NISSAN COGENT ANALYSIS

Submitted by: GODSON BABU ZACHARIAH

Finance Section Sahyadri College of engg & mgmt

Submitted to: Karthik Raj Kudroli

Assistant Professor MBA Department

ABSTRACT
Many successful organizations are now following supply chain management as a benchmark for themselves. In different organizations and firms the operation of supply chain management varies greatly and it is complex. Supply chain management is practiced by both servicing and manufacturing industries. Organizations are now adapting SCM to earn more profits and provide more customer satisfaction. Knowledge quality of a firm is the key factor to success in a competitive business environment which is now admired by all the successful organizations. SCM is the management of the raw materials, with proper planning, quality manufacturing and correct distribution. To develop a product it is crucial to know about the customer demands and expectations. With this knowledge combined with new technology and marketing a firm creates successful products. Sometimes companies solely try to improve but most of the time they discuss with their suppliers to gather knowledge about the customer requirements. This knowledge exchanging process enables the firms to learn more about their customers and also about the supplier's awareness about the market. This is beneficiary to both supplier and buyer firms. It is a common scene that powerful organizations insist their supplier to adapt their proposed process to improve the product quality and coordination.

Table of Contents
1.0 INTRODUCTION - NISSAN .................................................................................................................. 1 2.0 SUPPLY CHAIN MANAGEMENT ......................................................................................................... 1 3.0 DESCRIPTION OF COGENT ................................................................................................................. 1 4.0 SWOT ANALYSIS ................................................................................................................................ 1 4.1 Internal .............................................................................................................................................. 2 4.2 External ............................................................................................................................................. 2 5.0 SWOT- Nissan and the suppliers (Prior to COGENT) ......................................................................... 2 5.1 Where we want to go?...................................................................................................................... 2 5.2 HOW THE COMPANY WILL GET THERE? ........................................................................................... 3 5.21 SUPPLIER DEVELOPMENT ............................................................................................................... 3 5.22 SUPPLIER AND CUSTOMER MUTUAL DEVELOPMENT .................................................................... 3 6.0 DESIGN AND DEVELOPMENT CYCLE ................................................................................................. 3 7.0 COGENT ............................................................................................................................................. 4 8.0 SUPPLIER DEVELOPMENT (NEXT21).................................................................................................. 4 9.0 LEARNING OUTCOMES ...................................................................................................................... 5 10.0 CONCLUSION ................................................................................................................................... 5 11.0 FUTURE RECOMMENDATIONS........................................................................................................ 5 13.0 REFERENCES .................................................................................................................................... 6

1.0 INTRODUCTION - NISSAN

Nissan, established in 1933, is a well-known brand in manufacturing cars of today's automobile industry. Nissan Motor Company Ltd, which in short known as Nissan, is a market leading auto manufacturer with the headquarter in Japan. This multinational automaker was a central part of Nissan group. But with the reformation under Carlos Ghosn, the CEO of Nissan, it has become independent automaker. 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. Its listed in the top 3 auto manufacturers in Asia. It also owns the luxury brand called Infinity. With a revenue of over $93 billion (2008) and operating income of over$1.5 billion (2008) its one of the biggest automaker in the market. It has over 2 hundred thousand employees with a determination of constant improvement.

2.0 SUPPLY CHAIN MANAGEMENT

"Supply chain management (SCM) is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers." (Wailgum & Worthen, 2008)

3.0 DESCRIPTION OF COGENT

Cogent, the short form of Co development Regeneration Tool, is a research project done by Nissan with the coalition of Cranfield University and its suppliers. The main purpose of the research was to improvise the capabilities of the automobile components producers in UK and make better designs to sustain in the UK market. The design of a component is helpful to satisfy the customer demand and expectations.

4.0 SWOT ANALYSIS

SWOT is a short form of Strengths, Weaknesses, Opportunities and Threats. It is a tool toanalyze the internal and external environment of an organization (Mullins L. 1996). Strengths and weaknesses are assessed in internal environment of the organization.External environment is analyzed by opportunities and threats. By the proper understanding of the external factors and internal factors an organization decides how to increase its strengths, minimize the weaknesses, work for its opportunities and eliminate the threats.

4.1 Internal
Strengths and weaknesses of a company mainly depend on the following issues: Structure of the organization, representation, culture and key bodies of the organization. Accessibility of raw materials and natural resource. Organizations capacity and effectiveness Amount of market share Brand consciousness Economic situation

4.2 External
Opportunities and threats are external conditions. Opportunities may arise because of changes in the business or in the environment. Company should know how to take advantage of their opportunities. But sometimes changes become a threat to the company.So the company should know how to handle and omit the threats. External factors are: Rivals Clients Suppliers Market Changes in the technology Economy Legal and political influence Social alteration

5.0 SWOT- Nissan and the suppliers (Prior to COGENT)

When the question "where we are now?" was introduced, we got the SWOT of Nissan and the suppliers in the answer.

5.1 Where we want to go?

The main purpose of the COGENT project was to increase the performance by altering the relationship in the development and design phase. Reduce and omit the wastes during the operation. Achieving an improved QCDDM Omit the communication gap between Nissan and the suppliers Making more attractive and featured automobiles. Reduce the time during the process.

