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[Solved] Nissan Recovering Supply Chain Operations- Case Study Solution

Nissan recovering Supply Chain Operations
Nissan recovering Supply Chain Operations

Nissan Recovering Supply Chain Operations is a case study by HBS. The exact case study can be found here. The case is also popularly known as the Nissan supply chain case study

The case study can be analyzed from the point of view of strategy, disaster readiness, or from supply chain agility. Herein we have discussed in detail all the relevant points pertinent to the case. Also, we have discussed the operational plan, resilience plan, and its proactivity in identifying risks and closing them

Nissan recovering supply chain operations executive summary

It can be difficult to predict and prepare for natural disasters like earthquakes and tsunamis, for instance. As a direct result of the catastrophe, Nissan was compelled to write off 2,300 vehicles that were intended for sale in the United States. It is critical for a company to have a strategy in place for dealing with natural disasters, and this plan ought to be regarded as a form of business strategy.

As a result of Nissan’s superior preparedness compared to that of its rivals, the company was able to quickly resume production and begin making up for revenue lost. They were able to save a sizeable portion of the daily losses that had to be taken into account, which totaled $25 million. As a result of this, they were successful.

In an effort to get back the goods that were stolen, Nissan took a number of preventative steps, including stockpiling, diversifying, backing up, managing, and strengthening the supply chain. It would be beneficial to have a backup supplier and to use more than one supplier in order to assist in finding a solution to the problem. If you have a backup plan for locating replacement parts, the likelihood of a disaster having an effect on your business will be reduced.

In the event that a natural disaster befalls one of your suppliers, having multiple suppliers located in various parts of the world is beneficial.

Since 2003, Nissan has been running drills, and it has been established that the organizational strategy of the company has always given priority to the safety of its employees as well as the safety of its suppliers, dealers, and affiliated companies before deciding on the most efficient means of restoring operations.

There was absolutely no chance that any of those plans would have been successful. Nissan’s top executives were not immediately called together to discuss the accident and come up with potential solutions as soon as possible.

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Nissan Recovering Supply Chain Operations Nissan’s Business Continuity Plan (BCP)

Critically analyze Nissan’s business continuity plan BCP to recover its supply chain operations.

Every business should have a plan ready to implement in the event of a catastrophic event so that they can react quickly and competently to it. It is critical for a company to have a strategy in place for dealing with natural disasters, and this plan ought to be regarded as a form of business strategy. A business continuity plan for an organization should incorporate a disaster recovery plan as an integral component (BCP).

The goal of the responses that have been planned for natural disasters is to get businesses back up and running as quickly as possible. When developing plans for disaster recovery, essential life support systems should be given priority. During times of natural disaster, communication, hardware, and information technology systems are particularly susceptible to being damaged or destroyed.

In the event that it has not already done so, your organization ought to define its disaster plan in accordance with the guidelines that are provided below.

Make sure that the contingency plan is carried out by putting together a recovery team comprised of knowledgeable employees and assigning tasks to that team.

The important thing is to take lessons from previous disasters and be aware of any risks that may present themselves.

• Determine the order of importance of restoring critical business functions, and establish a hierarchy to organize them according to that order in case of a disaster.

In preparation for a catastrophic event, a disaster recovery site should be established where mission-critical computing resources can be retrieved and operations can be resumed.

It is recommended that testing and revisions take place every quarter or even more frequently.

• Establish satellite hubs in specific private residences or perhaps even hotels at a predetermined location.

• Ensure that any essential machinery you purchase, such as generators, computers, and so on, has a backup that is operational.

• You should make it a habit to check that the inventory of your fixed assets is always up to date.

You need to do the following things to ensure that your property can weather any kind of catastrophe: • Get your building and any other assets under inspection for safety issues (equipment, computers, etc.).

• Perform this check once every three months to ensure that all of the contact information for your employees and vendors is accurate in case of an emergency.

Because Japan has a long history of being struck by natural disasters, Nissan has established a global disaster control center in Yokohama. Within this facility, they keep their business continuity plan (BCP) as well as their disaster recovery plan. Because of their preparedness, they were able to get back to work quickly, which meant that they could begin making up for revenue lost more quickly than any of their competitors. They were able to save a sizeable portion of the daily losses that had to be taken into account, which totaled $25 million. As a result of this, they were successful.

The first action that Nissan took in response to the disaster was to set up a disaster control center in Yokohama. This allowed for the expedited dissemination of the most recent information regarding the management of disasters and the safety of employees. Because they had thoroughly prepared for and tested their seismic mapping, Nissan was ready for the devastating earthquake that struck Japan on March 11, 2011. Important data like emergency procedures and exit maps were among the kinds of information that were gathered, compiled, and shared with staff members.

Making sure everything was in order was the top priority for Nissan’s upper management.

Protection for workers in potentially hazardous environments. As a result, Nissan’s business continuity plan (BCP) is among the best in the industry when it comes to the management of crises and the recovery from disasters.

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Nissan Recovering Supply Chain Operations: Operational Strategies

The most important operational strategies for dealing with a disruption in the supply chain are stockpiling inventory, diversifying supply, having a backup supply, managing demand, and strengthening the supply chain.

The term “stockpile inventory” refers to the inventory that is stored in anticipation of meeting the demand of customers in the event that there is a disruption in supply.

A common strategy is to build up supplies that can be utilized in the event of a crisis. When Nissan’s parts finally arrived, it was right around the time that the earthquake occurred. Nissan had ordered a large number of parts. The success of this risk management strategy, which involves stockpiling supplies, is contingent on having a solid plan in place. The refined risk management strategy that Nissan has implemented has helped the company become better prepared for unfavorable occurrences.

