Nissan Motor Co.’s Leadership in Operations Management


Operations management is an activity related to the development, use, and improvement of production systems, based on which the main products or services of a company are produced. Operational management is the efficient and rational management of any operations, and the subject of operational management is operational activities. Operational activity at Nissan is an ordered combination of labor and natural processes, as a result of the implementation of which products are created and services are provided. The full system of the company’s production activities of the organization is the operating room and is the central link of any enterprise producing products and providing services. In this system, created on the basis of a rational division of labor and a combination of objects, means, and labor itself in time and space, and operational function is realized. It is a set of actions for processing and converting resources obtained from the external environment and outputting the results of the activity to the external environment.

Key Approaches in Operations Management

Six Sigma

It is important to note that a number of approaches can be utilized in conjunction in order to improve the overall operations management at Nissan. Six Sigma is a methodology of production process enhancement, which can be implemented at the company. Its primary objectives are focused on reliability and performance by reducing and minimizing defects. In addition, the given methodological approach aims to reduce the overall waste by eliminating the processes that provide no value. Six Sigma also encourages improved product quality and provides service quality after-sales. The main role of a manager is to implement a data-driven environment in the company, where the overall improvement is not dependant on collaboration. Nissan could adopt it in its manufacturing process by removing unnecessary elements of the non-essential car features, which are not valued by customers. Although Nissan cars are not known for their unreliability, the product is not the most valued in the market. In other words, there is room for major renovations and improvements regarding product quality. In the case of managers at Nissan, they can be more proactive in finding the elements of processes that yield no value. For example, eliminating unnecessary conference meetings at the company can be in adherence to Six Sigma’s doctrine because the latter method requires less collaboration, and it is more data-driven.

Lean Production

Another critical approach that needs to be considered is lean production, which is relevant in the case of Nissan, which produces various types of automobiles. Lean production is a combination of mass and craft production, where it promotes employing multi-skilled workers at all levels. The main objective of the approach is to make the processes more efficient and less wasteful. The primary role of a manager is to find the most wasteful processes and properly eliminate them. However, it is important to point out that the waste elimination process must not hinder the overall quality of products. In the case of Nissan, this can be achieved by focusing on the specific line of products, which are in high demand. The company could terminate the production of unpopular cars due to their wastefulness. Lean production initially originated in Japan, and Nissan is a Japanese company, can easily adapt the methodology and improve the efficiency of its operations management. The company’s managers can directly access the resource leakage points of the production process and eliminate them.

Total Quality Management

Total Quality Management (TQM) is a methodological approach in operations management, which focuses on the quality improvement aspect of the processes. It adopts an opposite philosophy of the Six Sigma method, where TQM emphasizes the increased involvement of all employees. The key responsibility of a manager is to ensure that the majority of employees are involved in the process. The given methodology is not viable for Nissan due to a number of key reasons. Firstly, the company is large in size, which makes it highly challenging and potentially inefficient to involve all employees in the quality improvement process. Secondly, the role of senior managers cannot include directly supporting each individual worker because of the sheer size of Nissan. Thirdly, the company’s products already possess an improved level of quality, and the company will benefit more from eliminating waste than focusing on further improvements. It is more plausible for small and medium-sized firms, which can directly communicate with each other.


Just-in-Time (JIT) is a supplier-related operations management that encourages aligning the ordering process of raw materials with production processes. In other words, a company that adopted the method orders raw-material in the amounts needed for production without accumulating for future use. The main benefit of the given approach is its flexibility because any sudden increase or drop in demand for production will not damage the company. Its main objective is to achieve maximum efficiency in inventory, supply, and production management. The role of a manager is to be able to forecast the precise amount of raw materials needed for production. However, in the case of Nissan, such a method is not viable due to the fact that automobiles are comprised of a high number of parts. Therefore, it will be challenging and even impossible to adjust the production processes with raw-material orders from suppliers due to a large pool of the latter. In addition, it is heavily based on forecasting the precise amount of materials needed, which is also difficult for the company.

Inventory Management

Inventories represent a significant part of the working capital of any enterprise and, accordingly, entail a large part of capital investments, and thus, it is important that the stocks are managed efficiently, and the investment in them does not become unreasonably large. The role of managers is to conduct proper inventory management, where they decide whether to integrate first-in-first-out (FIFO) and last-in-first-out (LIFO). Inventory management is a problem common to enterprises and firms of any sector of the economic system. Inventories are required to be created in the industry, retail, enterprises, and firms. There are many reasons why firms go on stockpiling. The main argument is that the company must have a certain amount of material resources to support the production process. In the absence of the necessary stock, the company, such as Nissan, may suffer large losses.

