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Nissan COGENT supplier co-development case study

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Introduction

Imam Ali Tahir ________________ TABLE OF CONTENTS 1-Introduction 2-Key theoretical points 3-Discussion 4-Nissan COGENT 5-Findings 6-Future trends 7-Conclusion 8-list of reference 1-INTRODUCTION Nissan Motor Company Ltd, established in 1933, is a well-known brand in manufacturing cars of today?s automobile industry, with its headquarters in Japan. Their main products include, automobiles, outboard motors and forklift trucks. Nissan used to market their autos under the brand name of Datsun which is a renowned car manufacturer. It is affiliated with Renault S.A. which holds its 45% of shares while Nissan has 15% of Renaults shares. It?s listed in the top 3 auto manufacturers in Asia. It also owns the luxury brand called Infinity. With revenue of over $93 billion (2008) and operating income of over$1.5 billion (2008) it?s one of the biggest automaker in the market. It has over 2 hundred thousand employees with a determination of constant improvement 2-DISCUSSION In today?s global manufacturing market, there is a need for shorter product development cycles and tighter affordable business structures. It is therefore necessary to achieve ?right first time? and ?on time? designs. Any unplanned or additional design effort or late design changes can have serious consequences on the timing, quality or costing of a development program. Burton (1998) and Naumann and Reck (1982) estimated that the suppliers account for 30 percent of the quality problems and 80 percent of the product lead time problems. Clark and Fujitmoto (1991) reported that an automotive assembler could reduce the engineering hours and lead time required for new model development by delegating part or the entire engineering responsibility to selected suppliers Also with the trend for using ?full service suppliers? (i.e. ...read more.

Middle

Building a co-development framework is the third phase in the alignment process. This requires the synchronization of both development processes to ensure compatibility and waste elimination between the organizations. The final step closes the loop and lesson learnt from the process is used as feedback for continuously improving subsequent processes. The capture, application and embedding of ?lessons learnt? within a Full Service Supplier environment is a complex task for any vehicle manufacturer. Capturing ?lessons learnt? relates to organizational learning and four stages of learning were identified which are: Knowledge acquisition, Knowledge dissemination, Knowledge utilization, Knowledge keeping. [Southey et al 2000]: 4-NISSAN COGENT Nissan?s European Technology Centre (NETC) and Cranfield University, both based at Cranfield, UK did a three year, three million pound co-development research project called ?Cogent? involving the participation of 85 of Nissan?s suppliers. The main objective of the project was to improve the co-development capabilities of Nissan and its suppliers in order to reduce both product development times and costs by a targeted 30% in three years. They identified that the suppliers? design and development processes have to be of a very high standard in order to achieve ?right first time? designs and hence avoid late engineering changes and duplication of effort. Workshops at several levels of supplier management was conducted in order to develop, communicate and embed their co-development process understanding.(Southey et al., 2000) Nissan identified that if the design is right first time, with early concurrent input from suppliers and manufacturing associates, then fewer additional costs subsequently occur during the design release, testing, manufacturing and assembly stages. ...read more.

Conclusion

5 Enormous attentions to detail is required in order to remove the potential for stress and mistrust between VMs? and suppliers? representatives, and to ensure that agreed processes are repeated and embedded as a common way of working. 6 Co-development performance improvements is best pioneered on a real development project, so that all participants are focused by real targets and deadlines 7 Co-development improvements require enormous amounts of planning and execution time in order to overcome people?s natural fear, mistrust and resistance to change. 8 The intangible elements of a successful co-development program include a strong belief in the principles of co-development, a tight process, great attention to detail to ensure the co-development processes become embedded, and a lot of effort and determination to overcome numerous ?insurmountable problems? and people issues. 6- COGENT FUTURE WORKS Cogent can still be improved by taking the process to the second tier suppliers 7-CONCLUSSION It is not just technical expertise in a variety of disciplines that is needed to rapidly develop a new product, but it is the way that this expertise is applied and integrated. Co development is primarily concerned with alignment. Internal consistency between the customers and suppliers processes is an important prerequisite for significant co development improvement. For the best outcome and performance from the suppliers it is important to maintain a good communication with them. Supplier development is a crucial fact for the benefit of the buyer company. Supply chain integration and improvisation process of Nissan, which is known as COGENT, has increased the performance level of the company in various issues such as supply cost reduction, raw material and inventory maintenance, cost reduction and transport cost minimization. ...read more.

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