submitted by Tejas Udeshi.

More than the sum of its parts

-From finished vehicle logistics

The management strategy at the Renault Nissan Alliance has been to integrate operations without sacrificing each carmaker’s culture and identity. This has been the case for logistics as much as for product development and design, which flows developed according to each brand’s production and sales network.

Recession and competitive pressures pushed the group to find more savings, chief executive Carlos Ghosn set up a new alliance CEO office to accelerate integration, which included combining the logistics functions at Renault and Nissan.

This article is about:

Ø  Step changes in integration

Ø  Management and organisation

Ø  Combining in the UK

Ø  Network Map

Ø  Russian as an alliance template

Ø  Europe in decline

Ø  Finding opportunities

There are three people who are leading Alliance logistics namely

Chris Godfrey - Alliance logistics Europe’s manager of Outbound Engineering

Colin McDonald – Vice-president

Frans Kroon – General Manager

Connection with the management

Scanning their environment

They found that they had many opportunities to explore in Europe, Russia, Turkey and North Africa.

Planning

They set up a new alliance CEO office for Alliance logistics  which had right people in right room at the right time to join their dots and to see what was an obvious solution for them.

Ø  To combine their road, rail and sea route.

Ø  Bringing balance to Russia.

Directing

Kroon notes, that as the Alliance has “got its hands dirty”

So by combining transport flows in various market, there have been more IT issues than had been anticipated. This has also been a very rich learning experience in terms of building a future system for them.

They took the view of “hub and spoke” strategies which increased their lead time and the risk for damage.

They are positively looking forward for their common purpose that unites the team on common benefits rather than focusing on the can’t do because….’line of thinking.

Controlling

According to the integration remains a primary strategy, but control for them is equally important as said by Kroon, “We want to be in full control of Renault Nissan engineering and network analysis”

So effective controlling is very necessary to get the desired results. As in the article it is said for effective engineering and network analysis there is need of controlling.

Colin McDonald ,vice-president said,” the challenge from the beginning was to avoid creating an alliance organisation just for the sake of it – something on paper that actually did not really mean anything in practice”

It was a difficult and challenging task for them to have successful integrated logistics but they strived hard for it.

Calculated risk takers

They wanted to invest only if their benefits were very clear.

They need to better understand the benefits, so they are reviewing direct delivery as they’re not exactly where they want to be.

Team building

“Instead we have worked on creating a team that actually adds value by creating synergy” they stated.

So the whole idea was to build team which can add value to their products and energy in their organisation and in other words ,  something that makes one plus one equal three. Each company can individually make one plus one equal two !

Means that by combining their work and outbound logistics they can be more productive in their integrated business. By joining their both teams they can lessen their cost and improve productivity and ultimately revenue. Their high volume and by effective way of transport of rail was best solution for Renault. It is the first inter-UK rail service for the Alliance.