The most important measurement in manufacturing is the global cost per unit. During NISSAN 180, we achieved a cost reduction of 14 percent per unit, including indirect costs, or 8.3 percent in direct costs. We also evaluate our performance in time to delivery using three different measures. One measure is from customer to customer, and the time from order to delivery—an especially important calculation for our build-to-order system. We’ve reduced this interval to 24 or 25 days, and have set a target of about 18 days.  The second measure is from the “model freeze” stage until the start of production, which is an important factor for both manufacturing and R&D. With the recent launch of the Note in Japan, we brought this down to 10.5 months for the first time. The third measure is the time from the start of production to full production. The standard is about two months. Our target is two weeks, which we achieved with both the Tiida and the Note. While a faster rate could present quality issues, we produced these two cars with speed and high quality.  The second of our ‘never-ending’ quests at Nissan is greater synchronization, or  douki . With the Nissan Production Way, we are aiming to shorten production pipelines. The process begins with the customer’s order, which includes items such as colors and specifications. Based on this, we make the production plan, establish  the sequence and determine the shipping time. We broadcast this information to all players at the same time, within Nissan and our suppliers, and not just in the order  of need. If there is any problem, everyone immediately recognizes it. This makes quick action possible. The same can be said of what we call the “fishbone system.” Instead of a strictly linear production line, this system features  a constant, parallel introduction of supplies to the operation similar in construction to skeleton of a fish. We also  utilize the ‘strike zone,’ where supplies must be delivered within the reach of the factory workers, which improves quality and productivity. This is related to logistics, so we involve our production partners from the early stages  of planning. OUR WORK “To us, the Canton plant embodied the principles of NISSAN 180. We had to be prepared to launch and immediately produce five all-new vehicles. At the same time, we were taking the Decherd plant from an annual capacity of 250,000 engines up to 950,000, including two brand-new engines. That was a challenging and exciting time. “Today, we are pleased that our results in the recent J. D. Power and Associates Initial Quality Study show significant improvement over the prior year, and we’re determined to move beyond that level. We will continue to rely heavily on the Nissan Production Way as our guide, focusing on being quality-driven and waste-free.” “In North America, our manufacturing flexibility gives us a competitive advantage.  Both Smyrna and Canton are set up to produce five models each, and we can react to market changes quickly. We also recognize that we may need to boost capacity in the future due to expected growth and increases in exports to various countries. “I am proud to say that Nissan’s U.S. plants have long been among the most efficient in the country. We’ve topped  the Harbour Report automotive assembly rankings for the past 12 years. We are now operating at close to full capacity. The Smyrna and Canton plants, which can produce 550,000 and 400,000 vehicles  a year, respectively, are running at approximately 85 percent of total capacity. MANUFACTURING IN NORTH AMERICA Nissan Annual Report 2004 51 DAN GAUDETTE Senior Vice President Nissan North America