The aim of this report is to consider key theories and areas of supply chain management while referring to the case study of Nissan Cogent, for the achievement of world class base of supplier. A brief overview will be provided for the case study based on which further analysis will be conducted for drafting out key points of conclusion and recommendations. Further discussion will be conducted on the key objectives, role of leadership, commonality of purpose, and performance metrics. Further ahead, there will be an identification of risks, costs and benefits, based on which key recommendations and future trends will be identified.

1. CASE STUDY ANALYSIS OF
NISSAN COGENT

2. Table of Contents
Introduction................................................................................................................................2
Overview of the Case Study ......................................................................................................2
Objectives for Improvement Initiatives .....................................................................................2
Overview of the Key Theories...................................................................................................3
Achieving the Commonality of Purpose....................................................................................3
Performance Metrics..................................................................................................................4
Key Recommendations ..............................................................................................................4
Future Trends.............................................................................................................................5
Conclusion .................................................................................................................................5
References..................................................................................................................................6

3. Introduction
The aim of this report is to consider key theories and areas of supply chain management
while referring to the case study of Nissan Cogent, for the achievement of world class base of
supplier. A brief overview will be provided for the case study based on which further analysis
will be conducted for drafting out key points of conclusion and recommendations. Further
discussion will be conducted on the key objectives, role of leadership, commonality of
purpose, and performance metrics. Further ahead, there will be an identification of risks,
costs and benefits, based on which key recommendations and future trends will be identified.
Overview of the Case Study
In the early years of 1990s, Nissan initiated the improvement initiative of NX’96 with key
focus on four elements that are Development and Management, Delivery, Cost and Quality.
Thus, as a result of this initiative, Nissan could consider measuring the level of performance
from these components among the supplier, while setting and achieving the targets of
improvement (Oliver 2004).
However, the scenario had not been the same in assessment of development because of
highly diversified range of issues and challenges with respect to highly different nature of
technologies and products among the supplier. This resulted in overall poor performance and
increased threat of highly intensified competition (Ballou 2007). These issues of development
in the initiative of NX’96 had been replaced and considered with the initiative of NEXT21
that incorporated new approaches for the purpose of development and designing.
Objectives for Improvement Initiatives
The key objectives for the improvement initiative from the base of supplier was
approximately 75 per cent. Though the suppliers were known to be having world class levels
of quality with the rate of defects being below 10ppm, as per the perception of public, Nissan
had been identified as being below the competitors even after it surpassed them in figures of
quality data (Ballou 2007). With these types of feedbacks, the key focus of Nissan was on
enhancing attractive quality in addition to basic quality.

4. Overview of the Key Theories
Management of supply chain is referred to as integrating each element of distribution,
production, design and supplier by extracting raw material for ending the delivery of
customer. Management of relationships with the suppliers is important for strategic
management of supplier as trends and changes across the market end up making external
suppliers a crucial element for value chain of an organization (Oliver 2004). By an effective
relationship, activities of supplier development by the sources of collaboration with the
suppliers in several forms of partnerships, helps in improving the overall efficiency and
effectiveness of the supply chain on the whole.
There is an integration of suppliers within the network of buyers in the supply chain by
sources of involving supplier for new services, processes and products (Ngai 2005). Early
involvement of supplier is the process having reliability upon suppliers, both virtually or
physically; providing support earlier in supply and demand planning, strategic planning,
projects of continuous improvement, and project development and planning of new products
and technologies (Masclef 2002). This often has an association with development of new
products and key factors including the need for initiating continuous improvement, the need
for development of new processes, services and products quickly, and also saving costs by
designing right in the first go.
Thus, this helps in the achievement of reduced time of cycle when applying concept to the
customer. Though there is an involvement of several costs in management of relationship
with the supplier, purchasing companies are successful in reaping certain benefits like
achievement of low costs of production by the sources of right designing in one go, improved
flow of material by reduced level of inventory, and reduced costs of administration by the
sources of integrated systems of information (Ballou 2007).
Achieving the Commonality of Purpose
The management departments of supplier companies under Nissan had been invited to NETC
for discussing about major points of co- developments, as required for the achievement of
world class quality and design, and how there is implementation of change. Cranfield
University and NETC worked together in an intensive manner with the first tier suppliers of
Nissan for initiating communication as a basic essence for the business (Masclef 2002). There

