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It should be noted that the automobile industry is one of the most competitive ones and each manufacturer aims to bring value to its customers. Nissan, as well as its competitors, faced natural disasters several years ago; however, Nissan was able to recover much quicker than the rivals were. The purpose of this paper is to analyze the way effective operations management empowered the company to recover rapidly.
One of the critical components of operations management functions is the production of vehicles that are of high quality but reasonably priced. Also, it enables the company to ensure the rewarding customer experience by furnishing considerate customer care and manufacturing reliable and environmentally friendly cars that correspond with the client’s needs (Schmidt & Simchi-Levi, 2013). Moreover, enterprise cherishes and promotes diversity. The multi-nationality that characterizes its workforce allows meeting the requirements of the diverse markets in which Nissan functions.
To achieve a competitive edge, Nissan has decentralized the supply chain structure. At the time of the natural disasters, the company was already prepared to mitigate the possible disruptions through strong central control and coordination (Hill, Hult, Wickramasekera, Liesch, & Mackenzie, 2016). This strategy enabled the enterprise to recover from the crisis faster than the rivals and bring value to the clients rapidly. As stated by the company CEO, “most of the steps we have taken in response to the March 11 disaster have been continuations of strategies priorities and plans that were already in place” (Schmidt & Simchi-Levi, 2013, p. 7). Therefore, the emergency response strategy was centered on the decentralization of the supply chain.
Service operations and manufacturing operations have both similarities and differences. The main distinction lies in the tangibility of the output. In the first case, the output is intangible (for instance, purchasing a vehicle from Nissan and its maintenance). In the second case, operations produce physical goods (for example, car manufacturing). Nissan brings value to the clients by addressing all the customers’ needs so that they do not have to turn to other companies for service provision (Pyzdek & Keller, 2014). The main similarity between the two categories is that labor and location are needed for both of them.
Theories and Techniques of Operations Management
It should be noted that PERT (Program/Project Management and Review Technique) emphasizes the timeframe and planning. CPM (Critical Path Method) centers on the cost (O’Brien & Plotnick, 2015). In terms of the company under analysis, the first system would be more advantageous since the occurrences that took place were unpredictable. Also, this approach enables determining the minimum amount of time needed to furnish the task as well as the activity in general. Regarding CPM, Nissan could utilize it in everyday occupations or when cutting down the expenses in particular project parts.
The steps of forecasting can be concluded to the following: defining the operation that needs it, determining the items, and specifying the timeframe (range of the forecast). Then, Nissan could choose the approach and utilize a qualitative method to produce a new commodity. Regarding the top-selling product line, the enterprise will be able to address clients’ requirements better. It will be achieved by ensuring supply chain visibility. The major risks and reduction practices can be concluded in two main categories. They are currency fluctuations and financial risks (Abe & Ye, 2013). The company could employ flexibility in manufacturing decisions and decentralization to remit the possible negative manifestations (Mahutga, 2012).
Thus, it can be concluded that Nissan was able to recover from the disaster rapidly through a considerate approach towards operations management. Also, it has decentralized parts of the supply chain to mitigate the disruptions. This strategy has been developed before the devastating earthquake and tsunami, which allowed the company to mobilize faster than the rivals and deliver the value to the customers.
Abe, M., & Ye, L. (2013). Building resilient supply chains against natural disasters: The cases of Japan and Thailand. Global Business Review, 14(4), 567-586.
Hill, C., Hult, T., Wickramasekera, R., Liesch, P., & Mackenzie, K. (2016). Global business today. New York, NY: McGraw-Hill.
Mahutga, M. (2012). When do value chains go global? A theory of the spatialization of global value chains. Global Networks, 12(1), 1-21.
O’Brien, J., & Plotnick, F. (2015). CPM in construction management (8th ed.). New York, NY: McGraw Hill.
Pyzdek, T., & Keller, P. (2014). The six sigma handbook (4th ed.). New York, NY: McGraw Hill.
Schmidt, W., & Simchi-Levi, D. (2013). Nissan Motor Company Ltd.: Building operational resiliency. Web.