5.2 HOW THE COMPANY WILL GET THERE?

COGENT made a detailed plan to achieve the goals. The process is discussed below with explanation.

5.21 SUPPLIER DEVELOPMENT

The process of working collaboratively with your suppliers to improve or expand their capabilities. (Dominick, 2006) For example providing training to your suppliers how to create the products that they had never created before for the purpose of giving you the option to buy rather than make that item, a few years back the new trend of involving the suppliers in in six sigma and lean techniques have been rising Suppler development has four stages 1) Identify assesses and rationalize the supply base 2) Problem Solving Developments 3) Proactive Development 4) Integrated Development

5.22 SUPPLIER AND CUSTOMER MUTUAL DEVELOPMENT

Supplier and Customer mutual development can move in the right direction if the customer has the right ability to expand it with the suppliers. According to Henry K. (2001), supplier development is a combine effort by the suppliers and buyer companies to bilaterally develop the suppliers abilities and potentials in one or more of the following area s: 1) Quality 2) Delivery 3) Cost 4) Technology 5) Environmental responsibility 6) Time to market 7) Financial feasibility 8) Managerial capability

6.0 DESIGN AND DEVELOPMENT CYCLE

Cogent is designed to save time and resources in the development stage Cogent for Nissan aimed to move the bulk of the resources back nearer the start of the process so that the supplier d&d is more predictive and concurrent as shown in the diagram. This emphasised on right first time Improved work flow in the design and development cycle meant that less resources were being used, which meant less waste of products. Results in a chain of true co- development between suppliers and Nissan as engineers from both parties can work together with an understanding.

7.0 COGENT
What is Cogent of Nissan? Cogent, the short form of Co-development Regeneration Tool is a research project done by Nissan with the coalition of Canfield University and its suppliers. The main purpose of the research was to improvise the capabilities of the automobile components producers in UK and make better designs to sustain in the UK market. The design of a component is helpful to satisfy the customer demand and expectations. The main purpose of the COGENT project

Increase the performance by altering the relationship in the development and design phase. Reduce the wastes during the operation. Reduce the communication gap between Nissan and the suppliers. Making more attractive and featured automobiles. Reduce the time during the process.

8.0 SUPPLIER DEVELOPMENT (NEXT21)

Supplier development is the process when cross functional team from company and supplier works together intensively for weeks or months on targeted improvement projects (Kucera, 2011)

Key features of Next 21 More attention given on Development. More interaction between Nissan and suppliers on co development process on product design and development. There was an immediate improvement with defect rates of 10 parts per million for most suppliers. Nissan were working at world class standards. However, were still ranked lower than their competitors. A shift was made to start thinking about attractive quality. Suppliers were asked to improve from earlier mistakes and be more responsible for design and execution of new components. Measuring success was changed from NX96 to NEXT21. Nissan then realign its suppliers development processes alongside its own.

9.0 LEARNING OUTCOMES

1. Relationship between the suppliers and customers. 2. In terms of Total Qualilty Managment (TQM) bench marking is essential as a form of assessment which will help assess the condition of the company now that will help set future goals. 3. Early supplier involvement has a major mole in minimising cost through D+D (design and development). 4. The need of co- development is essential and is where suppliers are involved in the earlier stages of new product D+D (THESE ARE THE KEY LEARNING POINTS!)

10.0 CONCLUSION
It is important for Nissan to have good relationships with their suppliers. The main aim of this particular project was to improve the communication links between Nissan and their suppliers. They succeeded with this and found that this had a positive impact on their output. Merging with more than one supplier can be a lot more profitable, and successful for Nissan. Supplier development is a key factor, and this has resulted in Nissan becoming a lot more efficient. Their output has increased, and their costs have minimised. Supply and transport costs have decreased making the company more efficient. The case study explains how Nissan improved their efficiency with the help of their suppliers, and how improvements in communication is the key to success. Nissan Cogent was developed alongside Cranfield University to enable Nissan to work effectively with their suppliers during development. The main focus was to improve communication between suppliers and customers as early as possible, as well as focusing on the attractive quality of their designs.

11.0 FUTURE RECOMMENDATIONS

For Nissan to have a successful future, they would need to improve their performance even more within their second and third tier suppliers. These sort of changes could definitely accelerate Nissans global success within their supplier network. Keeping good communication links between customers and suppliers can also help them greatly, as a good understanding between customers and suppliers can provide benefits. Cogent has helped many companies become more efficient, and research has been done to suggest that many companies have benefited from their involvement in Cogent, by decreasing development time as well as costs

Nissan need to keep the consistency of their actions for the future if they want to keep development time and costs down.
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13.0 REFERENCES
C, Dominic. Charles purchasing certification blog. 1 Nov 2006. 14 3 2014. <www.solutionmatrix.com/tco-roi-cba- difference.html>. D.Taylor, D. Brunt. Manufacturing Operations and Supply Chain Management. 2008. Hoek, Harrison and Van. "Logistics Management and Strategy." Competing Through the Supply Chain. 2008. Monkzka, Trent & Handfield. "Purchasing & Supply Chain Management." 3rd Edition. 2005.