5. was an invitation of supplier for a day- long event of intensity for working by three certain
workshops taking by the core messages related to the organization.
The major concentration is on three major areas to align various aspects related to co-
development, in which there is an alignment of perceptions, processes, key milestones and
project target. The suppliers had been asked for considering the present perceptions related to
their relationship with the company of Nissan, analysing their own current processes of
development, and their plans for meeting the targets of NEXT21 (Ngai 2005). This has been
enabling the suppliers and Nissan for identification of possible activities of improvement for
strengthening the capabilities of development and also for prioritizing key areas of initiating
improvement that results in an improvement plan that has been defined clearly.
Performance Metrics
As a metrics of performance, Nissan has been using the Kraljic Model of Portfolio
Purchasing. This model had been presented by Peter Kraljic and its first appearance was seen
in the year 1983 in the Harvard Business Review. Irrespective of its age, it has been identified
as a useful and popular model used in organizations all across the globe (Oliver 2004). The
key purpose behind the utilization of this performance matrix at Nissan is for maximizing the
security of supply and reducing the costs for the purchaser, by the initiation of maximum
power in purchases. In order to do so, procurement moves to be an activity of transaction to a
strategic activity. The key notion is that purchasing must become the management of supply.
In using this model, there is an involvement of four different steps that are as follows (Cooper
2002):
 Classification of purchases
 Analysis of market
 Strategic positioning
 Planning of action
Key Recommendations
By the involvement of workshop, Cranfield University has been successful in the creation of
an environment for simplifying effective understanding and communication between Nissan
and supplier, and for having a better combined relationship at work for identifying the needs
of supplier and Nissan for maintaining competitiveness within the global market platform

6. (Ballou 2007). The whole process is not only to look at key areas of improvement for the
supplies, but also for presenting advantageous joint efforts of development in the future for
bringing continuous improvements and improvements of performance (Masclef 2002). This
will surely be useful in eliminating wastes at each and every stage, initiating concept for the
purpose of success delivery.
Future Trends
Strategic items are important for NETC (Nissan European Technology Centre) because they
are a key player in Nissan’s European market. Any risks identified with these suppliers needs
to avoided/solved to prevent major impacts on production.
Supplier development is important for NPD (New Product Development). Integrated
suppliers will help reduce costs, improve quality and performance at the development stage
(Ngai 2005). Their expertise will enhance the ideas in design and development.
Performance Management can be used to develop suppliers and increase production.
Successful suppliers need to be set targets and measured against, this will validate their
performance and ensure that both suppliers and Nissan increase their productivity whilst
decreasing costs (Oliver 2004).
Conclusion
From the video, it can be stated that the suppliers who had taken part in COGENT show an
11% improvement. This improvement was because Nissan had use objective performance
measurement system. Nissan measured performance through Q.C.D.D.M, setting targets that
suppliers had to meet, providing feedback to suppliers as a basis for improvement plans.
Successful suppliers were awarded for their performance levels.

7. References
Ballou, R.H., 2007. Business Logistics/Supply Chain Management, 5/E (With Cd). Pearson
Education India.
Cooper, M.B., 2002. Supply chain logistics management (Vol. 2). New York, NY: McGraw-
Hill.
Masclef, O., 2002. Generating Cooperative Behavior Between the Unacquainted: A Case
Study of the Renault/Nissan Alliance Formation Process. Working Paper.
Ngai, E.W., 2005. Build-to-order supply chain management: a literature review and
framework for development. Journal of operations management, 23(5), pp.423-451.
Oliver, G., 2004. Design quality needs conscious values. Designing Better Buildings: Quality
and Value in the Built Environment, p.135.