Soaring raw material costs and an unprecedented number of supplier bankruptcies are challenging the automotive supply chain like never before. Auto maker purchasing departments have become pivotal to the success, and survival of both suppliers and the customers they serve.
Ward’s 7-part series stems from interviews with the purchasing chiefs of GM,, , Nissan, and Toyota. This is Part 5.
North America Inc.’s move from Gardena, CA, to Franklin, TN, represents a number of unique challenges for John Miller.
True, the vice president-purchasing forNorth America will be closer to his bosses. His office will remain in Smyrna, TN, near Nissan’s primary manufacturing facility for the U.S. market, while upper management moves across country this summer from California to Tennessee.
The move of some 525 staffers will be completed by the end of July to temporary offices in downtown Nashville. The new headquarters building in Franklin, 20 miles (32 km) southwest of Nashville, will be completed in 2008. Until recently, Gardena had 30 purchasing employees (mostly in sales and marketing), and about half are moving to Tennessee, Miller says.
Franklin is a half-hour’s drive from Smyrna, which will improve communication and strengthen the bond between upper management and the manufacturing, engineering and purchasing staffs in Smyrna.
Although the world appears to be shrinking for Nissan North America, the purchasing organization in reality is becoming more global.
The bulk of Nissan North America’s purchasing staff will remain at the company’s technical center in Farmington Hills, MI, Miller says.
In addition, Nissan North America will retain a purchasing team in Mexico to support vehicle assembly operations there.
The company also has a Management Committee for the Americas, which reports on the state of the business directly to Carlos Ghosn, CEO of both Nissan Motor Co. Ltd. andSA, which controls Nissan.
Miller serves on the committee, whose area of interest had extended only to Mexico until recently. “As of April, it goes all the way to Brazil,” Miller says.
has a vehicle assembly plant in Brazil, that produces Nissan cars, as well. “We are revitalizing our existence in Brazil with new volume and new products,” Miller says of Nissan, “and we are sending people to Brazil to work in that area.”
Likewise, Nissan’s plant in Mexico has produced Renault vehicles for several years.
Nissan North America is sending two people (one from Smyrna, one from Mexico) on assignment to Brazil in July to work within the Renault purchasing organization. The assignment is for two years, with a third year as optional, Miller says.
The program will serve as a cultural exchange of sorts, as a Brazilian manager from Renault will come to the U.S. to work with Nissan.
Miller says he is pleased to send North American staffers to Brazil to expand their knowledge of an important vehicle market, although he doubts the program will result in significant shipping of vehicle parts from Brazil to the U.S.
“The initial focus will be for new models to be sold in Mercosur (regional trade pact),” Miller says. “As we do that, we hope there will be some synergy of parts sourcing between Mexico and Brazil.”
Nissan needs to be better acquainted with Brazil, Miller insists. “Our people will come back with a more global viewpoint,” he says. “We are a global purchasing organization, and we are trying to better understand how other regions work.”
Miller knows firsthand the benefits of such cultural exchanges. Before joining Nissan in 2004, he had spent most of his career with AmericanMotor Co. Inc. and lived for two years in Japan while working for Honda.