Nissan case study total quality management

QSO 300 Final Project Milestone Two

This case study analysis will cover quality, process, and location analysis problems that operations manager typically face. Theories and techniques such as the Theory of Constraints (TOC) and Total Quality Management (TQM) will be discussed, including data analysis diagrams and process maps to visually state some of these points applicable to the Nissan Motor Company and its operations functions.

The Theory of Constraints (TOC) is knowledge in identifying important factors that limit, or constraint, an organization’s ability to achieve its goals and then systematically improving or removing those constraints (Simchi-Levi, 2013).

Step Nissan

Step 1-Identify the constraint. Nissan identified the constraint as a bottleneck in ensuring required supplies from production bases.

Step 2-Develop a plan for overcoming the Nissan’s sales, marketing, and supply chain identified constraint. operations met and identified how to allocate supplies.

Step 3-Focus resources on accomplishing Nissan identified which car models required GPS step 2. and allocated resources accordingly within 2 weeks.

Step 4-Reduce the effects of the Nissan slowed production both upstream constraints by offloading work or by and down by ramping down production, decreasing expanding capability. Make sure that overtime, and pulled vacation time into spring the constraints are recognized by all months to free up capacity. those who can have an impact on them.

Step 5-When one set of constraints is Nissan identified lead time in transportation as overcome, go back to Step 1 and identify another constraint. new constraints. Applying the TOC to Nissan would be advantageous so that they can quickly overcome these constraints from re-occurring in the future.

Total Quality Management (TQM) emphasizes and fosters quality through the entire organization, from supplier to customer, while management is committed towards continued excellence in all aspects of products and services that are important to the customer (Heizer & Render, 2014). Striving for quality involves gaining sales by 1) improved response, 2) flexible pricing, 3) improved reputation; and reducing costs by 1) increased productivity, 2) lower rework and scrap costs (internal failure costs), and 3) lower warranty costs. One of the ways Nissan emphasized quality was through its rapid and flexible action by modifying its delegation of authority rules resulting in speedy decisions about quality issues.

Nissan clearly displayed many of the eight quality management principles depicted in ISO 9000, the quality standard with international recognition. Some of these principles were:

· Top management leadership – as demonstrated by their swift and flexible responses

· Continual improvement – by increasing localized production in the Americas from 70% to 90%

· Involvement of people – communication between European regional team with Japan in sharing critical information

· Mutually beneficial supplier relationships – produced an actionable Business Continuity Plan (BCP) with second and third tier suppliers

In addition to the 8 principles, Six Sigma contains a set of 7 tools of TQM: check sheets, scatter diagrams, cause-and-effect diagrams, pareto charts, flowcharts, histograms, and statistical process control. Nissan could utilize any of the Six Sigma tools but the one that could improve quality in their latest line of products is the cause-and-effect diagram. This aids the operations manager in identifying quality issues and their locations when reviewing any of the four Ms: material, machinery, manpower, and methods (Heizer & Render, 2014). Once the root cause has been discovered, operations managers can swiftly look for remedies and improvements. For example, Nissan could discover that productivity was lower in producing a certain output, which could be remedied with proper training of personnel (manpower).

Recently, Nissan has been experiencing production delays in getting the Nissan Leaf out on the sales floor. The reason for this involves one of their main components, the battery pack. As depicted in the cause-and-effect diagram below, the company struggled in many areas contributing to the delay. Based on this analysis, we find that the main reason the Leaf is delayed in making it out to dealerships is due to the long lead time in rolling out the electrodes, one of the main components in the battery pack. It takes the factory approximately 2 months just to begin the process (Jerew, 2013).

As an operations manager, my job would be to review the time function map as a guide in detecting where the overall level of productivity lies and if any gaps. I would determine where certain areas are taking more time that could be reduced, and where other areas may need more time devoted.

What I found based on the attached map, is a long lead time from concept to production of the new Nissan Rogue, as well as warehousing the product once it’s been painted and detailed (Jackson, n.d.). It would make sense to collaborate with the appropriate departments in understanding the time allotted for these activities to see if we can improve on them for delivering a faster, yet quality product.

We have also considered moving our plant location based on further location analysis. To determine our new production facility, the company uses a weighted average calculation. Management bases the weight of these factors on what is crucial to the company, such as political risk, and transportation and labor costs. Based on this calculation, the new facility should be located in Mexico City based on a total score of 73. If a decision is made to change the weight of some of the factors, further analysis of the points assigned may be appropriate.

Factor

Weight

Mexico City

Columbia, SC

MC EXTENDED

COL EXTENDED

Political Risk

.25

70

80

17.5

20

Transportation

.20

40

90

8

18

Labor Productivity

.20

85

75

17

15

Rental Costs

.15

90

55

13.5

8.25

Labor Costs

.10

80

50

8

5

Taxes

.10

90

50

9

5

TOTALS

1.00

73

71.25

To conclude, as operations managers it is our responsibility to manage and deliver quality in our product and in our work. We represent the company and build our reputation based on this quality and this in turn leads to a strong and loyal customer base, a durable product or deliverable service, and recognition throughout the industry. Our process and location strategies play an integral part in our decision making process as well, including our relationships with our supply chain management. These are all part of the 10 strategic OM decisions we face on a daily basis (Heizer & Render, 2014).

REFERENCES

Heizer, J., & Render, B. (2014). Operations Management (11th ed.). Person Education.

Jackson, L. (n.d.). Nissan is perfecting the art of auto manufacturing in Mississippi. Retrieved May 25, 2017, from http://www.reliableplant.com/Read/4509/nissan-mississippi

Jerew, B. (2013, August 22). Nissan Leaf Production to Increase, Battery Production Playing Catchup. Retrieved May 25, 2017, from https://www.greenoptimistic.com/nissan-leaf-production-to-increase-battery-production-playing-catchup-20130822/#.WSeE1NzavIW

Simchi-Levi, W. D. (2013, August 17). Nissan Motor Company Ltd.: Building Operational Resiliency. Retrieved May 29, 2017, from https://mitsloan.mit.edu/LearningEdge/operations-management/nissan-motor-company/Pages/Nissan-Motor-Company.aspx