Honda ppt

HRM Batch Spring Summer 09-11 IIPM, Bangalore 30th August 2010

Prathibha.S Prerna Ragini Prayag

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The

Automotive industry is one of the largest industries in the United States New and used automotive sales sa les and repairs generates over $200 billion dollars dollars of the GDP each year. New car and light weight truck sales sa les generated generated $699 billion dollars in revenue in 2003.

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Traditionally, domestic manufacturers have

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dominated the market in the United States. The top three domestic manufacturers include: 

General

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Ford DaimlerChrysler 

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Motors

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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.

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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.

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Careful site selection of their US manufacturing plants 

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Greenfield Manufacturing Plants

In- depth supplier relationship 

Close and interactive, similar to a partnership

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Uses the concept

keiretsu

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

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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

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Conduct joint improvement activities Share information intensively, but selectively Develop suppliers' technical capabilities Supervise suppliers Turn supplier rivalry into opportunity Understand how suppliers work

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

Honda Honda Purchasing Purchasing

Parts Supplier  Honda Trading Parts Supplier  Parts Supplier 

Raw Materials Mill

Parts Supplier  Parts Supplier  Parts Supplier 

Honda  Assembly Plant Honda  Assembly Plant

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Also known as executional drivers that reduce operating costs and increase productivity 

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Economy of Scale ² All purchasing done by Honda Trading America Corp. Technology ² Multipurpose machinery Capacity Utilization ² Honda operates facilities in every major market they enter

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IT advancements 

3rdwave distribution software by Blinco Systems 

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Assures parts quality, controls availability, guarantees delivery, provides consistent materials pricing

External factors 

Increasing oil prices effect transportation costs for all markets

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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)

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The

key element for Honda is the flow of information with their suppliers 

12 steps: 

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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

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Strategic sourcing ² ´maximizing the value added through your external suppliersµ 

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Will chose highest supplier in overall service (not  just lowest price)

´Target pricingµ  

Price table for parts If price cannot be met, Honda will work with supplier to get costs down

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Customer Satisfaction is top priority 

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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

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Cost  

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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

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Development  

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Uniqueness in design and specifications Helps create identity for Honda

Management  

Positive attitude Measured by Q.C.D.D

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Established in 1985, started its operation in 1986 along with pre delivery inspection facility. 4000 employees, engineers, manufactures. 1.3 billion pounds ² for 270 acres site. 1 car in 80 seconds 250,000 cars per year ² CRV, Civic

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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

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Car body - Flat sheets Welding department Pre treatment process Paint Bumpers are produced Assembly frame department Material logistics

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