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

Ohio molder Denbro Plastics moves to new location

September 29, 2014 6:17 pm ET

Logo products injection molder Denbro Plastics Co. has moved to another plant within Toledo, Ohio, to streamline production and improve efficiency.    More

Image

Japan's parts makers face challenges as carmakers expand supply base

September 29, 2014 11:01 am ET

For all their size and success, Japanese auto suppliers that rocketed to global dominance on the coattails of their No. 1 customer, Toyota Motor Corp....    More

Image

ZF, TRW combination creating a new player for autonomous autos

September 23, 2014 9:59 am ET

The era of autonomous vehicles is close at hand — and is already changing the auto industry in fundamental ways. The latest and biggest example?...    More

Image

Delphi buying connector maker Antaya

September 22, 2014 2:25 pm ET

Delphi Automotive plc will buy Antaya Technologies Corp., a Rhode Island company that supplies wire harnesses and other technologies that connect...    More

Image

Poland's Boryszew to work with Mitsui on lightweight auto parts

September 22, 2014 10:12 am ET

European plastics car parts maker Boryszew Group has signed a letter of intent to work with the Japanese investment and trading conglomerate Mitsui & ...    More

Market Reports

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our industry analysis highlights macro industry trends and micro trends faced by companies that do business in Mexico. The report also provides key industry statistics and forecasts to anticipate future industry expansion.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

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