Toyota and Nissan use very similar production strategies in their battle for dominance among Japanese makers in Europe. At the same time, their strategy is markedly different from that of many European automakers.
Nissan and Toyota demand continuous improvements in efficiency and quality from their workers and suppliers. While their European competitors are enthusiastic about supplier parks and modular sub-assemblies, Nissan and Toyota are not.
Nor are they enthusiastic about automation. They prefer to rely on proven management techniques imported from Japan.
Kaizen is the key
The main technique is kaizen, or continuous improvement.
Both companies organize production staff in teams in order to raise the efficiency of the workplace on a continuous basis.
This activity is so important to Toyota that the production line is stopped once a month for 30 minutes for the teams to meet and generate ideas and solutions. In addition, every individual is paid to work on kaizen projects for two hours a month.
On two occasions during the ramp up of the Avensis at Burnaston, Toyota challenged its members to take one second off the cycle time. They did this by looking for the bottlenecks and then 'kaizening'' them, says Carl Klemm, general manager of the car manufacturing division.
At Nissan, teams are given budgets for kaizen that they can spend as they wish on overtime and materials.
'Our main focus of improvement today is to become more flexible on delivery,' says Colin Dodge, Nissan's production director. 'We want to be able to change our volumes to always match market demand.'
A 10 percent increase in line speed at Nissan's Sunderland, UK, plant now takes four weeks to achieve. A 25 percent rise takes six weeks. Three years ago such improvements would have taken twice as long, says Dodge.
As a result, line changes are frequent.
Last year, there were about 10. 'We can do it because we know how to re-allocate work very quickly and we train people properly,' says Dodge.
It is also important, he says, to preserve the knowledge of how long it takes to actually complete each job.
The key to Nissan's productivity is its management system, says Dodge. The first line supervisor plays a vital role.
'He has very broad responsibility,' says Dodge. 'He writes standard operations, allocates work, and decides on the line-side layout. If he wants to improve something or change it, he does not have to refer to anyone. He has complete authority to do it himself.'
Workers over robots
Both Nissan and Toyota prefer workers to robots.
'In my experience, it is much more cost-effective to build cars by man than by machine,' says Nissan's Dodge. 'Automation is not cost-effective unless you can't control your skills, or your people are not interested in doing a good job, or you have to pay very high wages.'
Nissan does use robots for strenuous and quality-sensitive spot welding tasks, but the only automated task in the final assembly area is the application of sealant to windshields.
Toyota's attitude to automation is very similar. About 90 percent of spot welds are automated, but very little final assembly.
'We use automation to assist a member but not instead of a member,' says Klemm. 'A person is much better at dealing with variables than a machine, and can contribute more to the future of the company in terms of ideas and suggestions.'
Furthermore, 'you can't have people working anywhere near a robot,' says Klemm, 'as people on either side of a robot installation are cut off from each other. This is very unhealthy from the teamwork point of view. Mixing automation and manual work is not a good solution.'
Nissan and Toyota each have about 200 suppliers. To have more would make communications and continuous improvement more difficult. All components are single-sourced, except tires.
Few suppliers are changed, even at model changeover times. 'The suppliers for the Corolla will be roughly the same as those who supply the Avensis,' says Rob Johnson, general manager of Toyota's purchasing division. About 90 percent will be common to both models.
At Nissan, 85-90 percent of suppliers are common to the Micra and Primera. 'Our whole strategy is to commonize the supplier base,' says Purchasing Director Peter Hill. The new lower-medium Almera-replacement, code-named HS, is unlikely to bring many changes.
The HS shares the same platform as the multi-purpose vehicle that will be produced in Barcelona, Spain, so Hill is working with the Spanish plant to create a common supplier base.
The two plants currently have a total of 378 suppliers; Hill expects to cut that to around 250.
Furthermore, says Hill, cars built at Sunderland will have 'common platforms not just with Spain, but also with Tennessee.' Nissan's US plant now builds the Sentra, Altima and 200SX.
Nissan has no supplier park, but seven key suppliers were asked to locate within 5km of Nissan's Sunderland plant at the very beginning. They supply seats, carpets, facia panels and other bulky components that come in many variations.
To minimize Nissan's inventory, these suppliers make in-sequence deliveries. They are informed of the exact versions of components to deliver only when the painted body arrives at the start of the final assembly line.
For seat supplier Ikeda Hoover, the period between receiving the instruction and fitting the seats to the car is 134 minutes.
'Synchronous deliveries help not only to minimize cost, space and stock but also to improve quality, because it enables us to identify problems quickly,' says Hill.
Only the key suppliers are asked to deliver in sequence. 'The cost of synchronous delivery is more trucks and more drivers to drive them,' says Hill. 'You have to do a cost-benefit analysis.'
Nissan and Toyota expect continuous improvement not just in their own manufacturing activities, but also in their suppliers'.
Nissan sets ambitious cost-cutting targets with its suppliers. Says Hill: 'We set targets that are realistic, and work with suppliers to achieve them.'
No more modules
Neither carmaker plans to use more modules.
'We believe we have the right level of in-house assembly already,' says Johnson at Toyota. 'There is no pressure to change at the moment. In any case, before we move to modular sub-assemblies we would want to see that the suppliers can demonstrate their competence to handle them.'
At Nissan, Dodge says that sub-assembly operations have to be carried out close to vehicle assembly.
'Unless you have a problem you want to transfer to someone else, or you can find a third party whose labor rates and overheads are much lower than your own,' says Dodge, 'it makes no sense to bring in significant components fully assembled.'
In recent kaizen projects, Nissan has moved sub-assembly activities even closer to the final assembly line than before.
Instrument panels and axles are no longer prepared at islands separated from the final assembly line, but are now integrated into it.
In the case of instrument panels, Nissan has been able to:
Cut one operator from each shift
Cut component stocks by 54 percent
Cut lead time from 28 minutes to four minutes.
'The most cost-effective way must be to make them next to where the car is built,' says Dodge, 'because then you have no stock.'