Sustaining Operations Case Study Analysis

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Theories and Techniques

Summary

Just-in-time (JIT). Just-in-time manufacturing produces on an on-demand basis, meaning that a manufacturing unit produces the required quantity at the exact time it’s needed and keeps minimal material in stock. JIT implementation requires exhaustive planning of the procurement and manufacturing processes.

Toyota Production System (TPS). The Toyota Production System refers to a set of principles implemented by Toyota to eliminate stockpiling and replace traditional push manufacturing. TPS states the alterations required to adopt JIT.

Lean. Lean manufacturing focuses on eliminating waste from the manufacturing process. By doing so, it improves production efficiency and saves both time and resources. It provides a set of tools for reducing unwanted steps from traditional manufacturing processes.

All three of these techniques impart the principles of total quality management (TQM) and increase the efficiency of production. Initially, these concepts were developed for the manufacturing sector, but slowly they are being implemented in other sectors including the construction and service industries.

Advantages and disadvantages of using JIT, TPS, and LEAN for Nissan Motor Company Ltd. After the 2011 earthquake, Nissan Motor Company started looking to make major changes in its production chain to reduce its dependence on regional manufacturers. Among the three big Japanese automotive companies, Nissan sustained the most damage from the earthquake. Moreover, it felt the pressure of lagging behind in its implementation of concepts such as JIT. The earthquake damaged five major manufacturing units of Nissan. At present, Nissan follows a flexible supply chain with a huge reliance on regional manufacturers and a strong focus on coordination. Nevertheless, the impact of the 2011 earthquake indicates the scope of improvement possible for Nissan’s present manufacturing philosophy. The implementation of JIT and LEAN will help the company reduce unnecessary steps in the manufacturing process when dealing with its regional manufacturers. For example, Nissan follows build-to-stock for a few SKUs and build-to-order for the rest. Thus, Nissan can consider implementing some aspects of LEAN, JIT, and TPS to increase the efficiency of its flexible model wherever required.

Sustainability

Triple Bottom Line

Triple bottom line—also known as three Ps for its focus on people, planet, and profit— measures the sustainability of an organization along three dimensions: social, environmental, and financial performance. The implementation of the triple bottom line framework can enhance the operational management of an organization by building proper communication, preventive actions, and sustainable operations. Triple bottom line measures profits, but it also measures the negative and positive impact of organizational processes on the environment and society. This measure might seem discouraging from a stakeholder and shareholder perspective, but a critical study shows that this method does not discourage growth and profit. First, this framework calls for a company to review its operations and their impact on people by improving safety in the workplace, offering healthcare benefits, and discouraging child labor. Second, it encourages stronger plant protection from industry operations through better waste management and more efficient energy usage. Third, it encourages profit to support sustainable operations.

Nissan’s sustainability can be measured and improved by analyzing its performance based on its impact on society, the environment, and profitability. Nissan focuses on profitability; however, for sustainability, it also needs to consider taking action to prevent environmental damage due to its manufacturing processes. In addition, the implementation of the triple bottom line method will help Nissan share its profitability with the local community. The present case study shows that Nissan already considers social wellbeing during times of disaster by focusing on recovery and safety operations at its factories; nevertheless, the company also needs to reduce the negative environmental impact of its manufacturing units.

ISO 14000 Standards

The International Organization for Standardization (ISO) proposed the ISO14000 as an environmental management standard. The ISO provides a series of technical reports, management guides, and standards for environmental planning and the prevention of damage as a result of an organization’s activities (Castka & Corbett, 2015). The organization should note that ISO14000 is not mandatory but rather voluntary. Nevertheless, growing globalization will make such certification a requirement to protect the planet’s shared natural resources and environment. The first requirement to achieve this certification is an environmental policy document approved by the organization’s top management. Second, the organization must have an established process to identify its environmental impact. Third, the role of employees must clearly defined. And last, organizations must periodically monitor their progress and make necessary changes.

An organization can implement the ISO14000 series of environmental standards by following the guidelines specified by the ISO, which include a lifecycle assessment of the process and evaluation of the organization, eco-design, implementation of labels, and declarations. Thus, organizations must review their activities and proceed with these standards. The implementation of ISO14000 should follow continual improvement based on Plan-Do-Check-Act, proper process planning and implementation, and regular checks to improve the existing process and ensure minimal environmental damage.

Corporate Responsibility Principle

The corporate responsibility principle suggests that organizations and corporate entities should behave responsibly towards society and the environment (Farooq, Payaud, Merunka, & Valette-Florence, 2014). To implement corporate responsibility principles, an organization must address human rights, as well as labor, environmental, economic, and health issues. Some of the important aspects of corporate responsibility are as follows:

  • Organizations should protect, respect, and support human rights by eliminating abuses.
  • Organizations should not discriminate against employees and should help build a collective association.
  • Organizations should encourage environmental awareness and develop processes to protect the environment.
  • Organizations should help global cooperation and reduce health concerns.

Overall, it can be concluded that triple bottom line, ISO14000, and corporate responsibility principles are interlinked. In addition, a comparative analysis shows that corporate responsibility principles encapsulate concepts of sustainability and environmental protection.

References

Castka, P., & Corbett, C. J. (2015). Management systems standards: Diffusion, impact and governance of ISO 9000, ISO 14000, and other management standards. Foundations and Trends® in Technology, Information and Operations Management, 7(3–4), 161-379.

Farooq, O., Payaud, M., Merunka, D., & Valette-Florence, P. (2014). The impact of corporate social responsibility on organizational commitment: Exploring multiple mediation mechanisms. Journal of Business Ethics, 125(4), 563-580.

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