For any organisation in any market sector to transform itself and its brand image is an incredible feat. It is a challenge that requires all levels of the organisation to be committed and for the company to have a culture that embraces change and ideas from the bottom to the top. Spending a day with Stephen Kneebone, vice president of corporate information systems, organisation development and external affairs (European CIO) for car manufacturer Nissan at its ultra-successful UK factory, it was evident how this company has gone from the makers of dowdy but reliable hatchbacks to an exciting brand well known for innovative cars such as the all-electric Leaf.
Nissan has six regions to its global business, with Kneebone based in Paris – the Japanese giant struck an alliance with French manufacturers Renault in 1999. The deal is a cross shareholding deal, which means they retain their individual brands, but act together both in the development of engineering projects and where it is beneficial to both businesses.
“Organisations within the regions are very strongly focused on the regional requirements. Yokohama is still our base and we have a long Japanese heritage,” Kneebone explains in the Nissan factory cafeteria where he and other senior management sit alongside factory line workers.
Nissan employs 185,000 people globally. Last year, its UK factory made 501,756 cars and since the plant opened in the 1980s it has manufactured over seven million cars.
“We don’t have any cars in compounds,” Kneebone tells me as we walk along the Sunderland factory line that is creating Juke, Quashqai and Note cars at an impressive pace. While many manufacturers focus on volume and fill fields with cars in the hope that they don’t depreciate too much, Nissan has an information-led strategy to its in demand manufacturing facilities.
“We can slow the line down and we can provide that build visibility to the dealers,” he hollers as dashboards are bolted in at speed. Nissan has a three-month waiting list for its Quashqai model.
A three-month waiting list for a vehicle that has been in production since 2007 is impressive and almost unheard of in the highly competitive car manufacturing industry. But that hasn’t always been the case. Nissan was once known for models such as the Sunny and the Bluebird. These were very reliable but uninteresting. In today’s competitive, digital retail industry, manufacturing a product that is uninspiring guarantees you will be overtaken.
Since the turn of this century, Nissan has reinvigorated itself and is now a company with innovative products to match its culture. Talking to former motoring journalist friends, all agreed that models such as the Leaf and Quashqai have totally changed the consumers perceptions of Nissan. Today’s car buyers, as the waiting list shows, consider Nissan a modern and exciting company that retains a reliability record. It was with this transformation of products and customer perception ringing in my ears that I was fascinated to see if the CIO role and business culture of Nissan was akin to its products.
“Monozukuri is about having a state of mind, the spirit to produce not only excellent products but also have the ability to constantly improve the production system and its processes,” state the management professionals, and Kneebone tells me the principals run throughout Nissan. He gestures across the cafeteria, telling me that everyone present has the opportunity to constantly improve the production processes and products.
“It is a mindset to constantly improve, not just in the making, but also the bringing to market,” he explains. “How we set the business objectives, KPIs and how they are translated through the organisation through this model.”
Returning to the product range, Kneebone believes the fact that Nissan has a volume and realistic all-electric car on the market keeps the innovative culture alive in the company. More electric models are on the way and Nissan is demonstrating the strength of its electric car engineering by entering the gruelling Le Mans 24 Hour sports car race for the second year running in 2014. For this year, it will take a vehicle that uses delta aircraft wing technology combined with electric power-train and Nissan Micra parts to the French race.
“We created the Crossover market segment in 2007 and it’s been the company’s most successful launch globally,” he says of the Quashqai that looks like an SUV, but has the practicality and efficiencies of a normal car. Globally two million have been sold.
Englishman Kneebone is proud of the Quashqai for its British heritage. “Globally Nissan runs a competitive process for the design, development and manufacturing of vehicles. Quashqai was designed in our studio in Paddington, London, engineered at a facility in Cranfield and it’s made here in Sunderland. That is a huge success for Nissan Europe and a testament to the skills of the UK.”
Quashqai came about, Kneebone explains, because Nissan analysed the prospects of the compact hatchback market, which it competed in with the unloved Almera. This market is dominated by the VW Golf and Ford Focus, but according to Nissan was a declining market sector.
