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Nissan
Quality
http://www.thetimes100.co.uk/case_study.php?cID=64&csID=124
Overview:acasestudyonNissanhighlightingmanyoftheissuesofleanproduction.
LearningObjectives

toanalysethereasonsbehindNissanshighlevelsofproductivity

tounderstandthemeaningofTotalQualityManagement

tounderstandtheimportanceofKaizen

toanalysethebenefitsofjustintime.
Planningforqualityandproductivity
Introduction:(9minutes)
Overviewofthelesson:tolookatNissanandexaminethereasonsforitshighlevelsofproductivity.
Youwilllookatthewayitworkswithitsemployeesanditsuseofleanproductiontechniques.You
maywanttotakelongerovertheactivitiesandspreadthisovertwolessons.
NissanMotorManufacturingUKLimited(NMUL)isUKslargestcarmanufacturingplantwhichis
locatednearSunderland.IthasbeenEuropesmostproductivecarplantforthepastsevenyears,cars
producedincludetheAlmera,MicraandPrimera.Over70%ofoutputisexportedto55markets
worldwide.
Studenttask:readsection1andanswerthefollowingquestions:

whatmodelsofcararemadebyNissanandhowmanyofeacharemade?(Almera86,491;
Micra190,690;Primera54473)

howmanycarsintotaldidNissanmakein2003?(331,924)

explainhowthemodelsproducedcaterfordifferentsegmentsofthemarket.
WhatisqualityandwhyisqualityattheheartoftheNissansuccessstory?
Productionandproductionprocess(10minutes)
Nissanscapacityisnowover500,000vehiclesayears.Studenttask:workinginpairs,studentsto
explainthefactorsthatmightdetermineafirmscapacity.(e.g.machinery,technology,training).
Studentstoreadsection4andsummarise:

thedifferencebetweenjobandflowproduction(e.g.scale,flexibility,unitcosts,volume,
capitalintensity)

thekeyelementsoftheNissanproductionprocess.
Howdocontinuousflowmethodsofproductionhelptoreducecosts?

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NissanLessonPlanfromTheTimes100website:www.tt100.biz
Employees(15minutes)
TheSunderlandplantishighlyautomatedbutstilltheroleofemployeesiscrucial.Askstudentshow
thefirmcouldmaximiseemployeescontributiontothebusiness.Puttheideasontheboard.e.g.
involvement,delegation,cellproduction,democraticmanagement,suggestionschemes)
Studenttask:havingcomeupwithyourideasoftheroleofemployeesinabusinesssuchasNissan
readsection4.Makenotesonhowanorganisationcanmaximiseemployeescontributiontothe
business.
WhyareNissanworkerstrainedtobemultiskilled?Whatistheimpactonproductivity?
ExamineoneofthekeyareasoftrainingatNissanandexplainhowthiswillhelpthecompanytobe
moreproductive.
Dividestudentsintoteamsandallocateoneofthethreetasksbelow:
TotalQualityManagement(15minutes)
Simplyproducingcarsisnotenoughtheymustbeofasuitablequality.ToachievetheseNissanusesa
TotalQualityManagement(TQM)approach.OutlinethemeaningofTQMawayofthinkingand
doingthatrequiresanimprovementcultureinwhicheveryonelooksforwaysofdoingbetter.
Studenttask:Readsection5andmakenotesontheprocessnecessarytoachieveTQM
Answer:e.g.plan,do,check,act.
WhyisTotalQualityManagementmuchmoreeffectivethanendofproductionlineinspection.
Justintime(15minutes)
NissanalsoadoptsaJustintimeapproach.Outlinewhatthisis(i.e.producingtoorderandnot
holdingstocks).Studenttask:Studentstoreadsection6andmakenotesonhowJustintimeisusedat
Nissan.
Studenttask:Workinginpairsstudentstoproducealistofadvantagesanddisadvantagesofajustin
timeapproach.(e.g.lesswarehousingandstockholdingcostsBUTmaylosingpurchasing
economies).Studentstopresenttheirideastotheclass.Studentstowriteupasummaryoftheir
collectivefindings.
Howcanjustintimeapproachesensurethatproductionissynchronisedwithcustomerdemand?
Kaizen(15minutes)
NissanalsousesKaizen.Explainwhatthisisaprocessofcontinuousimprovement.

