Nissan’s Cogent message spreads

In this report we detail how car makers are using supplier awards to influence the performance of component manufacturers and look at opportunities for joint ventures in India. We start with Arlene Foster examining a workshop-based programme aimed at help

The success of components suppliers in improving cost, quality and delivery of parts to vehicle manufacturers is widely recognised. But there is another factor, even more critical to overall vehicle cost that is often overlooked – design.

`Design and development of a product account for at least 80% of cost, quality and performance,’ says Ian Milburn, deputy managing director of Nissan’s European Technology Centre at Cranfield. `Our design and development function depends on suppliers who provide at least 70% of the components of a vehicle, so we must work with them to remain competitive in the year 2000.’

With this in mind, Nissan introduced a workshop-based programme called Cogent with Cranfield University, in December 1995. The three-year programme is funded by the Innovative Manufacturing Initiative, co-ordinated by the Office of Science and Technology, and is aimed at improving first tier suppliers’ ability to co-develop designs with the vehicle manufacturer. `We needed the expertise of academia to help to implement the project and feed its messages to the rest of industry,’ says Milburn.

The Japanese car manufacturer sources about 65% of its components from the UK and as such will benefit initially from the programme. But Cranfield, under the leadership of Dr Steve Evans, is responsible for disseminating the key lessons of Cogent to the rest of the automotive industry, and any other sector that could benefit.

Evans has a background in helping companies improve their design performance. `Up until now the main initiatives from the car makers towards improving the supply chain have been directed inside the factory focusing on improving quality, cost and delivery,’ he says. `What Nissan realised as a competitive weapon for itself is that suppliers have to be very good at design as well.’

Milburn and Evans both see design as often overlooked; it is not immediate, and visible improvements take time to feed through. `Part of what we’ve been trying to do with Cogent is to underline design’s importance and then create processes to improve it. Companies must incorporate a product strategy within their overall business plans,’ says Milburn.

None of the lessons or mechanisms learned over the past 15 years from working on process improvements readily apply to design, says Evans. `The objectives are similar but design is inside the head, so it’s harder to see what’s going on. This was the start of our collaboration.’

Since the first of the Cogent workshops opened, in January 1996, all 35 suppliers have gone through the programme with their managing directors and technical directors. There were a total of eight multi-company workshops which finished in October 1996.

`We started with the managing directors because it is important to get the decision-makers on board and then cascade the programme down through the technical directors and so on,’ says Milburn.

Priority has been given to high spend, high value components such as heating, lamp and engine management systems, but no component will be overlooked if improvements can be made.

Just over one year into the Cogent programme, the main benefit has been in creating better communication and a common understanding between Nissan and suppliers, says Stuart Owen, manager of supplier development at the Nissan European Technology Centre.

`In the past, we have just focused on solving the problem. The workshop enables us to take people away from the factory floor and look at the roots of problems. We offer participants a chance to communicate on specific issues. It is this process which facilitates a better understanding between us and them and results in quicker solutions to our problems.’

Deep and honest communication

An initial obstacle to communication at the workshops was overcoming fear about speaking out on often difficult or sensitive issues. `By the end of the workshops, most participants are surprised at how deep and honest the communication has been in such a short space of time,’ says Evans. `Once they have a true understanding of the problem, most can express their weaknesses in design and can self-improve.’

At the programme’s core is a move to get suppliers to consider design as a chain. `One supplier may have perfect drawings but be weak in delivering trial parts. Good design and development is as strong as the weakest part of that chain,’ says Milburn.

He splits the design process into three stages, which are discussed in a lot of detail between suppliers and Nissan. First, product strategy where the design strategies of suppliers and Nissan are co-developed. Secondly, product definition, usually a CAD drawing and thirdly, the supply and testing of trial parts.

Suppliers are asked to take part in all three stages. The aim is to get them to move from the traditional approach of putting most effort into the costly and less flexible trial and test stage and concentrate on getting design right in the early stages.

Another fundamental objective of Cogent is to find a measure of design performance and improvement which can be used by the car manufacturer and its suppliers, but also throughout the supply chain. Measuring improvements in design is a difficult process however. It is inherently different to manufacturing improvements which can be seen in action on the shopfloor relatively quickly.

`It might take three years to develop a car so it’s the next three-year cycle before you know if you could have done better,’ says Evans. `That is probably the root cause as to why it’s hard to improve design. There are lots of indications that the design processes are getting better but we’ll withhold judgment until the actual outputs are better.’

Cogent has created the right atmosphere for improved design and it will lead to quicker and less costly design and development for Nissan’s new C class of vehicle to be built at Sunderland.

Milburn foresees three major benefits: `The new vehicle will be more competitive on cost because of achieving a better component design. Secondly, we’ll have more attractive and better performing components, and thirdly reduced cost and time of design and development for Nissan vehicles.’

Nissan UK will aim to reduce design and development times from about four years to two-and-a-half years as is common in Japan.

In an effort to meet this target, Nissan is starting a mini-Cogent programme this year which aims to distil its key messages to up to 75% of its component suppliers, as quickly as possible. A new series of multi-company workshops will take place at Cranfield and lessons learned from the delivery of these workshops will be incorporated into the master Cogent project.

`Through this year, we will see changes in the way in which Cogent evolves, without changing any of the programme’s critical factors,’ says Evans.

Success of Cogent is assessed on whether the Nissan programme works and on how well the results are disseminated. `Right now we have a tool that works with Nissan but we still have to remove some specific parts to leave a more generic tool which can be used by the rest of industry,’ says Evans.

`No one will use the tool unless it works so it’s critical to monitor the actual results of the process at Nissan first.’

Evans believes it is just a matter of time before the lessons learned by Tier one suppliers through Cogent feed down the supply chain. `Tier ones are now focusing on design having made good progress in process improvements over the past few years. For tiers two and three the emphasis is still on process improvement. Once progress has been made in this area, they will turn to design.’

Evans says: `world class capabilities in product development are within the grasp of most UK companies because of our natural ability to create and problem solve. We’re good at engineering but less strong at communication and standardisation of ideas or processes.’