Generating Value
Nissan’s operations management strategies encompass key strategies for enhancing effectiveness and efficiency of operations. With the global scale of its business and operation facilities, Nissan uses a combination of several operations management tools and techniques to generate value for customers. Some of these tools and techniques include inbound and outbound logistics planning, mixed model assembly lines, strategic network design, efficiency analysis and performance measures, lifecycle planning and demand management, and risk management (Malakooti, 55). All these have enabled the company to attain competitive advantages and remain resilient during periods of economic downturns. Nissan achieves competitive advantages from operations management by way of improved ability to apply innovative ideas and technologies to reduce costs and increase productivity. As explained in the case study, operations management has enabled Nissan to streamline the supply chain, shorten delivery time and enhance product quality.
Nissan’s operations can be broadly classified as service and manufacturing operations. Manufacturing operations result in tangible goods, which are the company’s physical products sold to consumers. These products include cars, body parts, engines and prototypes. Examples of Nissans’ manufacturing operations include product design and development. In contrast, service operations result in certain intangible benefits that may not be easily visible. These include customer service, inventory management, employee relations, stakeholder engagement and corporate social responsibility programs. Service operations produce value by enhancing the company’s reputation and ability to compete in the industry (Malakooti, 53).
Theories and Techniques
The Critical Path Method (CPM) and program evaluation and review technique (PERT) are the most common techniques used in project management. CPM is in projects that have a definite and predictable list of activities and tasks such as in the automotive manufacturing industry. It is a deterministic tool that allows project managers to estimate the amount and cost of resources to be spent in each activity. On the other hand, PERT technique is used in projects that have no predictable activities and tasks such as research projects. Unlike CPM, PERT is a probabilistic tool that uses estimates to determine resources required to complete a project. Nissan can use CPM to support manufacturing activities and PERT to support research and development activities (Wysocki, 145).
Development of a forecasting system involves five key steps: problem definition; information gathering; exploratory analysis; model fitting and implementation of the forecasting model. Nissan can use these steps to develop a model for estimating future market demand for its products. For Nissan, problem definition may involve determining and understanding demand movements. This is followed by gathering of essential information from both primary and secondary sources. Exploratory analysis involves examination of data to establish consistency in patterns and trends. Once patterns and trends have been established, appropriate models can be fitted to help the company in predicting future demand. If the chosen model does not work, the entire process of forecasting can be repeated. Implementing a forecasting method for a top selling product line at Nissan can lead to high sales and rapid market growth in the global automotive industry (Wysocki, 85).
There are two major types of risks: external and internal risks. External risks are caused by factors outside the control of an organization such as catastrophic events, exchange rate fluctuations and interruptions of the supply chain. An example is the 2011 earthquake and tsunami that hit Japan. Internal risks are caused by adverse changes in personnel and management processes and disruption of internal business processes. Nissan can mitigate exposure to supply chain risks caused by natural disasters by establishing multiple production facilities abroad (Jolly,7).
Works Cited
Jolly Adam. Managing Business Risk: A Practical Guide to Protecting Your Business. Kogan Page Limited. pp.
Malakooti Behnam. Operations and Production Systems with Multiple Objectives. John Wiley & Sons, 2013.
Wysocki Robert. Effective Project Management: Traditional, Adaptive, Extreme. John Wiley & Sons, 2013.