“We needed to do something different, so we went through the design process and came up with a new type of vehicle. It is relatively easy to demonstrate an innovative product, the challenge is to embrace that as something in the way we work, but as a culture we are expected to bring innovation to the table and the key to that is always, what does the innovation mean to the customer and making sure that the innovation has as broad an impact as possible.
“As a mindset it is a culture you have to sustain,” he says of the challenge.
Being innovative has enabled Nissan to grow. A year after the Quashqai was launched, the financial crisis slammed the brakes on the world economy and credit dependent car sales. Kneebone says it’s been a major challenge for Nissan and partners Renault, but they remain third in the European market by sales and manufacturing, selling 10 million vehicles. Nissan alone has six per cent of the market share.
Kneebone believes a culture of innovation and a focus on business transformation has enabled it to grow in difficult times.
As we walk the factory line, I notice a telescopic crane arm with a seat attached that runs on caterpillar tracks, a worker zips inside a car shell that’s under construction and bolts in a series of parts. Kneebone explains that line side automation developments are part of the standard Kaizen discipline. I am then shown a small workshop to the side of the main line, here workers with an idea can develop tools like the crane seat with the support of the company to see if it will improve the lives and efficiency of those involved, which benefits Nissan.
“That culture is a step above what I have seen elsewhere. It is very lean and efficient and we are effective.
“It is the same in my IS department. We have a set of KPIs that are about delivering business value. We spend a lot of time talking to our customers and discovering what is their experience of us.
“The high availability, high throughput manufacturing systems requirements of Nissan is similar to those demanded in financial services, so there is an absolute demand to provide the applications with a strong service delivery culture and incumbent on us to have systems that are always available.”
Kneebone’s team provide systems to Nissan Europe factories in St Petersburg, Russia; Barcelona, Spain; South Africa; as well as the Sunderland plant and every dealership in the region.
Although responsible for IS across Europe, he explains that Nissan has a worldwide IS operation.
“Globally we have over 90,000 internal users, an IS team of 1,300 direct Nissan employees, with two major data centres in Japan and France. A third of the IS operations are provided by outsourced providers.
“We share the French data centre with Renault,” he says of the cost and energy efficiencies the alliance has brought both organisations. Our major development resources are in Japan, with an additional captive centre in India that we share with our Alliance partner Renault.”
With four major factories and the complex supply chain manufacturing requires, Nissan is a mainframe user through a partnership with IBM.
“Mainframes are very resilient and it is the central piece of our infrastructure.” Kneebone says all systems are being reviewed as to their strategic importance, including outsourcing deals.
“We have been reviewing how we use SAP and talking to them about how we use it across the globe. We have a vast scope as a business and wall to wall doesn’t work, so we have defined new road maps for each region,” he says of the need to increase the agility in critical application like ERP.
He has 150 IT staff in the UK factory, many with strong mainframe skills. Just as Nissan has modernised its product range and profited in difficult times, so too has Kneebone and his team.
He has standardised the infrastructure through major refresh of the desktop environment, which involved changing 9000 devices.
“I wanted this to have more of an impact on the organisation than just give us your old device, so we got the supplier of wraps to protect the cars in shipment to supply us with laptop covers. There were 20 to choose from, all using Nissan imagery and branding. It is the small things like that that people didn’t expect,” he says of a recent method of making the IS department personal and close to employees.
“Getting the basics right is a prerequisite. And since 2008 we have reduced our running costs by 35 per cent and that is a huge percentage. That has been done through having the right balance between effectiveness and efficiency.
“We had to respond to the financial crisis and we took to that challenge. Our success has been down to the drive and hard work of my team, and it’s because of this we have achieved the impressive results we have.
“At the same time, the company has not stopped rolling out new manufacturing facilities, such as the St Petersburg plants that opened in 2012, our expansion in South Africa and into new markets.
Just as in retail, media or financial services, for car manufacturers the next new market is not a geographic place, but the digital market.
“We are taking a hard look at how we align supply and demand. For IS that means how we deliver breakthroughs if as a company we are to reach our market ambitions. So we are assessing sales and operations planning to have the best demand forecasting,” he says.
