Nissan 2014 Annual Report Download - page 18

He is paying close attention to a couple of regions currently: North
America and China. “If they sneeze, everybody catches a cold,” Mann explains.
If North America accounts for almost a quarter of Nissan’s total annual sales
volume “it needs a level of attention” that ensures the market delivers on its
potential. The same is true of China, which Mann describes as the company’s
next most important market.
The CPO claims the challenge is clear-cut, although he admits the
management challenge is complex, reflecting the multi-function organization
and sheer range of markets to cover. “We all know what we’ve got to do. If you
look at the financial results we know where we are today. Our operating
margin was 5.3% at year-end; we are targeting a sustainable 8% [operating
profit] margin by the end of the plan.”
According to the executive with performance in his job title, Nissan has
to accelerate its performance in a range of areas. That will be achieved by
reducing the company’s total delivered cost per vehicle and improving sales
and marketing efficiencies. This means extractive efficiencies in every part of
the business before a vehicle reaches the showroom. Efficiencies are being
pursued in purchasing, manufacturing, logistics and revenue-management
− among other areas.
In manufacturing, for example, Mann has to ensure that new factories
such as Resende and Aguascalientes are operating efficiently. But he warns:
“We can’t run our business from inside the factories. We have to manage the
markets smartly, and launch good products with good brand power, and
efficient sales and marketing − and then we will have busy factories.”
Mann says this formula, ensuring that different functions are
synchronized more effectively, “will build volumes and justify the investment
we’ve made in the factories.” He adds that the performance program at Nissan
extends far beyond Monozukuri − the art of manufacturing efficiency. “I cut
across all disciplines. It is part of a creative tension throughout the business
and its region, which ensures that we are striving always for greater
efficiency.”
Nissan is already benefiting from the additional scrutiny of its different
group functions by the performance−team led by the CPO. This is ensuring,
for example, that the roll out of Datsun is maximizing the brand’s potential in
emerging markets.
Mann feels the organization is making progress. “We are doing a good
job but we’ve got to question the whole time exactly what is being done
throughout the company - and to what effect,” he adds. “We must look for
options; we must identify risks and deal with them.”
At an internal meeting in May 2014, the executive management at
Nissan assessed the level of risk in the organization and whether it was
performing against expectations. The executive group reaffirmed its
commitments to the Power 88 mid-term strategic plan, reflecting the
management’s confidence in the latest performance measures.
In pursuit of those commitments, Mann will this year continue travelling
across the organization: questioning, diagnosing, suggesting remedies. “I go
through all of the business functions on each trip. We focus on whether we
are achieving our cost-reduction targets, our quality targets, our market and
segment share and managing all this within our expected selling expenses.
"We ask each function whether they are performing to their potential. We
challenge the regions, and we challenge the functions to ensure we deliver on
the plan.
“We are now entering the second half of Power 88, and there are a
number of hotspots that we must focus on such as ASEAN, China and
the US.
“But the opportunities far outweigh the risks,” says the CPO. “We have
got a plan to deliver. It’s my job to execute that plan to hold the organization to
account. It’s exciting. I’m not daunted, I’m energized.”
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NISSAN MOTOR CORPORATION ANNUAL REPORT 2014
EXECUTIVE PROFILE
CONTENTS
CORPORATE FACE TIME
PERFORMANCE
NISSAN POWER 88
CORPORATE GOVERNANCE
CEO MESSAGE