CANTON, Mississippi (AP) — The old shipping racks at the Nissan Motor Co. supplier say “Topre, Cullman, AL.”
The new ones say “Topre, Canton, MS.”
That’s because Topre America’s robots, tended by 165 employees, are now welding together support frames for trucks inside a Mississippi facility that’s a long walk from where Nissan assembles them. Japanese-based Topre is one of seven suppliers expanding or setting up operations on Nissan’s Canton campus, part of the continuing push by automakers to draw critical suppliers close.
The process has been going on for decades at various automakers, but as Nissan seeks to capture a larger piece of the thriving American market, it’s trying to rationalize its supply chain. The effort seeks to clear out room inside its sprawling Canton assembly facility so the Japanese automaker can increase capacity from the current 450,000 vehicles a year to 507,000 by 2017. To do so, Nissan must ensure supplies flow smoothly to the 240 loading docks where the company aims to unload auto parts only an hour before workers put them together into Muranos, Sentras, Titans and Armadas.
On the other end of the complex from where Topre and other suppliers have set up shop, there’s a new 1.5-million-square-foot warehouse where a Nissan contractor organizes parts from suppliers into the batches that the assembly plant needs to keep going around the clock.
The expanded suppliers and logistics operation has helped push the total number of workers at the complex to 6,300, although many of the new employees don’t work for Nissan directly. Local government subsidized the construction of the new warehouse with tax-exempt bonds that Nissan will repay.
For automakers, the benefits of the system are clear, said James Gillette, an automotive industry analyst and consultant.
“They’re getting a consistent supply base at the lowest cost,” he said.
The warehouse — called the integrated logistics center — is meant to lower costs further, said Brian Miller, Nissan’s senior supply chain manager in Canton. It’s run by Exel, a unit of Deutsche Post DHL that specializes in logistics. Inside, workers are buzzing around on electric forklifts, trying to make 17 “picks” an hour for the eight vehicles that are being assembled on the other side of Nissan Parkway.
Miller’s the man in charge of making sure the company’s just-in-time supply system makes parts arrive on time. The idea is that by holding less inventory, Nissan will have less of its money tied up in parts. For many of the 8,500 parts that Nissan uses in Canton, there’s only one shift worth of inventory in the warehouse.
“I’m trying to give them only what they need as they need it,” Miller said.
A computer system tracks all those items, with workers scanning a barcode at every stop. It starts when a truck trailer arrives at a dock. Then there’s another scan when a pallet goes onto a forklift, and another when it’s dropped off. When it’s time for parts to go out, another forklift driver scans them when picking them up, and then scans again to drop them off at the outgoing loading dock. Finally, another truck trailer is scanned when it leaves for the plant.
The Canton plant is distant from the spine of the American auto industry, which runs up Interstate 65 and Interstate 75 from Alabama into Michigan. A few Nissan suppliers closed satellite plants they had built in Mississippi during the recession, falling back on other locations. But Nissan wants its most critical suppliers close to avoid disruption.
Miller said the company’s goal is for the makers of the top 85 parts to be “in sight, on site, or near site.” Nissan made room for some of those manufacturers by building the integrated logistics center, pulling warehousing operations out of another building that Topre and others are moving into.
By design, the companies are doing their work right under Nissan’s nose. Miller said that if there’s a problem, Nissan and suppliers can get together quickly.
Living under Nissan’s roof can make a company dependent on the automaker. “The downside of it is, what happens if the supplier suddenly loses the contract with the automaker?” Gillette said. “You are in the pocket of the automaker.”
But for Nissan, the relationship has few downsides.
“It really makes sense to partner up with suppliers and be close,” Miller said. “The stronger we can make our suppliers, the stronger we’ll be.”