MGT311 Operational Management

Case Study 

Introduction

Operation management is a method used by businesses to make the most of their existing resources in order to achieve the best possible levels of overall production and efficiency. For the purposes of this analysis, Nissan Motors, a Japanese vehicle manufacturer with annual revenues over 8 trillian Japanese yen, is taken into account (Carlier, 2022). The topic of operations management and how it may aid a firm in performing better by avoiding the problems will be covered in detail. In addition, different order winners and qualifiers, as well as the company’s ability to remain competitive in the market, will be examined. The concepts of uncertainty and fluctuation, as well as the importance of operation in product design, are discussed. Finally, with the assistance of a corporate example, the use of an assembly line and how it benefits the organisation are discussed.

Process, Challenges and Nature of Operation Management

As previously said, Nissan is a leading automotive manufacturer in the world, and as a result, they must constantly improve the quality of their vehicles to keep up with client demands and to keep up with their competitors’ products. To do this, Nissan developed their manufacturing technique, known as the Nissan production way (NPW) (Netland, 2012). It is analyzed from the business operation of the company that it gives the value to the total quality management, JIT (just-in-time) approach, maintenance total productivity, and management techniques statistical quality. The primary goal of their manufacturing is to retain the greatest possible quality of the product while cutting costs and eliminating waste to deliver the goods on time.

If Nissan wants to remain competitive in the market for an extended length of time, the company’s operations management must make adjustments to the company’s business processes on a regular basis. Operation management has made several choices to maintain products and services, including the lowest cost incurred by offering the greatest quality of product, maximising the use of available resources, and delivering required services and goods at the appropriate time and location (Reid and Sanders (2019). Other considerations include the design of the layout, the design of jobs for human resources, the design of capacity, and so on.

The huge number of competitors in the automobile market has influenced not only its sales but also the profits and revenues. As a result of the strong competition in the market, the company is facing several obstacles which are affecting the performance of the company in its target market. The company is required to make constant improvements in the design of the product, which comes at a significant financial cost and comes with the unpredictability of failure or success (Jolly, 2020). Nissan has hurdles in the areas of regulatory compliance and safety management since the company is required to manufacture its goods in accordance with the norms and regulations of each nation, which is difficult to achieve.

Order Winners and Qualifier

Nissan Motors is a leading participant in the car business in the world market, and as a result, they must develop their strategic goals while taking into consideration all of the aspects that might have an impact on their operations in the target market. The company’s goals are to have zero emissions from its vehicles, zero deaths produced in the manufacturing, and to promote zero inequalities at the workplace, among other things (Nisssan Motor Corporation, 2019). A vast variety of vehicles are available for targeting different income level people in the target market. With the help of this strategy, the company qualifies every order of the customers. An order winner is committed to giving its clients high-quality products by using cutting-edge technologies and high-quality raw materials.

Design of Product and Operations

Product design is the process of creating or designing items to meet the requirements and desires of customers, as well as their financial and aesthetic preferences. The operation function related to the design of the product is utilized with the help of available resources such as machinery, raw materials, skills, equipment, operation process, capabilities and competencies of human resources, and so on which are required to produce final products (Heizer and Render, 2014). Through the help of these processes, the company tries to meet the needs of the customer while providing a higher quality product than competitors.

Fluctuations in Demand and Uncertainty

It is critical for a firm to be able to foresee demand uncertainty or changes in the market since this is directly related to the profitability and competence of the organisation. Nissan employs the JIT framework to introduce raw materials into the factors in order to remove all of these variables. The result is that the corporation orders goods only when demand comes from the target market. It also helps in reducing the issues related to inventory costs, material handling, equipment costs, labour costs, and other expenses (Lung et al, 2018).

Demand variations may be caused by a variety of circumstances, including poor quality of products or excessive prices in comparison to rivals. To deal with it, the firm employs a variety of approaches, such as Genba Kanri for maintaining the floor shop and Douki Seisan to evaluate the quality of purchased raw materials (Sako, 2006). Finally, in order to sustain the whole operating unit of the organisation, they use the NPW or Nisan production method.

Proposed Change in Production Process

As per the analysis of the case, it can be stated that the decision to move the operation from batch to assembly line will cause various adjustments in the organisation since both processes have distinct requirements and demands (Grzechca, 2011). Nissan must correctly handle several problems such as finance, since a large initial investment is necessary, consequently increasing product costs. However, it will reduce future costs. So the corporation must strike a balance between these two factors. Nissan staff must be well trained to properly use the production line. Accounting will be simpler to handle with fewer sub-assemblies and pre-set charges. Marketing has to adapt since assembly lines are stiff and no modifications are made, which may lead to consumer dissatisfaction (Grzechca, 2011). The flow of information will grow smoother as the process becomes routine, allowing for better management of the activities related to the operation along with the monitoring of the entire management process.

Conclusion

Consequently, it can be inferred that operations management is critical to the organizations’  success and that continual innovation along with the change in operation’s response to the external environment is essential to remaining competitive in the marketplace. To do this, adequate monitoring of future uncertainty with the analysis of required changes in customers’ demand is essential so that the corporation may adjust its business operations as needed. Apart from that, the use of assembly lines helps the company in ensuring a smooth flow of important customers’ related information across the organisation, allowing for the most efficient use of available resources.

References

Carlier, M. (2022). Nissan’s net sales from FY 2008 to FY 2020. Retrieved from https://www.statista.com/statistics/314849/total-net-revenues-of-nissan/#:~:text=Nissan%20%2D%20net%20sales%202008%2D2020&text=Nissan%20generated%20nearly%208%20trillion,the%20fiscal%20year%20of%202020.

Grzechca, W. (2011). Assembly Line: Theory and Practice. BoD – Books on Demand.

Heizer, J. and Render, B. (2014). Operations Management: Sustainability and Supply Chain Management. Pearson.

Jolly, J. (2020). Nissan suffers first quarterly loss in decade as poor sales add to woes. Retrieved from https://www.theguardian.com/business/2020/feb/13/nissan-suffers-first-quarterly-loss-in-decade-as-poor-sales-add-to-woes

Lung et al. (2018). Coping with Variety: Flexible Productive Systems for Product Variety in the Auto Industry. Routledge.

Netland, T. (2012). Nissan Production Way: A better alternative to TPS? Retrieved from https://better-operations.com/2012/08/30/nissan-production-way-a-better-alternative-to-tps/

Nisssan Motor Corporation. (2019). Community Engagement. Retrieved from https://www.nissan-global.com/EN/SUSTAINABILITY/REPORT/SOCIAL/COMMUNITY_ENGAGEMENT/

Reid, D. and Sanders, N. (2019). Operations Management: An Integrated Approach. Wiley.

Sako, M. (2006). Shifting Boundaries of the Firm: Japanese Company – Japanese Labour. OUP Oxford.