In 2011, a massive earthquake struck Japan causing a devastating tsunami, which affected the country’s economy. The automobile industry suffered the worst loss for several years as a direct result of the tsunami. Nissan is one of the many auto manufacturers that were affected why the disaster and is yet to recover fully. This paper describes how operations management practices will help the company to recover and remain more resilient.
- Operations management refers to the implementation of business practices aimed at enhancing efficiency in the production process. Nissan has implemented a robust operations management program to provide products and generate value for its customers. The company has developed a lean manufacturing system, which focuses on optimization of the production process and continuous improvement of product quality. The company has also invested in a massive research and development program, which enables it to develop new operations procedures. For example, the company has implemented an advanced production planning system, which has streamlined the supply chain process. This way, the company generates value for its customers by ensuring that they get high-quality and low-cost products.
- Through operations management, Nissan has been able to achieve high levels of competitive advantages in the industry. One of the ways through which the company gains competitive advantages is in the design of its automobiles. The company has built a product development system that can produce superior products than those of competitors such as Toyota and Honda. Nissan’s assembly line is a very complex operation with multiple components that require close supervision. More competitive advantages are obtained from the system for monitoring labor hours. The production system is very responsive to the needs of customers. For example, the company can produce cars in quantity required by customers and at more competitive prices.
- A key similarity between service and manufacturing operations at Nissan is that both involve planning of the environment where operations take place. Both types of operations focus on identification and analysis of risks and implementation of effective countermeasures (Wren, 2008). Nissan has established a dedicated risk management system, which is responsible for disseminating best practices for sustained quality production. The main difference between the two operations is that manufacturing produces tangible products such as automobiles while the service operations result in intangible results such as marketing and advertisement. Another difference is that manufacturing operations are standardized while service operations are not.
- Theories and Techniques
- The CPM (Critical Path Method), coupled with the PERT (Program Evaluation and Review Technique) are some of the most widely used tools in the programming of projects. Both techniques use network diagrams for planning and control of production aspects (Montgomery, 2012). The network diagrams highlight the visual aspect, which enhances communication and inter-reliance of the countless undertakings requisite in execution of projects. Nissan’s manufacturing operations are more suited to the PERT methods because of the need for identification of sequential and time-critical activities that require close monitoring. On the other hand, the CPM technique is suitable for projects that require the trade-off between cost control and optimal balancing of schedule. These include the development of car prototypes and new research and development programs.
- Development of a forecasting system involves five major steps. The first step is problem identification, which involves an understanding of the need for the forecasting system and how it fits into the organization. The second step is gathering information. This can be obtained from statistical data or the historical and accumulated expertise of the organization. The third step is exploratory analysis, which involves graphing of data to identify trends. The fourth step is choosing and fitting of models. The availability of data determines the best model. The last step is application and evaluation of the forecasting model. The effectiveness of the model can be determined only when the right amount of data for the forecast period is available (Wren, 2008). Nissan can use the five steps of forecasting to develop a model for predicting future trends in demand for its products. Implementing a forecasting system for a top selling product for Nissan will enable the company to avoid inventory costs and achieve high profit.
- The main categories of supply chain risks are strategy risks, market risks and implementation risks (Montgomery, 2012). Strategy risks are related to the choice of the right supply chain management process while market and implementation risks are related to the compliance, brand and market exposure. Nissan can mitigate exposure to supply chain disruptions by establishing multiple production facilities in different countries and also by dealing with several suppliers simultaneously.
Operations management processes can help Nissan to achieve high levels of resiliency in the face of the various challenges it faces. Besides natural disasters, which cause disruptions to the supply chain, the company faces stiff competition from other industry players. Through innovative operations management strategies, the Nissan can overcome the challenges and attain a leading a dominant market position.
Montgomery, D. (2012). Statistical Quality Control: A Modern Introduction. Boston: Cengage.
Wren, D. (2008). The Evolution of Management Thought. Wiley: New York Wiley.