QSO 300 Final Project Milestone Three Guidelines and Ru
ic
Overview: You will submit a sustaining operations case study analysis that will discuss the emerging concepts of sustainability in business management,
specifically the topics of corporate responsibility and environmental compliance. This case study analysis will be incorporated into the final summative analysis.
This milestone is due in Module Five.
Prompt: Refer to the Nissan case study and the course materials to answer the following items. Specifically, the following critical elements must be addressed:
I. Theories and Techniques
A. Summarize the following theories: just in time (JIT), Toyota Production System (TPS), and Lean. How are these concepts related? Describe the
advantages and disadvantages for using each of these concepts at the company presented in the case study.
II. Sustainability
A. Describe how the emerging concept of the triple bottom line can be used to enhance operations management at the company. Be sure to
address each component of the triple bottom line.
B. Explain how the company integrates ISO 14000 standards in its manufacturing plants. Support your explanation with citations from your
textbook or outside sources.
C. Describe ways by which the company can integrate corporate responsibility principles into their operations. Which of these do you believe to be
the most effective? Why? Support your opinions with citations from your textbook or outside sources.
Guidelines for Submission: The format for this assignment will be a Word document using a business writing format of your choice. There is no minimum page
length requirement, but the submission should be double spaced, and no more than four pages in total. Copy and paste any data analysis from Excel into your
Word document for submission. You may include your original Excel documents as supplementary material if you believe this will strengthen your contribution.
https:
mitsloan.mit.edu/LearningEdge/CaseDocs/13-149%20Nissan.Simchi-Levi.pdf
Ru
ic
Critical Elements Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value
Theories and
Techniques:
Summarize
Summarizes JIT, TPS, and Lean
and explains how the concepts
are related, integrating the
advantages/disadvantages of
using each in the case study
context
Summarizes JIT, TPS, and Lean
ut does not explain how the
concepts are related, integrating
the advantages/disadvantages of
using each in the case study
context
Does not summarize JIT, TPS, or
Lean
20
Sustainability:
Triple Bottom
Line
Describes how the triple bottom
line can enhance OM and
addresses each component of
the triple bottom line concept
Describes how the triple bottom
line can enhance OM, but does
not address each component of
the triple bottom line concept
Does not describe how OM can
enhance triple bottom line
20
Sustainability: ISO
14000
Accurately explains how the
company integrates ISO 14000
standards in the manufacturing
plants and provides support
Explains how the company
integrates ISO 14000 standards
in the manufacturing plants but
does not provide support or
explanation is inaccurate
Does not explain how the
company integrates ISO 14000
standards in the manufacturing
plants
20
Sustainability:
Corporate
Responsibility
Describes ways the company can
integrate corporate
esponsibility principles into
operations and defends opinion
of the most effective way with
support
Describes ways the company can
integrate corporate
esponsibility principles into
operations but does not defend
opinion of the most effective
way with support
Does not describe ways the
company can integrate corporate
esponsibility principles into
operations
20
Articulation of
Response
Submission has no major e
ors
elated to citations, grammar,
spelling, syntax, or organization
Submission has major e
ors
elated to citations, grammar,
spelling, syntax, or organization
that negatively impact
eadability and articulation of
main ideas
Submission has critical e
ors
elated to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas
20
Total 100%
Microsoft Word XXXXXXXXXXNissan.Simchi-Levi.docx
13-149
August 27, 2013
This case was prepared by David Simchi-Levi, MIT Professor of Civil and Enviornmental Engineering and Engineering
Systems and Co-Director, Leaders for Global Operations, and William Schmidt, PhD candidate, Harvard Business School.
Copyright © 2013, David Simchi-Levi and William Schmidt. This work is licensed under the Creative Commons Attribution-
Noncommercial-No Derivative Works 3.0 Unported License. To view a copy of this license visit
http:
creativecommons.org/licenses
y-nc-nd/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San
Francisco, California, 94105, USA.
Nissan Motor Company Ltd.: Building Operational
Resiliency
William Schmidt, David Simchi-Levi
On March 11, 2011 a 9.0-magnitude earthquake, among the five most powerful on record, struck off
the coast of Japan. Tsunami waves in excess of 40 meters high traveled up to 10 kilometers inland
and three nuclear reactors at Fukushima Dai-ichi experienced Level 7 meltdowns. The impact of this
combined disaster was devastating, with over 25,000 people dead, missing or injured.1 Governments,
non-government agencies, corporations and individuals in Japan and around the world responded with
elief teams, supplies and donations to help ease the suffering and support the recovery.2 In truth, the
disaster was three calamities in one – an earthquake, a tsunami and a nuclear emergency. Recovering
from such a catastrophe was unprecedented.
