Nissan: Recovering Supply Chain Operations - Case Solution

Nissan: Recovering Supply Chain Operations

Background:

The “3/11 disaster”, as it is known, tragically impacted the Japanese automobile industry and Japan as a nation. A tsunami, nuclear crisis, and a 9.0-magnitude earthquake tore through the country, and the damages estimated by the World Bank totaled approximately US$235 Billion. Out of the several large automobile-producing companies within Japan, Nissan was praised for its rapid reaction to the crisis.

As a result of these events in 2011, Nissan lost seventeen families and five staff members, and over fifty of its dealers and 40 of its component suppliers were damaged. Additionally, 2,300 automobiles that were produced and ready to be shipped internationally were all destroyed during the destruction.

Carols Ghosn, Nissan’s CEO at the time, led the company’s great effort in recovery efforts. Carlos Ghosn was the only CEO of a Japanese automaker who was not also of Japanese nationality (French-Lebanese-Brazilian). This was unique compared to the typical corporate structure of other Japanese automakers with solely Japanese board members.

Ghosn held a press conference shortly after the destruction ended, which was very rare for a company’s CEO to do in Japan. The leadership he provided helped Nissan establish a set plan for the company while minimizing death and destruction based on their practice and plans. In the eyes of the public, he is considered a real leader.

Based out of Yokohama, Japan, Nissan was the second-largest automotive company in the world as of 2010. They delivered sixty-four different models of cars under the Nissan and Infiniti brands. The company used common parts on a global scale and standard parts worldwide, resulting in low-cost manufacturing and giving the company a competitive advantage in dealing with crises such as the “3/11 disaster”.

A brief historical timeline of Nissan Motor Company Ltd. is summarized below:

Nissan History

1933 – The company was established in Japan by founder Yoshisuke Aikawa.

1935 – It produced its first automobile – the Datsun.

1958 – The company expanded to the U.S. as Datsun.

1975 – It became the top vehicle importer in the U.S.

1999 – It introduced the first compact truck with four full-sized doors.

2007 – The company produced its first hybrid vehicle (Nissan, 2020).

Issue:

What can Nissan do to ensure that future disasters will be handled at least as well as the disaster in 2011?

Alternatives