Generating Value
a) How Nissan uses Operations Management in Creating Products and Generating value for Clients
Nissan utilizes operation management in several ways to create value for clients as well as in the production process as illustrated during the 2011 disaster that slowed down the company’s production (Nissan Motor Company Ltd., 2013). The company’s management responded by considering their in-transit and in-stock inventory and slowing down production both downstream and upstream. By adequately ramping down production, Nissan managed to minimize the costly overtime costs for the activities that the company expected to be affected. Further, the management utilized the time gained through the inventory in transit to determine supply options. For instance, the time for transportation from Japan to the U.S. west coast took 15 days in addition to 5 days utilized in the movement of material to plants in Mississippi and Tennessee (Nissan Motor Company Ltd., 2013). This illustrated that management had more time to access alternative sources of critical components. The management also had sufficient time to secure air transportation to access get crucial parts outside the country quickly and resolve the decrease in stocks in transit.
9\lb) How the Company achieves a Competitive Advantage
Nissan achieves a competitive advantage by maintaining a clear product line. During the crisis, Nissan implemented a build-to-stock approach for only some stock keeping units in every model as well as a build-to-order approach for the other models (Nissan Motor Company Ltd., 2013). The strategy presented competitive advantages to the company by simplifying its product offerings and operations and contributed to higher sales.
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c) Service Operations and Manufacturing Operations
In the context of Nissan, service operations refer to customer service and sales, while the manufacturing operations refer to the processes involved in making cars. One aspect in which the two operations work together is the process through which customers are sold quality cars or not and the customers’ belief that they are getting value for their money.
Theories and Techniques
a) CPM versus PERT
The program evaluation and review technique (PERT) is a method that an organization adopts for purposes of representing and analyzing project activity as well as illustrating the flow of events ( Aziz, 2014) . PERT is an approach that helps in estimating and evaluating the time required for purposes of completing tasks within stated deadlines. The major objective of the PERT approach is to minimize the time and cost needed to achieve a given project. On the other hand, the critical path method (CPM) is an approach in project management that is utilized in process planning ( Agyei, 2015) . The technique defines the non-crucial and crucial tasks for purposes of process gridlocks and time-frame challenges. According to Agyei (2015), PERT is suitable for projects that are difficult to estimate and take longer to complete, such as research, while CPM is suitable for conventional projects that comprise predictable tasks, including such functions as manufacturing cars.
b) Steps used in Developing a Forecasting System
There are seven crucial steps applied in the development of a forecasting system, including determining the use of the forecasts, selecting the items for forecasting, establishing the timeframe of the estimates, identifying a forecasting model, gathering the relevant data, making the forecast, and implementing the results ( Gahirwal, 2013) . The three significant types of forecasting include economic forecasts, demand forecasts, and technological forecasts. Economic forecasts comprise planning elements that are essential in enabling organizations to develop medium to long-range forecasts ( Gahirwal, 2013) . The estimates focus on the business cycle through the prediction of money supplies, inflation rates, housing as well as other planning aspects. On the other hand, technological forecasts comprise of long-term forecast that is involved with the extent of technological advancement, and they can often contribute to the creation of new products that may need new equipment and new plants. Finally, demand or sales forecasts comprise of projections of the sales of the company for each period within the planning horizon ( Gahirwal, 2013) . Demand forecasts drive a firm’s capacity, production, and scheduling systems, and they also act as inputs to the personnel, marketing, and financial planning.
c) Supply Chain Risk Reduction Tactics
The main categories of supply and associated risks include the transportation, packaging, and processing risks. The company could mitigate the supply chain risks by forming a viable alliance, as illustrated by the fact that Nissan's alliance with Renault played a critical role in resolving the challenges that the company was facing, including financial difficulties. Other approaches that could have helped to mitigate the risks include having emergency response plans and combining such crucial functions as supply chain management, local supply, marketing, and sales.
References
Agyei, W. (2015). Project planning and scheduling using PERT and CPM techniques with linear programming: case study. International Journal of Scientific & Technology Research , 4 (8), 222-227.
Aziz, R. F. (2014). RPERT: Repetitive-projects evaluation and review technique. Alexandria Engineering Journal , 53 (1), 81-93.
Gahirwal, M. (2013). Inter time series sales forecasting. arXiv preprint arXiv:1303.0117 .
Nissan Motor Company Ltd.: Building Operational Resiliency. (2013, August 27). Retrieved September 19, 2018, from https://mitsloan.mit.edu/LearningEdge/CaseDocs/13-149 Nissan.Simchi-Levi.pdf
