One key decision with a car plant is where to locate it. For its UK factory, Nissan chose in 1984a 300 hectare former airfield near Sunderland. Sunderlands attractions included:Manufacturing has a long tradition in the area. A decline in other local manufacturing meantthat skilled labour was readily available.Sunderland has good road and rail links to all major UK areas. This makes it relatively easy tobring in supplies from 105 separate UK component and sub-assembly suppliers, and also todistribute completed vehicles. A nearby deep water port (Port of Tyne) gives ready access toexport markets and for the import of vehicles to the UK.The government provided financial and other incentives to manufacturers who set up in an areawhere employment opportunities had reduced sharply and new jobs were needed.Since 1984, Nissan has increased the scale of its Sunderland operation; almost 3.5 million carshave already been made.Car assembly is a complex operation with many components requiring skilled assembly.Management are particularly keen to monitor total machine-hours and total labour-hours thateach vehicle requires. So far, Nissan has invested over 2.1 billion in the Sunderland site,taking its production capacity to 500,000 vehicles per year.Production methods must be able to produce what customers want, in the quantities customersrequire, at a price consumers are willing to pay, and at a cost that yields a profit to the business.That means that being efficient is vital to success.In some industries it is possible to carry out individual job production to meet a particularcustomers request e.g. a wedding dress, a birthday cake, a fitted kitchen. However, very nearlyLecturer: Engr. Tazeen Sharifall of the worlds car manufacturers mass produce standard models, with individual consumerchoice being accommodated by offering various colors, interior designs, and optional extraswithin a limited flexible production process. People can still personalize their cars further e.g.by choosing a particular car registration or accessories.In pursuit of high output at low average cost, car manufacturing typically uses a continuousflow production method, where sub-assemblies are brought together in a final assembly area.This is the most cost effective and efficient method of production and the speed of the finalassembly line can be adjusted to match consumer demand. If demand picks up, the productionline can be accelerated, within predefined limits.At Nissan Manufacturers UK (NMUK), the production flow draws on three main productionshops, as well as support areas. The three main shops are:Supporting manufacturing areas are:Widely different processes generate different jobs across three main broad areas. Themachinery is scheduled to work at a given level although when demand requires it; there isflexibility in regard to both the machinery and the workforce of 4,300. At the moment, with atwo-shift pattern, NMUK has a total production capacity of around 360,000 units/year a thirdshift can be introduced which would take production up to 500,000 units/year if and whenrequired.Nissans Sunderland plant is technically highly advanced. It uses sophisticated robotics andcomputer integrated manufacturing techniques to create a carefully monitored productionprocess that reduces errors to an absolute minimum.Automated machines can only do so much however; the human element remains vital.Organizing an effective flow of production at Nissan has involved developing a way of doingthings and an attitude towards work based on giving responsibility to employees at every step.This approach raises employees morale, and reduces absenteeism, which could severelyimpact on continuous flow production.Nissan expects and requires its employees to become multi-skilled decision makers. Mostemployees also want that for themselves. Reaching that goal involves:Lecturer: Engr. Tazeen SharifThe open communication policy includes daily face to face meetings between management andemployees, a company council, employee surveys, and employees having ready access to thecompanys intranet system.The emphasis placed on going for quality means that each employee is responsible both fortheir own work and the standards of their co-workers. By ensuring management recognizes thatindividuals have this control results in everyone taking the culture on board.Going for quality emphasizes building good quality in rather than inspecting poor qualityout. Each employee controls quality by checking that the previous job has been done properly.Automobilesevolve if NMUK continues with its practices.
Engineering Management Case Study: Nissan Automobiles
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