Nissan – L.A.M.E. or Lean?

Nissan has recently had an issue with production.  They are running short on one of their engine-control chips as they ramp up in production and their supplier is not able to keep up.

There is an article about it in the Wall Street Journal (here).  The Wall Street Journal is know for its understanding of lean and it shows.

The pitfalls of lean manufacturing methods, a hallmark of cash-rich and efficient companies, arise when parts either prove to be faulty or in short supply. Production delays or stoppages are a common occurrence in the electronics and car industries.

WOW!!  Lean went from people not understanding it completely to being a hallmark of cash-rich and efficient companies.  I didn’t know lean and cash-rich were synonymous.  This quote also shows how the authors view problems……….definitely not in the “No problem is a problem” light.  If you are truly practicing lean thinking you are asking, Why did we run out?  What in the process caused us to run out?  Did we not see the jump in demand coming?  Why?  Etc…..

Also, I worked in consumer electronics for 3+ years and for an auto supplier (supplied Toyota, Nissan, Honda, Ford, Chrysler, GM, and Harley) for 5 years.  Production stoppages were NOT common occurrences (unless at Toyota).  Mostly because they had enough inventory around to build cars for several months.  Even when we supplied Toyota, they rarely stopped the line due to stock shortages, but again they look at that as an opportunity and not a negative impact on the business.

So how is Nissan reacting?

In the early 2000s, Nissan Chief Executive Carlos Ghosn streamlined the company’s supply chain by slashing the number of suppliers as part of the company’s turnaround from the brink of bankruptcy. However, Nissan is now expanding its supplier base again for some parts after being burned in recent years by hiccups in procurement.

This sounds like L.A.M.E. (Lean as Misguidedly Executed as coined over on the Leanblog by Mark Graban) and not lean.  If you had hiccups in procurement, lean behavior would ask questions around what are the hiccups in procurement and why is Nissan having this hiccups.  Then Nissan would solve this problems, not arbitrarily start to add more suppliers “Just-In-Case” they have a similar hiccup in the future.  From the tone of the article, it sounds like it is one particular part and this usually doesn’t happen.  So why this part?  Why now?  Nope.  Just add another supplier.

It sounds like Nissan was heading in the right direction.  Scaling back on suppliers and building relationships with them.  I hope they don’t let what sounds like one incident shake them so much they revert back to their old ways.

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Posted on July 16, 2010, in Manufacturing, Principles, Problem Solving and tagged , , , , , . Bookmark the permalink. 1 Comment.

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