Synchronized Production Strategy

Manufacturing Management
Department

HU Jianping DGM
29th May, 2013
DONGFENG NISSAN PASSENGER VEHICLE COMPANY
 Content

1. Background of Synchronized Production Strategy

2. Overview of Synchronized Production Strategy

3. Construction of Customer Synchronization Culture

2
 1-1. External Environment of Passenger Vehicle Industry

The industry environment of slight growth exposes the vehicle manufacturers in front
of new challenges, and current mode has hidden risk.
Passenger vehicle market enters an
A era of slight growth
Unit: 10k units

After explosive growth of passenger

vehicle market a few years ago,
market returns to stability.
Production capacity is far more
than market demand, sellers’
market turns to buyers’ market and
the competition is fierce.

B Growing maturity of customer demand for

passenger vehicles
Intensifying C Increasing labor cost in the industry
competition in Labor cost of passenger vehicle industry stays at
Investigation of the major influencing factors for
car purchasing from a website shows that passenger a high level in manufacturing industry, it will grow
customers focus more on price, brand, quality vehicle market substantially every year in the future so as to
and service. capture talents and keep them stable.
Passenger vehicle maker
Sales volume
Year-on-year
growth of labor
cost
Unit: 10k
units
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
3
 2-1. Overview of Synchronized Production Strategy
 Features: “Continuous pursuit of synchronization with customers, continuous promotion of
improvement and innovation‖, provide high quality products and services to customers in the whole
value-chain, and keep improving customer value.
Customer value

Synchronization with customer needs

Quality synchronization (the best) Cost synchronization (the best) Time synchronization (the quickest)

TdC (total delivery cost) – whole value chain management

R&D Purchasing Parts logistics Production Vehicle logistics Sales (dealers)

INPUT Manufacturing system – synchronized production OUTPUT

Production management system
Profitability
People Shortening of production cycle, sequence ·time
observance Material & labor cost, budget, ROIC
Engineering management system
Material Flexibility, integration, ergonomics, waste Competitiveness
elimination
Equipment Shop-floor management system Quality, cost, delivery, cycle
Establish inspection abnormality system, standard
setting Note: ROIC: Return on Invested Capital
4
 2-2. Quality Synchronization
 “Quality Synchronization‖ — Priority assurance and quick response of customer
demanded quality in the whole value chain, i.e. ―quality is core‖ --- product quality +
service satisfaction

End customer Dealer Manufacturer Supplier

Product demand
Customer demand Ability support

Quality synchronization High quality product

Service synchronization High quality parts

Quality systematism
「Ensure customer demanded quality 研发 采购 制造
throughout the whole value chain」 商企 TCS
・Don’t accept defect
物流
・Don’t produce defect 。。。
・Don’t flow out defect

5
 2-2. Quality Synchronization – QRQC Activities
 By use of QRQC (Quick Response Quality Control) mechanism, to quickly detect, analyze, find
root-cause of and quickly solve the problems, so the quality can be improved more quickly and
accurately.

QRQC in plant
Assembly
SQGK activity,
Supplier system
Inspection Parts inspection certification

Paint shop
R&D
Touch-up line
Engineering
technology

Plant
Welding Shop
24H response

Metal line Customer

Dealers
Network
transmission
Press QRQC between
customer & plant

Quality information center Information feedback to

of each process previous process 6
 2-3. Cost Synchronization
“Cost Synchronization‖— By application of ―new technology, new process, new
concept‖, to carry over specific improvement activities in each part of value chain, and
reduce waste. Meet customer expectation of cost.
Amount → Big

Market condition (same level products・services）

Customer recognized price

Cost synchronization

Cost
Profit
Added value that’s worth
Non-value added＝ waste
customer payment
Completely eliminate waste
The so called added value which is recognized by customer and worth customer payment
means that in order to realize none-waste-operation throughout the whole value chain,
redundant processes & man allocation, long distance logistics, operational loss, unnecessary
inventory and other so called non-value-added operation (i.e. waste) should be completely
eliminated, only by this method the customer can be provided with the most valuable product. 7
 2-2. Quality Synchronization – SQGK Activities
 Support many suppliers in 2 years, joint improvement of local-brand competitiveness
with suppliers
＜Whole value chain of Venucia brand＞

