Nissan Wins a New Model

Short Case Nissan wins a new model

In the global automobile industry, multinational car manufacturers think very carefully before choosing where to spend the money needed to build new models. Cost factors, local taxes, proximity to markets and expansion opportunities are all issues which influence such decisions. But just as important is each plant’s track record of operations improvement. It was (at least partly) its excellent operations performance that secured Nissan’s Sunderland plant in the UK its new model, which started production in 2000. The Sunderland plant’s improvement programme had, over four years, reduced delivery times and the number of reject components from its suppliers significantly from an already low level. It also included a programme to help suppliers enhance their own product development skills. People development activities within the plant embraced improved career development, job rotation to give variety at work and ergonomically inspired changes to job designs on the shop floor. All this helped push performance up to Japanese averages in many areas – unusual for a European plant. The next initiative (called Next 21) is aiming to bring all of Nissan’s European operations up to the best Japanese performance levels.

Questions 1 The improvement initiative which helped to win the Sunderland plant its new model was called NX96, a four-year programme which started in 1992. The new model did not start production until 2000. Why do you think it takes eight years for initiatives like this to come to fruition? 2 What did Nissan do to help its suppliers? Why do you think it is so important to put time and effort into developing a good supply base?