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Nissan Cogent Supply Chain Management Case Study
Nissan Cogent Supply Chain Management Case Study
Introduction
Overview of Nissan
SWOT analysis
Supplier development
JIT Approach
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Conclusion
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Reference
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Introduction
Many successful organizations are now following supply chain management as a benchmark for
themselves. In different organizations and firms the operation of supply chain management
varies greatly and it is complex. Supply chain management is practiced by both servicing and
manufacturing industries. Organizations are now adapting SCM to earn more profits and
provide more customer satisfaction. Knowledge quality of a firm is the key factor to success in a
competitive business environment which is now admired by all the successful organizations.
SCM is the management of the raw materials, with proper planning, quality manufacturing and
correct distribution. To develop a product it is crucial to know about the customer demands
and expectations. With this knowledge combined with new technology and marketing a firm
creates successful products. Sometimes companies solely try to improve but most of the time
they discuss with their suppliers to gather knowledge about the customer requirements. This
knowledge exchanging process enables the firms to learn more about their customers and also
about the suppliers awareness about the market. This is beneficiary to both supplier and buyer
firms. It is a common scene that powerful organizations insist their supplier to adapt their
proposed process to improve the product quality and coordination.
Overview of Nissan
Nissan, established in 1933, is a well-known brand in manufacturing cars of todays automobile
industry. Nissan Motor Company Ltd, which in short known as Nissan, is a market leading auto
manufacturer with the headquarter in Japan. This multinational automaker was a central part
of Nissan group. But with the reformation under Carlos Ghosn, the CEO of Nissan, it has
become independent automaker. Their main products include, automobiles, outboard motors
and forklift trucks.
Nissan used to market their autos under the brand name of Datsun which is a renowned car
manufacturer. It is affiliated with Renault S.A. which holds its 45% of shares while Nissan has
15% of Renaults shares. Its listed in the top 3 auto manufacturers in asia. It also owns the luxury
brand called Infinity. With a revenue of over $93 billion (2008) and operating income of over
$1.5 billion (2008) its one of the biggest automaker in the market. It has over 2 hundred
thousand employees with a determination of constant improvement.
Receiving
Manufacture
Packing
Distribution
Customer
Supplier
Purchasing
Master
production
plan
Scheduling
Demand
management
Information Flow
make better designs to sustain in the UK market. The design of a component is helpful to satisfy
the customer demand and expectations.
SWOT Analysis
SWOT is a short form of Strengths, Weaknesses, Opportunities and Threats. It is a tool to
analyze the internal and external environment of an organization (Mullins L. 1996). Strengths
and weaknesses are assessed in internal environment of the organization. External
environment is analyzed by opportunities and threats. By the proper understanding of the
external factors and internal factors an organization decides how to increase its strengths,
minimize the weaknesses, work for its opportunities and eliminate the threats.
SWOT analysis
Internal:
Strengths and weaknesses of a company mainly depend on the following issues:
Brand consciousness
Economic situation
External:
Opportunities and threats are external conditions. Opportunities may arise because of changes
in the business or in the environment. Company should know how to take advantage of their
opportunities. But sometimes changes become a threat to the company. So the company
should know how to handle and omit the threats. External factors are:
Rivals
clients
suppliers
Market
Economy
Social alteration
Weakness:
SWOT
opportunities:
Threats:
The main purpose of the COGENT project was to increase the performance by altering
the relationship in the development and design phase.
Supplier Development
Supplier development can be loosely defined as the process of working collaboratively with
your suppliers to improve or expand their capabilities. An example may be teaching a supplier
how to manufacture a type of item that they never manufactured before for the purposes of giving
you the option to buy, rather than make, that item. In recent years, it is has become increasingly
common for buying organizations to train their suppliers in Six Sigma and Lean techniques.
(Dominick, 2006)
Supplier development makes the suppliers to develop themselves with the help of the buyer
company to make new and more advanced products. We can say that, customers are
responsible for the demand condition, manufacturers are responsible to react to the condition
and suppliers are responsible to deliver the quality goods for the manufacturers to react most
effectively to the demand.
It is important to reduce the process time to introduce a new product early so that more
market share can be taken. Researches show that world class organizations reduce their
process time by 30% to introduce a new product to get more market shares.
Quality improvement:
Improvement in quality enables the firm to get more customer loyalty and customers trust.
Quality can be achieved in many ways. A lot of individuals has researched and proved the
importance of quality improvement but it was ignored by the big companies because they could
not see the relationship between good quality and a better competition.
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JIT System
Principles:
There are 3 principles of JIT system:
Involvement of people.
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removing
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Conclusion
For the best outcome and performance from the suppliers it is important to maintain a good
communication with them. Supplier integration is also an important issue for a profitable result.
Supplier development is a crucial fact for the benefit of the buyer company. Supply chain
integration and improvisation process of Nissan, which is known as COGENT, has increased the
performance level of the company in various issues such as supply cost reduction, raw material
and inventory maintenance cost reduction and transport cost minimization. As COGENT case
study describes, Nissan achieved NEXT21 goal by taking some initiatives. These were, codevelopment and alignment, improved internal consistency for development, involvement of
third party, use of performance measurement system, focusing on a real project and use of
detail while interact and use the events as accelerators.
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Works Cited
Cost of ownership, ROI, and cost/benefit analysis: Whats the difference? (2007, february 12). Retrieved
april 4, 2010, from www.solutionmatrix.com: http://www.solutionmatrix.com/tco-roi-cbadifference.html
Dominick, C. (2006, november 1). Charles' Purchasing Certification Blog . Retrieved february 19, 2010,
from www.purchasingcourses.com: http://www.purchasingcourses.com/2006/11/supplierdevelopment-definition.html
Radisic, M. (2006). Just-In-Time concept.
Wailgum, T., & Worthen, B. (2008, november 20). Reflect Changes in Supply Chain Management
Technology. Retrieved february 16, 2010, from www.cio.com:
http://www.cio.com/article/40940/Supply_Chain_Management_Definition_and_Solutions
Ron. Basu & J Nevan Wright,(2008)Total Supply Chain Management, 1st Edition.
Southey, P,(2009/2010) Coventry University Module Notes.
Monkzka, Trent & Handfield, (2005) Purchasing & Supply Chain Management, 3rd Edition.
D. Taylor, D. Brunt,(2001) Manufacturing Operations & Supply Chain Management.
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