Nissan Motor Company Ltd.: Building Operational

ResiliencyPresented by:Group - 4

Presented to:Prof. Pradeep

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History of the Japanese Automotive Industry

• Military sponsored initiativesPrior to1930’s• Jidosha Seizo Company, Toyoda Automatic Loom1933• Nissan and Toyota faced risk of Bankruptcy1945• Toyota developed JIT and reduced buffer in stock,

Developed TPS1940’s to1960’s• Toyota and Nissan increased their

exports1960’s• Exported 50% of total production1970’s

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About Nissan• Jidosha Seizo Company1933• Named Nissan1934• Nissan resumed its manufacturing1945• Entered into market with procut targeting niche

market1970’s• Concentrated on eco-friendly engines1997• Won the North American Car of the Year Award2002

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Nissan’s Supply Chain Philosophy: A Focus on Flexibility

Flexible organization and integrating a variety of perspectives

Embraced diversity, as corporate officers were from various countries

Simplified product line compared to its competitors

Build-to-stock strategy for few SKUs and Build-to-order for rest

Simplify its operations, product offerings and increase sales

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Risk Management at Nissan

1999• Severe financial

difficulties• Resolved when it

formed an alliance with Renault

Renault• It bought 36.8%

stake in Nissan• Forced Nissan to

confront entrenched practices and to take proactive action

Executive Level Committee• Corporate Risks• Designated Risk

Owners• Reported to BoD

Risk Readiness• Seismic

Reinforcement of Facilities

• Business Continuity Planning

• Disaster simulation training

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Process of Risk ManagementIdentifying Analysing Planning

Implementing

Counter measures

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Adhered to the principles detailed in

its earthquake emergency-response

plan

Recovery Committee was established

Sharing Informati

on

Allocation Supply

Managing Production

Empowering Action

Nissan’s response to Disaster

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Recovery by the Big Three Japanese Auto Manufacturers from downfall of 24%

Toyota• Significant exposure• High rate of

Japanese production

Nissan• Several plants in

close proximity to the disaster area

Honda• Attributed its

production problems to supply chain constraints

• A strategy Nissan has successfully adopted

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Going ForwardNissan

- Increase its production of cars in US up to 90% by 2015 - Reduce reliance on Japanese parts- Identify critical dependencies within supply chain

Thank You

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