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Quality clouds over Nissan plant clearing, say execs

Canton — Can the employees of Nissan Canton produce vehicles that please drivers and score high with independent surveys?

Quality issues have plagued the Canton Nissan plant, as reflected by not-so-rosy reports of J.D. Power and Consumer Reports, but execs say a more positive story is now being told, thanks to new systems and quality checks. Reductions in warranty claims are already showing an 83% drop from November 2004 to November 2005 for all Canton-produced vehicles. The reduction far exceeds Nissan’s initial goal of a 20% reduction in claims per year.

Nissan and Infiniti jumped from 11th place in 2004 to 5th place in J.D. Power’s 2005 Initial Quality Study, out of 14 automotive manufacturers. And, Nissan North America (NNA) reports that combined FY2005 sales for Nissan and Infiniti totaled 1,075,097, up 6.1% over last year’s record breaking year of 1,013,295 units.

“The cloud over Canton is gone, and the sky is clear,” said Doug Betts, 42, who is himself an example of Nissan’s aggressive effort to turn quality issues around at the plant. Betts recently moved into the newly-created position of senior vice president of total customer satisfaction. The word “total” in his title means his job goes all the way from the assembly line to the dealership to the service that customers receive after they buy a vehicle.

The Canton Nissan plant manufactures five vehicles — the Quest minivan, the Armada full-size SUV, the Titan full-size truck, the Altima sedan and the Infiniti QX56 full-size luxury SUV. This year the plant will manufacture new generations of the Altima and the Quest for 2007.

The five vehicles are produced in a 3.5-million-square-foot plant that, if you drive along side it, stretches 7/10 of a mile. Walking the plant for a tour is nearly impossible, so a tram ferries visitors over the plant’s 1,400 acres.

Nissan Canton has the capacity to produce 400,000 vehicles a year and is currently running at close to 95%. It takes approximately 16 hours to manufacture a Nissan vehicle, and it all starts with coils of steel that are pounded by six-ton stamping presses into body parts. From there, more than 27 miles of conveyors on the ground and overhead move the parts from paint to trim and chassis to pre-delivery where the vehicle goes through rigorous testing and is wrapped for shipment.

The stakes are high for Nissan to raise the quality of the vehicles produced here. The plant is a $1.4-billion investment for Mississippi and employs 6,000 workers — 2,000 of them contract workers. When quality came into question, the company sent engineers from Japan to take corrective steps.

One immediate evidence of change is plasma screens on the metal line. A low spot in the metal will show up after the vehicle is painted — a costly mistake — but by studying the schematics on the screen in real time, technicians can pick up on the problem before the metal goes any further. Nissan reports that this rapid feedback has resulted in a 45% defect reduction.

A few months ago, Nissan assembled a Strike Force Team on the manufacturing floor to support engineering and raise quality by tackling assembly problems as they arise.

Nissan uses “visual management” with screens throughout the plant to stay in constant communication with employees and keep them informed on how the company is doing and where improvements are needed. At every turn, signs remind employees this is a “Paint Mutilation Free Zone” or “There is Always Time for Safety.”

The plant has also reduced its inventory to just under two days worth, down from 2-1/2 days worth of inventory housed in the beginning. Less inventory reduces costs for the plant and improves quality and efficiency, said Dave Boyer, vice president of manufacturing at Canton.

Better communication

Another important part of the process is better communication between Nissan designers and Nissan manufacturers. Thirteen teams made up of people from both sides are tackling 13 vehicle areas covering everything from wind noise to brakes. The teams address these problems, and their solutions are handed over to a 14th team, called a quick implementation team that has the resources to make them happen fast.

Betts offers an example of the squeak and rattle team, which created a vehicle vibration test known as the “shake and bake.” The vehicle is heated up and cooled down while it is shaken, just as it would be after the new owner drives it off the lot over railroad tracks and potholes. After the test, they might discover a loose door panel, for example, and know that an extra clip is needed to keep it from rattling. The Quest minivan’s current model and the new 2007 saw dramatic improvements after these tests, said Betts.

Nissan is improving communication with suppliers and has also started a built-in quality inspection (BIQ). Instead of waiting to see if there are defects, “we’re going upstream to see where defects will occur,” said Betts.

Betts said he rejects the idea that Nissan’s problems were due to cutting costs, instead pointing to the company’s very aggressive startup with five vehicles manufactured at the Canton plant from the first day of startup May 27, 2003.

Dan Gaudette, senior vice president for NNA, seconded that. “We needed to fit into a market segment we weren’t in, and we took aggressive approaches to do that,” Gaudette said. “We continue to look at what we need to do. This facility has gone through very structured changes.”

Nissan’s U.S. manufacturing division operates a second manufacturing plant in Smyrna, Tenn., with a capacity of 550,000 vehicles and a powertrain assembly plant in Decherd, Tenn., where every engine for Canton and Smyrna is produced.

Contact MBJ Staff Writer Kelly Ingebretsen at kelly@msbusiness.com.

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