Nissan Motor Company Ltd.’s Operations Management

Abstract

The process of operations management calls for companies that make valuable products to be attentive to each detail. Theory of constraints can be useful in helping the management eliminate the arising problems without putting the production process at risk. Total quality management is beneficial when an organization needs to ensure long-term success through customer satisfaction. This paper explored the ways in which Nissan Motor Company Ltd. could enhance its production line operations, reduce constraints associated with partners, and reach a high level of product quality and achieve long-term success.

Theories and Techniques

Theory of Constraints

Theory of constraints (TOC) is associated with the process of mitigation and identification of bottlenecks within systems. The five steps of the TOC process include the following:

  1. Identifying constraints within the system;
  2. Deciding on how to exploit the identified constraints (Dettmer, 2000);
  3. Subordinating other components to the decision;
  4. Elevating the constraints;
  5. Going back to the step 1 in the case if the constraint has been broken at previous steps (Goldratt, 1999).

According to the case study by Schmidt and Simchi-Levi (2013), Nissan experienced some financial difficulties in the process of risk management, which suggests that this area could benefit from the application of the theory of constraints. However, supply chain management is the most challenging process, with which Nissan has to deal, so it is important for the company to identify the constraints within the process and decide how to elevate them for achieving maximum performance.

Total Quality Management

Total quality management (TQM) is an approach towards management for achieving long-term success through ensuring customer satisfaction (ASQ, 2017). Fact-based decision-making and strategic approach are two tools that can have a positive impact on improving the quality in the latest product line of Nissan Motor. Since the company adopted a simplified approach and reduced its product line based on the needs of customers, TQM is an effective method for ensuring that the quality improves continuously, decisions are made based on the actual state of the production process, and that every step is communicated to ensure employee motivation and orientation towards a common goal of product quality improvement.

Data Analysis

Cause and Effect Diagram

Cause and Effect Diagram

Causes of partners’ struggle are shown in the diagram above; the most prominent are complexity, high costs, and lack of available resources. The constraints partners experience can be mitigated when Nissan addresses the mentioned causes.

Process Map

The process map for the new model of X-trail SUVs is presented in the diagram below:

Process Map

The process map can be used for multiple purposes. First, an operations manager can use this value map for checking the current state of the production process. Second, it can be used for assessing the future possibilities. Third, it can be used for complying with the requirements that arise during the process.

New Manufacturing Plant

Opening a new manufacturing plant in Mexico City presents a great opportunity for Nissan since the country is becoming a global manufacturing power (Coy, 2013), where companies can cut costs. The only risk for Nissan is the low productivity of labor (Cordova & Padilla, 2016), which can be solved through outsourcing. Despite the fact that labor costs are higher compared to Columbia, transportation costs are significantly lower, and they are essential for ensuring a smoother and more simplified production process.

References

ASQ. (2017). What is total quality management (TQM)? Web.

Cordova, J., & Padilla, J. (2016). Productivity in Mexico: Trends, drivers, and institutional framework. International Productivity Monitor, 30, 28-42.

Coy, P. (2013). Four reasons Mexico is becoming a global manufacturing power. Web.

Dettmer, W. (2000). Constraint management. Tuscon, AZ: Quality America Inc.

Goldratt, E. (1999). Theory of constraints. Great Barrington, MA: North River Press.

Schmidt, W., & Simchi-Levi, D. (2013). Nissan Motor Company Ltd.: Building operational resiliency. Web.