When a company has a number of different suppliers and production facilities, it can ensure that any disruptions that occur at a single location will not affect the entire supply chain. It has been possible for Nissan to successfully manage its supply chain thanks to the excellent alignment of its supply chain partners, which has also enabled the company to diversify its supply. Nissan was able to produce their vehicles at a lower cost thanks to global standardization and the use of common parts. There was a large selection of models from both Nissan and Infiniti that could be delivered to the customer. items that were unique and interesting were produced.

During the time that the economy was in a slump, Nissan was able to prioritize the production of the vehicles that were selling the best. Businesses can use demand management to encourage customers to buy products for which supply is not as tight by, for example, adjusting prices or providing incentives. In this way, businesses can increase sales. The information management system of the company, in addition to its analytical and intelligent management systems, is one of the most advanced in the sector.

Nissan’s operational strategy was sound because it was supported by a robust data analytics system that was able to contribute to demand management. Nissan has resolved to produce only the models that are selling the best in the market. The United States and China were given priority in Nissan’s shipping strategy for their vehicles. Because of this, Nissan was able to ship vehicles while its competitors were unable to do so. This worked to the company’s advantage. As a direct result of this, sales went up.

In the event that there is a disruption in the supply of goods, a backup supplier (or logistics provider) will be called into action. Nissan benefited from having an upstream and a downstream supply chain that were both well integrated, which made it possible for the company to have a reliable emergency supply.

To assist in retrieving broken components, there was a requirement for workers to come from other locations. We were able to come up with more innovative solutions when we worked together across multiple departments and in a global setting. The shop was only open during the evening hours and had its own private power supply. The workweek has been adjusted to reduce the negative effects of the power outage.

As a first step, Nissan took precautions to ensure the safety of all of its business relationships, including those with its suppliers, dealers, and other affiliated companies. It has been practicing lagging drills in order to ensure that priority decisions are made in the event of an emergency rather than panic being sparked. There was a communication that was prompt and accurate, indicating that operations had bounced back. The inborn ability of the company’s employees to work together productively while under duress was at risk. This was the company’s most valuable asset.

It may be necessary to work with suppliers or to strengthen the supply chain itself in order to cut down on the frequency of supply chain disruptions and/or the severity of those disruptions. In order to fortify its supply chain, Nissan has implemented strategies that involve the disruption of supply chain operations.

Their supply chain strategies are flexible and redundant, and their value chain functions are aligned and integrated in the correct manner. Nissan has been successful in overcoming supply chain disruptions by implementing the appropriate operational strategies. In contrast to the boards of other Japanese automakers, which are composed entirely of Japanese citizens, Nissan’s board is comprised of members from a wide range of different countries. In addition to that, there was a Chief Recovery Officer.

 Nissan made it a priority to ensure that its Tier 2 and Tier 3 suppliers developed contingency plans for the procurement of the components they supply. In the event that there was a disruption in supply, this was done so that multiple factories located throughout the country could produce the same component. It established a supply chain for the purpose of risk management (it had components of risk management). After calculating the costs of the disaster, they reexamined and altered the disaster strategy that they had previously developed.

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Nissan Recovering Supply Chain Operations: Resilience Strategy

The robust crisis management system that Nissan has in place was a major factor in the company’s ability to respond quickly and effectively to the events surrounding the case. The success of the system was contingent on a number of factors, some of which were interdependent on one another. These factors included the capacity of the business to recover quickly and to make snap judgments.

The first thing that Nissan did was establish a distinct order of importance and diagnosis. Both of these are essential in aligning and sharing the disaster management vision with all of the stakeholders in order to facilitate prompt actions attributable to the process of making hasty decisions after the occurrences.

In addition to that, Nissan utilized its well-known capability for making speedy recoveries. According to Aggarwal and Srivastava (2016), Nissan had its evacuation centers and routes meticulously planned out in advance. Furthermore, the company had been implementing seismic retrofitting and requirements in all of its plants and facilities that were located in earthquake-prone areas since at least the year 2003.

This indicates that Nissan had a comprehensive strategy in place to deal with the catastrophe a significant amount of time before it actually occurred. It is well established that the approach taken by the company placed a high priority on the health and happiness of its employees.

In order to ensure the protection of its suppliers, dealers, and other businesses associated with it, the company must first determine the most efficient way to resume operations.

But it should be obvious that none of those plans would have been successful. Nissan was unable to rapidly assemble its most senior executives for the purpose of analyzing the predicament and generating ideas for potential solutions.

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Analysis of its efforts and Final Verdict

In spite of the fact that Nissan’s disaster recovery efforts have been hailed as the best in the industry in terms of both disaster recovery and crisis management plans, Nissan still has a lot of room for improvement in terms of minimizing the impact on production. The next step that Nissan should take is to evaluate and then update its existing disaster recovery plan so that it includes additional safeguards to protect employees and customers in the event of an emergency. The first step in improving the situation should involve directly improving employee training.

To ensure that employees receive the additional training necessary to respond appropriately in the event of a disaster, a program for disaster recovery training should be developed and implemented. This training program ought to also include a guideline for how to prioritize different aspects of a company’s operations in the event of a catastrophe. A road map of the tasks that have been delegated should be shared as part of this guideline.

This road map ought to include the procedure for reporting assessments, as well as how those results will be communicated and to whom. Senior management teams should also be involved and should identify who will arrive at the disaster area to assess any damages and provide real-time decisions on critical business activities.

This information should be provided to those who will be arriving at the disaster area (Should employees continue, cease or pause). As a result of these modifications, Nissan will have a more all-encompassing disaster recovery plan that aims to cut the amount of production lost in the event of future disasters by an even greater margin.

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