From standpoint
SQGK
Guiding ability
of supplier and speed of

Competitiveness promotion
production field Dongfeng Nissan

Improve market competitiveness

Mutual trust
and win-win

C supplier production line D supplier production line E supplier production line

Manufacturer: Venucia brand vehicles production line

A supplier production line B supplier production line C supplier production line

Intensify shop-floor management, improve quality

Dongfeng Nissan assists each supplier to intensify shop-floor management, improve product
quality and whole value-chain competitiveness.
Take this chance to intensify relationship of mutual trust and interdependence with suppliers. 8
 2-3. Cost Synchronization --- Efficiency Improvement Activities

 By carrying over systematic efficiency improvement activities throughout the

whole value chain, to provide high cost efficient products and services.

R&D
Parts and
materials
Parts Manufacturing
Vehicle
purchased logistics logistics

efficiency up
Whole value chain
Package Route Route
Supplier
improvement by In site/on site
design localization optimization optimization

Reduce parts THANKS Logistics Logistics

complexity
IN/ON SITE
activities quality quality
Solid
Package Efficiency transportation
improvement improvement system

Inventory
IFA/LCA
reduction

9
 2-3. Cost Synchronization --- Supplier THANKS Activity

A large number of suppliers are involved in THANKS activities from CY11～13

Pure-THANKS improvement focus

areas & quantity

Other
CY11 CY12 CY13
XY/ZZ/Wuhan
Total
Shanghai

10
Guangzhou
10
 2-4. Time Synchronization
“Time synchronization‖— Based on the optimized construction of system to achieve
synchronization with customer demand, and provide products and services within
customers’ demanded due time.
All originate from customer Info. flow
Customer
to achieve global best
Logistics

Dealer

Confirmed plan for sequence & time

production
Synchronized

Optional
Suppliers parts fitting

Delivery
Engine Vehicle production Transportation
preparation
Transportation

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 2-4. Time Synchronization - Activities
 Adopt make-to-order, and drive whole value chain improvement through customer
demand. Satisfy customer orders and maintain low inventory at the same time.

Satisfy
customer Reasonable DLR
orders with in-stock
Reasonable DFL
in-stock the lowest
in-stock

Stable production
Quick check of Logistic network optimization,
In-bound logistics
orders and synchronized transportation,
mode, shorten
accurate plan innovative spare parts
production cycle,
making logistics mode
time･sequence
observance
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 3-1. Customer Synchronization Culture
 Show customers the whole value chain, and bring value feedback to customers and
improve their satisfaction through continuous improvement and innovation. Meanwhile,
to promote brand recognition and reputation. Create cultural atmosphere inside the
company with focus on customer synchronization.
DNPW want-to-be
Synchronization of new model
of purchasing
Satisfaction

development —— Synchronization project

Production synchronization——
customer order satisfaction
Value creation——By whole value chain
optimization, to create superior quality
and competitive price
Customer Brand
satisfaction value
of services
Satisfaction

Service quality

Service value

Quick response

Improvement
13
Thank you !
 Index of Special Terms

 DNPW: Dongfeng Nissan Production Way 东风日产生产方式

 TdC : Total delivered Cost 全流动成本

 On Site: besides the main production line 在主线旁 In Site: inside the plant 在工厂内

QRQC : Quick Response Quality Control 快速反应质量控制

 SQGK: Supplier Quality Genba Kanri 供应商品质现场改善

 ROIC: Return on Invested Capital 投资收益

 THANKS: Trusty and Harmonious Nissan Kaizen activity with Suppliers 供应商改善活动

 IFA : Integrated Factory Automation 集成工厂自动化

LCA : Low Cost Automation 低成本自动化

DFL : DongFeng Motor Company Limited 东风汽车有限公司

 DLR : Dealer 经销商

TCS: Total Customer Satisfaction 市场品质管理部

 同期生产: synchronized production (源于日文 Douki-seisan)