Nissan 2004 Annual Report Download - page 31

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NISSAN HAS DRAMATICALLY REDUCED ITS PURCHASING COSTS—ITS
LARGEST COST AREA—THROUGHOUT NISSAN 180. LEVERAGING THE
STRENGTHS OF THE NISSAN 3-3-3 PROGRAM AND THE RENAULT-NISSAN
PURCHASING ORGANIZATION (RNPO), COSTS HAVE BEEN REDUCED AHEAD
OF SCHEDULE, AND CONTINUE TO BE CUT.
World-Class Cost Performance
PURCHASING
Nissan Annual Report 2003 29
The second year of NISSAN 180 saw the
continuation of a trend necessary for
Nissan’s profitability—the ongoing cuts in
purchasing costs.
Purchasing represents the highest
source of costs for any automaker, so
Nissan saw that improvements would be
a key part of returning the company to
sustainable, profitable growth. NISSAN
180 has a commitment of a 15-percent
reduction in costs, building on the 20
percent reduction already achieved during
the Nissan Revival Plan. In 2003, cost cuts
continued, moving on schedule toward the
NISSAN 180 commitment.
The first tool to realize this cost
reduction is the Nissan 3-3-3 program.
Three sets of “3s”: a teamwork of supplies,
purchasing and engineering; the three
regions of Japan/Asia, the Americas,
Europe/Middle East/Africa; and a three-
year period. By focusing on these
important groupings, Nissan has been able
not only to cut costs, but to increase
efficiency and realize higher cost
performance while actually improving
quality. In all, Nissan 3-3-3 has been a
win-win situation for both Nissan and its
suppliers, both of whom benefit from
expanded business volumes.
Joint Purchasing Moves Ahead
When two major global automobile
manufacturers joined in the Renault-Nissan
Alliance, they brought together
a remarkable level of purchasing power.
To leverage this strength, the Renault-
Nissan Purchasing Organization (RNPO),
a joint purchasing company, was
established in 2001. Since its founding,
the RNPO has continued to build the
highest purchasing competitiveness in
quality, cost and delivery, while managing
supplier relations on a global basis.
In fiscal year 2003, the share of
purchasing for both companies handled by
RNPO was boosted dramatically, rising
from 43 percent of total global purchasing
to fully 70 percent. This represents an
increase in total value from US$21.5 billion
in 2002 to some $33 billion in 2003.
100
80
Target
’99 ’00 ’01 ’02 ’03 ’04 (FY)
NISSAN 180
-15%
NRP
-20%
Nissan 3-3-3 activity meeting
Reduced Purchasing Costs
Purchasing cost reduction (percent)