NISSAN MOTOR IBERICA CASE STUDY: Process re-Engineering, Technology, Quality and Productivity Improvement Opportunities

The readers of this blog working in the automotive sector – and there is quite a lot – must have realised, like me, how complicated the correct introduction of a design modification can be when our product is already in mass production and with a daily fabrication volume of hundreds of thousands of parts. This operation process, which is part of the “process map“ of automotive, aircraft, manufacturing (etc.) companies, becomes crucial in many cases: on the one hand, because of the risks it implies if not correctly controlled. These are the so-called “NON” quality costs: outdated, stop of the production lines, urgent transports, reworks, extra hours, and so on – that are unfortunately taken on as management costs by many companies -. On the other hand, because of the related opportunities if it is correctly done: improvements of quality, productivity, cost reduction, Customer satisfaction, and so on.

For a car manufacturer, managing between 1,000 and 3,000 modifications a year is not an easy job: the engineering department initiates the modification, which is then coordinated with the manufacturing departments, and negotiated with suppliers who manage their modification timings; afterwards, the change is approved and the new product is introduced in the car production line once the outdated material has been removed. Several departments of the OEM, Tier 1 and 2 come into play. Dozens of people are involved, everything must be square, and a quality or management fault may generate a cost of thousands of euros. All OEMs introduce design changes during the mass production life of a vehicle but…do they all do it with the same efficiency?

Last week, I have had the pleasure to meet a truly terrific expert of process optimization, Miguel Angel Martorell, who has been Nissan Motor Iberica DCC – Design Change Control – Manager since the end of 1993 (he is now improving the processes of Nissan Europe car dealers). Nissan board of directors asked him to revolution the management of design changes, and the success of his work was beyond any expectancy. Being simple, making changes and applying the cross-functional process policy are his main ideas, and his working methods are straightforward, innovative and very efficient: he analyses the existing process, eliminates what does not add any value, improves it according to the needs of the company and automates it with a software.

INTERVIEW OF MIGUEL ANGEL MARTORELL

1. In your opinion, what have been the successes of you and your team in the area of the control of design changes of Nissan Motor Iberica?

When I created the DCC department, there was not any management team for design changes. This meant that, in case of a cross process between several departments, information was limited, Our first main success was to have the DCC team in charge of changes, with fewer people and in a more efficient way than before. The DCCM computer application – Design Change Collaborative Management – that we created in 2004 was “the revolution”, since it used the new information technologies for design changes. Another important improvement was to design and develop a supplier valoration process to evaluate how they managed changes. This enabled us to assess them, help them to do better and integrate them as an extra department to the Nissan introduction team.

2. The readers of this blog like to get data. Could you quantify the improvements produced by the DCCM computer application?

The average time for a design change went from 96 days to 39.8 days. This meant an annual cost saving of nearly €4 million. Moreover, savings of 580,000€/year were also made on urgent transports, reworks, outdated and stops of production lines. In total, we had an improvement of 60.5% in one year.

Compared with the 1,003 modifications carried out in 2003, we made 2,613 in 2005 and increased our efficiency by 307.2%.

Dramatic, but true.

3. Can we also say that there has been an improvement of the quality of cars with the introduction of DCCM?

With DCCM, the quality of cars was improved on two aspects:

• a. Decrease in times of introduction of high priority design changes for quality improvements (25.3 days).
• b. Improvement of planning, coordination and control of the management between all the manufacturing departments and our suppliers, and consequently decrease in errors.

4. Could Tier 1’s use something similar to DCCM?

Of course, their processes are the same as ours, or are very similar. It is simple, easy to learn and the investment necessary in our case was paid back in less than 2 months.

5. What is your motto?

“If it is simple, let’s not get it complicated. If it is complicated, let’s make it simple”. What is Complicated is slow, difficult and expensive. What is Simple is quick, simple and cheaper.

6. As a conclusion, for those times of crisis, do you have any recipe for us?

During those difficult times, many companies harshly reduce their staff and demand to the remaining employees to do “the same works”, with the same outdated proceedings and processes and with the same level of efficiency and effectiveness. This is not logical and only triggers a “bad” management and extra costs (it produces a domino effect). For example, we cannot think about doing the same as we used to do with 20 people if we are now only 10. This is not possible without optimizing processes and adapting them to the real needs of the company and of our customers. I recommend the simple recipe of analysing processes, optimizing them, create internal and external synergies and automate everything that needs to be automated.

Today, no collaboration process can remain stable in time and really be improved – and not patchworked, as many do – if it is not automated and controlled by a process manager.

I learnt through my experience that “Excellency is not a matter of luck; you have to be visionary, work a lot with your team and be very well assessed”. Thank you.