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
  • Management

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.”