Executive Summary: Supply Chain Management at Nissan Amidst a Natural Disaster
Introduction
One of the most devastating examples of supply chain disruption can be seen from the natural disasters that hit Japan in March 2011. The damage from a major earthquake and its side effects including a tsunami, blackouts, and fuel shortages caused operational shutdowns in Japan’s second largest automobile manufacturer; Nissan. The Nissan operational suspensions were not only a result of local assembly plant destruction, but also the impact felt by numerous Tier 1, Tier 2, and Tier 3 suppliers. Amazingly, Nissan only experienced approximately four weeks of reduced production before resuming operations in all plants and by May 2011 numbers had rebounded to expected production based on the previous year. What features of Nissan’s operational strategy helped them manage to recover from such a devastating supply chain disruption? This executive summary will explore the managerial characteristics that worked well for Nissan during their supply chain disruption of March 2011 and what adjustments can be made to help enhance their supply chain risk management for future disruptions. …show more content…
Within minutes of the earthquake a Global Disaster Control Headquarters and a crisis management committee were formed to update information about employee safety, disaster management, and the direction of the business. Diagnosing the status of the organization and prioritizing business needs during and after the disaster struck allowed for quick, clear, and consistent action. After the immediate crisis was managed, Nissan reinforced its priority of continuity by appointing a Chief Recovery Officer whose primary responsibility was to be the point person for leading Nissan back from the devastation of the
Introduction
One of the most devastating examples of supply chain disruption can be seen from the natural disasters that hit Japan in March 2011. The damage from a major earthquake and its side effects including a tsunami, blackouts, and fuel shortages caused operational shutdowns in Japan’s second largest automobile manufacturer; Nissan. The Nissan operational suspensions were not only a result of local assembly plant destruction, but also the impact felt by numerous Tier 1, Tier 2, and Tier 3 suppliers. Amazingly, Nissan only experienced approximately four weeks of reduced production before resuming operations in all plants and by May 2011 numbers had rebounded to expected production based on the previous year. What features of Nissan’s operational strategy helped them manage to recover from such a devastating supply chain disruption? This executive summary will explore the managerial characteristics that worked well for Nissan during their supply chain disruption of March 2011 and what adjustments can be made to help enhance their supply chain risk management for future disruptions. …show more content…
Within minutes of the earthquake a Global Disaster Control Headquarters and a crisis management committee were formed to update information about employee safety, disaster management, and the direction of the business. Diagnosing the status of the organization and prioritizing business needs during and after the disaster struck allowed for quick, clear, and consistent action. After the immediate crisis was managed, Nissan reinforced its priority of continuity by appointing a Chief Recovery Officer whose primary responsibility was to be the point person for leading Nissan back from the devastation of the