Nissan has indeed left a mark on the automotive industry. The motor company has embraced diversity and has consistently shown its value for its customers. Its product line has maintained simplicity over the years. Its adoption of the build-to-stock and build-to-order strategies is believed to have been the reason for its impressive sales (William Schmidt, 2013). Its management working in the supply chain department has ensured that production processes are always running smoothly. The clear laying out of Nissan’s visions and missions has helped in its recovery in times of disaster.
Nissan has over the years displayed a commendable ability to achieve a competitive advantage. This trend has been as a result of various internal and external factors. Nissan, rather than following marketing shifts in consumer behavior, always establishes its corrective measures to establish a competitive advantage for itself in the auto market. Nissan also commendably focuses on identifying risks early enough before they occur (William Schmidt, 2013). Nissan had better disaster management strategies than Toyota and Honda after the earthquake, and the tsunami hit Japan in 2011 (William Schmidt, 2013). One of the corrective measures they take is the maintaining of sales and high production levels in Japan. To achieve this, Nissan always strives to bring new models to the markets that are appealing to the needs of the consumer. Nissan also comes up with creative technologies, thus boosting profit margins (Shiga, 2007). Another measure taken is the availing the employees under the sales department with the necessary tools to increase Nissan’s efforts in recreating as well as transforming their networking strategy, hence improving the cost structure. Another measure is the modification of sales to deliver maximum satisfaction to the consumers (Shiga, 2007). In April 2005, Nissan they began combining outlets so as to provide easier access to their products to customers.
The service operations and manufacturing operations at Nissan may be similar in some ways, but they are different too. A major similarity displayed commonly by these operations is the fact that they both help in laying out the visions and missions of Nissan, which is its aspiration to lead in the auto market. Both the manufacturing and service departments are faced with the responsibility of controlling costs in their respective departments. The manufacturers must incur relatively low costs when acquiring automobile parts while the service department is supposed to make sure that products are offered to consumers at competitive prices. However, the differences in these operations are also notable. The manufacturing operations at Nissan yield tangible goods that can be seen and held. Manufacturing may be classified further under process (production of goods that require the use of certain ingredients and formulas) and discrete (production of goods from parts) manufacturing. Discrete manufacturing is commonly used at Nissan as it involves the use of automobile parts to produce goods. Service operations at Nissan on the other hand yield intangible services, such as consultancy. The manufacturing operations tend to produce the same finished products while with service operations the services offered are not always the same. In the manufacturing department at Nissan, managers are tasked with overseeing the manufacturing process and the storage of raw materials as well as finished products. In the service department, employees are trained on how to handle customers and their increasing demand.
In project management, the Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are commonly applied. The implementation of PERT entails breaking down a project into small blocks that are conjoined together to form paths. Amongst these paths, there is a critical path which if not followed will slow down the project. PERT, hence, provides an overall schedule of the project. CPM, on the other hand, involves taking the critical path (the path that has the longest duration). This is the path established from the PERT charts and working towards making changes to it to ensure that the project is not slowed down. The schedule is then used to avail the resources required. CPM and PERT techniques make it easy for one to break down the details concerning a particular project. These techniques are used for complex projects. Manufacturing projects tend to favor PERT more than CPM. This is because PERT describes in detail the relationship between time and costs incurred in the manufacturing processes. In construction projects, CPM is favored more than PERT.
There are various steps involved in the development of a forecasting system. The first step is determining the use of the forecast. This means establishing the reasons for creating a forecasting system, also known as problem definition. The second step is the selection of items that are to be forecasted. The third step is determining the forecasting time horizon. The time horizon could be short range (3 months – 1 year), medium range (3 months-3 years) and long range (3 years). The fourth stage involves the gathering of information in the form of statistics (graphical data). Afterward, the forecasting model that is to be used is then selected. The model used greatly depends on the data that has been collected. Lastly, the results of using the selected forecasting model are validated so as to assess the accuracy of the models used. The use of forecasting will impact positively on the firm involved. The implementation of a forecasting system by Nissan will help in predicting the amount of inventory of automobile parts, thus cutting down on storage and transportation costs. Forecasting will help the management of Nissan to establish whether the market for their products is likely to increase or decrease. This way they know the amount of staff required to handle the customers. Forecasting will also help Nissan to retain its competitive advantage. Having knowledge regarding the sales that they are expecting helps Nissan to strategize on how to satisfy the consumer fully. The knowledge of future sales helps in calculating staff costs too.
There are four categories of risk mitigating strategies. These are cooperation, avoidance, flexibility and control (Uta Juttner, 2003). Avoidance occurs when the risks in the operations of a certain company are unacceptable. It is implemented by dropping products, suppliers, and markets. Control is a strategy that is very common amongst companies, as it involves taking measures such as using buffer stock, vertical integration and always ensuring that excess stock in storage units are maintained. Cooperation involves agreements between organizations (that are part of the supply chains) about the exposure to certain risks to prepare for future business plans. Flexibility is more about the responses to the risks. Such responses include postponement and localized sourcing (Uta Juttner, 2003). With respect to the natural disasters that occurred in Japan in 2011, Nissan could mitigate its exposure to supply chain disruptions by exercising control by using buffer stock and maintaining excess capacities in storage facilities and transport.
In conclusion, we can see that Nissan is one of the companies in Japan that were adversely affected by the earthquake and tsunami that occurred in March 2011. However, the company used this experience to establish disaster management strategies that have helped them retain competitive advantage in the automotive industry.
REFERENCES
Shiga, T. (2007). Nissaan Annual Report 2006 - 2007.
Uta Juttner, H. P. (2003). Supply Chain Risk Management: Outlining an Agenda for Future Research.
William Schmidt, D. S.-L. (2013). Nissan Motor Company Ltd.: Building Operational Resiliency. MITSloan Management .