March 26, 2001, 3:53 PM — THE AUTO INDUSTRY has been likened to the canary in the shaft used by miners to forewarn them of a gas leak. Similarly, automakers are the first to be hit by any downturn in the economy. Whereas the economic slowdown has been much talked about only for the last six months, automakers started to feel the pinch more than a year ago.
The knee-jerk reaction among most automakers is often to evacuate the tunnel, so to speak. But Nissan Motor Manufacturing U.K. found a more positive approach to the inevitable slowdowns, and its cost-saving methods may be exported to this side of the Atlantic as well.
Consider the problem: Consumers are buying fewer cars but at the same time are demanding more variety and choices. Nissan was faced with the dilemma of figuring out how to produce more rather than fewer models while simultaneously reducing costs. Nissan had witnessed the overwhelming success among European consumers of its super-mini and family-sized models, the Micra and Primera, respectively.
The challenge was how to introduce a midsize model, the Almera, without spending hundreds of millions of dollars upgrading equipment at its plant in Sunderland, England, to handle a third assembly line.
Michael Simpson, Nissan U.K.'s production controller played a key role in puzzling out the solution.
To build a third assembly line would not only cost upwards of a half billion dollars, according to Simpson, it would take approximately two years to get up and running.
With the specter of rising costs and missed opportunity staring Nissan in the face, Simpson chose to integrate the assembly of the Almera into the two existing production lines.
Of course this was easier said than done. Simpson compares the integration of a third car model into a facility with only two assembly lines to a multidimensional game of chess.
"The first vehicle would be simple -- move a pawn. Once the pawn has been moved, a restriction is placed immediately on the opposition. But then they cannot move their piece onto the square of the pawn, a constraint. And they don't [want to] move their piece where it can be taken, a 'nice to have,' "Simpson says.
On the assembly line, certain constraints are built in, such as the fact that you must not schedule a car to be painted red prior to a car to be painted white; that requires too much time to clean the equipment, which slows down the line. Also you mustn't schedule two cars with sunroofs in a row, because sunroofs take extra time to install and, again, time is lost.
The goal at Nissan was to create a production schedule that satisfied all constraints and, as Simpson puts it, provided "as many 'nice to haves'" as possible. Another word for Simpson's "nice to haves" is "optimization."