Honda ppt

Prathibha.SPrerna RaginiPrayag

HRM BatchSpring Summer 09-11IIPM, Bangalore30th August 2010

The Automotive industry is one of the largest industries in the United States

New and used automotive sales and repairs generates over $200 billion dollars of the GDP each year.

New car and light weight truck sales generated $699 billion dollars in revenue in 2003.

Traditionally, domestic manufacturers have dominated the market in the United States.

The top three domestic manufacturers include: General Motors Ford DaimlerChrysler

In recent years, these top domestic manufacturers have concentrated on the market for sport utility vehicles and light trucks.

This narrow concentration has allowed foreign manufacturers, primarily Japanese manufacturers, to steal some of the market share for cars.

In the past few years, General Motors, Ford, and DaimlerChrysler’s market share for cars has been cut in half.

While domestic manufacturers still dominate their foreign competitors, the Japanese market share of cars is growing.

Consumers are choosing Japanese cars over domestic because of their competitive price, and high quality reputations.

These advantages are results of a very organized and innovative way of doing business.

Honda’s Operational practices show a great example of the innovations the Japanese automobile manufacturers perform.

Careful site selection of their US manufacturing plants

Greenfield Manufacturing Plants In- depth supplier relationship

Close and interactive, similar to a partnership Uses the concept keiretsu

Autonomic organizational structure Japanese/North American manager mix New entrants focus on more established

products and processes

Suppliers are involved with development and design of new products

Eg. - Accord Relationship is much like a partnership Requires an in-depth supplier selection

process

Conduct joint improvement activities Share information intensively, but

selectively Develop suppliers' technical capabilities Supervise suppliers Turn supplier rivalry into opportunity Understand how suppliers work

Honda uses their economies of scale by working with their parts suppliers to order raw materials in large quantities.

Honda Purchasing

Honda Purchasing

Parts Supplier

Parts Supplier

Parts Supplier

Honda Trading

Raw MaterialsMill

Parts Supplier

Parts Supplier

Parts Supplier

Honda Assembly

Plant

Honda Assembly

Plant

Also known as executional drivers that reduce operating costs and increase productivity Economy of Scale – All purchasing done by

Honda Trading America Corp. Technology – Multipurpose machinery Capacity Utilization – Honda operates facilities

in every major market they enter

IT advancements 3rdwave distribution software by Blinco

Systems Assures parts quality, controls availability,

guarantees delivery, provides consistent materials pricing

External factors Increasing oil prices effect transportation

costs for all markets

Strategic and operational variables that must be factored into the design of a company’s global value chain Global value chain

Demand chain (marketing, sales, service) Supply chain (sourcing, manufacturing, logistics) Product development (R&D, design, engineering,

development, and launch)

The key element for Honda is the flow of information with their suppliers 12 steps:

Initial contact, preparation/investigation of Honda parts, quotations, initial plant visit, prototype development, testing and evaluation, mass production quotation, preparation for mass production, trial run, Quality Assurance Visit, agreement, purchase order

In-house guest engineers

Strategic sourcing – “maximizing the value added through your external suppliers” Will chose highest supplier in overall service

(not just lowest price) “Target pricing”

Price table for parts If price cannot be met, Honda will work with

supplier to get costs down

Customer Satisfaction is top priority Accomplished through suppliers

competitiveness in quality, cost, delivery, development, and management (Q.C.D.D.M.)

Quality Most important factor Must be built into production process

Cost Suppliers are given target costs Cost reductions through own ideas,

technology, improved productivity, along with joint efforts with Honda in value engineering, and value analysis

Delivery Suppliers must use just-in-time production

system

Development Uniqueness in design and specifications Helps create identity for Honda

Management Positive attitude Measured by Q.C.D.D

Established in 1985, started its operation in 1986 along with pre delivery inspection facility.

4000 employees, engineers, manufactures.

1.3 billion pounds – for 270 acres site. 1 car in 80 seconds 250,000 cars per year – CRV, Civic

Engine plant. - Every hour 1600 kilos of aluminum used to produce 60 engine blocks

Casting Machining

- engine unique number Engine assembly area Transferred to car plant

Car body- Flat sheets

Welding department Pre treatment process Paint Bumpers are produced Assembly frame department Material logistics

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Thank You……. !