From World Class Manufacturing to World Class Supply Chain

1
From World Class Manufacturing toWorld Class
Supply Chain

• John Griffiths
• Vice President, SCM, Nissan Europe

2
Industry Context

• Tough industry conditions in Europe
• On going cost reduction is an imperative but
• Customers are continually better informed and
  more demanding on Quality and Delivery

3
Everyone is trying to control costs
4
There are two imperatives in Supply Chain
Management

• Cost Reduction
• Customer Satisfaction

5
Two key factors in Customer Satisfaction are
influenced by SCM

• ? Lead-time
• ? On time delivery
• Customers lead-time expectations are varied but
  everyone expects promised delivery to be kept.

6
In the Ideal Supply Chain

• Production is completely synchronised with all
  customer orders requiring-
• High flexibility
• Short lead-times
• Zero defects

7
There are several barriers to progress

• Ability of all actors in the chain to move
  together
• Rigidity
• Distance
• Complexity

8
Huge flexibility is required to follow the market
Peak demand 141
Average production
Minimum demand 59
9
Flexibility is required to follow changing market
segmentation
10
Flexibility is required to follow changing market
segmentation
11
Difficulty of forecasting increases with detail
required-
Difficulty

• Hi

Lo
Total Market
Segment
Actual Vehicle
12
Nissan in Europe is moving towards the ideal

• Flexible/practical labour agreement
• Schedule finalisation 6 days from build
• Restructuring of physical distribution network
• Real time customer promise and follow up system

13
Lead-time is the barometer of production
flexibility

• Total lead-time for Customer

Total Production Lead-time
Back Orders
Vehicle logistics
6 Days
1 Day
Determined mainly by lead-time to procure parts
Variable depends on ability to follow real demand
Focus must change from capacity management ?
lead-time management
14
Suppliers will need to ..

• Recognise and embrace the difficulty of
  predicting the market
• Reduce lead-times for finished assemblies
• Enhance flexibility cost effectively

15
In Summary

• Q, C and D must co-exist as high level objectives
• Our customers require us to excel at all of them
• To achieve Q, C and D everyone has to work
  together
• Cost effective flexibility is vital
• The players who implement most effectively will
  be the winners