Operations Management and Business Objectives

Business objectives and the related strategies involve promoting the overall growth of the company, which can be achieved through asset accumulation and profit. Therefore, making the operations less wasteful and more efficient gives a company a competitive advantage. Operations management can have a significant impact on the company’s business environment, where social factors can damage the overall reputation. The production processes can be wasteful not only in terms of resources but also in terms of the environment, such as pollution. Therefore, in order for the company to have high levels of corporate social responsibility (CSR), it needs to adjust and focus on its operations management. For example, Nissan can focus on the environmentally damaging processes of production and integrate eco-friendlier approaches in order to adhere to its CSR and create a more positive socio-business environment.

One of the primary business objectives at Nissan or any car company is production optimization. The main Nissan’s production processes are that part of the processes during which there is a direct change in the forms, sizes, properties, the internal structure of objects of labor, and their transformation into finished products. Auxiliary production processes include those processes whose results are used either directly in the main processes or to ensure their uninterrupted and efficient implementation. Examples of such processes are equipment repair, manufacturing of tools, devices, dies, production of all types of energy at the enterprise. Serving production processes are labor processes associated with the provision of services to the main and auxiliary production. For example, the latter can include transportation of material assets, warehouse operations, and technical quality control of products.

Products as a result of the service process are not created. The main auxiliary and servicing production processes have different development and improvement trends. Thus, many auxiliary production processes can be transferred to specialized factories, which in most cases, ensures their more economical production. With the increase in the level of mechanization and automation of the main and auxiliary processes, service processes gradually become an integral part of the main production, play an organizing role in automated and especially in flexible automated production.

The Role of Leaders and Managers

The role of managers and leaders at the company is essential for achieving business objectives. The main difference between leaders and managers is the fact that the former mostly focuses on people and soft skills, whereas the latter works with things and uses hard skills. Leaders can use various strategies to achieve business objectives. Transactional leaders primarily see leader-follower interaction as a transaction (Deichmann & Stam, 2015). This type of leadership can manifest itself in offering more wages and benefits to stimulate the existing employees and attract more qualified ones. Transformational leaders primarily focus on the relationship aspect of the leader-follower interaction, where he or she communicates and reciprocates with the workers. In the case of Nissan, the leadership appears to be more transactional than transformational, because the key figures are not as engaged as they could be. Nissan’s leaders could adopt a transformational leadership style, but it will be challenging for such a large company to focus on the relationship aspect. In addition, the Japanese business environment and norms may not suit the transformational leadership approach due to the high hierarchal nature of society.

The general concept of the production management system is based on the shortcomings that exist today in the practice of Nissan and identified in the course of the analysis. Based on this, it is possible to determine the main directions of changes necessary to create an effective operations management system at Nissan. Firstly, the production management system should include three areas, such as the sphere of strategic management, the sphere of operational management, and the sphere of their relationship. The introduction of strategic management elements in the practice of the company is one of the important conditions for improving the management system. The lack of a clear market strategy leads to a dispersal of the efforts of management in the competition, does not allow an objective assessment of the opportunities and threats from the external environment, and narrows the economic space of activities. In the modern market conditions of Nissan, an appeal to past experience in solving many problems is not plausible, because the company must clearly present its line of development.

It is necessary to form the strategic thinking of the leadership and the whole team at Nissan, develop long-term planning skills, ensure the selection of highly qualified specialists with skills and experience in the field of strategic management. The second most important direction of changes in the management system in modern conditions is to increase its scientific validity, which consists in improving the methodology, developing a progressive regulatory framework, and increasing the professionalism of managers. The basis for constructing the processes of strategic and operational production management should be based on scientific approaches, principles, and modern theories. All management activities should be aimed at a comprehensive solution to the problems of improving the processes of development, adoption, and implementation of management decisions, which is the basis for increasing production efficiency. The third direction of changes in the management system is associated with an increase in the level of information and technical support. Modern management is associated with the processing of huge flows of information.


In conclusion, it is important to note that Nissan can adopt Six Sigma and lean production approaches, but it is unviable to integrate JIT and TQM methodologies. The main reason is the overall size of the company and its relatively high-quality products. The role of leaders at Nissan can undergo a change from transactional to transformational style, but it can be difficult due to cultural context and size.


Deichmann, D., & Stam, D. (2015). Leveraging transformational and transactional leadership to cultivate the generation of organization-focused ideas. The Leadership Quarterly, 26(2), 204-219.

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