Nissan Canada Inc.
Problem Statement
With the newly proposed plan the corporate manager, Dave Richardson is concerned that the dealers may not understand the benefits of the new plan and may view it as a step towards wrong direction. Secondly, he is concerned that suppliers and assembly plants may feel that the new requirements are unreasonable and against the concept of cost reduction. The company, NCI is facing serious demand forecast issue.
Key issues
The key issues that have been identified in the case “Nissan Canada Inc.” are the problems that the company may face while evaluating the integrated customer order project (ICON) and the decision by the company to move from ‘make to stock' into a ‘make to order' process. Along with this, another key issue is that the Nissan Canada Inc. (NCI) has a poor demand forecast. The company has been using Excel spreadsheets for actually planning and scheduling the production and has been using telephones, fax and emails to communicate with the dealers which obviously results in longer order processing time and the response time also increases with such a timely process. Another major issue is that currently suppliers and assembly plants receive orders well in advance around three months before the delivery date but; with the new system of “make to order” it is expected that the suppliers and plants may accommodate as much as 20% change in volume and it may also result in increased cost.
Case facts
The inability of all car manufacturers to estimate customer demand led to excess inventory and heavy sales incentive programs.
The company was transforming from ‘make-to-stock' into a ‘make-to-order' company.
Car manufacturers wielded incredible power in the supply chain.
Dealers were under pressure of carrying and selling excessive inventory.
The order processing time was too lengthy.
The new plan of “make to order” through Integrated Customer Order Network (ICON) benefited by increasing dealer-close rate and reducing the amount of inventory.
Analysis
Manugistics ERP System
To overcome the problem which Nissan Canada Inc. is currently facing with the shift from ‘make to stock’ to ‘make to order’ process; the company should look to implement demand forecast solution which can overcome the problems on hand. Basically, the implementation and execution of Manugistics planning tools will definitely improve demand forecasting.
Nissan Canada Inc. has to actually work even more closely with the suppliers and dealers when planning and scheduling the production process. The implementation of an automated centralized ERP system can be of great help over here. The reason that ERP can be a helpful tool is because it will eventually cover all the activities of the firm, Nissan Canada Inc. and will also help the company to allocate, modify, track and cancel orders in the real time; it will also create master production schedule (MPS) and will address up to the minute data on all aspects of the supply chain for the company.
Advantages of the Manugistics ERP System
With the implementation of the Manugistics, it will make it easier to globally integrate which will remove the barriers of currency, language, exchange rates and culture. Along with this, it will help in centralizing updates of all the data for Nissan Canada Inc. Another feature of the ERP system will be that it will provide real time information which will definitely reduce the possibility of errors in the current system. In addition, it will also create possibility to work more efficiently for the employees within the company.
Nissan Canada Inc Case Solution
The inventory optimization using sales forecasting will be improved for Nissan Canada Inc. Another feature of Manugistics ERP system will be that it will help in tracking an order for acceptance through its fulfillment. It will help in chronological history of each and every transaction through the available relevant data compilation in every area of the operation within NCI. As for now, the company is using emails, phones and fax to communicate with the Manugistics ERP system which will help in tracking revenue from invoice through cash and receipt simultaneously.
Disadvantage of Manugistics ERP System
The most obvious disadvantage of this system for the company, Nissan Canada Inc. is that the suggested ERP system is quite costly when compared with other less integrated and less comprehensive solutions. It is locked into a relationship with a contractor and is managed by the vendors. The newly proposed ERP system may not fit in with the company’s values and the re-engineering process may damage and hurt the competitiveness or divert its focus from other critical activities. To actually make it successful for Nissan Canada Inc., the company needs to provide extensive training to employees and make them aware of the system and its features...........................
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Corporate manager of vehicle planning at Nissan Canada Inc. was invited director of vehicle orders for Nissan North America (NNA), to review the proposed process of ordering a new car within the LAN on the sales order (ICON). ICON project will change the North American car Nissan in the order process from production to warehouse "in the production order of magnitude" of the environment, which called for a significant transformation during surgery Nissan in North America and Japan. Corporate Manager Vehicle Planning hoped that the new process will be the that dealers are looking for in an attempt to align production closer to customer requirements. Nevertheless, it should evaluate the new process from the point of view of all stakeholders to ensure that the objectives of Nissan business can be met. "Hide
by P. Fraser Johnson, Kyle, SK Hunter Source: Richard Ivey School of Business Foundation 12 pages. Publication Date: August 28, 2007. Prod. #: 907D18-PDF-ENG