Studenttask:studentstoworkinpairsandthinkofthepossiblebenefitsofKaizentoNissan.(e.g.cost
savings,higherprofits,betterquality).Theyshouldreadsection8tocomparetheirfindingsandaddin
anyotherfactors
Review:1minute
Nissanisaleadingproducerduetothewayitmanagesitsproductionprocessasyouhaveseeninthe
lesson.Itssysteminvolvestheefficientuseofpeopleandresources.
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Homework
1.
Completetheworksheetonthiscasestudy.
2.
TowhatextentisNissansapproacheasyforotherfirmstoimitate?(dependsontheimportance
ofculturetheideasmaybesimplebutgainingthecommitmentofstaffandconsistencyof
applicationmaybemoredifficult).
3.
TowhatextentcanNissansapproachtoproductionguaranteeitssuccess?(e.g.mayhelpwith
costsandqualitybutstilldependsontheactualnatureoftheproductisitwelldesigned?Does
itmeetcustomerneeds?;alsodependsonexternalfactorssuchastheeconomyand
competitors).

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Nissan
Quality
QuestionsandAnswers
WhatisqualityandwhyisqualityattheheartoftheNissansuccessstory?
Qualityisthebusinessprocessconcernedwithmakingsurethatproductionmeetstherequirementsof
theendconsumer.Insimpletermsthegoodsproducedneedtobefitforthepurposestheyare
required,individualcarcustomershaveparticularrequirementswhentheypurchaseacaraquality
carisonethatmeetstheserequirements.AchievinghighqualityenablesNissantobeanefficientand
profitablecarmanufacturer,andofcourse,qualityisnotjustaboutmeetingtherequirementsofthe
endconsumer.EveryemployeeatNissanhasinternalcustomersi.e.employeesthattheysupply(at
thenextstageoftheproductionprocess).Creatinghighqualitythereforemeansmakingsurethat
internalandexternalcustomersarecontinuallysuppliedwithqualityoutputsandproducts.
Howdocontinuousflowmethodsofproductionhelptoreducecosts?
Continuousflowinvolvesparts,componentsandsubassembliescontinuallyflowingdownthe
productionline.TheNissanplanthasbeenspeciallydesignedsoanumberofsubassembliesflow
intothefinalassemblyline,whichcanifrequired,run24hoursadaywithaseriesofshifts.Asthe
processesarestandardiseditispossibletoproducewithmaximumefficiencyusingjustintime
assemblytechniques.Wasteiseliminatedoratleastminimisedandthisleadstoveryhighoutputsat
verylowcosts.Withcontinuousflowtherearenotimegapsbetweentheproductionlinestartingup
andstopping.
WhyareNissanworkerstrainedtobemultiskilled?Whatistheimpactonproductivity?
Multiskilledworkersaretrainedtodoavarietyoftasks,andtheirdependenceonothersisreduced
andtheseworkersareabletotakeonmoreresponsibilityandthinkforthemselves.Theyarethus
likelytobefarmoremotivatedandcompetentthanworkerswhoonlyhaveasingleskill,theywillbe
farmoreproductive,andabletotakeonfreshresponsibility.
ExamineoneofthekeyareasoftrainingatNissanandexplainhowthiswillhelpthecompanytobe
moreproductive.
EachofthekeyareasoftraininghelpsNissantobemoreproductive,e.g.technicaldevelopmentgives
employeesgreatertechnicalskillsenablingthemtoworkmoreskilfullyandmakefewermistakes.
Peopledevelopmentimprovestheabilityofanemployeetoworkinateam,tocommunicatewith
others,etc.
WhyisTotalQualityManagementmuchmoreeffectivethanendofproductionlineinspection.
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Endofproductionlineinspectionchecks,whetherthereareanyfaultsfromtheline,sothatfaulty
componentsorendproductscanbescrapped.However,iftherearenootherqualityproceduresthisis
verywasteful.BycreatingaqualitycultureandTQMallthewaydowntheline,faultscanbe
eliminatedsothattheidealofzerodefectscanbeattained.

Howcanjustintimeapproachesensurethatproductionissynchronisedwithcustomerdemand?
Justintimeproductioninvolvesdeliveringvehiclestotheendcustomeratthetimerequired.Asa
result,theproductionlinecanbeorganisedtodelivertomeetthisdemanditcanbesloweddown,or
spedup.Thesamegoesforsubassemblyandthedeliveryofcomponents,stockpilesarenotrequired
andwastecanbereducedtoaminimum.

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