Executive Interview:  Nissan VP Rebecca Barker Vest

         We talked with Rebecca Barker Vest, VP of Purchasing, Renault-Nissan Purchasing Organization (RNPO), located in Franklin, Tennessee.  A twenty-plus year Toyota veteran, Vest joined Nissan North America in October 2009 as Director of Powertrain purchasing.  In February 2011 she was named Vice President of Purchasing /RNPO for Nissan Americas and was tasked with Nissan’s crisis management response following the March 11, 2011 earthquake in Japan when her official promotion was planned to take effect three weeks later, on April 1!  But crises don’t happen on preselected dates, and Vest was up to the multi-tasking that this night-and-day recovery required.  No one knew exactly how bad the earthquake damage would be, or which lines, which suppliers, which plants would be disrupted.  Certainly for Honda and Toyota and many Japanese suppliers, even one year later the financial markets continue to reflect the disruptions.  Heightened interest in risk and crisis management planning and software is, however, one of the more positive and lasting effects of the earthquake, tsunami, and floods in Thailand. 

But for Nissan and Vest, that day in March presented multiple questions and problems that demonstrated the working philosophy of Renault-Nissan as a very global operation.

Question:  when the news of the Japanese earthquake broke, what were the first things you set out to do for crisis response?

Vest:  Nissan’s operating approach is focused on achieving results, and meeting our commitments.. We believe strongly in the value of creativity, especially during times of crisis. Additionally, we believe that we must proceed in a manner which promotes trust and transparency, which, in turn, drives our ability to be responsive and take quick action when the situation calls for it.  In the case of the Japan Earthquake/Tsunami disaster in 2011, we took that approach.  Within 24 hours, we assembled a cross-functional crisis team in the Americas region, working in alignment with our global partners. I put together this team with members from the U. S. and Mexico-- about 10 – 20 people -- and some of these team members were dispatched to Japan.  The team size varied during the crisis, in accordance to what was needed.  In other words, the concept constantly changed in response to the business need at the time.   Not all team members were from purchasing – some were from supply chain management, R&D and manufacturing. All of these related groups worked together and sent some people for my team.

Question:  How did the crisis management teams work?

Vest:  I pulled people off their regular jobs, told them “you no longer have day to day responsibility for what you did yesterday, today you are responsible for earthquake management.” We held twice-a-day meetings, including the function VPs in the region and additionally, twice-a-day meetings occurred with the team members and counterparts in Japan.  This way, we had voices on both sides of the world that were up to date on what was happening and could answer detailed questions.

Question:  Did you have any special communications media?

Vest:  We had email and audio conferences which are customary for us because of our global structure.  But having two call-ins per day is extraordinary in frequency.

The unique point of this is that the team was set so quickly and started taking action literally within hours of the earthquake.  We decided right away that we would take action as a region to do everything in our power to avoid stopping production and to support and protect our suppliers because we knew that if we go down, they go down. We did our best every day to minimize any supply disruption for all of our vehicles made in the US and Mexico. We are very proud that we kept our lines running so that suppliers could keep running, on all of our lines in the North American plants...

Question:  It must have gotten pretty hectic.  What were the more difficult parts or assemblies to source?

Vest: While the U.S. was working, the crisis management teams were holding calls and feeding that information to their window person who was, in turn, talking to the window person in Japan.  In terms of the most difficult parts that we were working with, the chips going into electronic assemblies posed unique challenges, and the second-biggest challenge was with some power train components, particularly some castings and forgings.  The reason was that in-house castings and forgings were sourced from the Iwaki plant which is just outside of the Red Zone in Japan, so they had to recover.  Our people at Iwaki put in miraculous efforts – they had to rebuild a significantly damaged plant.  From our end, we reallocated production requirements, we pulled vacation time so that in effect the production curve went down in Q1.  When the earthquake hit, we were very quick to figure out how to do that, and the reason was close communication with the plant, design and with purchasing, lining up which parts went on which car.  Remember I said that Nissan is known for its creativity?  Well, this is a perfect illustration. 

Question:  So you reallocated parts and changed the production schedule?

Vest:  That’s right.  For example, if we knew we couldn’t get a particular part of the navigation system (part “A”), the design guys would step in and say, well, if we can’t get that part, let’s substitute, and very quickly they would check with the plant and with sales, and then they would allocate production to an alternative (part “B”).  So this was a system-assisted recovery supported by very methodical checking for quality and safety to be sure that the substitutions would maintain vehicle quality.

Question:  Why do you think the crisis recovery plan worked so well in spite of the odds?

Vest:  I would say that one of the reasons we reacted well is because people at Nissan, including myself, felt a huge sense of ownership and pride in keeping our plants running.  One way to respond is to say “well, it’s a force majeure, an Act of God, there’s nothing we can do.” But, that’s not our way.  What we did was to say, “Yes, we are very aware of the grave nature of the disaster and the impact to the people of Japan.  But how can we get through this in the best way? Everybody get together and raise your hand, tell us how we can minimize the impact,” instead of accepting the situation and not taking action.

Question:  So you’re saying this kind of response showcased Nissan creativity?

Vest:  Yes, that’s right.  At Nissan we are encouraged to be creative instead of just accepting.  We have the constant challenge to ask “why, why, why, why, why can’t we do this, why can’t we try that?”  One of Nissan’s great strengths is the amount of cultural and global diversity, both due to the makeup of the company and from our Alliance with Renault On my team alone, I manage people at seven sites in the U.S., Mexico, Canada and Brazil, and we have members from all over the world in the purchasing team. Including the viewpoints from these members gives a great advantage because I can call on the particular expertise of someone and input into a global situation quickly, and then take action based on fact, not based on someone’s understanding of what happens in other regions. I actually get direct input from the people who know what is going on.”

Question: What you’re describing is different from many other automotive and heavy equipment producers.

Vest: I’ll admit, coming into Nissan was tough after working for another company for over 20 years, but one thing that made it easier was that my ideas and creativity were welcomed as a newcomer. When the earthquake struck, sure we had to lose some units and we had to reschedule some production, but looking back we feel pretty good that all of us did just about everything we could have possibly done. It was not perfect, but we didn’t just accept it. We pushed the limits.

Final question: How did Nissan manage to emerge not only unscathed, but deliver strong operating profits and record global vehicle sales?

Vest: It’s because we took swift action as a region.  In less than 24 hours after the first tremors, at 6 am Central time we were all on the phone – purchasing, quality, manufacturing – figuring out what we could do, and developing our crisis recovery plan.  We got people on planes, we tracked down parts on the docks and on the trucks.  Everyone at Nissan and our suppliers reacted so quickly, it’s the Nissan way of doing things – quick, with a strong sense of urgency, working together as a regional team.  We weren’t waiting for Japan to tell us what to do!  We knew we didn’t want to shut suppliers, we didn’t want to impact them – and we knew we wanted to keep production running.  I have to add also that we could not have recovered so quickly without the strong support of our suppliers.  They were phenomenal.  And don’t forget, we have a major manufacturing facility just outside the Red Zone.  So we knew we had to put emergency actions in place.  We did, and it worked.  Nissan and its suppliers quickly got back on full schedule, growing full tilt.

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