The event was not just a humanitarian crisis, but also a heavy blow to the Japanese economy: 125,000
uildings were damaged and economic costs were expected to be ¥16.9 trillion.3 In the weeks
following the disaster, approximately 80% of Japanese automotive plants suspended production and
Mitsubishi UFJ Morgan Stanley Securities estimated utilization at other plants were below 10%.4
1 Ministry of Foreign Affairs, Government of Japan, http:
www.mofa.go.jp/j_info/visit/incidents/index2.html, accessed July 15, 2012.
2 Ministry of Foreign Affairs, Government of Japan, http:
www.mofa.go.jp/j_info/visit/incidents/pdfs
_goods.pdf, accessed July 15, 2012.
3 Ministry of Economy, Trade and Industry, Government of Japan,
http:
www.kantei.go.jp/foreign/policy/documents/2012/__icsFiles/afieldfile/2012/03/07
oad_to_recovery.pdf, accessed Fe
uary 27, 2012.
4 Tsuyoshi Mochimaru, “Auto sector: Our Stance in Wake of Recent Earthquake,” Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., April 12, 2011.
NISSAN MOTOR COMPANY LTD.: BUILDING OPERATIONAL RESILIENCY
William Schmidt, David Simchi-Levi
August 27, 2013 2
Across the industry, monthly production dropped nearly 60% in March and April 2011 compared to
2010, and did not fully recover until October.5 Production for all of 2011 was down 9%.6
Markets outside of Japan were affected as well. Toyota, Honda and Nissan, the three major Japanese
automotive original equipment manufacturers (OEM), exported a significant amount of their Japanese
production to serve foreign markets (Exhibit 1). Declines in Japanese production impacted product
availability in those export markets. In addition, overseas production had expanded in recent years,
ut only 70% - 80% of the production components were sourced locally with the remaining 20%
coming from Japan.7 Disruption to the Japanese supply base affected firms and factories around the
world.
Toyota, Honda and Nissan were all impacted by the disaster (Exhibit 2). In particular, Nissan
suffered damage to six production facilities and about 50 of its critical suppliers were impaired.
Nevertheless, the company was prepared to withstand the shocks.
History of the Japanese Automotive Industry
Prior to the 1930’s the domestic automobile manufacturing capability in Japan was essentially limited
to military-sponsored initiatives, hand-built models and imported automotive kits.8 The industry’s
nascent steps toward mass production started in 1933 when Aikawa Yoshisuke established Jidosha
Seizo Company, the predecessor of Nissan Motor Company.9 Around the same time, Toyoda Kiichirō
established an automobile department within Toyoda Automatic Loom, which would eventually grow
into Toyota Motor Company.10 In spite of protectionist government policies restricting imports and
direct foreign investment, prior to World War II the Japanese subsidiaries of Ford and General
Motors dominated the automobile industry in Japan. After the war, Nissan and Toyota were ho
led
y low production productivity and were at risk of slipping into bankruptcy if not for a combination
of huge governmental loans and special orders from the United States Army during the Korean War.11
Japanese automotive firms initially relied heavily on technology transfer from the United States and
Europe. Toyota was more aggressive in developing internal research and development capabilities, a
strategy eventually adopted by other Japanese automobile manufacturers.12 Japanese automotive
manufacturers also concentrated on process improvements, with Toyota being an early innovator. In
5 “Japan Production by Month, XXXXXXXXXX,” WardsAuto Group, 2012.
6 Ibid.
7 Ibid.
8 Koichi Shimokawa, The Japanese Automobile Industry: A Business History (London: Atlantic Highlands, NJ, Athlone Press, 2001).
9 Nissan Motor Company, http:
www.nissan-global.com/en/history/, accessed August 3, 2012.
10 Michael A. Cusumano, The Japanese Automobile Industry: Technology and Management at Nissan and Toyota (Cam
idge, MA., Published by the Council
on East Asian Studies, Harvard University, 1985).
11 Ibid.
12 Ibid.
NISSAN MOTOR COMPANY LTD.: BUILDING OPERATIONAL RESILIENCY
William Schmidt, David Simchi-Levi
August 27, 2013 3
the late 1940’s through the early 1960’s, Toyota transitioned away from push manufacturing
techniques that were ubiquitous in the United States automobile industry. The firm reduced buffer
stocks and instead adopted the principles of just-in-time manufacturing. Raw materials and work-in-
process were no longer pushed from early production stages to final assembly, but were instead
pulled forward only when needed. Components were produced and received