The British branch of Nissan was the first Japanese transplant company set up in Europe. From the moment of its arrival, the company recognised the traditional relationship between customer and supplier was insufficient to guarantee top quality. Nissan UK therefore developed its own partnership system called Pre-Production Quality Assurance. Colin Lawther Senior Engineer for Supplier Quality Assurance, Nissan Motor Manufacturing UK, presented the story. Here are some highlights of his talk:
"When Nissan Motors UK commenced operations the two big issues were quality: 'will it be possible to achieve the same level of quality in the UK as in Japan?' and industrial relations, 'will it be possible to achieve the same working relationships with employees as in Japan?'."
"The answer to both questions has been an overwhelmingly 'YES'. This success has been achieved by senior management demonstrating by their actions and words that they understand the crucial role that people play in the success or otherwise of an organisation. At Nissan Motors UK this is achieved in a number of ways, starting with the existence of a Company Philosophy."
"Included in this Philosophy is the statement that: People are our most valued resource, and we aim for mutual trust and co-operation between all people within Nissan Motors UK.
To support these ideals Nissan UK is committed to such items as: common terms and conditions of employment for all employees, single union recognition, a flat organisational structure with wide responsibility levels, annual appraisals with merit awards, no job descriptions and in general the development of responsibility to the lowest appropriate level."
"Continuous improvement has been embodied in Nissan Motors UK from the beginning, and all staff are encouraged to contribute and participate in issues which affect their place of work. The umbrella under which these improvement activities are carried out is known as 'Kaizen'. This Japanese word is made up of two Kanji characters. KAI meaning to modify and ZEN - meaning goodness. Combined together they form the concept of continuous improvement."
"Fundamental to the continuous improvement process is the method employed. This is referred to as the PDCA or Deming cycle."
- ACTION (identify action)
- PLAN (plan action)
- DO (execute action)
- CHECK (results of action)
"It is through this process that both people, environment and product can be continuously improved.
It is against this backcloth of in-house operations that Nissan UK has developed its policies and strategies for its European supply base. In the Western motor car industry the relationship up until the mid-1980s between the vehicle manufacturer and the parts supplier has been characterised by:
- Adversarial relationship
- Requirement to re-tender on an annual basis
- Dual or multiple sourcing
- Arms length relationship
In contrast to this the 'Nissan Way' with its supply base in Japan is characterised by:
- Long term relationships
- Mutual dependence
- Supplier development of parts and systems
- Supplier and Nissan having similar quality concepts.
With these factors in mind Nissan UK set out to establish a supply base using the principles that Nissan had found so effective in Japan. Consequently the following principles were laid down in 1985:
- Common aims and aspirations (mutual trust)
- Long term relationships
- Single sourcing (few exceptions e.g. tyres)
- Clearly understood responsibilities
- Shared benefits
- A small supply base (150-200)
- Suppliers to share the same quality/technical concepts as Nissan UK
- The concept of continuous improvement
"Of the current 195 suppliers, 130 are based in the UK and the remainder split between other European countries with 28 being in West Germany. During 1992 the projected spend in Europe on production components and material will be 850 million Pounds Sterling. This is based on a production volume of 175,000 units.
The Nissan Motors UK quality requirements for suppliers are encapsulated in a quality statement for suppliers:
The Nissan Quality Philosophy is one of commitment to customer satisfaction through continuous improvement in quality, safety and reliability. The supplier has total responsibility for the delivery of zero defect products and will, establish quality systems accordingly. These systems will include the continual review and development of management, product design, material specification and manufacturing processes. The development of mutual trust and cooperation will bring about quality and productivity improvements to the shared benefit of both supplier and Nissan.
This statement forms the basis for the selection of potential suppliers."
Once selected, the performance of suppliers is tracked according to the following criteria:
- Quality of components
- Cost of components
- Delivery on time
- Development ability
Awards are given to suppliers who perform consistently to the highest standards.
Three recipients of these awards are:
- Dunlop SP Tyres
- TBA Belting
- Lemmertz Alloy Wheels
Based on seven years experience approximately 30% of Nissan's UK supplier base is comparable to Japan in terms of performance
Colin closed by saying that:
"Nissan Motors UK recognises that its future success is largely dependent on the capability of the supplier base and has implemented many monitoring methods as data gathering tools which are used to generate mutual understanding and hence open the way for improvement."