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Stephanie FayQSO 3003/14/2019Milestone One: Nissan Case StudyIntroductionIn March of 2011, Japan was struck with a 9.0 Magnitude earthquake. This earthquake caused tsunami waves as big as 40 meters high that traveled up to 10 kilometers inland (Schmidt & Simchi, 2013). The combination of this earthquake and tsunami resulted in an abundance of destruction to not only the civilians but also business located in the country. This natural disaster caused several auto industries including but not limited to Nissan to be deeply affected. Although it created an abundance of devastation it sparked Nissan to create their global disaster control headquarters.
(Schmidt & Simchi, 2013). Generating ValueNissan uses operations management functions to provide and generate value for its customers. Operations management creates value for customers through three distinct steps: marketing, operations and finance. Nissan experienced a GPS shortage as a direct result of the tsunami and earthquake. To combat this issue, Nissan management made the executive decision to install GPS units in the more expensive vehicles. Nissan saw the importance of combatting issues in a timely manner.
To achieve this, they empowered management to make executive decisions for a limited time. This was in hopes that recovery would be sped up. Nissan also came to the realization that other facilities outside Japan would want answers to these changes. Nissan chose to invite two employees from every single outside facility to come onsite, gather their own information and help come up with additional solutions holistically. Inviting two employees not only helped to calm the chaos of fear of the unknown but also provided a means for Nissan to protect itself from information overload and competitors using the widely known information to their advantage.
(Schmidt & Simchi, 2013). Nissans quick action and response time to the disaster created a major competitive advantage. Their efforts to employer management to make decisions coupled with each departments willingness to work together to overcome obstacles resulted in a quicker turn around for getting the destructed locations up and running again. Nissans quick thinking and method of localizing the impact of damage and all outlying facilities was a major competitive advantage. Nissans corporate office consist of a variety of diverse nationalities and many have a high degree of experience when it comes to over seas operations. This gives Nissan leverage and a huge advantage over other manufacturers (Schmidt & Simchi, 2013). Nissans quick action and early response to analyzing destruction and quickly coming up with solutions to overcome hurdles is one of their most prominent strengths and what most likely contributed to their overall success of overcoming the devastation due to the 2011 Earthquake and tsunami. Nissans manufacturing operations consisted of the production of their vehicles. Goods are produced from parts making this form of manufacturing known as discrete manufacturing. Nissan also encompasses service operations through their delivery of the finished product, also known as the completed vehicle. Both service and manufacturing operations are similar based on the fact that they both hold high quality standards, are produced and designed according to a set schedule which in return meets the demands of customers, and finally; they are manufactured in a facility that has employment. (Schieltz,n.d) Also they have similarities, they also have a variety of differences including the following:Service Operations Manufacturing Operations Produce Intangible Goods Produce Tangible GoodsHigh Customer Interaction Limited Customer InvolvementShort response time Longer response timeLabor intensive Capital intensive(Schieltz,n.d)With this being said, manufacturing produces the product and ensures it meets customer standards and demands concerning overall product quality. The service operations aspect deal with the customer directly. They ensure that the customer is overall satisfied with the product. They deal with questions, comments and issues with a rather quick response time to ensure overall customer satisfaction. Theories and TechniquesThe Critical Path Method (CPM) is a risk management tool used to break larger projects down into smaller tasks and then maps them out in a logical sequence. This is achieved by making a list of all required tasks for project completion as well as the expected time the task should take and the dependencies between activities. This gives users the ability to calculate the ES, EF, LS, LF to finish the project on time. A second technique is known n as the Program Evaluation and Review Technique. This tools also give managers an estimate of when the project should most likely be completed. This is achieved by multiplying the most likely scenario by 4, add the optimistic and pessimistic times and dividing the results by six. (Berman, n.d) Nissan managers would most likely benefit from the CPM method when it comes to promotions, advertisement, marketing and advertisement since most aspects of their operations require one thing to be completed before the next item can be started. Also, the CPM method would be beneficial at some stages, The PERT technique would be more beneficial during the research and development stages of new projects since it does a more accurate job of capturing and analyzing risk (Berman, n.d).Forecasting is the process of predicting future events through a series of seven steps including:Determine the use of the forecastSelect the items to be forecastedDetermine the Horizon of the forecastSelect the forecasting modelGather the data needed to make the forecastMake the forecastValidate and Implement the results.(Heizer & Render, 2014)With the use of a forecasting system, Nissan will have the ability to deliver reliable information with regards to past, present and future events. This will provide Nissans management to more efficiently and accurately make decisions with a higher degree of confidence.There is no escaping internal and/or external risk in business. Risks can range from supplier mistakes, management mistakes or even natural disasters such as the earthquake and tsunami of 2011. Steps can be made to reduce the effect of these mistakes such as:Use multiple suppliers to reduce the effects of a supplier failing to deliver. Don’t put all your apples in one basket.Have contracts with penalties for active suppliers as well as subcontractors on retainer to limit supplier issues. Ensure a good insurance policy to cover equipment, property, lost revenue etc. in the event of a natural disaster. Nissan took a huge hit with the 2011 disaster. Despite this, their quick thinking and response was vital to them recovering from this potentially detrimental disaster. ReferencesSchieltz, M. (n.d.). Service Operations vs. Manufacturing Operations. C. (n.d.). How Does PERT & CPM Work? P. (2011, December 5). Why Nissan’s Disaster Recovery Bested Rivals ” Auto Observer. J., & Render, B. (2014). Operations Management: Sustainability and Supply Chain Management (11th ed).Schmidt, W., & Simchi-Levi, D. (2013, August 27). Nissan Motor Company Ltd.: Building Operational Resiliency.
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