Theory of Constraints And Application of Total Quality Management Principles-Nissan Motor Company

Part I 

Section A 

Theory of Constraints 

The Theory of Constraints (TOC) is premised on the concept that every process in an organization has a set of constraints. The total process can only be improved once the constraint has been dealt with. TOC provides the methodology of identifying and eliminating constraints through five steps, namelyidentify, exploit, subordinate, evaluate, and repeat. 

Step 1: Identify 

It is impossible to fix a problem you do not know exists. In the first step, Nissan can identify which process in the production process yields the highest number of challenges. That is to say, the company should be aware of the areas it is experiencing the highest number of unexpected delays. 

Step 2: Exploit 

This step entails making use of the available resources to make quick improvements. The company chooses actions that can be carried out as quickly as possible. In other words, Nissan should not spend or invest so much in making quick changes and upgrades. Step 3: Subordinate 

A review of all activities in step 1 and 2 is conducted to ensure that they are in line with the needs of the restrictions being solved. Looking at context of Nissan, the company should ensure that the plan put in place after step 1 and 2 is implemented in accordance with the needs of the specific constraint. 

Step 4: Evaluate 

If at this point, the company notices that the constraint still recurs or exist despite the quick improvements applied, the responsible manager should go back to the drawing board and come up with other possible solutions. The company might incur some costs in the process of finding and implementing the possible solutions. 

Step 5: Repeat 

TOC model methodology is a continuous cycle. Therefore, if the constraint has been addressed, then the company should shift to the next and repeat the cycle. If not, the company should go back to step 4 are an attempt to resolve the stalemate. 

Section B: 

Application of Total Quality Management Principles-Nissan Motor Company 

Total Quality Management (TQM) involves making customer-focused decisions by identifying their requirements and working toward meeting them. TQM mandates an organization to make and implement decisions based on credible and well-research information rather than speculation. It also compels managers to identify and eliminate the root causes of inefficiencies, problems, and conflicts among the staff. Being relevant in the market for so many years, the Company has perfected its processes and operations to ensure that the projected production and performance is not interrupted. The company has recently been investing heavily in innovation and research in order to improve the quality of its products. 

The company has an information system that connects all critical departments for faster decision making. Nissan also has elaborate customer relations department, which makes follow up on customers to obtain their feedback on their experience of using the company’s automobiles. It is for the same reason of increasing customer loyalty that the company has allowed customers to purchase cars that are customized to individual’s tastes and preference. The company trains its employees regularly on the new developments so that they constantly demonstrate impeccable skills and knowledge. Nissan’s senior management understands the need to keep TQM a normal practice so that it everyone devises ways of doing their tasks better. It has successfully built a culture over the year in which all employees feel their contributions are valued, acknowledged, and appreciated. 

Part II 

Cause and Effect diagram 

Nissan can use cause and effective diagram to comprehend when an order is placed by the customer and when it’s going to be completed thus, shows how much time is taken at the production. 

The diagram also shows how much stock to keep in store and also shows the consistence in manufacturing. 

A cause and effective diagram helps in solving problems and also identify the case of the problem and sort useful categories of ideas. 

Based on the diagram above we find that there is a big problem between the Nissan management and the dealership because of the inventory shortage. 

When a problem such as this becomes concern the diagram can be rearranged and encourage the supply chain to abide by the new regulations to rebuild the relationship based on trust, commitment, professionalism, transparency and respect. 

Process Map 

This process map will be instrumental in improving efficiency by helping in the identification of bottlenecks, redundancies in the system and well as any delays in the supply chain process. 

The process map will assists Nissan Company in making the right decisions about locations, where there is high factor and weight and market availability in innovative location. 

As an operations manager, the map will help me gain insight into the supply chain process so that I can identify areas that require improvement. 

Plant Location 

Based on the process map, the Company should consider locating its new plant in Columbia. 

Columbia has high political risks and higher transportation costs, but considerably lower rental, labor productivity, and general labor costs. 

It also has lower taxes compared to Mexico. Therefore, the higher costs incurred in transportation can be recovered in all the other factors that have lower costs. 

References 

Demirbag, M., Tatoglu, E., Tekinkus, M. and Zaim, S. (2006). An analysis of the relationship between TQM implementation and organizational performance. Journal of Manufacturing Technology Management,Vol. 17 No. 6, pp. 829-47.Gabay, R.(2008). Deming’s 14 Principles. Journal,Vol. 13 No. 5,pp. 548-65.Mabin, J., Balderstone, J. (1999). The World of the Theory of Constraints: A Review of the International Literature, St. Lucie Press. McNair, C.(1999).Theory of Constraints (TOC) Management System Fundamentals.Statements on Management Accounting 

Quasar, pp 10.Kollengode, A.(2010). The four steps of constructing a cause and effect diagram. Six sigma for healthcareLee, Y.P., Zailani, S. and Soh, K.L. (2006), “Understanding factors for benchmarking adoption: new evidence from Malaysia”, Benchmarking: An International.