Quality, Process and Location Analysis
Theory of constrains states that at every one point in a complex system, there is only one, or at most very few factors that inhibit the efficiency of the system. These bottlenecks should be identified and dealt with accordingly, to ensure a significant improvement in a system efficiency Stevenson, (2009). Before engaging the five steps of theory, the most important thing is to identify the goal of the system. In identifying the goals, one has to establish the end users of the system products. By so doing, we will be able to establish the matrix used to evaluate the quality and the amount of the product required by the client.
Step 1: Identifying the constraint
The fundamental rule of the theory of constraint is that the final product of a system is majorly influenced by the constraint the system is undergoing. The theory believes that a chain is always strongest at its weakest point Stevenson, (2009). A system therefore needs to work on the weakest point to ensure a strong efficient system. In the Nissan case study, the system bottleneck was identified to be severe financial difficulties caused by natural catastrophes and national economic recessions.
Step 2: Exploiting the constraint
The output of a system is undermined by the output of the constrain. In other words, an increase in the output of a bottleneck leads to diminishing production of the system. The best way therefore is to identify the bottleneck and squeeze it as much as possible to for its maximum output Samareh, (2007). This does not mean that one should increase the amount of bottlenecks. What it refers to is that we should first utilize the resources that we have in plenty. When Nissan experienced financial dificulties, the first thing they did was to form an alliance with Renault were Renault bought 36.8% of its stocks.
Step 3. Subordinate any other decision to the bottleneck.
The third step talks about using all that there is to ensure that the constraint is fully utilized. More products should not be added for this might result to what is known as “system chocking” Samareh, (2007). Trying to feed the constraint with more work than it can deal with will result to excess work in the process. This can be done by letting non-constraints to help constraints in its activities. It can also be done by ensuring that there is no any other variable which is working faster than the constraint; all must work at the pace of the constraint.
Step 4: Elevate the constraint
This is the step that most people apply first and that is where they go wrong. They end up buying more machines, hiring more labour, more training, and etcetera. This step should come fourth, Yükse, (2007). After Nissan sold 36.8% of its outstanding stock to Renault, they gain more financial power. And with time they become financially stronger that they bought back into Renault.
Step 5: Preventing the inertia from becoming the bottleneck
When the weakest point of the link has been elevated to be the strongest point, another weak point may emerge. Measures should be taken to ensure that such weak points are taken care of before they emerge again. As a result of tsunami attack, Nissan started to adhere to the principles stated in emergency response plan. This therefore prevented Nissan from creating other weak point.
Total Quality Management
Total quality management is the endless endeavour by companies to produce the best quality achievable. It also involves seeking ways to reduce operational cost and to increase efficiency of a system, Yükse, (2007). This can be done by benchmarking with other excellent systems to ensure that the system is functioning with the highest possible efficiency. Continuous improvement may result to reduction in the amount of time required in the production process. A good example in the evolution of production in Nissan is the management of waste product. The raw material which used to be pushed forward until the end of the process could now be removed at any point of the production.
Figure 1 above illustrates how the tsunami attacks lead to financial recession in Japan. As a result, japan sold some of its stock to Renault. By so doing, Nissan regain its financial strength and started buying back from Renault. Nissan then resorted to implementing disaster management strategies to cub future financial breakdowns.
When costumer places an order for Nissan products; the producer sends the order to the warehouse. When the products are in the house, they are now referred to as stock. The stock is then shipped to the costumer who receives them.
References
Stevenson, W. J., & Sum, C. C. (2009). Operations management (Vol. 8). Boston, MA: McGraw-Hill/Irwin.
Samareh, B., & Dolatabadi, A. (2007). A three-dimensional analysis of the cold spray process: the effects of substrate location and shape. Journal of Thermal Spray Technology, 16(5-6), 634-642.
Yüksel, İ., & Dagdeviren, M. (2007). Using the analytic network process (ANP) in a SWOT analysis–A case study for a textile firm. Information Sciences, 177(16), 3364-3382.
