May 17, 2020

Nissan Suspends Production on Supply Chain Problems

sectors/procurement/nissan-suspends-production-supply-chain-
Freddie Pierce
2 min
Nissan Suspends Production on Supply Chain Problems
A supply chain problem has forced Nissan to suspend production at several manufacturing facilities around the world. The carmaker said it will cease man...
A supply chain problem has forced Nissan to suspend production at several manufacturing facilities around the world. The carmaker said it will cease manufacturing of vehicles at some plants in the U.S. and Japan until the end of this week due to a shortage of engine controller devices.

A delay in the supply of electronic control units from electronic equipment maker Hitachi Ltd, is behind the decision, the carmaker said.

The problems at Hitachi are also affecting Honda and Fuji Heavy Industries.

“Hamstrung”
The Wall Street Journal reported that Hitachi said it is "hamstrung" by an electronics maker unable to fill an order for bespoke semiconductors designed for Nissan's engine management device.

The newspaper said delays in procuring custom-made chips from Swiss company STMicroelectronics N.V. (STM) are behind the production shortages.

Around five years ago, Nissan Chief Executive Carlos Ghosn streamlined the company's supply chain and moved to a lean manufacturing model.

“We are verifying inventories and are considering appropriate responses,” Nissan COO Toshiyuki Shiga told reporters on Tuesday.

AFP
quoted Shiga as saying the problem was a “random and unexpected case”.

Nissan has suspended production at the plants in Smyrna, Tennessee, and Canton, Mississippi, U.S.

In Japan, operations at Nissan’s four assembly plants have been suspended since Wednesday.

Integrated Circuits
The problem is believed to have occurred as delivery of integrated circuits used to produce the electronic auto parts at Hitachi Automotive Systems Ltd. started to be delayed earlier this month.

One Hitachi official said it was down to a tight demand-supply balance.

Link: Nissan

Edited by Chris Farnell

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Jun 10, 2021

Will Public Procurement Budgets Increase in 2021?

supplychain
Procurement
budgets
strategies
3 min
Often overlooked, government procurement professionals will play a critical role in helping communities, and local businesses recover from the pandemic

Procurement is more than just a private enterprise. COVID-19 reminded us that sourcing materials is an essential part of the government’s role. Throughout 2022, tiny departments sourced massive amounts of personal protective equipment (PPE), medical supplies, and emergency vaccines and testing kits. Even non-procurement professionals were pulled into the fray, as frantic timelines demanded nothing less. 

According to Celeste Frye, co-founder and CEO of Public Works Partners, the crisis brought procurement to the attention of skilled employees who had never considered it. As non-procurement personnel stepped up to help their coworkers, many found that they’d stumbled upon a critical and rewarding job. “Existing public employees have seen the essential nature of the work”, Frye said. “[They’ve] gained some critical skills and possibly [grown] interested in pursuing procurement as a longer-term career”. 

Small, Local Suppliers Take Charge

Frye, whose firm helps organisations engage stakeholders and develop long-term procurement strategies, thinks it well worth the effort to open one’s mind to new opportunities. Cooperative contracts, for instance, can help public departments and municipalities save money, time, and effort. By joining together with other towns or cities in the region, public procurement teams aggregate their purchasing power and can drive better deals. 

These cooperative contracts have the added benefit of advancing equity. Smaller suppliers that struggle to compete with established firms for government contracts can act as subcontractors, helping big suppliers fulfil bits of the project. Once they get their foot in the door, small, local, and disadvantaged suppliers can then leverage that government relationship to take on additional projects. 

Especially as governments start to pay attention to procurement resilience, public procurement departments must expand their requests for proposals (RFPs) to take into account innovative solutions and diverse suppliers. According to Frye, Public Works Partners—a certified female-owned firm—has benefitted from local and state requirements that specify diversity. 

Post-Pandemic Funding Swells Procurement Budgets 

And the pandemic won’t be the end of it. City governments need to build sustainable energy infrastructure such as solar panels, charging stations, and recycling plants, ensure that masks and medicines are never in short supply, and source new technologies to keep up with cloud and cybersecurity concerns. 

Public procurement budgets will likely increase to match demand. As Peter Ware, Partner and Head of Government at Browne Jacobson, explained, “in a non-pandemic world, the [U.K.] government spends on average around £290 billion on outsourced services, goods, and works...anywhere between 10% and 14% of Gross Domestic Product (GDP). Post-pandemic, city procurement will only increase as national governments provide local divisions with emergency funding.
And in truth, government employees might jump at the opportunity. Frye noted that public procurement could give immediate feedback on new programmes: “[Procurement] is where new laws and policies ‘hit the road’ and are implemented”, she said. “Professionals in these fields get the satisfaction of creating real change and seeing quantifiable outcomes of their work”.

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