Nissan Automobiles. Nissan Automobiles. 216401: Engineering Management
Case Study: Nissan Automobiles
Read and analyze the case given below to answer the questions at the end. Neatly document the report
One key decision with a car plant is where to locate it. For its UK factory, Nissan chose in 1984 a 300 hectare former airfield near Sunderland. Sunderland’s attractions included:
a) Skilled labour force
Manufacturing has a long tradition in the area. A decline in other local manufacturing meant that skilled labour was readily available.
Sunderland has good road and rail links to all major UK areas. This makes it relatively easy to bring in supplies from 105 separate UK component and sub-assembly suppliers, and also to distribute completed vehicles. A nearby deep water port (Port of Tyne) gives ready access to export markets and for the import of vehicles to the UK.
c) Government support
The government provided financial and other incentives to manufacturers who set up in an area where employment opportunities had reduced sharply and new jobs were needed.
Since 1984, Nissan has increased the scale of its Sunderland operation; almost 3.5 million cars have already been made.
Car assembly is a complex operation with many components requiring skilled assembly. Management are particularly keen to monitor total machine-hours and total labour-hours that each vehicle requires. So far, Nissan has invested over £2.1 billion in the Sunderland site, taking its production capacity to 500,000 vehicles per year.
Production methods must be able to produce what customers want, in the quantities customers require, at a price consumers are willing to pay, and at a cost that yields a profit to the business. That means that being efficient is vital to success.
In some industries it is possible to carry out individual job production to meet a particular customer’s request e.g. a wedding dress, a birthday cake, a fitted kitchen. However, very nearly
Lecturer: Engr. Tazeen Sharif
all of the world’s car manufacturers mass produce standard models, with individual consumer choice being accommodated by offering various colors, interior designs, and optional extras within a limited flexible production process. People can still personalize their cars further e.g. by choosing a particular car registration or accessories.
In pursuit of high output at low average cost, car manufacturing typically uses a continuous flow production method, where sub-assemblies are brought together in a final assembly area. This is the most cost effective and efficient method of production and the speed of the final assembly line can be adjusted to match consumer demand. If demand picks up, the production line can be accelerated, within predefined limits.
At Nissan Manufacturers UK (NMUK), the production flow draws on three main production shops, as well as support areas. The three main shops are:
Supporting manufacturing areas are:
press shop – produces panels for the vehicles
plastics shop – makes bumpers (fenders) on site
castings shop – makes engine parts e.g. cylinder heads
engine shop – assembles engines, installs oil, coolant fuel
axle plant – produces axles that are joined to engines in final assembly
Widely different processes generate different jobs across three main broad areas. The machinery is scheduled to work at a given level although when demand requires it; there is flexibility in regard to both the machinery and the workforce of 4,300. At the moment, with a two-shift pattern, NMUK has a total production capacity of around 360,000 units/year – a third shift can be introduced which would take production up to 500,000 units/year if and when required.
Nissan’s Sunderland plant is technically highly advanced. It uses sophisticated robotics and computer integrated manufacturing techniques to create a carefully monitored production process that reduces errors to an absolute minimum.
Automated machines can only do so much however; the human element remains vital. Organizing an effective flow of production at Nissan has involved developing a way of doing things and an attitude towards work based on giving responsibility to employees at every step. This approach raises employees’ morale, and reduces absenteeism, which could severely impact on continuous flow production.
Nissan expects and requires its employees to become multi-skilled decision makers. Most employees also want that for themselves. Reaching that goal involves:
training employees to develop their skills
encouraging them to make decisions
organizing employees into participative teams
developing open-channel, multi-directional communication systems
placing quality at the heart of flow production
flexible working practices
providing the employee variety within his/her role
The open communication policy includes daily face to face meetings between management and employees, a company council, employee surveys, and employees having ready access to the company’s intranet system.
The emphasis placed on ‘going for quality’ means that each employee is responsible both for their own work and the standards of their co-workers. By ensuring management recognizes that individuals have this control results in everyone taking the culture on board.
‘Going for quality’ emphasizes ‘building good quality in’ rather than ‘inspecting poor quality out’. Each employee controls quality by checking that the previous job has been done properly.
1. Identify the strategic, tactical and operations planning procedures adopted by Nissan Automobiles
2. Perform SWOT Analysis for the given scenario and forecast the possible threats which may evolve if MUKLUK continues with its practices.
3. Does the case study depict a success or failure in terms of strategic planning? Support your answer with references to quotes from the above case.
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