Nissan: Recovering supply chain operations
Nissan's resilience strategy had been considered an exemplary response to the triple disaster in Japan in March 2011. The Japanese automobile industry made their respective recovery efforts to resume production and delivery of vehicles after suffering damage from an earthquake, tsunami, and a nuclear crisis, but it took months before they could reach pre-disaster levels of operations. Nissan's resilience practices and supply chain disruption management were acknowledged as superior to those of their peers and were appreciated by experts and analysts. Nonetheless, it took Nissan more than a month to resume production, and each day of lost production cost Nissan $25 million.
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Q) Critically analyze Nissan's business continuity plan (BCP) to recover its supply chain operations?
Ans: Nissan’s business continuity plan (BCP) is that they have set up Nissan’s Global disaster control at Yokohama post many natural disasters at Japan. Due to natural disasters, Nissan took 1 month to resume its production and the loss per day due to non-production at Nissan is $25 million. Nissan has come up with a great crisis management plan by setting up a disaster control center at Yokohama led by chief operational officer. The disaster control center updates information on disaster management, employee safety and thus ensuing business continuity. The center generates and updates evacuation plan and routes for employees. The center has seismic mapping centers which can detect earthquakes earlier and thus plan in advance for evacuation. The employee data and safety information is saved in database and thus employee safety is given utmost priority during disaster management. Thus Nissan’s business continuity plan (BCP) is renowned and acknowledged even by critics as it can detect the disasters and employee safety is ensured.
Q) What are the operational strategies for managing supply chain disruptions? Evaluate Nissan on each of these?
Ans: The major operational strategies for managing supply chain disruption are stockpile inventory, diversify supply, backup supply, demand management and strengthening supply chain.
Stockpile inventory: During crisis or natural disasters, the major strategy is piling up inventory which can be used during crisis conditions. The risk management plan is very important for having this strategy of stockpile inventory. Nissan has proper risk management strategy in place which gives strong edge in piling up inventory during crisis phase.
Diversify supply: Nissan has great alignment between partners in supply chain and thus diversified its supply to manage its supply chain.
Demand management: Nissan has great information management system and good intelligent and analytical management systems. Nissan had good data analytics system which can help managing demand and thus had good operational strategy.
Backup supply: Nissan had good upstream and downstream supply integration system which presents opportunity to have proper backup supply
Strengthening supply chain: Nissan has implemented disruption supply chain strategies to strengthen its supply chain. They have flexible and redundant supply chain strategies and proper alignment and integration in value chain functions.
Thus, Nissan has managed supply chain disruptions with proper operational strategies.
Q) What resilience strategies did Nissan use?
Ans: Resilience strategies of Nissan are:
Q) In your opinion, had Nissan developed the perfect strategy or is there still room for improvement for future crisis?
Ans: According to me, Nissan had developed perfect strategy for risk management and strong resilient strategies. The risk management strategies of Nissan are very strong and well acknowledged by experts across the world and also have been implemented by other companies. However, I would suggest there is still room of improvement by implementing SCORE model and improve their operational strategy. Nissan can go for better operational strategies by managing their supply chain properly.
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Nissan: Recovering supply chain operations Nissan's resilience strategy had been considered an exemplary response to the...