissan can successfully control risks such as economic crisis, natural disasters, and malicious damage
2.) Natural Catastrophes
These are unforeseen risks that can only be mitigated adopting a tiered supplier list. The suppliers should be in diverse geographical locations to ensure that if a disaster occurs only one will be affected.
3.) Supplier to Delivery Failure
To successfully mitigate this risk, Nissan should develop a relationship with many suppliers and implement contract penalties when they fail to deliver. This will make sure that sufficient supplies are always available to avoid disruptions in production.
Sometimes there are failures in the distribution channels in the company. The risk is controlled through vigilant oversight and contract penalties implementation.
These risks can be managed by effective negotiations with suppliers to address prices fluctuations. This protects the variations in foreign currencies.
This would ensure protection against exchange rate risk.
6.) Terrorism, Theft or Vandalism
There are several approaches that can be used to decrease vandalism and terrorism. They include insurance cover, patenting, and diversification. The company assesses the effectiveness of the risk management team to address these issues that may disrupt the production process.
Theories and Techniques
Theory of Constraints Process
The TOC process plays a significant role in the company by address constraints limiting it to accomplish its objectives. Nissan is a vehicle manufacturer hence it faces two areas of TOC when assessing the constraints. These include the manufacturing cars parts and the assembling process. The company can improve its production if it applies the TOC steps in the two lines. The steps would boost efficiency in the manufacturing and assembly process to enhance quality management. The following are the steps that can be used to assess the Theory of Constraints and their effect on Nissan Company.
Step 1: Identification of the constraints - In this step, Nissan should detect factors lim...
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