Nissan already has a advanced information integration, with a vehicles VIN identification number shared with the dealer network from the moment the body panels are first pressed. This gives the dealership network a view of process from order to delivery. After sales support is being integrated into the SAP platform to support the dealer network in a pilot for the whole global business.
“Customer experience, for me, is the most interesting. We have to be very clear that the customer experience will be like from order to ownership.
“We have set up a brand leadership team, which I am a member of, which is defining the customer experience and the impression of what the customer wants that to be. Of all the touch points, how can we support all of those in IS?
“We have identified that digital excellence as a key priority, in the automotive world Nissan is seen as a challenger brand, in digital we are positioning ourselves as leaders.
“The pace of digital in automotive is faster than retail. After all we compete in general retail for consumers, so it is to be expected,” he says of the competition for consumer-spend in a slow economy.
Online brand experiences have been aligned with all other areas of interaction. At the recent launch of Juke crossover Nissan saw a 72 per cent increase of visits to its websites and threefold increase in mobile access. Kneebone explains perspective car buyers used to visit a dealership six or seven times before committing to a car, now it is down to one visit, they arrive very well informed and the site experience is inevitably the six non-physical visits that are made today.
“We are redefining the retail experience so that it is seamless between digital and the dealer,” he says using much the same multi-channel vernacular high street retailer CIOs use.
“Digital is where IS can really have a role, as the experience has to be engaging, offering online configuration and design. We have to up our game and make buying a car a more natural retail experience. The dealer is part of the customer engagement and how we look after our customer post sales so that our customers are loyal and will repurchase and recommend us.
“It is easy to say, but hard to deliver. Digital is very much a team effort with a cross functional team. You don’t get far if you are not operating as a team,” he says refuting hype that the CMO will oust the CIO. We have a brand team to get the issue moving, they are the custodians of the customer experience and I make sure that digital experience is delivered.
Kneebone has been with Nissan for seven years and is also head of the project management office across Nissan Europe that aims to improve the businesses ability to deliver and to change.
“As CIO I make sure that IS and the business priorities are very clearly aligned,” he says of his leadership style.
An engineer by trade Kneebone has spent “a lot of my time in computer centred engineering” with organisations such as vehicle electronics makers Lucas, Jaguar Land Rover, Airbus and Dassault.
“My main roles have been using technology as a lever for change or to develop new business lines. I came to Nissan to run a change programme and they asked me to step up programme management office and then CIO.”
Back in 2011 when Nissan committed to building the latest model of Quashqai in Sunderland – the factory was gearing up for the new model when CIO visited – Nissan painted the model in the Union Jack and took it to Downing Street for a PR stunt. But talk to anyone in the area and the Nissan factory is without doubt important to their community and to the UK economy. Sadly if the UK exits Europe Nissan CEO Carlos Ghosn has understandably signalled the factories future is in doubt.
The factory is impressive, not only in its size, but its productivity. Steel coils arrive from Austria, Belgium and our own Port Talbot in Wales and 330,000 car panels are pressed from 2,500 coils of steel by robots that take just 45 seconds to create one side of a car. There are 12 ovens that bake the paint onto 28 cars at a time and the paint shop controls the speed of the entire factory line.
The factory is a lesson in integration, from the moment steel is pressed, to the robotic carts that carry parts to the correct place on the line; a deep information trail from the mainframe tracks every nut, screw, bulkhead or seat. Four thousand parts are fitted to fully assemble a car in just under four hours. Each team along the line has 59 seconds per car to fit its range of parts, and they are timed and work like an F1 pit crew. There’s no slouching to be seen. Sirens ring if a team leader has a problem and has to spend longer on a vehicle so all on the line know. Each member of a team has three jobs to complete in those 59 seconds and after their breaks they change role to prevent repetitiveness. By the time you read this article Sunderland will be on three shifts a day to keep up with demand. Each of those shifts will have just two minutes to swap over to prevent the line slowing or stopping. Businesses that supply parts such as brake pipes or dashboards have their lines within the Nissan factory, removing supply chain issues.
There are those that would flinch at the demands placed on the workforce, but it felt like being inside a beehive, a calm sense of order existed and it’s a testament to the UK that one of the most efficient manufacturing plants on the planet is in our green and pleasant land.