Scm - Renault Nissan

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Individual Assignment: Renault – Nissan

Logistics and Supply Chain Management

Logistics and Supply Chain Management Individual Assignment
Module Coordinator: Dr Nicolas Wake Prepared by: Aissam Ouaza April 2012 1

Individual Assignment: Renault – Nissan

Logistics and Supply Chain Management

Executive summary
What if each client can get exactly the right model with the right color and all the options he or she wishes in a "reasonably short" delay? (“Renault Speeds Up Delivery” O.R. helps French automaker overhaul its supply chain from a built-to-inventory to a built-to-order perspective By Alain Nguyen). It seems to be a holistic goal for each automotive company, competing in an ever challenging global environment, under changing political circumstances and unpredictable natural conditions. However, some companies like Renault – Nissan managed to face the global international crisis, through a recovery program based on a radical change in its supply chain. Overcoming the push-pull boundary, generated substantial cost savings by reducing car inventory levels, and shortening lead times so as to create customer value by selling a better profitable product mix. Such an ambitious strategy involved a huge speed-up of the whole planning process. The significant change that improved the supply chain of Renault-Nissan was the creation of the Global Supply Chain Department (DSCM) in 2008 which has leaded significant improvements in the production process. The DSCM implemented also several best practices in collaboration with core departments like Supply Chain Architecture, Purchasing, Manufacturing, Sales and Marketing and Quality, that accompanied the move from a built-to-capacity to a built-to-order company. In addition, the strategic Alliance between Renault and Nissan brought a unique competitive advantage, combining the Nissan’s know-how and reliability with Renault’s design and cheaper streamlined supply chain, creating economies of scale by coordinated procurement and improvement as well as the use of common hubs for distribution networks. The significant decrease of number of platforms, the resources pooling and the geographical complementarity between both companies, provided the cash for Nissan to survive and the authority for Renault to insure compliance. This winwin strategy has brought positive outcomes to this synergy, and is expected to produce sustainable free cash flows to the Alliance over a high performing supply chain.

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Individual Assignment: Renault – Nissan

Logistics and Supply Chain Management

Table of contents
IIIIIIIVVVIIntroduction to the Supply Chain of Renault – Nissan……………….4 A cross-cutting global function…………………………………….…………...4 Outstanding progress……………………………………….………….……………5 Managing the crisis………………………………………………………..………….5 The Renault – Nissan Alliance…………………………………………..………..6 Conclusion………………………………………………………………………………….7

References……………………………………………………………..…………………………….8

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Individual Assignment: Renault – Nissan

Logistics and Supply Chain Management

I- Introduction to the Supply Chain of Renault - Nissan
The automotive industry is undergoing a strategic transition. Cost pressure from rising stock levels in the market and increasing incentives needed to sell these vehicles are forcing vehicle manufacturers to rethink their prevalent stock-push approach, building vehicles against a forecast and selling from stock, in favor of a stock-less buildto-order order fulfillment strategy (Joe Miemczyk, Matthias Holweg.Journal of Business Logistics.Oak Brook: 2004.Vol.25, Iss.2; pg. 171, 27 pgs). So, the switch from built-to-inventory to a built-to-order perspective, while offering a more diverse product range with shorter delivery times, has been a must. Within Renault, the supply chain management aims to deliver on time best price vehicles to each customer, that comply with its quality standards, starting from suppliers to plants then to dealerships, by aligning...
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