Research Paper on Nissan Motor Co. Overcomes Earthquake & Tsunami: OM Practices

Introduction

From the case study, Nissan Motor is an Automobile Company which was established in 1933 in Japanese. Following the occurrence of an earthquake and a tsunami in Japan, the company's operations were tampered with. This paper will provide a comprehensive description of how the Nissan Motor Company has strived to overcome the atrocities by using suitable Operations Management (OM) practices.

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Generating Value

Operations Management Functions

Nissan has maximized operations management principles to avail their products as well as create value for its consumers by executing operation advantages. (William Schmidt and David Simchi-Levi, 2013) Nissan balanced its undertakings regionally and decentralized its supply chain structure. However, they created robust central management, which was tasked with settling operations disputes around the globe. The company adopted a flexible culture, which enabled it to diversify its operations world. The culture played an essential role in the production flexibility criterion that the Nissan Company has embraced. The flexible initiatives have since been the order of the day, more simplified versions from what competitors produce has provided them with a competitive advantage. To increase their sales and meet consumer demands, they adopted two strategies that are; build-to-stock strategy and a build-to-order strategy.

Competitive Advantage

To realize a competitive advantage, Nissan Company focuses their operations management in that they are prepared for worst bearing in mind of another similar catastrophe (earthquake) may occur, that is, the 2007 and 2008 Global Liquidity Crisis and the 2011 Thai Floods. They have adopted a resilient supply chain as a contingency plan if a similar occurrence happens. The strategy was a result of the previous experience (Heizer, 2014). This has seen a shift like the competition between companies to supply chains. Thus, the supply chain tactics have been their source of resiliency and salvage in times of improbability. Supply chain management has ensured constant production.

Comparison and Contrasting

According to William Schmidt and David Simchi-Levi (2013), Nissan has undertaken various contingency measures in respective places of the business. For instance, in Europe, immediately after the earthquake and the tsunami, to maintain production to other countries, Spain, Russia and the UK, the contingency measures were implemented. It paved the way for regional creation adhering to the market dynamics; that is, it was organized, and it followed a stipulated schedule. Nissan's manufacturing operations aim to generate value for its customers, achieved through brand diversification. When catastrophe strikes regional teams coordinate to make available the required supplies. Also, Nissan Company's central management quickly extends its operations to different regions to make available its products (CSCMP and Nada Sander, 2014). The motive of various regional activities coordinating and being linked to the central management is to be able to reduce the cost incurred in delivering the right products to its customers on time.

Theories and Techniques

PERT and CPM, Comparison and Contrasting

PERT means the Program Evaluation and Review Technique. It's a technique for project management that is designed to evaluate and represent the activities entangled in finalizing a project. CPM means the Critical Path Method. It's a technique used in project management in observance of time factor forever task. The methods have a similarity in that they were designed to help project managers monitor, control, and program complex and enormous projects. The techniques outline six steps to follow to attain success (Heizer, J., 2014, p. 65)

• State the project and prepare the work structure.
• Develop the affiliations between tasks.
• State the sequence of completing the tasks.
• Structure a schedule linking all tasks as well as allocating time and cost for every activity.
• Calculate the time-consuming activity from the schedule that is, critical path.
• Use the structured schedule to enable the program, monitor, and control the project.

The two techniques, however, were designed for different purposes, PERT designed for the U.S. Navy specifically to develop research tasks. CPM similarly was intended to assist in constructing and maintaining chemical plants at DuPont as a guide. CPM, as opposed to PERT, utilized the least time available for tasks to be completed. In this case study, Nissan would prefer PERT over CPM because of its operations nature. First, in the supply chain, updated information provides an advantage in production, the supply chain is designed to meet consumer preference continually; thus, PERT will help Nissan maintain its relevance to the customers. CPM would suit in predictable and repetitive projects such as systems that Nissan recycles.

Forecasting System

In developing a forecasting system, the following steps will be appropriate:

• Determine the use of the forecast: For Nissan to increase its sales, it should consider this step to analyze their customers' preference when purchasing their products worldwide.
• Select the items to be forecasted: Identification of Nissan's most selling supplies will help improve the nature of their production and maximize the sales. For instance, models of cars sold in a particular country and the period the purchase was made.
• Determine the time horizon of the forecast: Frequency of Data collection period should be agreed, for instance, monthly, quarterly or yearly.
• Select the forecasting model(s): Some of the appropriate model(s) in this case may be Time-series models and Associative models.
• Gather the data needed to make the forecast: It will provide essential data, for instance, Nissan's purchasing season like summer or spring. Therefore, the supply chain will strategize appropriately to meet the specifications.
• Make the forecast: Through the discovered trends, accurate predictions can be made. For example, Nissan's hybrid cars are highly purchased in North America during the mid-spring and late fall.
• Validate and implement the results: From the information at the disposal of Nissan Company, cost-effective strategies to meet customer preference should be executed.

Supply Chain Risks

The contemporary trends have seen increased specialization, low cost of communication, and fast transportation, whereby companies are buying more than what they make. Thus, more dependence on supply chains and more risk providing a challenge in managing integrated supply chains. The lower the supplies, the more dependent the supplier is with her customers; thus, increased risk for both. The nature of this risk is enclosed by globalization and logistical intricacy. Vendor reliability and quality can be puzzling in any supply chain (Heizer, J., 2014, p 440)

To mitigate all these supply chain risks, Nissan ought to craft detached departments linked to every supply chain utility in case of a disaster. If they have an ultimate sustenance scheme for every chain of command, they will have a safety measure standby in the occurrence of an emergency.

References

CSCMP and Nada Sanders (2014). InformIT [PEARSON]. Operations Management Defined. http://www.informit.com/articles/article.aspx?p=2167438

Heizer, J., Render, B. (2014). Operations Management: Sustainability and Supply Chain Management, 11th Edition. [MBS Direct]. Retrieved from https://mbsdirect.vitalsource.com/#/books/9780133558203/

Schmidt, W., Simchi-Levi, D. (2013) Nissan Motor Company Ltd.: Building Operational Resiliency. Retrieved from https://mitsloan.mit.edu/LearningEdge/CaseDocs/13-149%20Nissan.Simchi-Levi.pdf