Nissan studies plants, suppliers to shave its costs

Lindsay Chappell
AUTOMOTIVE NEWS

Published: July 29, 2013 1:18 pm ET
Updated: July 29, 2013 1:21 pm ET

Related to this story

Topics Automotive
Companies & Associations Nissan Motor Corp.

NASHVILLE — Nissan Motor Co. is attempting to pare U.S. operating costs by rethinking the way it buys parts, builds cars and moves cars and components around the continent.

The company won't say how much it hopes to save in the far-ranging campaign, except that the amount is significant.

U.S. executives are looking for the cost reductions to help Nissan meet CEO Carlos Ghosn's "Power 88" business plan, which calls for a global consolidated operating profit of 8 percent by March 2017.

To get there, the U.S. company is looking into such unglamorous minutiae as how many individual parts are shipped in a single container; who performs the task of electrocoating a part; and where stamping presses are located.

"We're looking throughout the supply chain," says Dan Bednarzyk, who is heading the campaign. "We're reviewing opportunities with the suppliers -- everything in the supply chain from Tier 1 to the delivery of vehicles."

It will also re-examine past decisions to source parts for North America from sole suppliers overseas. The search, which is gaining momentum as Nissan attempts to boost both U.S. market share and production levels, will attempt to bring new suppliers closer to Nissan assembly plants to cut transportation expenses.

Bednarzyk, a longtime manufacturing manager with the company and most recently vice president in charge of Nissan's assembly plant in Canton, Miss., took up the new post of vice president of total delivered cost in May.

His mission is to enlist different parts of Nissan Americas — including the company's purchasing, engineering and design functions — to adopt less expensive ways of making cars and trucks, he says.

Several recent moves illustrate Nissan's thinking:

  •  Nissan previously deemed DVD screens in the back of vehicle headrests to be an accessory option. That meant the screen would be installed in the finished vehicle after it had left the assembly line. The car would move into accessorizing, where a Nissan employee would remove the base headrests, throw them away, and then insert the deluxe "accessory" headrests containing the DVD components. Nissan now has the DVD headrests installed during the initial assembly process.
  •  Nissan discovered that its seat suppliers have been paying different prices for seat-covers from Tier 2 companies. A review revealed that was largely because the seat covers were being shipped in different packaging. After much back-and-forth among the suppliers, Nissan has adopted a standardized guideline requiring the covers to be packed more densely in shipping cartons.
  • Nissan is saving "millions" on that change alone, Bednarzyk says.
  •  The company has recognized that it needs to help some suppliers move closer to its assembly plants to reduce transportation costs. Nissan plans to build factory and warehouse space at Canton to facilitate the moves. It is also assisting with real estate issues in Smyrna, Tenn.
  •  Nissan has been purchasing some truck splash guards for factory installation, and others for low-volume accessories installed by Nissan after a truck leaves final assembly. Nissan developed a scheduling method to tell assembly workers which splash guards to install, and has now brought higher-grade splash guards in-house.

"It seems simple, but somebody just had to look at it to see there were differences in costs," he says. "We're going out supplier by supplier, doing line walks, doing product tear-downs. We're sending logistics people, process people and manufacturing people to help with the look."

Bednarzyk and executives from purchasing and design have begun meeting weekly to review a stream of cost-cutting ideas, most of them submitted by suppliers.

"Some of the proposals require fairly major design changes," he says. "And sometimes the bureaucracy of a big company slows down the progress of ideas. So sometimes it takes a little push to get it done.

"I believe our suppliers will look at this as a way to accelerate their ideas about how to achieve cost savings," he says. "Yes, we're asking our suppliers for cost reductions, and that's a standard practice. But we're going to work with them to establish real sustainable savings that are win-wins for both of us."

A complete version of this story is available at www.autonews.com.


Comments

Nissan studies plants, suppliers to shave its costs

Lindsay Chappell
AUTOMOTIVE NEWS

Published: July 29, 2013 1:18 pm ET
Updated: July 29, 2013 1:21 pm ET

Post Your Comments


Back to story


More stories

Image

Lund adds to aftermarket auto products portfolio with buy of Bushwacker

January 29, 2015 2:49 pm ET

Lund International Inc. has expanded its portfolio of plastic aftermarket vehicle accessories by acquiring Bushwacker Inc.    More

Image

Plastics News Now: Losing weight with style, plastics in the Dragons' Den

January 29, 2015 6:00 am ET

A 19-year-old entrepreneur brings business to a U.K. injection molder after winning support on TV's Dragons' Den, auto suppliers combine...    More

Image

Plastics help Volt hit new target

January 28, 2015 1:54 pm ET

The 2016 Volt, unveiled at the North American International Auto Show in Detroit in January, features a sportier exterior design — GM calls it...    More

Image

Bain buying TI Automotive

January 27, 2015 8:49 am ET

After months of speculation, Auburn Hills, Mich.-based TI Automotive Ltd. entered into an agreement Tuesday to be acquired by private equity firm...    More

Image

Auto industry on the hunt for new lightweight materials

January 26, 2015 4:03 pm ET

The auto industry is focusing on lightweighting, and this is igniting a race to find new materials that can meet ever-changing performance needs of th...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events